A leading Brazil-based multinational steel producer with major manufacturing and procurement operations across the Americas. CPG was engaged to evaluate China sourcing opportunities across a large portfolio of indirect industrial materials as part of a broader strategic procurement initiative.
Challenges
The client wanted to determine whether China could provide competitive, technically viable alternative sources for a large and highly diverse portfolio of industrial products used across its operations in the Americas.
The project required CPG to evaluate 767 SKUs across bearings, electrical materials, and power-transmission products, while accounting for technical equivalency, supplier capabilities, certifications, regulatory requirements, tariffs, logistics, and total landed cost.
CPG Solutions
- Large-Scale Market & Supplier Research: Conducted structured China market research across 767 SKUs and multiple industrial supply markets.
- Supplier Identification & Qualification: Contacted more than 300 Chinese suppliers and evaluated respondents using a structured framework covering legitimacy, production capabilities, quality systems, industry experience, technical responsiveness, and commercial suitability.
- Technical Product Matching: Classified sourcing opportunities according to whether Chinese suppliers could provide identical products, customized functional equivalents, or alternative products requiring further technical validation.
- RFQ & Commercial Benchmarking: Conducted large-scale competitive benchmarking across the prioritized portfolio, comparing Chinese sourcing economics against the client’s existing procurement costs.
- Landed-Cost Analysis: Modeled freight, insurance, tariffs, duties, and taxes for major destinations in the Americas to evaluate realistic sourcing economics rather than relying solely on factory pricing.
- Risk & Feasibility Assessment: Evaluated technical, compliance, certification, supplier, and commercial risks and developed category-specific recommendations and implementation priorities.
Results
- Identified multi-million-dollar potential annual savings opportunities across the client’s indirect-material portfolio.
- For bearings alone, conservative implementation modeling indicated approximately $1.5M–$2.0M+ in potential annual savings, with substantially greater theoretical upside if a larger portion of the opportunity is successfully validated and adopted.
- Identified selected categories with preliminary landed-cost savings potential of 75% or more, while also identifying categories where certification, technical requirements, or supply-chain risks could materially reduce or eliminate the China sourcing advantage.
- Provided the client with a clear category-by-category sourcing strategy, allowing procurement resources to focus on the highest-potential opportunities while avoiding categories where China was not currently attractive.
- Established a phased implementation roadmap covering technical validation, supplier due diligence, pilot orders, total-cost verification, and eventual integration of successful suppliers into the client’s broader procurement program.
Service Length/Status
2025–2026 / Ongoing
