Phenolic Resin Sourcing Project Case Study
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The document provides details of a sourcing project to identify competitive suppliers of phenolic resins in China and India. It outlines the objectives to develop a supplier database, RFI/RFQ templates and conduct market analysis. A two stage approach is described: 1) supplier pre-qualification through screening 108 potential suppliers down to 20 and 2) administering RFI/RFQ to further qualify suppliers. Suppliers were then assessed, ranked and pricing provided for 24 phenolic resin SKUs. The top 5 suppliers are identified based on number of SKUs offered, production capacity, pricing and country.
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Phenolic Resin Sourcing Project Case Study
- 1. Phenolic Resin sourcing project Case Study Dragon Sourcing - 龙 源 Delivering sustainable sourcing value from emerging markets © 2020 Dragon Sourcing. All rights reserved.
- 2. 2 Agenda 1. Sourcing Project Introduction 2. Sourcing Approach 3. Conclusions © 2020 Dragon Sourcing. All rights reserved.
- 3. Objectives and approach © 2020 Dragon Sourcing. All rights reserved. Context Client Introduction: • Client has global network of relationships with top chemical manufacturers and raw material suppliers around the world. They are service provider for compounding materials and ingredients with head quarter in USA. Project Objectives: • Identify and recommend new potential competitive supplies manufacturing Phenolic Resins. Geographical scope: China and India Deliverables: • Supplier database • RFI-RFQ template • RFI-RFQ analysis report • Supplier profiles with rankings • DS Recommendation on next steps Dragon Sourcing approach Stage 1: Supplier Pre-Qualification 1. Demand Analysis 2. Supply Market Analysis 3. Telephone Pre-screening 4. Develop RFI/RFQ 5. Administer RFI/RFQ 6. Analyse RFI/RFQ Responses Remark: Whole project was done anonymously without revealing client identity to any of the supplier following as per client instructions. 3
- 4. 4 1. Sourcing Project Introduction 2. Sourcing Approach 3. Conclusions © 2020 Dragon Sourcing. All rights reserved. Agenda
- 5. No. Steps in Stage 1 Deliverables 1. Demand Analysis Work with client to define and understand the product and requirements (specs, volumes, material, Production technology requirements, current unit prices, others) • Kick-Off Report 2. Supply Market Analysis Identify long list of potential suppliers in the interested target countries by leveraging B2B websites, DS database, fair catalogues, Chamber of Commerce, magazines, network, references. • Supplier Long List 3. Telephone Pre-screening Selection of suppliers to be included in the RFI/RFP process by telephone pre-screening based on agreed simple criteria (e.g. capability to make the product, min company size, quality certification, Export capability, interest in participating) • Shortlist for RFI-RFQ process 4. Develop RFI/RFQ document Prepare an RFI/RFQ document, with an aligned balanced scorecard that has the objective to pre-qualify the competitiveness and capabilities of the manufacturers, including background, financial, client and product experience, quality certification & processes, social responsibility, manufacturing/technology capability, R&D capability. • RFI-RFQ Template • Balanced Scorecard 5. Administer RFI/RFQ: The RFI/RFQ is translated to the local languages as relevant, and distributed to the suppliers, with telephone follow-up to push for maximum participation. • Completed RFI-RFQ’s 6. Analyze RFI/RFQ Responses: Analysis of RFI/RFQ responses and preparation of a report which profiles & objectively ranks the suppliers by capability, including a recommendation for those to be audited. • RFI-RFQ Report • Supplier Profiles • Proposed Shortlist for Audit. Approach & Schedule, Stage1: Supplier Pre-Qualification © 2020 Dragon Sourcing. All rights reserved. 5
- 6. STEPS Week 0 Week 1 Week 2 Week 3 Week 4 Week 5 Week 6 Week 7 Week 8 Jan 15 - 17 Jan 20 – 24 Jan 27 – 31 Feb 03 – 07 Feb 10 – 14 Feb 17 – 21 Feb 24 – 28 March 02 – 06 March 09 - 13 1. Demand Analysis 2. Supply Market Analysis 3. Telephone Pre-screening 4. Develop RFI/RFQ 5. Administer RFI/RFQ 6. Analyze RFI/RFQ Responses 1 RFI/RFQ validated 2 Supplier profiles with recommendations. © 2020 Dragon Sourcing. All rights reserved. Couple of steps were extended by a week to receive maximum response from the suppliers. Extended for Chinese suppliers. ExtendedWeek Extended 6 Project was completed in 8 weeks
- 7. © 2020 Dragon Sourcing. All rights reserved. # SKU Name Packaging Packaging Lbs Units Annual Volume (Lbs) Cost in $US Spend in $US 1 RE01220-050 SP-6701 Resin - 50# Bag SP-6701 Resin - 50# Bag 50 XXX XXX XXX XXX 2 RE01221-050 SP-1068 Pellets - 50# bag SP-1068 Pellets - 50# bag 50 XXX XXX XXX XXX 3 RE01201-057 SP-1044 Resin - 55.115# Bag SP-1044 Resin - 55.115# Bag 55.115 XXX XXX XXX XXX 4 RE01137-057 HRJ-1367 Resin - 55.115# Bag HRJ-1367 Resin - 55.115# Bag 55.115 XXX XXX XXX XXX 5 RE01214-057 SP-560 Resin - 55.115# Bag SP-560 Resin - 55.115# Bag 55.115 XXX XXX XXX XXX 6 RE01202-157 SP-1045P Resin - Pastille Form SP-1045P Resin - Pastille Form 55.115 XXX XXX XXX XXX 7 RE01223-537 SP-6877 Resin - 537 lb drum SP-6877 Resin - 537 lb drum 537 XXX XXX XXX XXX 8 RE01120-275 FRJ-425 Resin - 275# Drum FRJ-425 Resin - 275# Drum 275 XXX XXX XXX XXX 9 RE01203-057 SP-1055 Resin - 55.115# Bag SP-1055 Resin - 55.115# Bag 55.115 XXX XXX XXX XXX 10 RE01132-057 HRJ-11041 Resin - 55.115# Bag HRJ-11041 Resin - 55.115# Bag 55.115 XXX XXX XXX XXX 11 RE01218-050 SP-6700 Resin - 50# Bag SP-6700 Resin - 55.115# Bag 55.115 XXX XXX XXX XXX 12 RE01212-050 SP-25 Resin - 50# Bag SP-25 Resin - 50# Bag 50 XXX XXX XXX XXX 13 RE01131-057 HRJ-10518 - 55.115# Bag HRJ-10518 - 55.115# Bag 55.115 XXX XXX XXX XXX 14 RE01121-057 FRJ-551 Resin - 55.115# Bag FRJ-551 Resin - 55.115# Bag 55.115 XXX XXX XXX XXX 15 RE01206-050 SP-1077 Resin - 50# Bag SP-1077 Resin - 50# Bag 50 XXX XXX XXX XXX 16 RE01134-275 HRJ-1166 - 275# Fiber Drum HRJ-1166 - 275# Fiber Drum 275 XXX XXX XXX XXX 17 RE01209-057 SP-134 Resin SP-134 Resin 55.115 XXX XXX XXX XXX 18 RE01213-057 SP-553 Resin - 55.115# Bag SP-553 Resin - 55.115# Bag 55.115 XXX XXX XXX XXX 19 RE01200-057 SP-103 Resin - 55.115# Bag SP-103 Resin - 55.115# Bag 55.115 XXX XXX XXX XXX 20 RE01216-057 SP-6600 Resin - 55.115# Bag SP-6600 Resin - 55.115# Bag 55.115 XXX XXX XXX XXX 21 RE01147-050 HRJ-11995 Resin - 50# bag HRJ-11995 Resin - 50# bag 55.115 XXX XXX XXX XXX 22 RE01257-057 Rezilite 888 - 25 kg bag Rezilite 888 - 25 kg bag 55.115 XXX XXX XXX XXX 23 RE01251-552 SRF-1524 Resin - 250 kg drum SRF-1524 Resin - 551.15# Drum 55.115 XXX XXX XXX XXX 24 RE01145-057 HRJ-11331 Resin - 25kg bag HRJ-11331 Resin - 25kg bag 55.115 XXX XXX XXX XXX Total XXX XXX $ XXX 7 Demand Analysis, Yearly volumes and spend was collected at the project kick off stage,
- 8. © 2020 Dragon Sourcing. All rights reserved. Dragon Sourcing has developed an online sourcing tool (GSP) to manage sourcing projects end to end. The GSP provides: • A central database of hundreds of thousands of suppliers • Management of sourcing projects from start to finish. • Tools to facilitate supplier research, pre-screening, RFI-RFQ administration & qualifying supplier through ranking process and generating supplier profiles. Complete unique online platform suitable for Global Strategic Sourcing process. http://gsp.dragonsourcing.com
- 9. © 2020 Dragon Sourcing. All rights reserved. 9 ‒ As a first step, extensive supplier data base was built leveraging multiple sources of information & from existing DS database.
- 10. © 2020 Dragon Sourcing. All rights reserved. 10 ‒ Pre-screening process was initiated after receiving client validation, ‒ This process was to filter the long list of identified suppliers prior moving them to the RFI-RFQ step
- 11. ‒ Supply market analysis was shared in the weekly progress and final RFQ report. Process Steps China India Total Supplier Identification • Suppliers identified 55 53 108 Pre-screening (Completed) • Supplier passed pre-screening so far, XX XX 58 • Suppliers failed pre- screening so far, XX XX 79 RFI-RFQ Administration (Completed) • Number of RFI-RFQ sent XX XX 58 • Don't intend to respond XX XX 38 • Number of RFI-RFQ received XX XX 20 © 2020 Dragon Sourcing. All rights reserved. 11
- 12. 12 9 9 7 1 Not interested to continue Producing phenolic resins in different grade used in plywood, ink, colours industry Cannot meet the technical requirement / quality standard Producing Rosin modified Phenolic Resin Disclosed now, Trading Company. 29 21 13 6 5 5 Only producing polymer wax, polymer resin or others. Suppliers not resumed office due to outbreak of coronavirus Cannot export Company shutdown Traders/distributors or Importers only. Only producing modified resins in lump form Supply Market Analysis, Supplier rejection analysis were shared for each step, Pre-screening and RFI-RFQ administration. 12 Phenolic Resins Example for Pre-screening rejection analysis Example for RFI/RFQ rejection analysis
- 13. 13 Post pre-screening the suppliers, RFI-RFQ process was administered to filter out most capable suppliers.
- 14. 14 Post pre-screening the suppliers, RFI-RFQ process was administered to filter out most capable suppliers.
- 15. 15 ‒ Category specific technical questions were added in the RFI relevant to the Phenolic Resin to understand supplier production capability and capacity.
- 16. © 2020 Dragon Sourcing. All rights reserved.16 Suppliers Assessment, Suppliers were assessed and ranked based on the Company profile, Scoring and ranking of the suppliers are done on the GSP,
- 17. © 2020 Dragon Sourcing. All rights reserved. Price given are in lbs (pound) # 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 RFI Ranking from total 20 suppliers 8/20 7/20 13/20 17/20 4/20 1/20 20/20 15/20 16/20 6/20 2/20 12/20 18/20 10/20 5/20 19/20 11/20 14/20 9/20 3/20 Supplier name Supp 1 Supp 2 Supp 3 Supp 4 Supp 5 Supp 6 Supp 7 Supp 8 Supp 9 Supp 10 Supp 11 Supp 12 Supp 13 Supp 14 Supp 15 Supp 16 Supp 17 Supp 18 Supp 19 Supp 20 No. of SKU's offered 17 12 9 9 9 8 5 4 3 2 13 2 2 2 1 1 1 1 1 1 Country India India India China India China India India India India China India India China China India India India India China # #SKU Annual Volume (LBS) FOB Price FOB Price FOB Price FOB Price FOB Price FOB Price FOB Price FOB Price FOB Price FOB Price FOB Price FOB Price FOB Price FOB Price FOB Price FOB Price FOB Price FOB Price FOB Price FOB Price 1 RE01220-050 112,700 $0.87 - - $ XX $ XX $ XX $ XX - $ XX $ XX - $ XX - - $ XX - - - - - 2 RE01221-050 88,350 $1.03 $ 1.02 - $ XX - $ XX - - - - - - $ XX - - - - - - - 3 RE01201-057 54,178 $1.08 $ 0.99 $1.10 $ XX - $ XX - - - - $ XX - - - - - - - - - 4 RE01137-057 54,123 $0.94 - - - - - - - - - $ XX - - - - - - - - - 5 RE01214-057 52,084 - - $1.10 - - - - - - - $ XX - - $ XX - - $ XX - - - 6 RE01202-157 XX $1.08 - $1.10 $ XX - $ XX - - - - - - $ XX - - - - - - - 7 RE01223-537 XX - - - - $ XX - $ XX - - - - - - - - - - - - - 8 RE01120-275 XX $0.87 - - - $ XX - - $ XX - - $ XX - - - - - - - - $ XX 9 RE01203-057 XX - - - $ XX - $3.81 - - - - - - - - - - - - - - 10 RE01132-057 XX $0.94 $ 0.99 $1.10 - - - - - - - - - - - - - - - - - 11 RE01218-050 XX $0.87 - - $ XX $ XX $ XX $ XX $ XX $ XX $ XX - - - - - - - - - - 12 RE01212-050 XX $0.98 $ 0.99 - - $ XX - - - - - $ XX - - - - - - - - - 13 RE01131-057 XX $1.08 $ 0.99 $1.10 - - - - - - - $ XX - - - - - - - - - 14 RE01121-057 XX $0.94 $ 0.99 $1.10 $ XX - - - - - - $ XX - - - - - - - - - 15 RE01206-050 XX $1.03 $ 0.99 $1.10 $ XX - $ XX - - - - $ XX - - - - - - - - - 16 RE01134-275 XX $0.90 - - - $ XX - $ XX - - - $ XX - - - - - - - - - 17 RE01209-057 XX $0.94 $ 0.99 - - - - - - - - - - - - - $ XX - $ XX - - 18 RE01213-057 XX - $ 1.20 $1.10 - - - - - - - - - - $ XX - - - - - - 19 RE01200-057 XX $0.96 $ 1.02 - - - - - - - - - - - - - - - - - - 20 RE01216-057 XX - - - $ XX $ XX $ XX $ XX $ XX $ XX - - $ XX - - - - - - $ XX - 21 RE01147-050 XX - - - - $ XX - - $ XX - - $ XX - - - - - - - - - 22 RE01257-057 XX $0.96 $ 0.99 - - - - - - - - $ XX - - - - - - - - - 23 RE01251-552 XX - - - - $ Xx - - - - - - - - - - - - - - - 24 RE01145-057 XX $0.95 $ 1.02 $1.10 - - - - - - - $ XX - - - - - - - - - ‒ Price analysis was done for the 30 suppliers responded to the RFQ. Minimum price Below Average Above Average Maximum price
- 18. © 2020 Dragon Sourcing. All rights reserved. 18 Logistics cost was considered from FOB China & India to DDP XXX, USA. EXW Price Loading on container on manufacturing site Container transportation to China & India seaports. Export documents expenses, transportation & other taxes Handling & loading of the container on the vessel Loading cost on truck Haulage cost to final destination Fuel taxes Import duty Destination port handling cost & terminal charges Custom Clearance Charges Port Security, etc. Port Infrastructure fees Sea freight from China & India FOB port to destination port New York- USA. Additional fees (BAF & CAF) Insurance cost based on the CFR value. DDP Price FOB Price Delivered Duty Paid priceChinese & Indian suppliers quotation
- 19. © 2020 Dragon Sourcing. All rights reserved. Lowest DDP price Below client DDP price Above client DD price Price given are in lbs (pound) # 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 RFI Ranking 8/20 7/20 13/20 17/20 4/20 1/20 20/20 15/20 16/20 6/20 2/20 12/20 18/20 10/20 5/20 19/20 11/20 14/20 9/20 3/20 Supplier name Supp 1 Supp 2 Supp 3 Supp 4 Supp 5 Supp 6 Supp 7 Supp 8 Supp 9 Supp 10Supp 11Supp 12Supp 13Supp 14Supp 15Supp 16Supp 17Supp 18Supp 19Supp 20 No. of SKU's offered 17 12 9 9 9 8 5 4 3 2 13 2 2 2 1 1 1 1 1 1 Country India India India China India China India India India India China India India China China India India India India China # #SKU Annual Volume (LBS) Client DDP Price/ Lbs DDP Price DDP Price DDP Price DDP Price DDP Price DDP Price DDP Price DDP Price DDP Price DDP Price DDP Price DDP Price DDP Price DDP Price DDP Price DDP Price DDP Price DDP Price DDP Price DDP Price 1 RE01220-050 112,700 $ XX $1.04 - - $ XX $ XX $XX $ XX - $ XX $ XX - $ XX - - $ XX - - - - - 2 RE01221-050 88,350 $ XX $1.21 $1.19 - $ XX - $ XX - - - - - - $ XX - - - - - - - 3 RE01201-057 54,178 $ XX $1.27 $1.16 $1.28 $ XX - $ XX - - - - $ XX - - - - - - - - - 4 RE01137-057 54,123 $ XX $1.11 - - - - - - - - - $ XX - - - - - - - - - 5 RE01214-057 52,084 $ XX - - $1.28 - - - - - - - $ XX - - $ XX - - $ XX - - - 6 RE01202-157 XX $ XX $1.27 - $1.28 $ XX - $ XX - - - - - - $ XX - - - - - - - 7 RE01223-537 XX $ XX - - - - $ XX - $ XX - - - - - - - - - - - - - 8 RE01120-275 XX $ XX $1.04 - - - $ XX - - $ XX - - $ XX - - - - - - - - $ XX 9 RE01203-057 XX $ XX - - - $ XX - $ XX - - - - - - - - - - - - - - 10 RE01132-057 XX $ XX $1.11 $1.16 $1.28 - - - - - - - - - - - - - - - - - 11 RE01218-050 XX $ XX $1.04 - - $ XX $ XX $ XX $ XX $ XX $ XX $ XX - - - - - - - - - - 12 RE01212-050 XX $ XX $1.15 $1.16 - - $ XX - - - - - $ XX - - - - - - - - - 13 RE01131-057 XX $ XX $1.27 $1.16 $1.28 - - - - - - - $ XX - - - - - - - - - 14 RE01121-057 XX $ XX $1.11 $1.16 $1.28 $ XX - - - - - - $ XX - - - - - - - - - 15 RE01206-050 XX $ XX $1.21 $1.16 $1.28 $ XX - $ XX - - - - $ XX - - - - - - - - - 16 RE01134-275 XX $ XX $1.07 - - - $ XX - $ XX - - - $XX - - - - - - - - - 17 RE01209-057 XX $ XX $1.11 $1.16 - - - - - - - - - - - - - $ XX - $ XX - - 18 RE01213-057 XX $ XX - $1.39 $1.28 - - - - - - - - - - $ XX - - - - - - 19 RE01200-057 XX $ XX $1.14 $1.19 - - - - - - - - - - - - - - - - - - 20 RE01216-057 XX $ XX - - - $ XX $ XX $ XX $ XX $ XX $ XX - - $ XX - - - - - - $ XX - 21 RE01147-050 XX $ XX - - - - $ XX - - $ XX - - $ XX - - - - - - - - - 22 RE01257-057 XX $ XX $1.14 $1.16 - - - - - - - - $ XX - - - - - - - - - 23 RE01251-552 XX $ XX - - - - $ XX - - - - - - - - - - - - - - - 24 RE01145-057 XX $ XX $1.13 $1.19 $1.28 - - - - - - - $XX - - - - - - - - - ‒ DDP price comparison & savings analysis were shown to the client.
- 20. 20 RFI Scoring Supplier name City Province 84 XXX XXX Shanghai 83 XXX XXX Shandong 81 XXX XXX Jiangsu 75 XXX XXX Shandong 68 XXX XXX Guangxi 62 XXX XXX Shandong Suppliers location – China ‒ Manufacturer locations of the suppliers as per country wise were highlighted in the map Location of the Suppliers Marked © 2020 Dragon Sourcing. All rights reserved. Shortlisted Could be considered Not shortlisted
- 21. © 2020 Dragon Sourcing. All rights reserved. 21 Supplier company profiles as per ranking wise was shared in the final report. RFI Score 76 RFI Ranking 4
- 22. 22 1. Sourcing Project Introduction 2. Sourcing Approach 3. Conclusions © 2020 Dragon Sourcing. All rights reserved. Agenda
- 23. 23 Conclusions © 2020 Dragon Sourcing. All rights reserved. Whole project was carried out in 8 weeks with total 108 suppliers identified 20 suppliers responded to the RFI-RFQ document. Most of the suppliers were failed as they were producing phenolic resin for different applications other than rubber. Many Chinese suppliers were not reachable and/or not interested to continue which seems impact due to Coronavirus situation which had started in China over this period. All the recommended suppliers were top ranking suppliers with substantial savings. Savings were achieved from several suppliers with highest saving of US$ 1.21 M from Indian supplier based on 17 SKU’s. As a next step, Dragon Sourcing recommended to send original samples to shortlisted suppliers & collection of available samples & sample development from same set of suppliers. Overall based on the DS Report, It helped client to shortlist and possibly partner with most potential suppliers from the target countries.