Dragon Sourcing case study Supporting New Factory launch
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Transcript of Dragon Sourcing case study Supporting New Factory launch
Dragon Sourcing case study Supporting New Factory launch
Shanghai, Aug 2015
Dragon Sourcing - 龙 源 Your Tailored Sourcing Approach to LCC Sourcing
22
Introduction
client – one of the biggest chocolate producer in the world with +10 billion EUR in revenues
Project ObjectivesDragon Sourcing was selected to carry sourcing services to support the launch of a new factory in China by selecting world class competitive suppliers in China to cover all needs of the new factory
© 2015 Dragon Sourcing. All rights reserved.
33
The programme was managed in 3 stages
All other Purchasing requirements •Equipments/instruments•MRO •Service•Others
Capex Sourcing •Pipelines•Utilities•Automation•Tanks and silos•Part of production line•Packaging machine•IT
Pilot projects• Engineering service• Construction service
May 2014 – now
August 2013July 2013
© 2015 Dragon Sourcing. All rights reserved.
Agenda
© 2015 Dragon Sourcing. All rights reserved. 4
1. Introduction
2. Projects – July 2013 to May 2014
3. Projects – May 2014 to Sept 2015
© 2015 Dragon Sourcing. All rights reserved.
Context
Objectives:• Focused on below capex 9 categories to build a new plant in China,
Pipelines Tanks and Silos Utilities Part of a Production Line Packaging MachineEngineering serviceConstruction serviceAutomation/InstallationIT
Geographical scope:• China
Deliverables: • RFI / RFQ and Score Card• Supplier profiles• Audit reports
5
Gansu
JiangxiZhejiang
BEIJING
Jiangsu
Guangxi
Hunan
Hubei
Qinghai
Ningxia
Shaanxi
Anhui
Fujian
Neimongu
ShanxiShandong
Sichuan
Yunan
Guizhou
Henan
Jilin
LiaoningHebei
Guangdong
Gansu
SHANGHAI
TAIWAN
Heilongjiang
Location of identified suppliersLocation of client’s plant
© 2015 Dragon Sourcing. All rights reserved. 6
Process for New Plant Building
9 important categories in the process for the new plant building
DS Scouting Out of DS scope
New plant
Location selection
6.EngineeringService(design)
Trial production Formal productionCommission
Feasibility report
ConstructionManagement
Procurement
7.Construction service
3. Utilities
Process area
Production area
Packaging area
Electrical parts
8. Automation
Mechanical parts
5.Packaging machine
1. Pipelines
2. Tanks and Silos4. Part of production lineOthers
9. IT
• Analyse spend category in detail– Specifications and quality
requirements– Volumes– Deadlines
• Analyse supply market and identify potential suppliers
• Pre-qualify potential suppliers through an RFI process
• Manage RFP process with pre-qualified suppliers
• Analyse supplier responses and calculate fully delivered price (logistics, import duties, ADT,..)
• Develop Business case and implementation plan
• Shortlist suppliers based on RFI/RFP process
• Audit shortlisted suppliers
• Select 2-3 suppliers for sample development process
• Manage sample development process
• Conduct final negotiations and select suppliers
• Finalise Contract
Dragon Sourcing Approach
Value Discovery Supplier Selection and Contracting Procurement Operations
• Manage P/O and agree payment terms and details (L/Cs,..)
• Check in process production quality
• Conduct pre-shipment QC
• Arrange logistics
• Manage supplier performance
• Monitor new sourcing opportunities
Key
act
iviti
es
© 2015 Dragon Sourcing. All rights reserved.
© 2015 Dragon Sourcing. All rights reserved. 8
• Steering Committees weekly (conference call) to review overall progress on all categories
• Categories follow-up meetings on an ad-hoc basis to review category issues
• Meeting minutes record main decisions, planned actions and project status
Dragon SourcingClient
DS CEO
DS Account Manager
CPO
Strategic SourcingManager
Buyer
Buyer
Buyer
Buyer
Buying Engineer
Buying Engineer
Buying Analyst
The 9 categories sourcing is managed via a series of frequent conference call meetings
Buying Analyst
Buying AnalystBuyer
9 categories-5 categories for equipments -1. Pipelines, 2. Tanks&Silos
© 2014 Dragon Sourcing. All rights reserved. 9
1. Pipelines 2. Tanks and Silos
9 categories-5 categories for equipments -3. Utilities-electrical parts and mechanical parts
© 2014 Dragon Sourcing. All rights reserved. 10
Electrical parts-Switchgear &Switchboard Electrical parts-Transformer Electrical parts-UPS Electrical parts- Diesel Generator
Mechanical parts-AHU Mechanical parts-Chiller Mechanical parts-Cooling Tower Mechanical parts-Air compressor
9 categories-5 categories for equipments -4. Part of production line-equipments
© 2014 Dragon Sourcing. All rights reserved. 11
Equipments-Mixer Equipments-Refining System Equipments-Tempering Machine Equipments-Roaster
Equipments-Air Humidifier Equipments-Mills Equipments-Chocolate Pump Equipments-Pumps and Valves
9 categories-5 categories for equipments -4. Part of production line-lines
© 2014 Dragon Sourcing. All rights reserved. 12
Lines-Moulding line Lines-easy line
9 categories-5 categories for equipments -5. Packaging Machine
© 2014 Dragon Sourcing. All rights reserved. 13
Flow pack Wrappers Thermoforming Machine Tray Formers Cartoner/Case Packing Shrinker machine
Robot & Tool Checkweigher Ink Jet Laser Marker Hot Transfer
9 categories - 4 services categories -6. Engineering service, 7. Construction service, 8. Automation, 9. IT
© 2014 Dragon Sourcing. All rights reserved. 14
6. Engineering service 7. Construction service 8. Automation 9. IT
-Working scope for engineering company Detailed engineering servicesDetailed designPermitting serviceEngineering timing & Permitting scheduleManhours and fee for engineering If good enough the engineering company can also be the management companyClose to client‘s factoryRecommend for piling supplierGood English skill
-Working scope for construction company Construction servicesPermitting serviceSupport for tender for construction company and supervision for realisation phaseConstructoin timing & Permitting scheduleManhours and fee for constructionList the work for sub-contractEnough licenseClose to client‘s factory and can do construction work in Xiaoshan, Hangzhou city (with license)Good English skill
-Working scope for construction company No matter integrator or producer, supplier must have the capability to program software and integrate hardware for different brands, and also cabling workAutomatioin including 4 areas: utilities automation, process automation, production automatoin and packaging automationSupplier has the design capablity fo the packaigng partsGood english skillHardware will be used as below:
• Automation control system (PLC)• Operator control and monitoring
System (HMI)• Identification system• Industrial communication• Industrial control• PC based automation• Sensor system• Vision system
-Working scope for construction company Ferrero would like to identify 2 types of suppliers for the IT category:
1.One is the equipment supplier who produce or distribute the equipments in the scope;
2.The other is the GC supplier who don’t produce equipments but can provide: installation of component
(customized or not)cables and racks installationWiFi installation (antenna, ..)Services (like setup of active
component)Datacenter Setup
1742 suppliers initially identified leading to 5 Chinese suppliers being selected in addition to global European suppliers
© 2015 Dragon Sourcing. All rights reserved. 15
CategoryNo. of
suppliers identified
No. of suppliers go to pre-screening
No. of suppliers RFI
sentNo. of suppliers
RFI receivedNo. of
suppliers audited
No of suppliers selected for RFP No of suppliers final selected
Pipelines 284 90 36 21 9 9 0 (client decided to use 1 engineering company
to do the project management and source products from suppliers selected by DS)
Tanks and Silos 83 51 39 22 5 5
Utilities-electrical 223 87 65 47 10 4 0 (As client decided to use global European supplier for all electrical utilities)
Utilities-mechanical 431 104 104 47 12 6 1 for HVAC
1 for Chiller
Part of a Production Line 394 208 158 77 27 11 0 (Chinese suppliers not capable of matching
European requirements)Packaging Machine 69 69 50 34 12 4 0 (Chinese suppliers not capable of matching
European requirements)Engineering service 25 25 15 14 6 6 1
Construction service 34 34 9 9 8 8 1
Automation 72 40 18 11 11 4 0 (Chinese suppliers not capable of matching European requirements)
IT 127 54 54 37 6 4 1
Total 1742 762 548 319 106 61 5
Agenda
© 2015 Dragon Sourcing. All rights reserved. 16
1. Introduction
2. Projects – July 2013 to May 2014
3. Projects – May 2014 to Sept 2015
Total projects Completedprojects
On goingprojects
On holdprojects
0
10
20
30
40
50
60
70
80
90
100
110
74
39
27
8
14
8
4
2
8
5
2
1
4
3
1
0
100
55
34
11
Project Overview
Others
Instrument
Service
MRO
1717
From May 2014 to sept 2015, more than a 100 sourcing projects were carried out
© 2015 Dragon Sourcing. All rights reserved.
CategoryTotal projects Completed
projectsOn going projects
On hold projects
No. % No. % No. % No. %
MRO 74 74% 39 71% 27 79% 8 73%
Service 14 14% 8 15% 4 12% 2 18%
Instrument 8 8% 5 9% 2 6% 1 9%
Others 4 4% 3 5% 1 3% 0 0%
Total 100 100% 55 100% 34 100% 11 100%
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The work covered all of the services and MRO requirements for the plant
MROUniform sourcing CompletedBox sourcing CompletedDrum sourcing CompletedAir shower/air curtain CompletedStationary-staples CompletedSmall tool supplier sourcing CompletedWashing machine CompletedPlastic and wooden pallet CompletedLED lighting CompletedDistributor mechanical material CompletedWorkshop list CompletedMetal label CompletedDust collector CompletedDry Ice Blasting CompletedFilters bags inlet/outlet sourcing CompletedLocker CompletedPb ball CompletedDiesel oil CompletedBoiler CompletedDesk for QA CompletedLabel printer CompletedGasket & Oring CompletedProtection products CompletedNameplate CompletedCleaner CompletedOil supplier sourcing CompletedAlcohol supplier sourcing CompletedVacuum cleaner CompletedChairs Completedo3 generator CompletedTrash bag CompletedAluminum wire mesh Completed
LegendCompletedOn goingOn hold
MROWelding kit Completed
Safety video Completed
Meters Completed
Canteen POS system Completed
Hazelnuts container Completed
Sparking water Completed
Dozier equipment Completed
Metal label Completed
Stainless table On going
Stairs On going
Container On going
Fridge On going
Aluminum platform On going
Max printer label/ribbon On going
lock system On going
Toilet paper On going
Acoustic panels On going
Doors On going
Deodorizing tower cover On going
Medicine On going
Signage On goingHydrogen concentratoin detector and alarm system On going
Speed sensor and camera On going
Sensory cup & spoon On goingMicro media On goingSieve On goingGlasses box On goingPatrolling rod On goingCondenser shelf On goingAdhesive tape On going
© 2015 Dragon Sourcing. All rights reserved
MRODecoration On goingClock On goingVideo system for meeting room On goingWater shelf On goingPlatform for checkingproducts inside the trucks On hold
Carton press machine On holdLean lift sourcing On holdPallet turner On holdDeep cleaning system On holdVacuum machine for hazelnuts ton bag
On hold
Rubbish bin On holdCover for machinery: :Lexan On hold
ServiceCleaning and pest controlservice Completed
Security service CompletedIndustrial kitchen products CompletedHotel CompletedScouting for wastesupplier CompletedInternet & telephone CompletedEHS consultant company sourcing
Completed
Household waste CompletedPrinter service On goingOccupational HazardAssessment On going
Greenery On goingWaste Oil On goingDoctor service for Ferreroplant On hold
Civil maintenance service On hold
Instrument/EquipmentChocolate melting tank Completed
Vacuum machine forsampling Completed
Movable and fixedwrapping machine sourcing Completed
Roche cartoner Completed
Chocolate mould Completed
Lab instrument sourcing On going
tackle/crane for plastic film On goingVacuum machine forRoche On hold
OthersCongress or ExpoInvestigation Completed
Computer Completed
Sky tunnel/ skylightssystem Completed
Aluminum sheet On going