Double wall Glass Bottle Sourcing Project Case Study by Dragon Sourcing

Bottle Sourcing Project – Case study report
Dragon Sourcing - 龙源
Delivering sustainable sourcing value from emerging markets

2
Agenda
1. Project scope
2. Project planning & progress
3. Quotation sum up
4. Suppliers scoring
5. Summary and recommendation
6. Relevant QC job for bottles

3
DS launched sourcing activities RFI and RFQ for Food Double wall Glass Bottle in China
Product & Country China
Double Wall
Glass Bottle

5
Specification of the product
Product Specifications Information Picture & Documents
Project Deadline Drawing asap / present product Feb
Target sourcing market China
Material Data
Glass must be arsenic and heavy metals free
Glass must pass the LFGB and FDA test
Current price (FOB US$), Target price Target price XXX USD
Annual Volume & P Frequency 15.000 pcs/year – First order: 5000
NDA needed (Y/N) No NDA
Suppliers NOT be included (Y/N)
None, but contact of current contacted supplier
was passed
Require a Sample Not discussed yet
Mention Client ? (Y/N)
No, since it is delivery in China from China, not
mention client name and keep local delivery
Technical information Product specifications document
Suppliers capabilities
- Certifications
- Production equipment/Process
- Final Testing requirement
Pass FDA tests (SGS)
Bottle needs to be clean, no heavy metal content, transparent (no arsenic use)
Packaging requirements Not discussed yet
4-5 criteria for phone pre-screening Not discussed yet

6
Agenda
1. Project scope
3. Quotation sum up

7
The project is scheduled on 8 weeks.
Not started Started Completed
Phase Process Steps Weeks
November December Jan
17 24 1 8 15 22 29 5
1
Demand &
Analysis
Collect information from client 1
Questions clarification with DS &
Client
1
Supplier
identification
Identify list of potential suppliers in
China
1
Launch supplier phone screening 2
Develop the RFI doc jointly with
Client
2
RFI/RFQ
process
RFI to finalize & approve by Client 1
RFI send out & follow-up 2
Develop the score card doc jointly
with Client
2
Analyze responses & rank suppliers 2
Supplier
selection
Recommend suppliers to be audited
/ samples ordering / drawing
confirmation
1
Sampling Collect and send supplier’s samples 3
2
Supplier
Audit
Client confirms what are the
suppliers to audit
2
Suppliers visit preparation 2
Suppliers audit 1
Final scoring report for audited
suppliers
2

42
38
25
18
12
0
5
10
15
20
25
30
35
40
45
# Suppliers identifed # RFI/RFQ sent # Confirmed ITR # Quotes received # RFI received
Scully project - supplier follow-up
8
Over 42 suppliers in China, 38 RFI/RFQ were sent, 24 suppliers intend to respond, 18
sent RFI and/or Quotation
# of Suppliers
Suppliers identified 42
Suppliers contacted 38
RFI/RFQ sent 38
Intend to respond 24
Sent RFI&RFQ completed
12
(18 only quote)
14 Suppliers gave up
- No reply, only focused on
steel or plastic products,
Traders, not interested
- Don’t make this product
• 4 suppliers not reachable
6 suppliers did not sent RFI
7 suppliers gave up

9
Agenda
1. Project scope
3. Quotation sum up

Among 18 quotations received, 13 suppliers quoted according to Client’s drawing (DS RFQ).
10
It was verified that all quotes exclude lid
Supplier 1 Supplier 2 Supplier 3 Supplier 4 Supplier 5 Supplier 6 Supplier 7 Supplier 8 Supplier 9 Supplier 10 Supplier 11 Supplier 12 Supplier 13

5 other suppliers quoted their current products only. Considering the short project timeline and
that supplier don’t fill in RFI/RFQ we’d suggest to exclude those suppliers for the next steps
Supplier Price (ex. Works) Production information
Supplier 14 16.2 RMB/ pcs • sample received quality of the thread not so good
Supplier 15 1.65 USD/ pcs
• Trader
• 410ml similar bottl
Supplier 16 2.72 USD/ pcs • 300 ML, it is coated, suitable for sublimation printing
Supplier 17
3.74 USD/ pcs
(incl. lid)
• 330ML Lid, 462g: Lid PP/PC
• Body: glass(food grade high borosilicate glass/HBG)
Supplier 18
4.40 USD/pcs
(incl. lid）
• 320ML
11

12
Agenda
1. Project scope
3. Quotation sum up

For the 9 suppliers who provided filled in RFI/RFQ, each 8 sections of the RFI/RFQ were scored and
weighted
13
Section Weight
Business information 20%
CSR 5%
Process and Technology 5%
Production Capability 5%
Quality control and equipment 15%
Certifications 20%
Cooperation 5%
Quotation 25%
Total 100%

Business information, CST, Process & Technology, Production capability
14
Business information Weight Scoring
Year founded 10%
1=After 2010
2=Between 2006 to 2010
3=Between 2000 to 2005
4=Between 1995 and 1999
5=Before 1995
Workfloor size (m²)? 5%
1=Less than 1,000m2
2=1,000m2
-5,000m2
3=5,000m2
-10,000m2
4=Above 10,000m2
Number of production facilities 2%
1=Only 1 facility
2= 2 facilities
3= 3 facilities
4= 4 facilities
5= 5 or more facilities
Number of employees 6%
1= Less than 50 employees
2= 50-100 employees
3= 100-300 employees
4= 300-500 employees
5= Above 500 employees
Number of employees with good english
communication skills
10%
1= 2 people
2= 3-5 people
3= 6-10 people
4= 10-15 people
5= above 15 people
Export experience 10%
0= No export, no license
1= Less than 5 years
2= 5-10 years
3= More than 10 years
Products specially developped for
international market
5%
0= No
1= Yes
Supplier has European customers 15%
0= No Only Chinese customers
1= Yes but no detailled provided
2 = Yes, detailled provided, small EU companies
3 = Yes, European /FR customers large corporations
Supplier provided e-catalogue 2%
0= No
1= Yes
2013 Turnover in USD 5%
1= Less than 3M
2= Between 4 to 10M
3= Between 10 to 20M
4= More than 20M
% of sales share 15%
0= No export
1= Export but not to Europe (<5%)
2= < 15% export to Europe
3= 15% to 30%
4 = 30% to 50% export to Europe
5= > 50% export to EU
Top 5 Customers 15%
0=Mainly Asian, small coprorations.
1= Wordwide large corporations
2= EU main customers, large corporations
CSR
Weight of
criteria
Scoring
Respect Child Labor Regulation 25%
0=No
1=Yes
Adhere to China Labor Law (36h) 25%
0=No
1=Yes
Adhere to all rules and regulation about
environmental issues
25%
0=No
1=Yes
Adhere to all rules and regulation on
safety issues
20%
0=No
1=Yes
Would sign a confidentiality agreement 5%
0=No
1=Yes
Process and Technology
Weight of
criteria
Scoring
Have stable and long-term partners to
supply raw material
30%
0=No
1=Yes
Have an equipment list 40%
0=No
1=Yes
2=Yes and provided
Production Process description
provided
30%
0= Not provided
1= Provided with detais
2 = Provided, majority of processes in-house
Production Capability
Weight of
criteria
Scoring
Annual supply capacity in 2014 30%
0 = not provided
1 = provided
Annual LVE supply capacity in 2013 20%
0 = not provided
1 = provided
Increase/decrease in supply capacity 10%
0=Decrease
1=Stable
2=Increase
% of Double wall glass bottles products
among all the categories you
manufacture
40%
1=Below 10%
2=Between 10-25%
3=Between 25-50%
4=Over 50%

Quality, Certifications, Cooperation and quotation
15
Quality control and equipment
Weight of
criteria
Scoring
Supplier has incoming material
inspection and report
5%
0=No
1=Yes
Supplier accepts 3rd Party QC 5%
0=No
1=Yes
Regularity of in-line quality inspection
(Y/N)
5%
0=None
1=Have, rdetails not provided
2=Have, regularity provided
3=Have, several times per dayd & at different points of
the production process
Type of inspection conducted for
finished goods
5%
0=None
1=Sample inspection following AQL
2=100% inspection
What is the rate of defect / rejected ? 5%
0=Above 5%
1=Between 2-5%
2=Between 1-2%
3=Below 1%
Process for treating defects found 5%
0=Nothing is done, no reply
1=Clear process to separate, discard or rework
What is your internal rule regarding
reaction time of quality claim?
5%
0 = No reply, no process
1 = Defined process detailled
2= Defined process including problemn solving options
provided (reparation, replacement, etc.)
For how long are the QC records
kept
5%
0=Below 6 months
1=Between 6 and 12 months
2=Between 12 and 24 months
3=Above 24 months
Quality Control equipment 5%
0=No details given
1=Between 1-3 equipment listed
2=4-6 equipment equipment listed
3=6-10 equipment listed
4=More then 10 equipment listed
Test the products before delivery 5%
0=No
1= Finished products Test listed
Can meet all requirements listed from
Client ?
50%
0 = Not replied
1 = <2
2 = between 2-4
3 = Can meet 4
4 =Yes can meet all important (not sleeve, lightweight,
5 = Yes, all of them
Certifications
Weight of
criteria
Scoring
Have ISO 9001 20%
0=No
1=Yes
Have ISO 14001 20%
0=No
1=Yes
Other International Standards
applied
25%
0=No
1=Yes
Agree to send product to SGS
laboratory for FDA certiification
35%
0=No
1=Yes
Cooperation
Weight of
criteria
Scoring
Cooperation during RFI 50%
1= Poor
2= Satisfactory
3= Excellent
Completeness of RFI 50%
1= Poor
2= Satisfactory
3= Excellent
Quotation
Weight of
criteria
Scoring
Quotation competitiveness 100%
0 = Quotes highest (20%)
1 = Above average price (20%-50%)
2 = 20%-50% lowest prices
3 = 20% lowest prices Below 1.20 USD Target price

The 11 suppliers who submitted RFI reply were scored. Average score is 63 %, 7
suppliers are above the average
16
Average 63%
Supplier 1 Supplier 2 Supplier 3 Supplier 4 Supplier 5 Supplier 6 Supplier 7 Supplier 8 Supplier 9 Supplier 10 Supplier 11

17
Agenda
1. Project scope
3. Quotation sum up

10 suppliers were shortlisted as they provided quotation, RFI and mould information. Mould price
is stable between 800 to 1,000 RMB, lead time could be decreased to 10-15 days for most suppliers
18
Based on scoring, pricing and mould information, DS recommends to move forward with the 6 following suppliers
1, 6, 7
Others suppliers (2,3,4,5,8,9) could be interesting as well depending on priotiry on price or quality/scoring
# Supplier Name
RFI
received
RFQ
received
Can make
Mould
Scoring
results
Scoring %
OK Thread
3D ?
Mould cost
Mould Lead
time
Existing samples
shipment status
Excl. lid
Incl.
Tranport
Quotation /
bottle
(incl. delivery &
excl. lid)
RMB/pcs
1 Supplier 1 YES YES YES 6 67% TBC 1,000 RMB 15 days Received ok ok 6.16 RMB
2 Supplier 2 YES YES YES 8 63%
Can’t open
AI
No mould
Hand made
85USD sample
15 days Client has sample ok ok 8.7 RMB
3 Supplier 3 YES YES YES 7 65% OK
100$ sample
100$ mould
1,300 TOTAL
10 days N/A ok ok 9.8 RMB
4 Supplier 4 YES YES YES 2 71% OK 950 RMB 11 days On the way to DS ok ok 10.47 RMB
5 Supplier 5 YES YES YES 4 68% TBC TBC NA TBC TBC ok 11.8 RMB
6 Supplier 6 YES YES YES 3 70% OK 800 RMB 8 days Received ok ok 12.7 RMB
7 Supplier 7 YES YES YES 1 76% OK 1,000 RMB 7-10 days Received ok ok 13.95 RMB
8 Supplier 8 YES YES YES 9 61% TBC 1,000 RMB
40 days
(TBC)
Will be sent to DS on
Friday
ok No 14.5 RMB
9 Supplier 9 YES YES YES 5 68% Ok 800 RMB 15 days TBC ok ok 15.8 RMB
10 Supplier 10 YES YES YES 10 54% Ok 6000 RMB 30 days Received ok No 27.5 RMB
Not recommended for next steps (low score, difficult communication, high price, long lead time low reactivity）
Recommended for next steps (score, reactivity, price, lead time）

5 Suppliers sent samples of their current product to DS, then sent to client
19

20
Agenda
1. Project scope
3. Quotation sum up

21
QC job - General information and Sampling standard
Product Name Bottle
Order quantity (units) 7404 Pcs
CTN 1234 cartons
Supplier FG
Inspection date Mar 30th
, 2018
Inspection type Random Inspection
Sampling standard MIL-STD-105E
Sampling level General Inspection LEVEL II
Inspected sample size 200pcs+80 pcs(80 pcs measured dimensions)
Approval sample(s) available No
Inspection location Yongkang
Factory cooperation during the inspection Good
Factory Quality organization Good
Inspector’s general opinion on the factory Good

22
Product Details: Bottle
Dimension in mm (body)
Height 213.7 +/- 1.0 mm
Diameter outside 71.6 + 0.1 / - 0 mm
Height innerpipe 199.7 +/- 0.3 mm
Logo Height 13.0+0/-1.0 mm
Diameter neck 41.1 + 0 /- 0.3 mm Gauge
Liquid content / water level 0.5 l +/- 5%
Picture

23
Defects analysis - summary
Defect Description CRI MAJ MIN Comments
Log printing defect - 1 -
Scratch and caved - 1
Push Button lock - 1 Push Button lock system loosen
Push button and printing Logo not
align
- - 1
Polishing defect - - 1 The bottle neck dusty due to polishing defect
Non-slip bottom - 1 - Non-slip bottom not in right place
# Total of defectives found - 3 3

24
Defect pictures
Logo printing defect Scratch and caved

25
Defect pictures
Non-slip bottom not in right place. Push button and Logo not align.

26
Defect pictures
Push Button lock system loosen .Polishing defect.

27
Packing, storage and shipping marks inspection
Storage condition .

28
Packing, storage and shipping marks inspection
Master Carton Sample 1 Sample 2 Sample 3 Sample 4 Sample 5
Size(cm) 25*18.5*30.5 25*18.3*30.5 24.8*18.4*30.5 25.1*18.1*30.6 24.9*18.3*30.7
G.W(kg) 2.90 2.91 2.90 2.91 2.90

29
Inner Packing, Bar code , Mater carton and inner box product instructions inspection
Master carton and inner box bar code are the same.6 inner boxes/carton.

30
Leaking Test, Sampling size: 13 bottles
Fill in carbonated Drinks
Bottles placed on its side and keeping 60
minutes,
Test result: Not found leaking

31
Dropping and leaking Test, Sampling size: 5 bottles
From 0.75m height drop bottles to surface 3 times( onetime lid, on time side and one time base), Fill
in water and placed on its side 30 minutes After dropping test,
Test result: Not found plastic parts separate from bottle, Not found leaking

32
Printing stability test, Sampling size: 5 bottles
Printing stability test
Test result: Not found printing fade

Double wall Glass Bottle Sourcing Project Case Study by Dragon Sourcing

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