Sherbourne Consulting

Case Study Sourcing Construction Components in Asia

Sherbourne Consulting specialise in helping companies develop and execute procurement from low-cost countries.

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We have extensive experience across a wide range of materials and products for the construction sector.

Case Study Summary

Our client was a fast-growing SME providing products and services nationally for the UK construction industry. They had reached a scale of operations to consider purchasing materials and components directly from low-cost countries, rather than through distributors in the UK.

Photograph of Graham Barker, China consultant

For enquiries, please contact: Mr. Graham Barker
Asia Sourcing Specialist
+44 (0)1789 731 803
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Sherbourne Consulting has wide experience in Asia, with specialist consultants based in the UK and China. We have the insight and knowledge to source materials, components and finished products and provide long-term support.

Please contact our team for any further information or arrange an appointment for a more detailed discussion and tailor-made advice.


Client — UK Construction Firm

Our client was a fast-growing provider of products and services for the UK construction industry.

They had a good reputation for executing large, complex projects — from airport terminals to the power transmission industry — whilst maintaining enviable safety standards.

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Whilst experiencing rapid growth, the company recognised the need for external support to develop a sourcing strategy for the direct purchase of materials and products from Asia.

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The range of materials and products included pressings, forgings, castings, fasteners, welded assemblies, plastic laminates and woven fabrics. Processes required included galvanising, zinc plating, painting and printing. All of the products needed to meet strict BS/EN requirements.


Requirements — Sourcing Directly from Offshore Suppliers

The client asked us to develop a strategy and implementation programme for offshore sourcing and deliver a complete solution.

We undertook a full review of:

Our client knew that their UK suppliers were importing from Asia, but needed to really understand the product costs and ensure that quality levels could be met consistently.

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Approach — Transition to Offshore Purchasing

Sherbourne Consulting has developed proven techniques to identify and map the key stages, and adapted this approach to the unique requirements of the client.

To establish target pricing and expected savings, we started by analysing the products, standards, and volumes currently purchased in order to identify products which were viable to source directly and establish priorities by reviewing the overall value of savings.

Initial Sourcing in India & China

Our research identified that India, as well as China, was a very viable source for many items.

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Suppliers were identified using terms of reference established in our methodology to pre-qualify them.

“Our ability to research, locate and evaluate sources objectively was critical to the project's success.” Jeremy Waller, Sherbourne Consultant

A detailed RFQ was developed: setting out the engineering standards, material specifications, and projected quantities. It was sent out to over 90 potential suppliers.

Pricing was evaluated using TCA models to assess indirect costs of procurement and delivery through to the clientʼs warehouse. Suppliers were short-listed based on a basket of factors.

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Mapping of prices was used to demonstrate pricing on a geographic basis in India and China compared with current and target prices for each product. This provided a target group of suppliers that met the agreed objectives and warranted further investigation.

Qualification of Suppliers & Factories

Visits were arranged to assess the suppliersʼ factories and ensure that they could meet the standards needed.

This involved an intensive trip to India and China covering over a dozen cities, meeting and evaluating over 30 potential suppliers. About 30% were rejected as a result of this process.

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Implementation with Suppliers — Testing Sample Products

After further price and specification checking, a shortlist of recommended potential suppliers was agreed for each product category.

Samples of the products were arranged to be made to the clientʼs requirements for evaluation. As a final confirmation before initial volume supply could be agreed, samples were tested to the appropriate British standards by an external testing house in the UK.

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Results & Benefits — Profitable Direct Sourcing

“We were new to sourcing outside the UK and the consultants achieved all our goals by their practical, hands-on approach — working closely with us. The visits to factories in India and China were excellent and really taught us a lot.” — Andy Needham, Client Managing Director

This project entailed many safety critical components, across a range of industries and two key countries. The results were overwhelmingly in support of a direct sourcing strategy:

The end result was a successful selection of a strong and fully-validated group of 8 suppliers across the wide range of products.

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By using regular reviews with senior management and a highly detailed, pragmatic approach, we were able to exceed the clientʼs expectations for savings by a considerable amount.

The client was able to work with us and position themselves as a highly attractive customer by visiting suppliers and assessing them first hand in a structured methodology. Results were achieved in the required timeframe and this could not have been achieved without our consulting work.


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