Case Study - Desalination Unit Project

Dragon Sourcing - 龙源
Your Tailored Sourcing Approach to Emerging Countries
Desalination Unit Project
Case Study
September 2016

Client Introduction & Project Objectives
© 2016 Dragon Sourcing. All rights reserved. 2
 Client introduction:
A world leader in water treatment solutions, specializes in the development, engineering,
construction and operation of enhanced desalination and industrial water treatment plants. They
leads the water industry with some of the world’s most advanced thermal and membrane
desalination plants.
 Objectives:
• The Company hereby appoints Dragon Sourcing to screen the supply market in Mexico.
• Identify potential fabricators capable of manufacturing and assembling client’s desalination unit
and load them in container for export to America’s.
• These suppliers will also need to be able to import the commodity items that go into the making
of desalination units whereas client will be supplying all the strategic items that are needed for
these units.
• These fabricators should be able to manufacture the units based on "end to end solution”.
 Final deliverables:
• RFI Analysis Report with list of recommended suppliers for audit.
• Supplier profiles

© 2016 Dragon Sourcing. All rights reserved.. 3
Approach & Schedule,
No. Step Deliverables
1.
Demand Analysis
Work with client to define and understand the products and requirements (specs, volumes, materials,
production technology requirements, Quality tests, Standards, etc.)
 Project Requirement
Questionnaire
 Kick-Off Report
2.
Supply Market Analysis
Identify long list of potential fabricators in the Mexico 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 process by telephone pre-screening based on agreed
simple criteria (e.g. capability to make the product, Able to export, ISO 9001 certified,..)
 Shortlist for RFI
4.
Develop RFI
Prepare an RFI document, with an aligned Balanced Scorecard that has the objective to pre-qualify the
competitiveness and capabilities of the suppliers, including: Background, financial, Client and product
experience, Quality certification & processes, Social Responsibility, Manufacturing/technology
capability)
 RFI Template
 Balanced Scorecard
 Introduction Letter
Milestone 1: RFI & Scorecard Approved
5.
Conduct RFI Administration
The RFI is translated to the local languages as relevant, and distributed to the relevant suppliers, with
telephone follow-up to push for maximum participation.
• Completed RFIs
6.
Analyze RFI Responses
Analysis of RFI responses, estimation of logistics costs, and preparation of a report which profiles &
objectively ranks the suppliers by capability and competitiveness, including a recommendation for
those to be audited/Sampled.
 RFI Report
 Supplier Profiles
 Proposed Shortlist for
Audit/Samples.
Milestone 2: Shortlist for Auditing
Stage 1: Supplier Pre-Qualification

Steps
Duration
/week
commencing
Week 1 Week 2 Week 3 Week 4 Week 5 Week 6 Week 7 Week 8
07-25
07-29
08-01
08-05
08-08
08-12
08-15
08-19
08-22
08-26
08-29
09-02
09-05
09-09
09-12
09-16
1. Demand Analysis 1
2. Supply Market Analysis 2
3. Pre-screening with identified suppliers 2
4. Develop RFI template for validation 1
5. Administer NDA process 2
6. Administer RFI process 3
7. Submit RFI report with recommendation
for audit.
1
1
RFI validated
4
Not started Done
In process Delay
Project timeline,
- Stage 1: Supplier Pre-Qualification timeframe.
- RFI process was completed in 8 weeks as per schedule.
Today
2

Supply Market Analysis
- Strategic Sourcing process completed with the following STEPs,
Identify Suppliers
Pre-screen
suppliers
NDA Process RFI Process
80
26
14
11
0
10
20
30
40
50
60
70
80
90
Suppliers identified Supplier passed pre-screening NDA received RFI received
Mexico
54 suppliers failed
pre-screening
12 suppliers
rejected NDA
3 suppliers
rejected RFI

Rejection analysis were shared for each step, Pre-screening, NDA and RFI.
12
12
11
9
5
5
Interested in domestic sales only &/or Cannot export outside Mexico
Not reachable as none of the Contact details are valid and/or Company shutdown
Not ISO 9001 certified
Not interested as they consider them as very small Companies for such projects.
Not doing turnkey project for fabrication, Equipment assembly, electrical works, engineering skills etc for skid mounting
(Desalination) units
Currently capacity full
Pre-screening rejection
5
5
1
1 Not interested anymore
Not just willing to sign NDA
Others - Duplicated same owner different names
Consider themselves small for this project
NDA rejection analysis
1
1
1
Not interested to continue
Consider themselves small for this project
Do not have the technical capability after reviewing the RFI & Drawings
RFI rejection analysis
54
12
3

BUSINESS INFORMATION
Total number of employees
Number of people in these
positions
Sales &
Management
Production
Quality
Control
Others
Turnover (in Mex $)
2016 - till date 2015
Can you export
USA South American Countries
Percentage of turnover Domestic USA
South
America
Rest of the
world
2016 till date
2015
Top 3 Customers
Customers Industry Country % of sales
CORPORATE RESPONSIBILITY & POLICIES
Follow all rules and
regulations in respect to,
(Yes/No)
Health & Safety Policy
Environmental Policy
Child labor
COMPANY INFORMATION (Head office)
Company Name
Address
Town & State
Company Website
COMPANY INFORMATION (Manufacturing facility)
Company Name
Town & State
CONTACT PERSON INFORMATION
Contact Person
Title
Email
Tel
Mobile phone
BUSINESS INFORMATION
Year Founded
Nature of the Company
Ownership
Registration Capital (Mex $)
square meters overall factory occupy
square meters manufacturing area
Export License
Years of export experience
Free Zone Areas
Nearest INTL sea port & distance in Km
Nearest INTL airport & distance in Km
7
RFI Score 82
RFI Ranking 1
RFI/RFP process was administered to filter out most
capable suppliers

8
Supplier name - Country
• Section: Production: Technology & Process
PRODUCTION: TECHNOLOGY & PROCESS
Area of expertise In house/outsource Quantity
Cutting thickness(mm)
Process area LxW(mm)
Min Max
Cutting
Laser cutting
Plate thickness (mm) Press rating
(KN)
Bending length(mm)
Min Max
Bending
Area of expertise In house/outsource Quantity Nominal Press(KN)
Stamping
Max process diameter
(mm)
Max process length(mm)
Turning
Working table
dimension (mm)
X axis stroke(mm) Y axis stroke(mm) Z axis stroke(mm)
Milling
CNC
Working table
dimension (mm)
Welding Gas Welding Way Welding Depth
Welding
Area of expertise In house/outsource Quantity Manufacturing area m3 Max Product Size
MAG Welding
Sand blasting
Painting
Area of expertise In house/outsource Quantity Product size your company can varnish
Varnish
Area of expertise In house/outsource Quantity Coating method Coating thickness (μm)
Zinc coating
Polyuria coating
Maximum lifting
weight(T)
Span (m)
Wheel Type (Single or
Double or Girder)
Single or Dual or
Manual Geared Speed
Crane
1. Overhead Crane:
2.Overhead Crane:
© 2016 Dragon Sourcing. All rights reserved.
Supplier Profile Example

Business Registration Tax Registration Factory Overview from outside
Factory Entrance Office Tooling Workshop
Stamping work floor Welding work floor MAG Welding Technology
9
Section: Factory Pictures
Supplier Profile Example

Manufacturer locations’ were highlighted with the map
RFI
Ranking
Supplier name City State
1 XXX XXX
San Luis
Potosi
2 XXX XXX Monterrey
3 XXX XXX Mexico
4 XXX XXX Puebla
5 XXX XXX Mexico
6 XXX XXX Jalisco
7 XXX XXX Mexico
8 XXX XXX Monterrey
9 XXX XXX Mexico
10 XXX XXX
Jalisco
11 XXX XXX
San Luis
Potosi
Mexico
Monterrey
San Luis
Potosi
Puebla
Factory Locations

14
10 12
8 9 9 10 9 8 9 8
16
13 9
8
13 14
7
7 8 7 7
11
14
8
9
1
9
8
8 7 7 8
23
25
18
17
18
9
13
11 11 11 10
9
6
5
7
6 6
5
6 7 6 6
10
10
10
10
10 10
10
10 10 10 10
0
10
20
30
40
50
60
70
80
90
DSMX/DU1 DSMX/DU2 DSMX/DU3 DSMX/DU4 DSMX/DU5 DSMX/DU6 DSMX/DU7 DSMX/DU8 DSMX/DU9 DSMX/DU10 DSMX/DU11
Business information Production
Quality system Manufacturing & Assembly Instructions/ Scope of work
RFI Response & others Corporate Responsibility
11
- Suppliers were assessed and ranked based on the Company profile.
- RFI scoring of the 11 Mexican suppliers,
Average RFI scoring: 59
82 77 63 59 57 56 53 51
Recommended Suppliers
51 50 49

Conclusions
 Whole project was carried out in 8 weeks, Total 80 Mexican suppliers identified, 14 NDA signed,
& 11 suppliers responded with the RFI document.
 Most of the suppliers were ISO 9001 certified as per Client’s mandatory quality requirement
expect only one supplier.
 Most of the suppliers including the DS recommended suppliers with highly interested in the
client project & confirmed meeting the technical requirement as per the detail scope of work
shared with them.
 Procurement Intelligence report was shared with the client giving insight on the import duties
based on the several HS codes of the commodities that the contracted fabricator will be need to
import, Local taxes applicable and Mexico free trade partners.
 DS recommend the top 4 suppliers as priority and suggested Client to consider visiting other
suppliers too during their trip to Mexico as some of the suppliers were common within same city
or nearby location.
 Overall based on the DS Report, It helped client to shortlist the fabricators in Mexico for the
projects undertaken by them in the neighbouring Countries.
15

Case Study - Desalination Unit Project

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