Case studies - Buying office

Goal: operate cost reduction by outsourced producgion while keeping a European standard quality level

Product: Steel powdercoated garbage cam

Materials needed: Steel, Powdercoating, Plastic

Skills needed: Cuting, welding, punching, drilling, assembly, powdercoating, packaging

Client type: Importer and wholesaler in Europe

Targeted price: 35-38 on 100 basis scale FOB price/piece

Volume ordered: more than 2000 pieces/year

Initial western cost: 100 on 100 basis scale

Final cost: 36.2 on 100 basis scale FOB price/piece

Lead time: 1week for a prototype/4 weeks for mass production

Ressources needed to lead the project: sourcing people, project manager, engineer, quality control inspector

The goal of our client was to reduce production cost while keeping an European quality standard on the product he is selling in Europe.

Whereas this product looks like very common, it is actually a real technical item: right cutting shape, clean welding, uniform powdercoating, well drilled and punched steel sheet, parallelism for mechanical connection is not as simple as we can imagine. There was a real step between doing a single prototype and starting a mass production. This project was clearly challenging cost, quality, lead time

For this reason our first step was to really understand our client's product:Which material is used and why? What is the production process follozed in Europe? What are the critical point on this project and how to pass trough the traps?

Second steps was to find a reliable supplier in China: After sending more than 30 requests for quotation trough the whole country, we finally shortlisted 4 suppliers (factories, not trading). We visited and met them at their fabric in order to asset them (equipment, capacity production, documents checking, review of the specification, price negotiation, terms and conditions).

One of them looked like more serious reliable and agreed to do a protoype within 7 days. After getting the prototype on time, we finnally signed a contract with this company. We paid the first amount of money and the mass production started.

Below is displayed our buying office process

The main difficulties linked to this product was due to the fact that:

Client was really exigent about the quality of the product.

Some parts of the product had a special shape and powdercoating in some area was difficult to operate.

We needed to check the quality of the raw material before the production process in order to be sure that quality of raw material was respected.In order to meet the requirement of our client we paid attention to:

Operate a real preparation before the sourcing to well understand the product was a must in order to guide the factory and advice them on how to operate.

Operate an important negotiation on the price, contract clauses, terms and conditions, and warranty.