Case Study - Optimize your Marketing Expenditures in China

Case Study

How to optimize your marketing expenditures in China?

Dragon Sourcing - 龙源Your Tailored Sourcing Approach to China

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© 2007 Dragon Sourcing. All rights reserved. 2

Agenda

1. Context and Products

2. Sourcing Strategy

3. Relationship with Creative agencies

4. Results & Conclusions





Context

• Major global FMCG company producer– Presence in over 70 countries, including Europe, Asia and America– 18,000 employees worldwide– Approx $8 billion turnover– 15 key brands accounting for 70% of total turnover

• Effective management of marketing spend requires to overcome several challenges:– Double digit growth in BTL marketing budget (approximately RMB120M/year)– Communication within a complex decentralised organisation (brand driven)– Collaboration between employees with very different backgrounds– Relationship with creative agencies for product design– Peak demand and short time to market– Reactivity to frequent design change requests

• Decision to outsource BTL marketing/promotional procurement in 2005 to Dragon Sourcing





Marketing spend includes all goods typically designed by creative agencies, such as Gifts which is 1 category amongst the many BTL categories





Agenda



3. Relationship with Creative agencies






Dragon Sourcing manages, for all BTL categories, the whole sourcing process…

Contracting,Production & Delivery

Product design &Supplier selection

• Collect product design proposals from creative agencies

• Forecast future volumes and consolidaterequirements

• Manage RFQ process with all qualifiedsuppliers

• Collect supplier samples and refine final product design

• Update supplier quotations

• Negotiate and select supplier

• Negotiate contract with supplier

• Facilitate supplier and customer signatures

• Monitor down-payments

• Follow production quality

• Organize delivery

• Manage quantity variation effects

• Organize final payment

• Measure supplier performance

Supplier qualification & Supply base management

• Monitor supply markets

• Qualify potential new suppliers through an RFI and « theoretical » RFP process

• Analyse responses and « identical »samples

• Audit suppliers

• Follow current supplier performance

• Set up list of qualified suppliers– Introduce new supplier in base– Eliminate poor performing current supplier





Monthly spend evolution

May-05

June

-05

July-

05

Augus

t-05

Septem

ber-0

5

Octobe

r-05

Novem

ber-0

5

Decem

ber-0

5

Janu

ary-06

Februa

ry-06

March-0

6

April-0

6

May-06

June

-06

July-

06

Augus

t-06

Septem

ber-0

6

Octobe

r-06

Novem

ber-0

6

Decem

ber-0

6

Janu

ary-07

Februa

ry-07

… for approximately 350 discrete sourcing projectsdriven by 2 major annual events: Mid-Automn Festival and Chinese New Year

Mid

-aut

omn

fest

ival

Chi

nese

New

Yea

r

Mid

-aut

omn

fest

ival

Chi

nese

New

Yea

r





The RFI/RFP and “identical sample” process result in a short-list ofpotential new qualified suppliers

Pre-qualifiedsuppliers Potential new

qualifiedsuppliers

Potential suppliers

Qualification of suppliers through RFI/RFP Analysis of offers and samples

GoodAverageGoodGoodCooperation140/day75/day120/day100/dayCapabilities

880430700350Staff198146Turnover (M€)

ShanghaiShanghaiZhejiangJiangsuRegion38.441.338.140.2Prod. 412.812.215.113.4Prod. 333.734.933.836.1Prod. 224.624.923.826.4Prod. 1

Price

Current Supplier

Potential Supplier

3

Potential Supplier

2

Potential Supplier

1

Samples

RFI/RFPprocess Sampling

process





This shortlist is then audited in order to finalise the qualification process

Audit questionnaire

Audit report

Audit summary

Objectives• Meet top management and sales management teams• Present product requirement and order details• Understand organisation and processes• Refine offer understanding• Validate manufacturing capabilities• Visit factory and check work conditions

Topics• General Management• Order management• Shipping / packaging• Planning process• Goods flow• Procurement• Purchasing• Production• Quality





CONTACT INFORMATION 联系资料

B+

Response 评分Comment 附加

评语Response 评分

Comment 附加评语

Yes/No被取录 /不取录 /

Comment 附加评语

V019 estate catalogue Jul-06 Not needed, known supplier 常用供应商 Yes, on time 守时收到 Yes 有 Yes 有V020 shopping bag Jul-06 Not needed, known supplier 常用供应商 Yes, with delay 迟受到 No 没有 No 没有

V021-V050 mini brochures Jul-06 Not needed, known supplier 常用供应商 Yes, on time 守时收到 Yes 有 Yes 有

A

Required 计划时间 Actual 实际时间

V019 estate catalogue Jul-06 10 11 1 Low 低V020 shopping bag Jul-06 20 23 3 Low 低

V021-V050 mini brochures Jul-06 20 20 0 Low 低

AContractnumber Items Date

(mm/yy) 日Proposed alternative(yes/no) 有否提供建议

Impact ofproposal 建议重要

V019 estate catalogue Jul-06 Yes 有 High 高V020-V039 shopping bag Jul-06 No 没有 N/A 不应用V021-V050 mini brochures Jul-06 No 没有 N/A 不应用

A+Contractnumber Items Date

(mm/yy) 日Quality issues (yes/no)

质量Issue Criticality/

Impact 质量重要性V019 estate catalogue Jul-06 No 没有 Low 低V020 shopping bag Jul-06 No 没有 Low 低

V021-V050 mini brochures Jul-06 No 没有 Low 低

INDUSTRY 行业

QUALITY PERFORMANCE (Other issues than delay) 服务性质量评分（不包括送货延误事情）

PROACTIVENESS 前摄能力(Good supplier should constantly propose alternative technology or cost-cutting options without jeopardizing quality and appearance / 好供应商应经常事先提出新的生产法案和改良方法)

Contractnumber

Contractnumber

RESPONSIVENESS IN PARTICIPATION TO RFx / COMPETITIVENESS 回应效率 / 竞争力

Shanghai xxxxxxxxxxx Co Ltd

Paper

No 2,Lane xxx, Xxxxx RoadShanghai

Address 地址City / Town 城市

SUPPLIER PERFORMANCE TRACKING 供应商项目评分

SECTOR 分类Printing

COMPANY NAME 公司名字

General Manager Manager Assistant

Mobile phone 手机号码[email protected]@xxx.comEmail 电子邮址

RFQ stage 报价阶段

139xxxxxxxxx 131xxxxxxxxxxx

Recommended tothe client 已推荐

给客户

Date(mm/yy) 日期（月 /年）

Comment 附加评语Delivery lead-time (days) 生产期（天）

Selected fornegotiation after RFQ报价后，已被取录

ON-TIME DELIVERY PERFORMANCE 发货守时评分

Comments on issue, impact and supplier explanation / 请解释服务性质量和它们的重要性

On-Time DeliveryCriticity 准时重要

性

RFI stage 要求资料阶段

First Name 名字ALTERNATIVE CONTACT 其他联络人

CMAIN CONTACT 主要联络人

ATitle 职位

If yes, please describe alternative and comment impact / 如果“有”，请解释他们的提议和重要性

Give advice on paper to use in order to save cost

Date(mm/yy) 日期（月 /年）

Products

# # of days delay 延误（天）

The current suppliers’ performance is assessed on an on-going basis

Supplier Scorecard

CompetitivenessQ1 Q2 Q3 Q4

On-time delivery

Quality

Proactiveness

B+ B+ B+ A

A A+ B A

B B+ A A+

A B+ B B

B+ A B+ B+Performance

Overall performance

Q1 Q2 Q3 Q4


mailto:[email protected]

mailto:[email protected]




Introduction of new suppliers into the sourcing pool contributes to driving cost and quality improvements while challenging incumbent suppliers

Alternative sourcingopportunities monitoring

Current supplier performance management

List of qualifiedsuppliers

• Supplier name• City, web site, contact• Turnover, #employees• Price structure• Capacities• Audit report• Samples

• New supplier 1

• New supplier 2

• New supplier 3

• …

• New supplier n

• Current supplier 1



• …

• Current supplier n

Supplier pool structure

0

5

10

15

20

25

30

35

40

45

50

New suppliers (< 1 year)

New suppliers (1-2 years)Historic suppliers (> 2 years)

> 2 years

1-2 years

<1 year





Creative agencies provide initial specifications for each product

Triple wall corrugated fiber box

Plastic film

5 C

DIC

-

PS plastic with flocking

4mm board, 157 paper

Material

8 units / package

Subject to real size

-

-

174 gram silver paper

Subject to real size

400*120*125

Size

-Printing

shapePlastic bed & Flocking

Color -

Strength testTest Method

Mark: SKUOutside Package

Surface protection

-Ink

shape, paperhangingCardboard

Product PictureProcess requirementItem





Cross-brand quantitative requirements are consolidated by product categoriesto leverage negotiation with suppliers

Fore-cast Actual Var. Fore-

cast Actual Var. Fore-cast Actual Var. Fore-

cast Actual Var. Fore-cast Actual Var. Fore-

cast Actual Var.

Product 1 63,548 64,993 10,560 6,744 14,175 13,823 7,484 12,207

Product 2 45,592 48,739 12,997 7,945 7,354 6,092 7,412 6,939

Product 3 46,886 50,750 9,489 7,225 13,598 8,610 5,302 6,525

Product 4 50,736 52,358 9,133 7,388 11,200 12,431 5,965 6,241

Product 5 47,616 47,833 11,542 5,819 5,796 10,704 5,896 8,075

Product 6 44,016 45,626 11,169 5,647 8,981 5,109 6,330 8,390

Product 7 47,030 48,779 10,134 5,305 9,058 9,306 6,291 8,685

Product 8 46,948 48,666 8,373 5,954 7,366 9,890 7,345 9,738

Product 9 51,204 53,550 11,104 7,424 12,723 7,770 5,057 9,471

Product 10 47,674 50,052 12,832 6,699 7,582 9,148 7,593 6,197

Product 11 59,735 64,437 11,648 6,731 14,498 13,442 6,637 11,481

Product 12 40,135 44,001 5,136 7,563 6,148 8,971 6,853 9,330

Product 13 43,453 47,023 10,732 6,967 5,852 8,930 5,839 8,703

Product 14 46,570 48,411 8,827 6,655 11,949 9,258 5,112 6,610

Total 681,142 715,217 143,676 94,067 136,280 133,485 89,116 118,593

Fore-cast

Actualproduc-

tion

Brand 2Var.

Brand 6Brand 5Brand 4Brand 3Unit: pcs

Brand 12006CNY

Actual





The RFQ process includes a supplier cost structure breakdownto check consistency and to gain a deep understanding of price drivers

Box production TransportationPrinting and effects on the printing

Cardbo

ard - 纸板

Flockin

g - 植绒

Plastic

Bed

(PS) - 吸塑

Outside

Packa

ge - 外包装

After p

roces

s & La

bor -

后道

&人工

Paper

- 纸张

Ink - 油墨

Golden

/Silve

r Prin

ting -

印金

/印银

Film C

overi

ng - 覆膜

Spot U

V Varn

ishing

- 过釉

Golden

/Silver

Stampin

g - 烫金

/烫银

Emboss

ing / D

ebos

sing -

凹凸处理

Price o

f extr

a 4C pr

inting

- 4色印刷

Price o

f extr

a 6C pr

inting

- 6色印刷

Price o

f extr

a 7C pr

inting

- 7色印刷

TOTAL

Shang

hai - 上海

Beijing

- 北京

Xiamen

- 厦门

Zhong

shan

- 中山

Wuh

an - 武汉

Cheng

du - 成都

Supplier 1 4.49 0.32 0.28 1.54 3.87 0.26 0.62 0.04 0.44 4.62 0.28 0.23 0.07 0.55 0.05 17.7 0.21 0.09 0.43 0.67 0.79 2.18

Supplier 2 4.06 0.31 0.26 1.63 3.91 0.24 0.63 0.04 0.48 4.95 0.27 0.24 0.06 0.54 0.04 17.7 0.20 0.08 0.39 0.64 0.81 2.36

Supplier 3 4.54 0.31 0.29 1.44 3.72 0.26 0.66 0.04 0.40 4.56 0.26 0.24 0.07 0.60 0.04 17.4 0.19 0.09 0.44 0.72 0.82 2.14

Supplier 4 4.36 0.34 0.31 1.64 4.17 0.24 0.62 0.04 0.41 4.99 0.28 0.22 0.07 0.58 0.05 18.3 0.20 0.08 0.42 0.68 0.74 2.34

Supplier 5 4.42 0.31 0.26 1.45 4.01 0.24 0.58 0.04 0.43 4.27 0.30 0.25 0.07 0.58 0.05 17.3 0.23 0.08 0.43 0.71 0.79 1.98

Supplier 6 4.57 0.32 0.29 1.58 3.82 0.23 0.64 0.04 0.42 4.29 0.26 0.23 0.07 0.53 0.05 17.4 0.23 0.09 0.40 0.60 0.72 2.02

Supplier 7 4.87 0.33 0.29 1.41 4.00 0.25 0.56 0.05 0.41 4.25 0.26 0.23 0.07 0.54 0.05 17.5 0.21 0.08 0.44 0.65 0.82 2.21





The final supplier selection is based on sample quality and price level

Suppliers’ quotation

Sample

3Supplier 5

5Supplier 4

2Supplier 3

4Supplier 2

1Supplier 1

Final Ranking

Supplier Name

Supplier summary

Supplier capabilities

Supplier assesment

Box production TransportationPrinting and effects on the printing

Cardbo

ard - 纸板

Flock

ing - 植绒

Plastic

Bed (P

S) - 吸塑

Outside

Packa

ge - 外包装

After p

roces

s & La

bor - 后道

&人工

Paper

- 纸张

Ink - 油墨

Golden

/Silver P

rintin

g - 印金

/印银

Film C

overi

ng - 覆膜

Spot U

V Varnish

ing - 过釉

Golden

/Silver S

tampin

g - 烫金

/烫银

Emboss

ing / D

ebos

sing -

凹凸处理

Price o

f extr

a 4C pr

inting

- 4色印刷

Price of

extra

6C pr

inting

- 6色印刷

Price of

extra

7C pr

inting

- 7色印刷

TOTAL

Shang

hai - 上海

Beijing

- 北京

Xiamen

- 厦门

Zhon

gsha

n - 中山

Wuhan

- 武汉

Cheng

du - 成都

Supplier 1 4.49 0.32 0.28 1.54 3.87 0.26 0.62 0.04 0.44 4.62 0.28 0.23 0.07 0.55 0.05 17.7 0.21 0.09 0.43 0.67 0.79 2.18

Supplier 2 4.06 0.31 0.26 1.63 3.91 0.24 0.63 0.04 0.48 4.95 0.27 0.24 0.06 0.54 0.04 17.7 0.20 0.08 0.39 0.64 0.81 2.36

Supplier 3 4.54 0.31 0.29 1.44 3.72 0.26 0.66 0.04 0.40 4.56 0.26 0.24 0.07 0.60 0.04 17.4 0.19 0.09 0.44 0.72 0.82 2.14

Supplier 4 4.36 0.34 0.31 1.64 4.17 0.24 0.62 0.04 0.41 4.99 0.28 0.22 0.07 0.58 0.05 18.3 0.20 0.08 0.42 0.68 0.74 2.34

Supplier 5 4.42 0.31 0.26 1.45 4.01 0.24 0.58 0.04 0.43 4.27 0.30 0.25 0.07 0.58 0.05 17.3 0.23 0.08 0.43 0.71 0.79 1.98

Supplier 6 4.57 0.32 0.29 1.58 3.82 0.23 0.64 0.04 0.42 4.29 0.26 0.23 0.07 0.53 0.05 17.4 0.23 0.09 0.40 0.60 0.72 2.02

Supplier 7 4.87 0.33 0.29 1.41 4.00 0.25 0.56 0.05 0.41 4.25 0.26 0.23 0.07 0.54 0.05 17.5 0.21 0.08 0.44 0.65 0.82 2.21





Very short time to market requires efficient contracting and payment management

0

5

10

15

20

25

30

35

40

45

50

55

60

65

70

75

80

6-Nov 13-Nov 20-Nov 27-Nov 4-Dec 11-Dec 18-Dec 25-Dec 1-Jan 8-Jan 15-Jan 22-Jan 29-Jan 5-Feb 12-Febdate

# co

ntra

cts

signed by supplier

s igned by customer

-17

-12

-18

-29

-29

9-Nov-06

19-Nov-06

29-Nov-06

9-Dec-06

19-Dec-06

29-Dec-06

8-Jan-07

18-Jan-07

28-Jan-07

7-Feb-07

17-Feb-07

1

Theorical date of downpayment Actual date of down payment

Down payment tracking

Contract signature analysis

Order global overview

Delivery status

15-Nov-06 22-Nov-06 29-Nov-06 6-Dec-06 13-Dec-06 20-Dec-06 27-Dec-06 3-Jan-07 10-Jan-07 17-Jan-07 24-Jan-07 31-Jan-07 7-Feb-07

Product 14

Product 13

Product 12

Product 11

Product 10

Product 9

Product 8

Product 7

Product 6

Product 5

Product 4

Product 3

Product 2

Product 1

Signature date Start Production1st batch completed 2nd batch completed3rd batch completed Batch 1:

25/12Batch 2:

10/01Batch 3:

21/01

• Contract preparation in collaboration with Legal

• Close interaction with suppliers and customer to have contracts signed rapidly

• Monitoring of customer down-payments triggering production start

• Follow-up of production progress





Overall methodology & 7-step process

Quality is regularly monitored during production and at pre-shipment

• Dragon Sourcing teams are trained to follow a 7-step process to execute Quality inspections

• Sampling and criteria requirements are detailed in a specific document for customer approval

• On-site data are recorded in a specifically designed Excel table

• Inspections are documented in a report submitted to customer

• Action plans are defined in order to improve product quality

Sampling & Criterias

Excel recording tool

Checkitem # Box # \ Marking Inner carton Mug Quantity Mug heigth Mug upper

diameterMug lowerdiameter

Wallthickness Mug w eigth Material type Q uality

1 OK OK 48 104.3 64.9 3.6 326 OK OK2 OK OK 48 103.4 64.5 4.2 346 OK OK3 OK OK 48 104 64.6 3.9 344 OK OK4 OK OK 48 104.6 64.8 3.8 317 OK OK5 OK OK 48 104.3 57 3.6 308 OK OK6 OK OK 48 104.8 61 3.8 317 OK OK7 OK OK 48 103.7 64.5 3.9 328 OK OK8 OK NO 48 103.8 62 3.9 345 OK OK9 OK OK 48 103.3 64.1 3.1 322 OK OK

10 OK OK 48 103.2 63.4 3.7 325 OK OK11 OK OK 48 104.4 64.8 3.9 317 OK OK12 OK OK 48 102.3 64.2 3.2 316 OK OK13 OK OK 48 105.4 63 4 316 MO OK14 OK OK 45 105.6 65 4 322 OK OK15 OK OK 48 106.3 65.6 4.1 357 OK OK16 OK OK 48 103.4 65.5 3.9 311 NO OK17 OK NO 48 104.7 64.1 3.8 300 OK OK18 OK OK 48 104 60 3.8 342 OK OK





Upon production completion, daily planning ensures smooth nationwide delivery

• Tight integration with supply chain teams

• Transportation planning

• Stock level monitoring

• Anticipated dispatching to regions

• Priorization of production outputs

• Reactivity to market demand changes

• Management of quality issues at delivery

Delivery follow-up

Due date:

Brand Delive-ries

Objec-tive

Ratioachieved

Region1

Region2

Region3

Region4

Region5

Region6

Product 1 17,488 18,022 97% 3,323 2,273 2,448 2,798 2,973 3,673Product 2 22,138 24,500 90% 4,206 2,878 3,099 3,542 3,763 4,649Product 3 21,797 24,139 90% 4,141 2,834 3,052 3,488 3,706 4,577Product 4 14,991 17,789 84% 2,848 1,949 2,099 2,399 2,548 3,148Product 5 13,010 14,180 92% 2,472 1,691 1,821 2,082 2,212 2,732Product 6 11,867 12,016 99% 2,255 1,543 1,661 1,899 2,017 2,492Product 7 16,586 17,525 95% 3,151 2,156 2,322 2,654 2,820 3,483Product 8 20,106 23,287 86% 3,820 2,614 2,815 3,217 3,418 4,222Product 9 14,011 16,580 85% 2,662 1,821 1,962 2,242 2,382 2,942Product 10 11,060 13,228 84% 2,101 1,438 1,548 1,770 1,880 2,322Product 11 12,895 14,288 90% 2,450 1,676 1,805 2,063 2,192 2,708Product 12 24,923 25,131 99% 4,735 3,240 3,489 3,988 4,237 5,234Product 13 9,869 10,058 98% 1,875 1,283 1,382 1,579 1,678 2,072TOTAL 210,742 230,745 91% 40,041 27,397 29,504 33,719 35,826 44,256

March 10thCHINA





Agenda



3. Relationship with Creative Agencies






Monitor payments

Organize delivery

Prepare contracts

Weekly Steering Committee

Manages processPays supplier

Brand 3

Brand n

…

Suppliers

Produce

Design

Creative agencies

Supply Chain

Finance

Efficient sourcing requires the management of several interfaces

DS Managing Director

DS Account Manager

Category Buying Engineer

Marketing Director

Marketing Services Manager

Brand ManagerBrand Manager



Dragon SourcingCustomer

Category Buying EngineerCategory Buying

Engineer

Marketing

Dedicatedproject team

Product categories

Brand 1

Legal





The product design results from a close collaboration between Creative Agencies, the Customer, Dragon Sourcing and the Suppliers

RFQ and Sample request

Creative agencies SuppliersDragon Sourcing

Product briefing

Customer

Quotation

Sample

Sample assessment

Sample modification request

Updated sample

Final design decision

Final quotation

Quotation analysis and recommendations

Supplier selection

Consumer research





A Supplier day is organised once a year to strenghten relationships andcommunicate key messages to the qualified supply base

Attendees:• Suppliers management and sales teams• Customer purchasing team• Dragon Sourcing project team

Objectives• Present future purchasing trends and “sell” Customer as a strategic account• Gain suppliers’ commitment to Customer’s Corporate Social Responsibility chart • Remind suppliers of the purchasing rules of engagement• Present main contractual evolutions





A collaborative web tool supports a live communication on project status





Project status is updated after each meeting

Promo type DS Category Contract number Supplier ItemSigned &

chopped bysupplier

Signed byCustomer Month

CNY07 Printed Item V121 Supplier 1 Letter 4-Jan-07 12-Jan-07 Jan-07POSM Printed Item V056 Supplier 2 Posters 4-Jan-2007 still not Jan-07MAF06 Gifts J084 Supplier 5 jar 12-Jan-2007 still not Jan-07MAF06 Gifts J085 Supplier 3 jar 4-Jan-2007 still not Jan-07flow material Glass J086 Supplier 1 Wine glass 15-Jan-2007 still not Jan-07flow material Gifts J087 Supplier 4 Watch 10-Jan-2007 still not Jan-07MAF06 Gifts J091-1 Supplier 3 Camera 2-Jan-2007 9-Jan-07 Jan-07MAF06 Gifts J091-2 Supplier 4 key ring 11-Jan-2007 9-Jan-07 Jan-07

Gifts V019 Supplier 2 passort holder 2-Jan-2007 Jan-07MAF06 Gifts V020 Supplier 5 back pack 22-Jan-2007 no Jan-07MAF06 Gifts V021 Supplier 3 Camera 23-Jan-2007 still not Jan-07MAF06 Gifts V022 Supplier 1 Gym bag 17-Jan-2007 no Jan-07MAF06 Gifts V023 Supplier 4 back pack 26-Jan-2007 still not Jan-07events Gifts V025 Supplier 3 Gym bag 26-Jan-2007 still not Jan-07events Gifts V026 Supplier 4 key ring 26-Jan-2007 still not Jan-07MAF06 Gifts V040 Supplier 2 manicure kit 16-Jan-2007 Jan-07MAF06 Gifts V064 Supplier 5 passort holder 15-Jan-2007 Jan-07

Gifts W095 Supplier 3 plastic pen 23-Jan-2007 19-Jan-07 Jan-07Gifts W096 Supplier 1 Gym bag 12-Jan-2007 still not Jan-07Gifts W097 Supplier 4 Travel bag 8-Jan-2007 still not Jan-07Gifts W098 Supplier 3 back pack 16-Jan-2007 still not Jan-07Gifts W099 Supplier 4 Ice bucket 16-Jan-2007 no Jan-07Gifts W100 Supplier 2 key ring 15-Jan-2007 18-Jan-07 Jan-07Gifts W101 Supplier 5 manicure kit 29-Jan-2007 24-Jan Jan-07Gifts W102 Supplier 3 passort holder 15-Jan-2007 still not Jan-07Gifts W103 Supplier 1 plastic pen 23-Jan-2007 still not Jan-07Gifts W104 Supplier 4 tent card 5-Feb-2007 still not Feb-07Gifts W105 Supplier 3 plastic pen 5-Feb-2007 17-Jan-07 Feb-07

MAF06 Gifts J088-1 Supplier 4 passort holder 12-Feb-2007 no Feb-07flow material Gifts J088-2 Supplier 2 Gift box additional order 2-Feb-2007 Feb-07flow material Gifts J088-3 Supplier 2 standee 6-Mar-2007 Mar-07

Supply Contracts managed by Dragon Sourcing - Starting May 2005





Agenda

1. Context

2. Sourcing Process

3. Contract Governance

4. Conclusions





Budget and current spend evolution

0102030405060708090

2004 2005 2006

BudgetActual spend

Despite double-digit budget increases and increases in product quality requirements, the actual spend has been maintained below the initial budget

Double-digit budget

increaseDouble-digit

budget increase-25%

-20%

Outsourcing to Dragon Sourcing





In addition to these significant savings, other soft benefits have been achieved after nearly two years of collaboration

• Total transparency over sourcing process and supplier base

• Greatly reduced supply chain risks– CSR– Availability

• Improved Quality of the spec and to the spec

• Reduced time to market

• Internal Marketing team totally focused on higher value added activities




Case Study - Optimize your Marketing Expenditures in China

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Transcript of Case Study - Optimize your Marketing Expenditures in China