Case Study China RFI/RFQ Report for “Tomato Sauce”

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Case Study

China RFI/RFQ Report for “Tomato Sauce”

Dragon SourcingYour Tailored Sourcing Approach to Emerging Markets

© 2013 Dragon Sourcing. All rights reserved. www.dragonsourcing.com

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Supplier Market screening in China for “Tomato Sauce”

Context

Our client, an international Food Manufacturer, was looking to identify capable producers of tomato sauce in China.

Segments involved:•Tomato Sauce

Approach

• Collect detailed spend information about the categories such as technical requirements, standards applied, material specification, volume and current unit prices by Client’s consuming factories

• Identify list of potential suppliers based in China to include in the RFI/RFP process by leveraging the web, external databases, and various networks of experts

• Develop the RFI / RFP – jointly with client – to include all key supplier qualification criteria (e.g.: financial, technology, manufacturing capability, corporate responsibility, quality…)

• Administer RFI / RFP process to ensure as high a return rate as possible

• Analyze responses, prices and use balance score carding process to rank suppliers and recommend suppliers per category which client needs to take through their auditing process in order to potentially qualify them

• Provide Client with a profile for all of the suppliers recommended to be audited

© 2013 Dragon Sourcing. All rights reserved.

Week No. Project Activity

1 2 3 4 5 6 7 8 9 10

1. Demand Analysis

2. Supply Market Analysis

3. Telephone Pre-screening

4. Develop RFI/RFQ

5. Conduct RFI/RFQ Administration

6. Analyze RFI/RFQ Responses

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Program Schedule: Target was to finalize the program within 9 weeks

Project workflow updated

Done Started Delivery critical Delay

Currently Milestones Not started


4Suppliers for RFI/RFQ Suppliers responding to RFI/RFQ Shortlisted for Audit

For China market, our approach enabled us to shortlist 5 suppliers out of 33 suppliers that passed telephone pre-screening

Selection of potential suppliers Pre-selected suppliers Sending & follow up of the

RFQAnalysis of the suppliers’

offer

33 suppliers

11 suppliers

5 suppliers


© 2013 Dragon Sourcing. All rights reserved.5

The focus of this project was on the coastal provinces.

Province # of SuppliersAnhui 3Beijing 4Fujian 11Gansu 1Guangdong 23Guizhou 1Hebei 3Heilongjiang 1Henan 13Hongkong 1Hubei 2Hunan 1Jiangsu 9Jiangxi 7Liaoning 4Ningxia 1Shaanxi 2Shangdong 19Shanghai 17Shanxi 3Sichuan 1Tianjin 5Zhejiang 9Henan 1

Supplier Distribution:Key supplier provinces were Guangdong, Shanghai and Shanghai

© 2013 Dragon Sourcing. All rights reserved. 6

Category Source from RFI-RFQ Weight of criteria Scoring Max Score per criteria

Max point per criteria

Weight ofSection

Company background Is your company a manufacturer, trader or both? Company Profile 2-1 4% 0= Trader, 1= Manufacture, 2= Manufacture & Trader 2 0.08

30%

Ownership (State Owned/ Private/Foreign Investments/Joint Venture) Company Profile 2-4 4% 1= State Owned, 2= Private, 3= Foreign Investments, 4= Joint Venture 4 0.162011 turnover in USD(1 US$ = 6.3 CNY) Company Profile 2-6 4% 1= Less than 1, 2= 1M - 5M, 3= 5M - 10M, 4= More than 10M 4 0.16Do you have a good English speaker for commercial and/or technical liaison in your factory? Company Profile 2-10 4% 0= No, 1= Yes 1 0.04Number of Staff in R&D Department? Company Profile 2-11 3% 0= None, 1= 1-2 persons, 2= 3-4 persons, 3= more than 4 persons 3 0.09Number of Staff in Quality Control? Company Profile 2-11 3% 0= None, 1= 1-2 persons, 2= 3-4 persons, 3= more than 4 persons 3 0.09Where is your top 5 provinces for Sales? How many provinces for your sales? Company Profile 2-12 4% 1= 1-2 provinces, 2= 3-5 provinces, 3= more than 5 provinces 3 0.12

Does Supplier Adhere to local and international CSR law & Regulations? Company Profile 2-14/15/16/17 4% 0= No, 1= Yes 1 0.04

Production Ability 30%Total maximum production capacity (ton / year) in 2011 Production 3-1 10% 1= <1Ktons, 2= 1001-2Ktons, 3= 2001-3Ktons, 4= 3001-4Ktons, 5= >4001tons 5 0.5

40%Actual annual production (ton /year) in 2011 Production 3-2 4% 1= <1Ktons, 2= 1001-2Ktons, 3= 2001-3Ktons, 4= 3001-4Ktons, 5= >4001tons 5 0.2Does the supplier have the necessary production equipment? Production 3-6 2% 0= No, 1= Yes 1 0.02Can the suppliers production process handle all the ingredients? Production 3-7 2% 0= No, 1= Yes 1 0.02Does the supplier have the necessary packaging equiipment Production 3-8 2% 0= No, 1= Yes 1 0.02

Quality Control 40%Does the supplier have ISO 9001? Quality Management 4-1 6% 0= No, 1= Yes 1 0.06

30%

Does the supplier have ISO 14000? Quality Management 4-1 6% 0= No, 1= Yes 1 0.06Does the supplier have other local certification ? Quality Management 4-1 10% No=0, if Yes:, 1= 1 Certificate, 2= 2 Certificates, 3= more than 2 Certificates 3 0.3Do you manage the traceability in the production process? (Y/N) Quality Management 4-1 2% 0= No, 1= Yes 1 0.02Do you have formal QC criteria for in-house quality control? (Y/N) Quality Management 4-2 2% 0= No, 1= Yes 1 0.02Do you accept 3rd party QC? Quality Management 4-3 2% 0= No, 1= Yes 1 0.02Do you have an on-site lab. If yes, specify whether physical / chemical / microbiological Quality Management 4-4 2% 0= No, 1= Yes 1 0.02Subtotal 30% 9 0.5 30%Total scoring 53.00 2.24 100%

Criteria definition for manufacturer suppliers ranking & scoring.

© 2013 Dragon Sourcing. All rights reserved. 7

Supplier nameSections

TotalCompany background Production Capability Quality Management30% 40% 30% base 10

MAX SCORE 3 4 3 10 Supplier #1 2.85 3.58 2.04 8.47 Supplier #2 2.31 3.58 2.04 7.93 Supplier #3 2.27 3.17 2.28 7.72 Supplier #4 1.77 3.67 2.28 7.72 Supplier #5 2.00 3.42 2.28 7.70 Supplier #6 2.69 3.67 0.84 7.20 Supplier #7 2.15 3.58 1.08 6.82 Supplier #8 2.58 2.42 1.44 6.43 Supplier #9 2.38 2.42 1.44 6.24 Supplier #10 1.77 2.17 1.68 5.62 Supplier #11 1.77 1.25 2.04 5.06

8.477.93 7.72 7.72 7.70

7.20 6.82 6.43 6.245.62

5.06

Results of the suppliers ranking & scoring

Shortlisted for Audits

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Results

• Dragon Sourcing proceeded to perform a audits of top-ranked suppliers, and facilitated supplier discussions with client technologists.

• The project was a success and the Food manufacturer proceeded to request samples for testing.



Company ProfileExample Supplier Tomato Industry Co., Ltd. (1/3)

COMPANY INFORMATION

Company name Example Supplier Tomato Industry Co., Ltd.

Town Xiamen

Province Fujian

Company website http://www.ExampleSuppliercom

Contact person Mr. Xiao

Title Sales

Email sales@ExampleSuppliercom

Telephone number 0592-5555-5555

Fax 0592-5555-55555

Mobile phone +86-5555-55555-55555

COMPANY BACKGROUND

Manufacturer, trader or both Manufacture

Own brands Yes,

Found Year 2008

Ownership Private

Capital in USD 40 million

2011 turnover in USD 12 million

Work floor size (m²) More than 20000

Number of employees in total 200

Can your commercial / technical liaison speak English? Yes

EXPORT % OF 2011 TURNOVER

Category % Sales Exported Countries

NUMBER OF PEOPLE IN THE POSITIONS

Sales & management R&D staff QC Production supervision Logistics

15 6 2 159 2

TOP 5 PROVINCES FOR SALES

Province % of sales

TOP 5 CUSTOMERS

Customer Industry Location % of sales Type of product

http://www.examplesuppliercom/

http://www.examplesuppliercom/


ACCEPTABLE RAW MATERIAL INPUTS

Raw Materials Handed Yes/No Dry/Fresh/Frozen Description

PACKING TECHNOLOGY

Packaging Technology Yes/No Specify Instructions Description

Packaging in Modified Atmosphere (Y/N) If yes, please describe

Automated Packaging (Y/N) If yes, please describe

Other Packaging Technology 1 If yes, please describe



QUALITY, ENVIRONMENTAL & PRODUCT CERTIFICATIONWhat certificates do you have? Yes / No Date of Certificate Certifying Org.

ManufacturingISO 9001 YesISO 14000 No

Other local food certifications

HACCP Yes FDA Yes

ISO22000 YesKOSHER YesHALAL Yes

QUALITY CONTROL & TESTING EQUIPMENT Yes / No Description

Do you manage the traceability in the production process? (Y/N) If yes, please describe.

Yes

Do you have formal QC criteria for in-house quality control? (Y/N)If yes, please describe your QC process.

Yes

Do you accept 3rd party QC? Yes

Do you have an on-site lab. If yes, specify whether physical / chemical / microbiological.

Yes

PRODUCTION CAPACITY Total maximum production capacity (ton / year) in 2011 40000Actual annual production (ton /year) in 2011 20000How many production lines do you have ? 4What is the daily production capacity per day per line ? How many shifts per day do you operate ? 1

PRODUCTION EQUIPMENT Production Equipment Yes/No Equipment & Producer Year acquired Quantity

NA NAYes 4Yes 4Yes 4NA



FACTORY PICTURES


Business

Case Study China RFI/RFQ Report for “Tomato Sauce”