E-Procurement tools have been around since the late 1990’s. Reverse auctions are probably the tool that most companies are familiar with or have some knowledge of.
There are well established processes which when followed will create higher quality sessions for the retailer and their supplier partners, resulting in better savings or cost avoidance dependant upon the category and market condition.
Although brief, the list below provides a good framework by which to build your program and should get you headed in the right direction.
1. Executive sponsorship is mandatory by the CEO,CFO and or the COO
2. Get the entire buying organization together for a kickoff session.
3. Provide an over view of what you are going to do and the impact it can have on the company. Use company financial models.
4. Discuss and agree on success criteria.
5. Every event is not a homerun. Singles and doubles score runs.
6. Create a fun environment.
7. Consider prizes for the most creative use of an auction.
8. Use scorecards by department with percent of savings.
9. Discuss the meaning and importance of corporate aggregation.
10. Hand out event templates to gather existing product specifications.
11. Put a time requirement on data collection.
12. Gather an accurate list of your present suppliers.
13. Work with your sourcing company to identify a top 100 list of events.
14. Calendar the events.
15. Prioritize by dollar value, date and strategic value.
16. Conduct department level discovery meetings of 30 minutes to an hour.
17. Investigate existing contract language.
18. Look for auto renewal (evergreen) language roadblocks.
19. Determine alternate sources of supply with your sourcing company.
20. Develop an event rules and instruction template and post with each event.
Although these steps are not all encompassing, they provide a format for getting started that offers the best opportunity for reduction in capital expense, cost of goods, expenses and improvement in corporate earnings.
We look forward to and appreciate your comments.