CHALLENGES IN INDIRECT SOURCING IN RETAIL JEWELRY INDUSTRY BY TRISTA AU YEUNG DATE: 10 JUL 2015 1
CONTENT PANDORA at a glance Procurement at PANDORA Challenges How we deal with Challenges Q & A 2
PANDORA AT A GLANCE 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 of 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 3
PANDORA AT A GLANCE 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 His dream has come true. Today, PANDORA has over 10,00 points of sale The very first PANDORA concept store opened in Hamburg, Germany, in 2006 In 2015, we have over 1400 concept stores around the world 4
PROCUREMENT AT PANDORA Indirect Procurement Covers : Fixtures and Furniture POS Materials Jewelry Boxes Shopping bags Standard Display VM Campaign Material Gift with Purchase (GWP) 5
PROCUREMENT AT PANDORA FIXTURES & FURNITURE 6
PROCUREMENT AT PANDORA FIXTURES & FURNITURE 7
PROCUREMENT AT PANDORA FIXTURES & FURNITURE 8
PROCUREMENT AT PANDORA POSM Packaging 9
PROCUREMENT AT PANDORA POSM Standard Display 10
PROCUREMENT AT PANDORA POSM VM Campaign Material 11
PROCUREMENT AT PANDORA Gift with Purchase (GWP) 12
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 Rising labour cost in China Min. wage in China changes every year Appreciation of RMB They want to work in service industry They want to have a more relaxing life (work life balance) Insufficient Capacity Limitation of the land for further expansion Lack of workers CSR Issues Working hours & Benefits Health & Safety Some of the process cannot be done by machinery e.g. folding of shopping bag Large order volume (Global scale) 13
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 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 Multiple Suppliers Never put all eggs in one basket Mitigate supply chain risk contingency planning Improved capacity Better quality and services with competition Vendor management QBR meeting provide the supplier with performance feedback Two way evaluation form CSR training 14
GEOGRAPHICAL LOCATION OF SUPPLIERS IN CHINA Geographical Spread of Social Audits 15
NEW SOURCE OF SUPPLIERS Thailand: Thailand is more famous in home and outdoor furniture, not retail fixtures. 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. Malaysia: 1) Some fixture suppliers has set up their manufacturing facility in Malaysia. 2) Comparable brands reference 16 GROUP PROCUREMENT 2ND TENDER F&F
THANK YOU 17
Q & A 18