CHALLENGES IN INDIRECT SOURCING IN RETAIL JEWELRY INDUSTRY BY TRISTA - - PowerPoint PPT Presentation

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CHALLENGES IN INDIRECT SOURCING IN RETAIL JEWELRY INDUSTRY BY TRISTA AU YEUNG DATE: 10 JUL 2015 1 3 JULY 2015 PANDORA COMPANY PRESENTATION CONTENT PANDORA at a glance Procurement at PANDORA Challenges How we deal with

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CHALLENGES IN INDIRECT SOURCING IN RETAIL JEWELRY INDUSTRY

3 JULY 2015 PANDORA COMPANY PRESENTATION 1

BY TRISTA AU YEUNG

DATE: 10‐JUL‐2015

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CONTENT

3 JULY 2015 PANDORA COMPANY PRESENTATION 2

Challenges
How we deal with Challenges
Q & A
PANDORA at a glance
Procurement at PANDORA

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PANDORA AT A GLANCE

3 JULY 2015 PANDORA COMPANY PRESENTATION 3

Founded in 1982 by Per and Winnie

Enevoldsen

Present in more than 90 countries across six

continents

Our cornerstone product is the collectible

charm bracelet, complemented by a range

f other jewelry
Positioned within the affordable luxury

segment of fine jewelry

Vertically integrated business model, from

in‐house design and production to global marketing and direct distribution

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PANDORA AT A GLANCE

3 JULY 2015 PANDORA COMPANY PRESENTATION 4

The very first PANDORA concept store

pened in Hamburg, Germany, in 2006

In 2015, we have over 1400 concept stores around the world His dream has come true. Today, PANDORA has over 10,00 points of sale PANDORA founder Per and Winnie had a dream that they would one day be able to travel the world and see a PANDORA store on every high street

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PROCUREMENT AT PANDORA

Indirect Procurement Covers :

Fixtures and Furniture
POS Materials

‐ Jewelry Boxes ‐ Shopping bags ‐ Standard Display ‐ VM Campaign Material

Gift with Purchase (GWP)

PANDORA COMPANY PRESENTATION 3 JULY 2015

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PROCUREMENT AT PANDORA

FIXTURES & FURNITURE

PANDORA COMPANY PRESENTATION 3 JULY 2015

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PROCUREMENT AT PANDORA

FIXTURES & FURNITURE

PANDORA COMPANY PRESENTATION 3 JULY 2015

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PROCUREMENT AT PANDORA

FIXTURES & FURNITURE

PANDORA COMPANY PRESENTATION 3 JULY 2015

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PROCUREMENT AT PANDORA

POSM – Packaging

PANDORA COMPANY PRESENTATION 3 JULY 2015

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PROCUREMENT AT PANDORA

POSM – Standard Display

PANDORA COMPANY PRESENTATION 3 JULY 2015

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PROCUREMENT AT PANDORA

POSM – VM Campaign Material

PANDORA COMPANY PRESENTATION 3 JULY 2015

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PROCUREMENT AT PANDORA

Gift with Purchase (GWP)

PANDORA COMPANY PRESENTATION 3 JULY 2015

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CHALLENGES

Lack of Labour in China (esp. Southern China)

People tend to get a job in their home town
Young generation does not want to work in the

factories

They want to work in service industry
They want to have a more relaxing life (work‐life

balance)

PANDORA COMPANY PRESENTATION 3 JULY 2015

Rising labour cost in China

Min. wage in China changes every year
Appreciation of RMB

Insufficient Capacity

Limitation of the land for further expansion
Lack of workers
Some of the process cannot be done by machinery

e.g. folding of shopping bag

Large order volume (Global scale)

CSR Issues

Working hours & Benefits
Health & Safety

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HOW WE DEAL WITH THE CHALLENGES

Sourcing for new supplier

To look at the suppliers whose located out of

Guangdong area or even out of China

For example: Southeast Asia

PANDORA COMPANY PRESENTATION 3 JULY 2015

Vendor selection thru Tendering

RFP / RFI / Pre‐visit / Cost Comparison
Prototyping
Re‐submission of pricing
To select the best performing supplier and achieve

cost saving

Vendor management

QBR meeting – provide the supplier with

performance feedback

Two‐way evaluation form
CSR training

Multiple Suppliers

Never put all eggs in one basket
Mitigate supply chain risk – contingency planning
Improved capacity
Better quality and services with competition

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Geographical Spread of Social Audits

PANDORA COMPANY PRESENTATION 3 JULY 2015

GEOGRAPHICAL LOCATION OF SUPPLIERS IN CHINA

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NEW SOURCE OF SUPPLIERS

3 JULY 2015 GROUP PROCUREMENT ‐ 2ND TENDER F&F 16

Malaysia: 1) Some fixture suppliers has set up their manufacturing facility in Malaysia. 2) Comparable brands reference Vietnam: 1) They are growing in home furniture business but don’t have any large manufacturers for retail fixtures. 2) High inflation rate i.e. 8% 3) High Economic and Political risk Indonesia: 1) Capacity & delivery issue 2) Turnover rate of worker is high. Thailand: Thailand is more famous in home and outdoor furniture, not retail fixtures.

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3 JULY 2015 PANDORA COMPANY PRESENTATION 17

THAN THANK YOU YOU

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Q & A

3 JULY 2015 PANDORA COMPANY PRESENTATION 18