An established Australian company with 40 years of experience in retail solutions sought to optimize its procurement of point-of-sale (POS) displays. The client, a leading provider of retail shelving, ticketing, and merchandising products, aimed to reduce costs while maintaining quality standards. They partnered with Dragon Sourcing to identify and qualify competitive suppliers in China capable of meeting their requirements.
The project focused on a diverse range of POS displays, including freestanding units, podiums, cardboard boxes, and life-size cutouts. With an annual budget of $1.3 million USD and hundreds of designs, the potential for cost savings was significant. We selected a representative design, a Honda Generator Display, for the Request for Information/Request for Quote (RFI/RFQ) process, with an order of 200 units.
Dragon Sourcing successfully implemented a comprehensive eight-week approach:
- Demand analysis
- Supply-market analysis
- Telephone pre-screening
- RFI/RFQ and supplier scorecard development
- RFI/RFQ administration
- Response analysis
- Reporting and recommendations
Our sourcing team identified 27 potential suppliers, conducted 22 phone interviews, and sent RFI/RFQs to 15 qualified candidates. Based on a balanced scorecard evaluation, the team selected two of the four responding suppliers for on-site audits.
The scorecard assessed company profiles (10%), production capabilities (10%), quality systems (20%), and RFQ responses (60%). This approach ensured a holistic evaluation of potential partners.
Quotation analysis revealed significant variations in pricing and production capabilities among the suppliers. Supplier 1 offered the lowest total quote despite having the highest mold cost, demonstrating the importance of comprehensive cost analysis.
We conducted factory audits using the client’s standard audit process, evaluating design capabilities, certifications, factory organization, quality control, and business overview. Supplier 1 scored 89 out of 100, while Supplier 2 scored 72.
The project resulted in the identification of a highly qualified supplier capable of delivering substantial cost savings without compromising quality. By leveraging Dragon Sourcing’s expertise and methodical approach, the Australian company successfully optimized its POS display procurement strategy in the Chinese market.
This case study illustrates the value of a structured sourcing process in emerging markets, combining rigorous supplier evaluation with on-site audits to ensure both cost-effectiveness and quality assurance in retail display procurement.