Case Study-Procurement of Leather Bound Notebooks

Dragon Sourcing - 龙源 Your Tailored Sourcing Approach to Emerging Countries

Leather Bound Notebooks Project

Pankaj Tuteja+ 91- 9867602535

[email protected]

Project Objectives

© 2013 Dragon Sourcing. All rights reserved.

Client introduction: UK based Company selling real leather bound notebooks to their clients in UK, Germany & other Countries in Europe and Australia.The notebooks are in lots of different shapes, sizes and colours perfect for work, play, notes, sketches and more.

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Objectives:The Company hereby appoints Dragon Sourcing to perform the following procurement and supply chain services for the category of Leather Bound Notebooks from the Indian supply market.• Service level 1: Supplier Qualification• Service level 2: Supplier Audits, Selection & Contracting• Service level 3: Procurement Operations

They key objective will be to find notebook suppliers having in-house printing & binding process. During Selection & Contracting stage, suppliers would be ranked based on in-house production

process, machinery, experience in leather notebooks, export markets, manpower & several other criteria's.


• Short List suppliers based on RFI/RFP process

• Audit shortlisted suppliers

• Select 2-3 suppliers for sample development process

• Conduct final negotiations and select suppliers

• Finalise Contract

• Analyse spend category in detail– Specifications and quality

requirements– Volumes– Deadlines

• Analyse supply market and identify potential suppliers

• Pre-qualify potential suppliers through phone screening process.

• Manage RFI/RFP process with pre-qualified suppliers

• Analyse supplier responses , estimation of logistics costs, and preparation of a report with suppleir profiles icluding a recommendation for those to be audited.

Dragon Sourcing covered the end-to-end sourcing process

Feasibility Analysis 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

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• Shortlist suppliers based on RFI/RFP process



















Key

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Demand Analysis

© 2013Dragon Sourcing. All rights reserved. 5

Quotation requested to all the suppliers based on following benchmark: • 3 sizes only in Portrait & Landscape & following printing requirements .• 8 colours leather cover: Black, Brown, Tan, Green, Red, Navy, Pink & Turquoise.• Leather : Leather (TC Buffalo leather - terracotta) - 1.2 - 1.5 mm thickness. Simple spray dye, finishing + plating• Hexavalent Chromium VI is the hazardous and is banned in Europe. Should not used in the tanning of leather.

Notebook Size A4 (29.8 x 21 cm) A5 (21 x 14.8 cm) A6 (14.8 x 10.5 cm) Paper type Number of pages

PrintingRuled (7mm lines) Ruled (6mm lines) Ruled (6mm lines) Sirpur Ltd Natural 90gsm

192

PrintingDot Grid (5mm Dots) Dot Grid (5mm Dots) Dot Grid (5mm Dots) Sirpur Ltd Natural 90gsm

192

Plain Plain Plain Sirpur Ltd Natural 90gsm

192

Sketch Sketch Sketch BILT Cartridge 140gsm

96

Client Sales Estimates 2013 2014

Estimated Sales (units) 1,91,500 5,86,000

What quality and environmental registrations do you have? Yes / No Date of Certificate

ISO 9001

ISO 14000

Others (please list)

How many QC people in your company?

What quality control equipment do you have in-house?

QUALITY CONTROL Date of Expiry

Leather Bound Note booksHow many years of production experience for notebooks ?

Can you offer LEATHER COVER (TC Buffalo leather - terracotta) on the notebooks ?If required, Can you offer paper from FSC certified local mills ?

Can you offer Acid free paper ?

Monthly notebooks production capacity based on our requirement ? (PCS)

Production Process Printing Section sewing & cover overdrawn binding.

Finished Leather cutting Leather Embossing with Logo

In-House or Outsource ?

Monthly Capacity (PCS)

Raw materials Raw Leather Leather Tanning Paper Accessories (Stickers, Elastic, Ribbon)

Outsource (Sub-contract) or In-house

If outsource, then please mention city name of your sub-contractor

Notebook Sizes Size A4 (10,000 PCS) Size A5 (50,000 PCS) Size A6 (37,500 PCS) Size A7 (37,500 PCS)

Lead time for providing complete (finished) notebooks

Minimum Order Quantity for complete leather bound notebooks (PCS)Can you stock Paper & Leather in your warehouse for urgent orders or small shipments if required ?

Please list production equipment that you have in-house Application Number of PCS

1

2

3

4

5

6

What type of binding can you offer ?

Do you have Shrink Wrap machine in-house for packaging ?

PRODUCTION

Name

To :Email :TelephoneFax

Please return before:

Company Name Address Town Province Company Website

Contact Person Title Email Tel Fax Mobile phone Alternative Contact Title Email Tel

4. Request for Quote (RFQ)

+ 91- 9867602535

1. Contact Information

5. Leather Boud Notebook Pictures

2. Company & Business Information

CONTACT INFORMATION

COMPANY INFORMATION

April 4th, 2013

DRAGON SOURCING

This RFI contains totally of 5 worksheets detailed below:

+ 91- 22 - 26365009

pankaj . tutej a@dragonsourci ng. comMr Pankaj Tuteja

3. Factory Pictures


Then, an RFI/RFP process was administered to filter out most capable suppliers

Quality Management

Contact detailinformation

Businessinformation

Identified Suppliers RFI/RFQ doc sent Intend to Respond RFI/RFQ Received0

10

20

30

40

50

60

70

80

90

100

95

36

8 8

INDIA

INDIA

© 2013 Dragon Sourcing. All rights reserved. 7

‘Leather Bound Notebook’ project Out of the 95 identified suppliers, RFI/RFQ document was sent to 36 shortlisted suppliers only based on phone screening.

Identify Suppliers Pre-screen suppliers Administer RFI/RFQ Analyse RFI/RFQ received

Top reasons for suppliers not responded, • Suppliers not willing to make real leather covers due to

religious reason.• Suppliers don’t have binding facility & don’t wish to

outsource this process• Suppliers cannot offer leather bound notebook, as they

are mainly interested in printing jobs only.• Other Traders.


Paper Quality : 100% Wood pulp

Number of Pages in notebook Paper GSM Paper Printing

Brightness Min 80% 192 Ruled - Printing

Brightness Min 80% 192 Dot Grid Printing

Brightness Min 80% 192 Plain

Brightness Min 90% 96 "BILT" cartridge

paper 140 GSM or Sketch

"Sirupur" Natural 90 GSM or

Equivalent quality.

• Shortlisted 4 suppliers based on the Company profiles, Capability & Capacity able to fulfil the client requirement.

• Below costing are taken from the actual report.

Supplier 1 Supplier 2 Supplier 3 Supplier 4




Paper Quality : 100% Wood pulp

Number of Pages in notebook Paper GSM Paper Printing

Brightness Min 80% 192 Ruled - Printing

Brightness Min 80% 192 Dot Grid Printing

Brightness Min 80% 192 Plain

Brightness Min 90% 96 "BILT" cartridge

paper 140 GSM or Sketch

"Sirupur" Natural 90 GSM or

Equivalent quality.

• So far “Supplier 1” have provided the most competitive quote, 20% - 35 % Cheaper than current supplier.

• Supplier 2 preferred to offer x-factory price only for Ruled printing for the moment. • Supplier 3 did not submit X-factory price for the moment.

Cur

rent

Sup

plie

r

Cur

rent

Sup

plie

r

Cur

rent

Sup

plie

r

30% saving 20% saving

35% saving

Supplier 1 Supplier 2 Supplier 4

Supplier 1 Supplier 2 Supplier 4

Supplier 4Supplier 2Supplier 1

Below information taken from

the actual report.


INDIAN Suppliers Location – India. • Potential suppliers are located in Tamil Nadu, Maharashtra & Haryana.• Top 4 suppliers were shortlisted for sample development.

Shanghai

Supplier Name Province City Website

Supplier 1 Tamil Nadu Sivakasi Confidential

Supplier 2 Maharashtra Navi Mumbai Confidential

Supplier 3 Haryana Faridabad Confidential


Below suppliers not shortlisted based on RFI/RFQ analyses,

Supplier 5 Andhra Pradesh Hyderabad Confidential

Supplier 6 Tamil Nadu Chennai Confidential



Tamil Nadu

Andhra Pradesh

Maharashtra

Haryana

© 2013 Dragon Sourcing. All rights reserved.11

Company Name:

• Supplier profiles were shared with factory pictures.• Below is only illustrative example fitted in one slide only.• Supplier 1 was shortlisted for order placement after sample approved.


• Shortlist suppliers based on RFI/RFP process



















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Production Process UK Order German Order UK Order German Order Total UK Order German Order Total

Finished leather Arrived factory Arrived factory

Leather Cut In production In production

Embossed with logo In production In production

Rounded Corners In production In production

Number of Reams:90 GSM paper Completed Completed



Printing (All types) Completed Completed

Book Blocks 90 GSM In production In production



Barcode Stickers Arrived factory Arrived factory

Real Leather Sticker Arrived factory Arrived factory

Band (Paper Wrap) Arrived factory Arrived factory

Black Elastic Arrived factory Arrived factory

Ribbons Arrived factory Arrived factory

Inner Cartons Arrived factory Arrived factory

Outer Cartons Completed Completed

Shrink Wraps Arrived factory Arrived factory

Total Stock at the factory (PCS/Meters/etc)

Accessories

Packaging

Status

Leather

Paper

Order Quantity (PCS/Meters/etc)

• A production plan was built to monitor the order and to schedule timely quality inspections.

• Based on the claimed production capacity, Dragon Sourcing and supplier agrees on the production schedule

• And also Develop a detail QC criteria with the client

Status:

Arrived factory in Transit In production Production Not Started Completed


Conclusions

Qualified a supplier, who can respect all European standard at a price point with maximum saving up to 35%.

Special attention was given during the tanning process, Hexavalent Chromium VI is the hazardous and is banned in Europe. Should not used in the tanning of leather.

We trained the supplier to enable him to meet all European standards

Built a long-term/ exclusivity agreement with the supplier

Successfully delivered production orders

Further on-going process with the supplier for them to apply FSC Certification which will be value addition to the buyer when selling notebooks.

Services

Case Study-Procurement of Leather Bound Notebooks