Case Study - Optimize your Marketing Expenditures in China

Case Study
How to optimize your marketing expenditures in China?
Dragon Sourcing - 龙源
Your Tailored Sourcing Approach to China
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© 2007 Dragon Sourcing. All rights reserved. 2
Agenda
1. Context and Products
2. Sourcing Strategy
3. Relationship with Creative agencies
4. Results & Conclusions

Context
• Major global FMCG company producer
– Presence in over 70 countries, including Europe, Asia and America
– 18,000 employees worldwide
– Approx $8 billion turnover
– 15 key brands accounting for 70% of total turnover
• Effective management of marketing spend requires to overcome several challenges:
– Double digit growth in BTL marketing budget (approximately RMB120M/year)
– Communication within a complex decentralised organisation (brand driven)
– Collaboration between employees with very different backgrounds
– Relationship with creative agencies for product design
– Peak demand and short time to market
– Reactivity to frequent design change requests
• Decision to outsource BTL marketing/promotional procurement in 2005 to Dragon Sourcing

Marketing spend includes all goods typically designed by creative agencies,
such as Gifts which is 1 category amongst the many BTL categories

Agenda
3. Relationship with Creative agencies

Dragon Sourcing manages, for all BTL categories, the whole sourcing process…
Contracting,
Production & Delivery
Product design &
Supplier selection
• Collect product design proposals from
creative agencies
• Forecast future volumes and consolidate
requirements
• Manage RFQ process with all qualified
suppliers
• Collect supplier samples and refine final
product design
• Update supplier quotations
• Negotiate and select supplier
• Negotiate contract with supplier
• Facilitate supplier and customer signatures
• Monitor down-payments
• Follow production quality
• Organize delivery
• Manage quantity variation effects
• Organize final payment
• Measure supplier performance
Supplier qualification & Supply base management
• Monitor supply markets
• Qualify potential new suppliers through an
RFI and « theoretical » RFP process
• Analyse responses and « identical »
samples
• Audit suppliers
• Follow current supplier performance
• Set up list of qualified suppliers
– Introduce new supplier in base
– Eliminate poor performing current supplier

Monthly spend evolution
M
ay-05June-05July-05
August-05
Septem
ber-05
O
ctober-05
N
ovem
ber-05
D
ecem
ber-05
January-06
February-06M
arch-06April-06M
ay-06June-06July-06
August-06
Septem
ber-06
O
ctober-06
N
ovem
ber-06
D
ecem
ber-06
January-07
February-07
… for approximately 350 discrete sourcing projects
driven by 2 major annual events: Mid-Automn Festival and Chinese New Year
Mid-automnfestival
ChineseNewYear
Mid-automnfestival
ChineseNewYear

The RFI/RFP and “identical sample” process result in a short-list of
potential new qualified suppliers
Pre-qualified
suppliers Potential new
qualified
suppliers
Potential suppliers
Qualification of suppliers through RFI/RFP Analysis of offers and samples
GoodAverageGoodGoodCooperation
140/day75/day120/day100/dayCapabilities
880430700350Staff
198146Turnover (M€)
ShanghaiShanghaiZhejiangJiangsuRegion
38.441.338.140.2Prod. 4
12.812.215.113.4Prod. 3
33.734.933.836.1Prod. 2
24.624.923.826.4Prod. 1
Price
Current
Supplier
Potential
Supplier
3
Potential
Supplier
2
Potential
Supplier
1
Samples
RFI/RFP
process Sampling
process

This shortlist is then audited in order to finalise the qualification process
Audit
questionnaire
Audit report
Audit
summary
Objectives
• Meet top management and sales management teams
• Present product requirement and order details
• Understand organisation and processes
• Refine offer understanding
• Validate manufacturing capabilities
• Visit factory and check work conditions
Topics
• General Management
• Order management
• Shipping / packaging
• Planning process
• Goods flow
• Procurement
• Purchasing
• Production
• Quality

CONTACT INFORMATION 联系资料
B+
Response 评分
Comment 附加
评语
Response 评分
Comment 附加评
语
Yes/No
被取录/
不取录/
Comment 附
加评语
V019 estate catalogue Jul-06 Not needed, known supplier 常用供应商 Yes, on time 守时收到 Yes 有 Yes 有
V020 shopping bag Jul-06 Not needed, known supplier 常用供应商 Yes, with delay 迟受到 No 没有 No 没有
V021-V050 mini brochures Jul-06 Not needed, known supplier 常用供应商 Yes, on time 守时收到 Yes 有 Yes 有
A
Required 计划时间 Actual 实际时间
V019 estate catalogue Jul-06 10 11 1 Low 低
V020 shopping bag Jul-06 20 23 3 Low 低
V021-V050 mini brochures Jul-06 20 20 0 Low 低
A
Contract
number
Items
Date
(mm/yy) 日
Proposed alternative
(yes/no) 有否提供建议
Impact of
proposal 建议重要
V019 estate catalogue Jul-06 Yes 有 High 高
V020-V039 shopping bag Jul-06 No 没有 N/A 不应用
V021-V050 mini brochures Jul-06 No 没有 N/A 不应用
A+
Contract
number
Items
Date
(mm/yy) 日
Quality issues (yes/no)
质量
Issue Criticality/
Impact 质量重要性
V019 estate catalogue Jul-06 No 没有 Low 低
V020 shopping bag Jul-06 No 没有 Low 低
V021-V050 mini brochures Jul-06 No 没有 Low 低
INDUSTRY 行业
QUALITY PERFORMANCE (Other issues than delay) 服务性质量评分（不包括送货延误事情）
PROACTIVENESS 前摄能力
(Good supplier should constantly propose alternative technology or cost-cutting options without jeopardizing quality and appearance / 好供应商应经常事先提出新的生产法案和改良方法)
Contract
number
Contract
number
RESPONSIVENESS IN PARTICIPATION TO RFx / COMPETITIVENESS 回应效率 / 竞争力
Shanghai xxxxxxxxxxx Co Ltd
Paper
No 2,Lane xxx, Xxxxx Road
Shanghai
Address 地址
City / Town 城市
SUPPLIER PERFORMANCE TRACKING 供应商项目评分
SECTOR 分类
Printing
COMPANY NAME 公司名字
General Manager Manager Assistant
Mobile phone 手机号码
cd@xxxx.comab@xxx.comEmail 电子邮址
RFQ stage 报价阶段
139xxxxxxxxx 131xxxxxxxxxxx
Recommended to
the client 已推荐
给客户
Date
(mm/yy) 日
期（月/年）
Comment 附加评语
Delivery lead-time (days) 生产期（天）
Selected for
negotiation after RFQ
报价后，已被取录
ON-TIME DELIVERY PERFORMANCE 发货守时评分
Comments on issue, impact and supplier explanation / 请解释服务性质量和它们的重要性
On-Time Delivery
Criticity 准时重要
性
RFI stage 要求资料阶段
First Name 名字
ALTERNATIVE CONTACT 其他联络人
C
MAIN CONTACT 主要联络人
A
Title 职位
If yes, please describe alternative and comment impact / 如果“有”，请解释他们的提议和重要
性
Give advice on paper to use in order to save cost
Date
(mm/yy) 日
期（月/年）
Products
#
# of days delay 延误
（天）
The current suppliers’ performance is assessed on an on-going basis
Supplier Scorecard
Competitiveness
Q1 Q2 Q3 Q4
On-time delivery
Quality
Proactiveness
B+ B+ B+ A
A A+ B A
B B+ A A+
A B+ B B
B+ A B+ B+Performance
Overall performance
Q1 Q2 Q3 Q4

Introduction of new suppliers into the sourcing pool contributes to driving
cost and quality improvements while challenging incumbent suppliers
Alternative sourcing
opportunities monitoring
Current supplier
performance management
List of qualified
suppliers
• Supplier name
• City, web site, contact
• Turnover, #employees
• Price structure
• Capacities
• Audit report
• Samples
• New supplier 1
• New supplier 2
• New supplier 3
• …
• New supplier n
• Current supplier 1
• …
• Current supplier n
Supplier pool structure
0
5
10
15
20
25
30
35
40
45
50
New suppliers (< 1 year)
New suppliers (1-2 years)
Historic suppliers (> 2 years)
> 2 years
1-2 years
<1 year

Creative agencies provide initial specifications for each product
Triple wall corrugated
fiber box
Plastic film
5 C
DIC
-
PS plastic with flocking
4mm board, 157 paper
Material
8 units / package
Subject to real size
-
-
174 gram silver paper
Subject to real size
400*120*125
Size
-Printing
shapePlastic bed & Flocking
Color -
Strength testTest Method
Mark: SKUOutside Package
Surface protection
-Ink
shape, paperhangingCardboard
Product PictureProcess requirementItem

Cross-brand quantitative requirements are consolidated by product categories
to leverage negotiation with suppliers
Fore-
cast
Actual Var.
Fore-
cast
Actual Var.
Fore-
cast
Actual Var.
Fore-
cast
Actual Var.
Fore-
cast
Actual Var.
Fore-
cast
Actual Var.
Product 1 63,548 64,993 10,560 6,744 14,175 13,823 7,484 12,207
Product 2 45,592 48,739 12,997 7,945 7,354 6,092 7,412 6,939
Product 3 46,886 50,750 9,489 7,225 13,598 8,610 5,302 6,525
Product 4 50,736 52,358 9,133 7,388 11,200 12,431 5,965 6,241
Product 5 47,616 47,833 11,542 5,819 5,796 10,704 5,896 8,075
Product 6 44,016 45,626 11,169 5,647 8,981 5,109 6,330 8,390
Product 7 47,030 48,779 10,134 5,305 9,058 9,306 6,291 8,685
Product 8 46,948 48,666 8,373 5,954 7,366 9,890 7,345 9,738
Product 9 51,204 53,550 11,104 7,424 12,723 7,770 5,057 9,471
Product 10 47,674 50,052 12,832 6,699 7,582 9,148 7,593 6,197
Product 11 59,735 64,437 11,648 6,731 14,498 13,442 6,637 11,481
Product 12 40,135 44,001 5,136 7,563 6,148 8,971 6,853 9,330
Product 13 43,453 47,023 10,732 6,967 5,852 8,930 5,839 8,703
Product 14 46,570 48,411 8,827 6,655 11,949 9,258 5,112 6,610
Total 681,142 715,217 143,676 94,067 136,280 133,485 89,116 118,593
Fore-
cast
Actual
produc-
tion
Brand 2
Var.
Brand 6Brand 5Brand 4Brand 3
Unit: pcs
Brand 12006
CNY
Actual

The RFQ process includes a supplier cost structure breakdown
to check consistency and to gain a deep understanding of price drivers
Box production TransportationPrinting and effects on the printing
C
ardboard
-纸
板
Flocking
-植
绒
Plastic
Bed
(PS)-吸
塑
O
utside
Package
-
外
包
装
Afterprocess
&
Labor-后
道
&人
工
Paper-纸
张
Ink
-油
墨G
olden/SilverPrinting
-印
金
/印
银
Film
C
overing
-覆
膜
SpotU
V
Varnishing
-过
釉
G
olden/SilverStam
ping
-烫
金
/烫
银
Em
bossing
/D
ebossing
-凹
凸
处
理
Price
ofextra
4C
printing
-4色
印
刷
Price
ofextra
6C
printing
-6色
印
刷
Price
ofextra
7C
printing
-7色
印
刷
TO
TA
L
Shanghai-上
海
Beijing
-北
京
Xiam
en
-厦
门
Zhongshan
-中
山
W
uhan
-武
汉
C
hengdu
-成
都
Supplier 1 4.49 0.32 0.28 1.54 3.87 0.26 0.62 0.04 0.44 4.62 0.28 0.23 0.07 0.55 0.05 17.7 0.21 0.09 0.43 0.67 0.79 2.18
Supplier 2 4.06 0.31 0.26 1.63 3.91 0.24 0.63 0.04 0.48 4.95 0.27 0.24 0.06 0.54 0.04 17.7 0.20 0.08 0.39 0.64 0.81 2.36
Supplier 3 4.54 0.31 0.29 1.44 3.72 0.26 0.66 0.04 0.40 4.56 0.26 0.24 0.07 0.60 0.04 17.4 0.19 0.09 0.44 0.72 0.82 2.14
Supplier 4 4.36 0.34 0.31 1.64 4.17 0.24 0.62 0.04 0.41 4.99 0.28 0.22 0.07 0.58 0.05 18.3 0.20 0.08 0.42 0.68 0.74 2.34
Supplier 5 4.42 0.31 0.26 1.45 4.01 0.24 0.58 0.04 0.43 4.27 0.30 0.25 0.07 0.58 0.05 17.3 0.23 0.08 0.43 0.71 0.79 1.98
Supplier 6 4.57 0.32 0.29 1.58 3.82 0.23 0.64 0.04 0.42 4.29 0.26 0.23 0.07 0.53 0.05 17.4 0.23 0.09 0.40 0.60 0.72 2.02
Supplier 7 4.87 0.33 0.29 1.41 4.00 0.25 0.56 0.05 0.41 4.25 0.26 0.23 0.07 0.54 0.05 17.5 0.21 0.08 0.44 0.65 0.82 2.21

The final supplier selection is based on sample quality and price level
Suppliers’ quotation
Sample
3Supplier 5
5Supplier 4
2Supplier 3
4Supplier 2
1Supplier 1
Final
Ranking
Supplier
Name
Supplier
summary
Supplier
capabilities
Supplier
assesment
Box production TransportationPrinting and effects on the printing
Cardboard
-纸
板
Flo
ckin
g
-
植
绒
Pla
stic
Bed
(PS)-
吸
塑
O
utsid
e
Package
-
外
包
装
Afterprocess
&
Labor-
后
道
&人
工
Paper-纸
张
Ink
-油
墨G
old
en/SilverPrin
tin
g
-
印
金
/印
银
Film
C
overin
g
-
覆
膜
SpotU
V
Varnishin
g
-
过
釉
G
old
en/SilverStam
pin
g
-
烫
金
/烫
银
Em
bossin
g
/Debossin
g
-
凹
凸
处
理
Price
ofextra
4C
prin
ting
-4
色
印
刷
Price
ofextra
6C
prin
ting
-6
色
印
刷
Price
ofextra
7C
prin
ting
-7
色
印
刷
TO
TA
L
Shanghai-
上
海
Beijin
g
-
北
京
Xia
m
en
-厦
门
Zhongshan
-
中
山
W
uhan
-武
汉
Chengdu
-成
都
Supplier 1 4.49 0.32 0.28 1.54 3.87 0.26 0.62 0.04 0.44 4.62 0.28 0.23 0.07 0.55 0.05 17.7 0.21 0.09 0.43 0.67 0.79 2.18
Supplier 2 4.06 0.31 0.26 1.63 3.91 0.24 0.63 0.04 0.48 4.95 0.27 0.24 0.06 0.54 0.04 17.7 0.20 0.08 0.39 0.64 0.81 2.36
Supplier 3 4.54 0.31 0.29 1.44 3.72 0.26 0.66 0.04 0.40 4.56 0.26 0.24 0.07 0.60 0.04 17.4 0.19 0.09 0.44 0.72 0.82 2.14
Supplier 4 4.36 0.34 0.31 1.64 4.17 0.24 0.62 0.04 0.41 4.99 0.28 0.22 0.07 0.58 0.05 18.3 0.20 0.08 0.42 0.68 0.74 2.34
Supplier 5 4.42 0.31 0.26 1.45 4.01 0.24 0.58 0.04 0.43 4.27 0.30 0.25 0.07 0.58 0.05 17.3 0.23 0.08 0.43 0.71 0.79 1.98
Supplier 6 4.57 0.32 0.29 1.58 3.82 0.23 0.64 0.04 0.42 4.29 0.26 0.23 0.07 0.53 0.05 17.4 0.23 0.09 0.40 0.60 0.72 2.02
Supplier 7 4.87 0.33 0.29 1.41 4.00 0.25 0.56 0.05 0.41 4.25 0.26 0.23 0.07 0.54 0.05 17.5 0.21 0.08 0.44 0.65 0.82 2.21

Very short time to market requires efficient contracting and payment management
0
5
10
15
20
25
30
35
40
45
50
55
60
65
70
75
80
6-Nov 13-Nov 20-Nov 27-Nov 4-Dec 11-Dec 18-Dec 25-Dec 1-Jan 8-Jan 15-Jan 22-Jan 29-Jan 5-Feb 12-Feb
date
#contracts
signed by supplier
signed by customer
-17
-12
-18
-29
-29
9-Nov-06
19-Nov-06
29-Nov-06
9-Dec-06
19-Dec-06
29-Dec-06
8-Jan-07
18-Jan-07
28-Jan-07
7-Feb-07
17-Feb-07
1
Theorical date of downpayment Actual date of down payment
Down payment tracking
Contract signature analysis
Order global overview
Delivery status
15-Nov-06 22-Nov-06 29-Nov-06 6-Dec-06 13-Dec-06 20-Dec-06 27-Dec-06 3-Jan-07 10-Jan-07 17-Jan-07 24-Jan-07 31-Jan-07 7-Feb-07
Product 14
Product 13
Product 12
Product 11
Product 10
Product 9
Product 8
Product 7
Product 6
Product 5
Product 4
Product 3
Product 2
Product 1
Signature date Start Production
1st batch completed 2nd batch completed
3rd batch completed Batch 1:
25/12
Batch 2:
10/01
Batch 3:
21/01
• Contract preparation in collaboration with Legal
• Close interaction with suppliers and customer to
have contracts signed rapidly
• Monitoring of customer down-payments
triggering production start
• Follow-up of production progress

Overall methodology & 7-step process
Quality is regularly monitored during production and at pre-shipment
• Dragon Sourcing teams are trained to follow a
7-step process to execute Quality inspections
• Sampling and criteria requirements are detailed
in a specific document for customer approval
• On-site data are recorded in a specifically
designed Excel table
• Inspections are documented in a report
submitted to customer
• Action plans are defined in order to improve
product quality
Sampling & Criterias
Excel recording tool
Checkitem #
Box #
Marking Inner carton Mug Quantity Mug heigth
Mug upper
diameter
Mug lower
diameter
Wall
thickness
Mug w eigth Material type Q uality
1 OK OK 48 104.3 64.9 3.6 326 OK OK
2 OK OK 48 103.4 64.5 4.2 346 OK OK
3 OK OK 48 104 64.6 3.9 344 OK OK
4 OK OK 48 104.6 64.8 3.8 317 OK OK
5 OK OK 48 104.3 57 3.6 308 OK OK
6 OK OK 48 104.8 61 3.8 317 OK OK
7 OK OK 48 103.7 64.5 3.9 328 OK OK
8 OK NO 48 103.8 62 3.9 345 OK OK
9 OK OK 48 103.3 64.1 3.1 322 OK OK
10 OK OK 48 103.2 63.4 3.7 325 OK OK
11 OK OK 48 104.4 64.8 3.9 317 OK OK
12 OK OK 48 102.3 64.2 3.2 316 OK OK
13 OK OK 48 105.4 63 4 316 MO OK
14 OK OK 45 105.6 65 4 322 OK OK
15 OK OK 48 106.3 65.6 4.1 357 OK OK
16 OK OK 48 103.4 65.5 3.9 311 NO OK
17 OK NO 48 104.7 64.1 3.8 300 OK OK
18 OK OK 48 104 60 3.8 342 OK OK

Upon production completion, daily planning ensures smooth nationwide delivery
• Tight integration with supply chain teams
• Transportation planning
• Stock level monitoring
• Anticipated dispatching to regions
• Priorization of production outputs
• Reactivity to market demand changes
• Management of quality issues at delivery
Delivery follow-up
Due date:
Brand
Delive-
ries
Objec-
tive
Ratio
achieved
Region
1
Region
2
Region
3
Region
4
Region
5
Region
6
Product 1 17,488 18,022 97% 3,323 2,273 2,448 2,798 2,973 3,673
Product 2 22,138 24,500 90% 4,206 2,878 3,099 3,542 3,763 4,649
Product 3 21,797 24,139 90% 4,141 2,834 3,052 3,488 3,706 4,577
Product 4 14,991 17,789 84% 2,848 1,949 2,099 2,399 2,548 3,148
Product 5 13,010 14,180 92% 2,472 1,691 1,821 2,082 2,212 2,732
Product 6 11,867 12,016 99% 2,255 1,543 1,661 1,899 2,017 2,492
Product 7 16,586 17,525 95% 3,151 2,156 2,322 2,654 2,820 3,483
Product 8 20,106 23,287 86% 3,820 2,614 2,815 3,217 3,418 4,222
Product 9 14,011 16,580 85% 2,662 1,821 1,962 2,242 2,382 2,942
Product 10 11,060 13,228 84% 2,101 1,438 1,548 1,770 1,880 2,322
Product 11 12,895 14,288 90% 2,450 1,676 1,805 2,063 2,192 2,708
Product 12 24,923 25,131 99% 4,735 3,240 3,489 3,988 4,237 5,234
Product 13 9,869 10,058 98% 1,875 1,283 1,382 1,579 1,678 2,072
TOTAL 210,742 230,745 91% 40,041 27,397 29,504 33,719 35,826 44,256
March 10th
CHINA

Agenda
3. Relationship with Creative Agencies

Monitor payments
Organize delivery
Prepare contracts
Weekly Steering Committee
Manages processPays supplier
Brand 3
Brand n
…
Suppliers
Produce
Design
Creative agencies
Supply Chain
Finance
Efficient sourcing requires the management of several interfaces
DS Managing
Director
DS Account
Manager
Category Buying
Engineer
Marketing Director
Marketing Services
Manager
Brand Manager
Brand Manager
Brand Manager
Brand Manager
Brand Manager
Brand Manager
Dragon SourcingCustomer
Category Buying
EngineerCategory Buying
Engineer
Marketing
Dedicated
project team
Product categories
Brand 1
Legal

The product design results from a close collaboration between Creative Agencies,
the Customer, Dragon Sourcing and the Suppliers
RFQ and Sample request
Creative agencies SuppliersDragon Sourcing
Product briefing
Customer
Quotation
Sample
Sample assessment
Sample modification request
Updated sample
Final design decision
Final quotation
Quotation analysis and recommendations
Supplier selection
Consumer research

A Supplier day is organised once a year to strenghten relationships and
communicate key messages to the qualified supply base
Attendees:
• Suppliers management and sales teams
• Customer purchasing team
• Dragon Sourcing project team
Objectives
• Present future purchasing trends and “sell” Customer as a strategic account
• Gain suppliers’ commitment to Customer’s Corporate Social Responsibility chart
• Remind suppliers of the purchasing rules of engagement
• Present main contractual evolutions

A collaborative web tool supports a live communication on project status

Project status is updated after each meeting
Promo type DS Category Contract number Supplier Item
Signed &
chopped by
supplier
Signed by
Customer
Month
CNY07 Printed Item V121 Supplier 1 Letter 4-Jan-07 12-Jan-07 Jan-07
POSM Printed Item V056 Supplier 2 Posters 4-Jan-2007 still not Jan-07
MAF06 Gifts J084 Supplier 5 jar 12-Jan-2007 still not Jan-07
MAF06 Gifts J085 Supplier 3 jar 4-Jan-2007 still not Jan-07
flow material Glass J086 Supplier 1 Wine glass 15-Jan-2007 still not Jan-07
flow material Gifts J087 Supplier 4 Watch 10-Jan-2007 still not Jan-07
MAF06 Gifts J091-1 Supplier 3 Camera 2-Jan-2007 9-Jan-07 Jan-07
MAF06 Gifts J091-2 Supplier 4 key ring 11-Jan-2007 9-Jan-07 Jan-07
Gifts V019 Supplier 2 passort holder 2-Jan-2007 Jan-07
MAF06 Gifts V020 Supplier 5 back pack 22-Jan-2007 no Jan-07
MAF06 Gifts V021 Supplier 3 Camera 23-Jan-2007 still not Jan-07
MAF06 Gifts V022 Supplier 1 Gym bag 17-Jan-2007 no Jan-07
MAF06 Gifts V023 Supplier 4 back pack 26-Jan-2007 still not Jan-07
events Gifts V025 Supplier 3 Gym bag 26-Jan-2007 still not Jan-07
events Gifts V026 Supplier 4 key ring 26-Jan-2007 still not Jan-07
MAF06 Gifts V040 Supplier 2 manicure kit 16-Jan-2007 Jan-07
MAF06 Gifts V064 Supplier 5 passort holder 15-Jan-2007 Jan-07
Gifts W095 Supplier 3 plastic pen 23-Jan-2007 19-Jan-07 Jan-07
Gifts W096 Supplier 1 Gym bag 12-Jan-2007 still not Jan-07
Gifts W097 Supplier 4 Travel bag 8-Jan-2007 still not Jan-07
Gifts W098 Supplier 3 back pack 16-Jan-2007 still not Jan-07
Gifts W099 Supplier 4 Ice bucket 16-Jan-2007 no Jan-07
Gifts W100 Supplier 2 key ring 15-Jan-2007 18-Jan-07 Jan-07
Gifts W101 Supplier 5 manicure kit 29-Jan-2007 24-Jan Jan-07
Gifts W102 Supplier 3 passort holder 15-Jan-2007 still not Jan-07
Gifts W103 Supplier 1 plastic pen 23-Jan-2007 still not Jan-07
Gifts W104 Supplier 4 tent card 5-Feb-2007 still not Feb-07
Gifts W105 Supplier 3 plastic pen 5-Feb-2007 17-Jan-07 Feb-07
MAF06 Gifts J088-1 Supplier 4 passort holder 12-Feb-2007 no Feb-07
flow material Gifts J088-2 Supplier 2 Gift box additional order 2-Feb-2007 Feb-07
flow material Gifts J088-3 Supplier 2 standee 6-Mar-2007 Mar-07
Supply Contracts managed by Dragon Sourcing - Starting May 2005

Agenda
1. Context
2. Sourcing Process
3. Contract Governance
4. Conclusions

Budget and current spend evolution
0
10
20
30
40
50
60
70
80
90
2004 2005 2006
Budget
Actual spend
Despite double-digit budget increases and increases in product quality
requirements, the actual spend has been maintained below the initial budget
Double-digit
budget
increase
Double-digit
budget
increase
-25%
-20%
Outsourcing
to Dragon
Sourcing

In addition to these significant savings, other soft benefits have been achieved
after nearly two years of collaboration
• Total transparency over sourcing process and supplier base
• Greatly reduced supply chain risks
– CSR
– Availability
• Improved Quality of the spec and to the spec
• Reduced time to market
• Internal Marketing team totally focused on higher value added activities

Case Study - Optimize your Marketing Expenditures in China

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