Aluminum Die- Casting Case Study
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Transcript of Aluminum Die- Casting Case Study
Your Tailored Sourcing Approach to Low Cost Countries
Aluminum die-casting case study
February, 2012
Demand Analysis: heating block and meat mincer
© 2011 Dragon Sourcing. All rights reserved.
Item description Product picture Qty per annum
(in units)Current US$ FOB purchasing price
Meat mincer in aluminum 150,000 US$ X.XX
Heating block in aluminum 500,000 US$X.XX
3
Project approachSteps April May June July
W1 W2 W3 W4 W5 W6 W7 W8 W9 W10 W11 W12 W13 W14
1Collect detailed spend information about the category such as technical requirements, standards applied, material specification, drawings, pictures, consolidated volume by consuming factories, and current unit prices
2 Collect one representative sample of the products to be sourced in our Shanghai, HCMC, Mumbai and Istanbul offices
3 Identify list of potential suppliers in Vietnam, Thailand, Indonesia, China and Turkey to include in the RFI / RFQ process
4Develop the RFI / RFQ to include all key supplier qualification criteria (e.g.: financial, technology, manufacturing capability, corporate responsibility, quality…) and quotation requirements
5 Administer the RFI / RFQ process
6Analyze responses and use balance score carding process together with management team to rank suppliers and recommend suppliers which client needs to take through a formal qualification process
7 Jointly develop with our client the structure of the audit report
8 Carry out audits (either alone or jointly with clients auditors or buyers) for the short listed suppliers that appear attractive and competitive based on RFI/RFQ process
9 Issue audit reports and rank suppliers based on audit and price competitiveness
10 Recommend which suppliers to move to sample development stage and manage sample development stage
11 Based on sample quality select suppliers with who to enter into final contract negotiations and support the contract negotiation process
MilestonesStarted FinishedNot-started Delayed
Phase 2: Supplier qualification (Optional)
SCHEDULE TO BE DEFINED
© 2011 Dragon Sourcing. All rights reserved.
4
We identified 346 suppliers in China, Thailand, Indonesia, Vietnam and Turkey and received 27 RFI/RFQs
Intend to respond
RFI-RFQ received
RFI-RFQ sent
Suppliers initially identifiedCN 173 THAI 51 IN 40 VN 35 TUR 47
Give upCN 88 THAI 41 IN 28 VN 15 TUR 25
Intend to respond receivedCN 11 THAI 4 IN 3 VN 4 TUR 7
Only RFI receivedCN 3 THAI 2 IN 1 VN 2 TUR 6
RFI and RFQ receivedCN 8 THAI 2 IN 2 VN 1 TUR 0
19729
346
RFI-RFQ sent CN 113 THAI 45 IN 36 VN 19 TUR 32 245
14 13
Not Confirmed yetCN 14 THAI 0 IN 5 VN 0 TUR 0
19
Not received yetCN 0 THAI 0 IN 0 VN 1 TUR 1
2
© 2011 Dragon Sourcing. All rights reserved.
5
Reasons for not participating in the RFI-RFQ:
Reasons for not participate China Thailand Indonesia Viet Nam Turkey Total Percentage
Not sent RFI/RFQ
Contact detail not valid 22 2 0 4 15 43 43%
Only produce stamping or plastic ; focus on one Industry like automotive ;produce other metal products not alu
27 2 2 12 0 43 43%
Not interested in the project 9 0 0 0 0 9 8%
Trading company 2 0 1 0 0 3 3%
Focus on domestic market 0 1 1 0 0 2 2%
Others 0 1 0 0 0 1 1%
Sub Total 60 6 4 16 15 101 100%
Don't intend to respond
Can not produce ; the products are complex; focus on other industry 44 24 18 1 6 93 47%
RFI is too complex; not interested in the project 34 9 5 2 19 69 35%
Can produce but don’t think they can meet client strict requirements 2 0 0 9 0 11 5%
Have submitted quotes to client earlier several times 0 0 1 0 0 1 1%
client’s current supplier 1 0 0 0 0 1 1%
Others 7 8 4 3 0 22 11%
Sub Total 88 41 28 15 25 197 100%
Total 148 47 32 31 40 298 -© 2011 Dragon Sourcing. All rights reserved.
6
China: We have received RFI/RFQ from 11 Chinese suppliers
No. Supplier Name Province City WebsiteRFI/RFQReceived
(Y/N)
CECED/GC
received(Y/N)
Confidential letter
received (Y/N)
1 Zhejiang Ningbo Both Y Y Y
2 Zhejiang Ningbo Both Y Y Y
3 Zhejiang Ningbo Both Y Y Y
4 Zhejiang Ningbo Only RFI N N
5 Zhejiang Ningbo Both Y Y Y
6 Zhejiang Taizhou Both Y Y Y
7 Jiangsu Nanjing Both Y Y Y
8 Jiangsu Yixing Both Y Y N
9 Jia ngsu Suzhou Only RFI N N
10 Guangdong Foshan Both Y N N
11 Shandong Qingdao Only RFI N N
Shanghai
Gansu
Jiangxi
Zhejiang
Jiangsu
Guangxi
Hunan
Hubei
Ningxia
Shaanxi
Anhui
Fujian
Neimongu
Shanxi Shandong
Sichuan
Yunan
Guizhou
Henan
Jilin
Liaoning
Hebei
Guangdong
Gansu
Heilongjiang
Beijing
Tianjin
Taiwan
© 2011 Dragon Sourcing. All rights reserved.
7
No. Supplier Name Province City WebsiteRFI/RFQReceived
(Y/N)
CECED/GC
received(Y/N)
Confidential letter
received (Y/N)
1 Nakornprathom Aomyai Both Y Y Y
2 Bangkok Bangkok Only RFI Y Y
3 Bangkok Bangkok Only RFI N N
4 Samut Sakorn Amphur Muang Both Y N Y
Thailand: We have received RFI/RFQ from 4 suppliers
© 2011 Dragon Sourcing. All rights reserved.
© 2011 Dragon Sourcing. All rights reserved.8
Indonesia: We have received RFI/RFQ from 3 suppliers
Tangerang
Bekasi, Bandung, Karawang Timur, Karawang
Barat
No. Supplier Name Province City WebsiteRFI/RFQReceived
(Y/N)
CECED/GC received
(Y/N)
Confidential letter received
(Y/N)
1 West Java Tangerang Both Y Y Y
2 West Java Tangerang - Both Y Y Y
3 West Java Bekasi - Only RFI N N
© 2011 Dragon Sourcing. All rights reserved.9
Dong Nai
HCM City
No. Supplier Name Province City WebsiteRFI/RFQReceived
(Y/N)
CECED/GC received
(Y/N)
Confidential letter
received (Y/N)
1 Dong Nai Bien Hoa Only FRI N Y
2 HCM City HCM City Both Y Y Y
3 HCM City HCM City Only RFI N N
Vietnam: We have received RFI/RFQ from 3 suppliers
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No. Supplier Name Province City WebsiteRFI/RFQReceived
(Y/N)
CECED/GC received
(Y/N)
Confidential letter received
(Y/N)
1 MARMARA REGION BURSA Only RFI N N
2 MARMARA REGION BURSA Only RFI N N
3 MARMARA REGION ISTANBUL Only RFI N N
4 MARMARA REGION ISTANBUL Only RFI N N
5 MARMARA REGION IZMIR Not received yet N N
6 MARMARA REGION KOCAELI Only RFI N N
7 MARMARA REGION KOCAELI Only RFI N N
Turkey: We have received RFI from 7 suppliers
© 2011 Dragon Sourcing. All rights reserved.
11
RFI score sum up for 9 Chinese suppliers according to the scoring category
Remark:-The Chart’s legend is ordered by the ranking of the RFI score.-We remove the score of “corporate responsibility” and split into other categories-We indicate the highest and lowest score on the chart to see the gap among suppliers and we found the gap between highest and lowest score on each category are quite big even more than 50%.
© 2011 Dragon Sourcing. All rights reserved.
12
RFI score sum up for 4 Thailand suppliers according to the scoring category
© 2011 Dragon Sourcing. All rights reserved.
13
RFI score sum up for 3 Indonesia suppliers according to the scoring category
© 2011 Dragon Sourcing. All rights reserved.
14
RFI score sum up for 3 Vietnam suppliers according to the scoring category
© 2011 Dragon Sourcing. All rights reserved.
15
RFI score sum up for 6 Turkey suppliers according to the scoring category
© 2011 Dragon Sourcing. All rights reserved.
16
Average score for each country
Remark:-We use the same tool to scoring the 5 countries’ suppliers.-The average score of China is the highest 67 points but close to Vietnam and Indonesia.-Thailand and Turkey get the lower score below 60 points.
© 2011 Dragon Sourcing. All rights reserved.
17
Meat mincer FOB price and mould cost comparison for 8 Chinese suppliers and 1 Indonesia supplier.
We have cross checked the price with this supplier, they can’t decrease in order
to assure the quality
Pls see below remark area Pls see below
remark area
© 2011 Dragon Sourcing. All rights reserved.
Chinese supplier 2
Chinese supplier 3
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Heating block FOB price and mould cost comparison for 8 Chinese suppliers
© 2011 Dragon Sourcing. All rights reserved.
Client Chinese supplier 1
Chinese supplier 2
Chinese supplier 3
Chinese supplier 4
Chinese supplier 5
Chinese supplier 6
Chinese supplier 7
Chinese supplier 8
19
Heating block FOB price and mould cost comparison for 2 Thailand suppliers, 2 Indonesia suppliers and 1 Vietnam supplier
Thailand Indonesia Vietnam
© 2011 Dragon Sourcing. All rights reserved.
Client
© 2011 Dragon Sourcing. All rights reserved.20
ChinaRecommended Chinese suppliers to take through audit process.
Country China
Supplier name Supplier 1 Supplier 2 Supplier 3 Supplier 4 Supplier 5 Supplier 6
Province Zhejiang Zhejiang Zhejiang Guangdong Jiangsu Zhejiang
RFI/RFQ received Both Yes Both Yes Both Yes Both Yes Both Yes Both Yes
Main Product
SHARP products, motorcycle
accessories, lamp accessory, Medical
device
Boiler parts, Motorcycle
accessories, Auto parts
Aluminum die castingOEC: Auto parts,
furniture, lamp accessories
Did-casting products
Motorcycle accessories,
Lamp, gasoline engine
accessories
Reason for recommending
• Very aggressive & cooperative for doing business with client• Know mould very well.• High RFI score but quotation is too high
• The factory capability seems good• High RFI score• Have long experience on die casting products
•The factory capability seems good• Very aggressive & cooperative for doing business with client• Good RFI score
• The factory capability seems good• Good RFI score• The price of meat mincer is good and heating block very close to current price
• Very aggressive & cooperative for doing business with SEB• Main products are exported• Quotation is O.K.
• Very aggressive & cooperative for doing business with SEB• Good price
RFI score 86 points 82 points 75 points 73 points 63 points 60 points
RFI ranking
No.1 in 9 ranked Chinese suppliers, and all 25 ranked
suppliers for 4 countries
No.2 in 9 ranked Chinese suppliers, and all 25 ranked
suppliers for 4 countries
No.3 in 9 ranked Chinese suppliers, and No.4 in all 25
ranked suppliers for 4 countries
No.4 in 9 ranked Chinese suppliers, and No.6 in all 25
ranked suppliers for 4 countries
No.5 in 9 ranked Chinese suppliers, and No.10 in all 25
ranked suppliers for 4 countries
No.6 in 9 ranked Chinese suppliers, and No.11 in all 25
ranked suppliers for 4 countries
RFQ score 0 point0 point
(The price is higher but not too much)
0 point(The price of meat mincer is too high)
38 points 0 point (The price are very close to current
price)50 points