Are Reverse Auctions Strategic? YES THEY ARE!!!!!!!

May 5th, 2016

It really does not depend on who you ask as much as how you intend to use them!

 

Today’s post is from Ron Southard, CEO at SafeSourcing.

This argument has continued unabated for years so this author is going to jump in and take a look based on my teaching background albeit that was a long time ago if you remember the 3 – R’s.

First of all, what is strategic is entirely up to the person or group using the tool, whether or not they have used it before and if it returns the results they require as part of their strategic plan. There really is only one meaning to the word strategic. So can a reverse auction be strategic? Of course it can. A companies overlying strategy whether we agree with it or night might be to simply get costs under control as quickly as possible. At least in the first year of tool use. I shudder to think that this would be a company’s entire strategy, but in these times of economic survival, it may well be. I can envision the following. The economy, competition or board of directors are kicking a company’s ass and the CEO calls a  staff meeting and says we have a new strategy and for the time being everything else will take a back seat in order to get our costs down. Come back in a week and tell you how you are going to do this immediately.

Now for the English lesson.

The word strategy is a noun that has several definitions. According to Wiktionary, 2 of those are.

1. A plan of action intended to accomplish a specific goal
2. The art of using similar techniques in politics or business

The word strategic is an adjective which we know is a word that modifies a noun and can also me modified by an adverb. So think of strategic as meaning of and pertaining to strategy and can be used comparatively as in something that is more strategic or less strategic.

So can a reverse auction or auctions be strategic. Of course they can and one example would be if your strategy was to simply reduce costs immediately. They can also be more strategic as part of a going forward strategy as well as provide other strategic benefits such as cleaning up your specifications and reporting as well as providing new sources of supply.

If your plan strategic or otherwise calls for reducing costs a.s.a.p. please contact a SafeSourcing customer’s services representative. We can help, and more of you may keep your jobs.
We look forward to and appreciate your comments.

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