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

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 Challenges • Q & A 2 3 JULY 2015 PANDORA COMPANY PRESENTATION

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 3 JULY 2015 PANDORA COMPANY PRESENTATION

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 3 JULY 2015 PANDORA COMPANY PRESENTATION

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 3 JULY 2015 PANDORA COMPANY PRESENTATION

PROCUREMENT AT PANDORA FIXTURES & FURNITURE 6 3 JULY 2015 PANDORA COMPANY PRESENTATION

PROCUREMENT AT PANDORA FIXTURES & FURNITURE 7 3 JULY 2015 PANDORA COMPANY PRESENTATION

PROCUREMENT AT PANDORA FIXTURES & FURNITURE 8 3 JULY 2015 PANDORA COMPANY PRESENTATION

PROCUREMENT AT PANDORA POSM – Packaging 9 3 JULY 2015 PANDORA COMPANY PRESENTATION

PROCUREMENT AT PANDORA POSM – Standard Display 10 3 JULY 2015 PANDORA COMPANY PRESENTATION

PROCUREMENT AT PANDORA POSM – VM Campaign Material 11 3 JULY 2015 PANDORA COMPANY PRESENTATION

PROCUREMENT AT PANDORA Gift with Purchase (GWP) 12 3 JULY 2015 PANDORA COMPANY PRESENTATION

CHALLENGES Lack of Labour in China (esp. Southern China) Rising labour cost in China • People tend to get a job in their home town • Min. wage in China changes every year • Young generation does not want to work in the • Appreciation of RMB factories • They want to work in service industry • They want to have a more relaxing life (work ‐ life balance) Insufficient Capacity CSR Issues • Limitation of the land for further expansion • Working hours & Benefits • Lack of workers • Health & Safety • Some of the process cannot be done by machinery e.g. folding of shopping bag • Large order volume (Global scale) 13 3 JULY 2015 PANDORA COMPANY PRESENTATION

HOW WE DEAL WITH THE CHALLENGES Sourcing for new supplier Vendor selection thru Tendering • To look at the suppliers whose located out of • RFP / RFI / Pre ‐ visit / Cost Comparison Guangdong area or even out of China • Prototyping • For example: Southeast Asia • Re ‐ submission of pricing • To select the best performing supplier and achieve cost saving Multiple Suppliers Vendor management • Never put all eggs in one basket • QBR meeting – provide the supplier with performance feedback • Mitigate supply chain risk – contingency planning • Two ‐ way evaluation form • Improved capacity • CSR training • Better quality and services with competition 14 3 JULY 2015 PANDORA COMPANY PRESENTATION

GEOGRAPHICAL LOCATION OF SUPPLIERS IN CHINA Geographical Spread of Social Audits 15 3 JULY 2015 PANDORA COMPANY PRESENTATION

NEW SOURCE OF SUPPLIERS 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 Thailand: risk Thailand is more famous in home and outdoor furniture, not retail fixtures. 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 3 JULY 2015 GROUP PROCUREMENT ‐ 2ND TENDER F&F

THAN THANK YOU YOU 17 3 JULY 2015 PANDORA COMPANY PRESENTATION

Q & A 18 3 JULY 2015 PANDORA COMPANY PRESENTATION