Archive for the ‘Procurement Auctioning’ Category
Thursday, September 2nd, 2010
I was reading a blog post from the Doctor over at Sourcing Innovation today titled “A Hitchhiker’s Guide to e-Procurement: Terminology” and I thought it was great as well as very timely.
Ultimately it is up to practitioners and solution providers of these tools to educate their customers as to what the proper terms are for the tools they are using. As an example E-RFI, E-RFP, E-RFQ. I have numbers of customers that have used other solution providers and not only are the definitions different by customer; they are actually different within a specific company. In some cases everything is referred to as a reverse auction and in other situations the companies have made up their own name for the service or tool.
This author uses Wikipedia and Wictionary quite often as a source and in this case, they have a very good definition that covers most of the terminology in the entire e-procurement space as well as related B2B and B2C internet based or private network based functions. As your company moves in the direction of a computerized supply chain management solution for your company understanding what you are asking for and what you are using will make both your job and that of your solution provider easier.
We look forward to and appreciate your comments.
Posted in B2b Reverse Auction, B2b Supply Chain, E-procurement, E-procurement Solutions, E-procurement Tools, E-supply Chain, Eprocurement Auction, Online Procurement, Online Reverse Auction, Procurement Auctioning, Procurement Outsourcing, Procurement Purchasing, Procurement Solutions, Procurement Tool, Product Procurement, Reverse Auction, Reverse Auction Procurement, Supply Chain Procurement
Thursday, August 5th, 2010
Just because you need to buy a product or service does not mean that you will receive the optimal price for that product. For certain products there are better times to run e-procurement events and if you miss that opportunity by even a couple of weeks the lost savings could be astronomical.
Some consumers give this considerable thought when they buy products like cars, computers, televisions, furniture and even certain food products. Retail buyers should be doing the same. If you are the poultry buyer planning for Thanksgiving, you do not want to be buying your frozen turkeys in July and quite frankly if you buy them in March you are probably going to miss out on some savings. The same could be said for just about any type of fresh produce. You can certainly get everything in today’s world at any time of year, but there are better times to do it than others.
A couple of tangential examples that require careful thought would be landscaping services and snow removal services for store parking lots and distribution centers. The services for the most part may be provided by the same suppliers. The optimal time to source landscaping may be the month of March while the optimal time for sourcing snow removal services may be September. These months also mark the beginning and end of the respective service seasons for each service. Even though you may get the service from the same provider, keeping the services separate leaves the leverage with the retailer when you source the other service for the upcoming season. This is also the time when the suppliers are looking for business that will sustain them through the upcoming season as another winds down.
Make sure you ask your e-procurement solutions provider to assist you with the apropriate timing to source your goods and services.
We look forward to and appreciate your comments.
Posted in E-procurement, E-procurement Solutions, E-procurement Tools, Online Reverse Auction, Procurement Auctioning, Reverse Auction, Reverse Auction Procurement
Friday, July 30th, 2010
A reserve is also sometimes called the desired price, or a “qualification price”. Careful thought is required on the part of the retailer in determining their reserve price. Quite often retailers just rely on their existing or current price from their last contract. If careful thought is not given, this may in fact create an unreasonable expectation that results in less participation from prospective suppliers, particularly if the market has changed dramatically in an upward direction since the last award of business. You have to be very careful that once a reserve is met that suppliers will stop bidding because you have already indicated your desire price point.
In a reserve revere auction if the bidding does not reach the “reserve price”, the buyer is not obligated to award the business based on the results of the reverse auction. This can also add risk to the participation level of suppliers. However once the reserve price is met, the buyer is obligated to award the business to a participating supplier or group suppliers based on previously published auction rules. Most reverse auctions today include terms and conditions that protect the retailer from awarding the business whether the reserve is met or not. This author would caution that if you are just trying to collect prices to analyze market conditions, tell the suppliers up front. If you set a reserve plan to award the business.
Additional pricing considerations can be given to adding other price points or qualifiers in a reserve price reverse auction such as entering a market price. In the case of fuel, this may be from a price index such as OPIS, Platt or Gulf Coast. This information can be visible or blind to the supplier, but let’s the retailer compare a suppliers mark up strategies. This also offers a nice opportunity to calculate cost avoidance during an up market.
We don’t see reserve auctions to often anymore, but understanding the different types of formats and tools available to you and assessing them in your event setup for their potential impact can add to the quality of the data collected and the event itself.
We look forward to and appreciate your comments
Posted in B2b Reverse Auction, Online Reverse Auction, Procurement Auctioning, Reverse Auction, Reverse Auction Procurement
Wednesday, June 2nd, 2010
A Forward Auction is part of most e-negotiation tool belts. Probably the most well known type of forward auctions are those run by eBay. These tools are often overlooked as a way for companies to sell items that represent overstock, out of cycle, buffer stock, new old stock and other types of inventory that has been paid for and not sold through.
Placing these items for sale on your e-procurement provider’s website so that buyers from a variety of formats such as dollar stores, liquidation companies and other overstock resellers can bid for the items can positively impact shrink.
The simple philosophy here is that getting something for inventory that has already been paid for is better than getting nothing. The biggest dilemma to this solution is that most retailers do not know what is in the back rooms of their stores or how long it has been there.
An issue the above can create is the misinterpretation that shrinkage caused by employee theft, error or other mistakes is actually higher than it is.
There are any numbers of sources that report on annual retail shrinkage numbers. It is safe to say that average shrink numbers across the retail industry has hovered around 3% for years, although you will find significantly higher numbers by specific retail industry vertical.
The fact is that for a one billion dollar supermarket company, this represents $30,000,000.00 annually. With net earnings in this vertical averaging 1%, a reduction in shrink of 33% can improve earnings by as much as 100%.
A quick hit to these numbers can be accomplished by a forward auction. What do you have to lose? Better yet, what do you have to gain?
We look forward to and appreciate your comments.
Posted in Business Sourcing, E-procurement, E-procurement Solutions, E-procurement Tools, Eprocurement Auction, Online Procurement, Procurement Auctioning, Procurement Outsourcing, Procurement Purchasing, Procurement Solutions, Procurement Tool
Monday, May 24th, 2010
Part III Reasons to Use E-Procurement
Sometimes an explanation can be lost in translation so we have developed the following 20 reasons why utilizing the technology-based e-procurement process can provide significant benefits to you and your company. These are certainly not all of the benefits that can be derived from the use of the e-procurement process, but it is a good starting point.
While this list is not ranked in order of importance, many might argue that not much is more important than the #1 item which is improved earnings.
• Improve net earnings
• Enhance safety
• Reinforce corporate social responsibility
• Find new sources of supply
• Streamline the procurement process
• Elevate supplier accountability to meet your standards
• Improve quality
• Reduce costs in a volatile market
• Ensure a competitive environment
• Buy at market pricing
• Maintain a reliable history for comparison
• Educate suppliers as to how you wish to procure products
• Eliminates questions through effective supplier training
• Maintain consistent product specifications
• Improve negotiation
• Improve carbon footprint
• Simplify your “award of business” process
• Free up time for other tasks
• Process works for all product categories
• Provide a detailed audit trail
E-procurement offers many benefits for a broad range of companies in a variety of industries, assuming that the process selected is a high quality system with an extensive supplier database. We must also assume that the e-procurement process is implemented properly with the purchasing company and that the experienced e-procurement system provider works in concert with the buyer in order to realize optimal cost savings.
Numerous technology advancements have streamlined the e-procurement process and made it more user-friendly and less expensive. A company today can expect to reap significant benefits from e-procurement, including: saving money on purchases, reducing the time involved in the purchasing process, tracking current and archival activities and results, eliminating waste and improving the overall efficiency of the supply chain.
Take advantage of the technology advancements and don’t overlook the benefits of implementing an e-procurement process to strengthen your company’s bottom line.
To download copies of this entire article please use the following link.
We look forward to and appreciate your comments.
Posted in E-procurement, E-procurement Solutions, E-procurement Tools, Eprocurement Auction, Global E-procurement, Green eProcurement Practices, Online Procurement, Procurement Auctioning, Procurement Company, Procurement Outsourcing, Procurement Purchasing, Procurement Solutions, Procurement Tool, Product Procurement, Reverse Auction Procurement, Supply Chain Procurement
Friday, May 21st, 2010
Getting Started
First and foremost in getting the e-procurement process right is to select a solution provider or partner that knows what they are doing and is willing to work closely with you during the early part of the process. The e-procurement plan for each company will be somewhat different in order to meet the specific needs of the company. There is however a general order to things that will provide the best opportunity for success.
To realize the most benefit from your e-procurement process, you will need to:
• Develop your strategy
• Complete a detailed discovery
• Learn to understand how to set up your procurement events, even if handled by your provider.
• Use a provider with a high quality process and an extensive database for sourcing suppliers
• Clearly communicate how events will be run or executed to all involved parties • Review the process for sustainability and adjust as necessary
As mentioned earlier, it is incumbent upon your e-procurement solutions provider to be able to assist you in completing these tasks in a reasonable period of time. You should be checking the background of the team and the leadership that will be assisting you to ensure their understanding of your industry such as operations, technology, procurement, warehouse management, logistics, transportation, loss prevention, store management and other functional areas of your business that will be sourcing products and services. It is all about detail because knowledgeable attention to detail will improve quality, reduce costs and ensure the success of your company’s new e-procurement process.
Please join us for part III of this post series on Monday titled Reasons to Use E-Procurement.
To download the entire article please use the following link.
We look forward to and appreciate your comments.
Posted in E-procurement, E-procurement Solutions, E-procurement Tools, Eprocurement Auction, Global E-procurement, Green eProcurement Practices, Procurement Auctioning, Procurement Company, Procurement Outsourcing, Procurement Purchasing, Procurement Solutions, Procurement Tool, Product Procurement, Reverse Auction Procurement
Friday, May 7th, 2010
It hardly seems possible that we launched our company two years ago. At the time there were indicators for those paying attention of trouble in the global economy but know one had any idea just how bad it was going to get. In hindsight what a time to launch a company. When customers and business partners asked me why, my response was if you are doing what you believe in and the results you promise are true, then there really is no bad time to launch a business.
Our promise has been the same from day one, to reduce the cost of goods and services regardless of a company’s size or the size of the category being sourced. And, while doing so improve quality, safety and environmental focus. Today, two years later our customers will attest to the fact that we have held true to that promise.
Following is a short list of accomplishments that we are very proud of.
1. Over 700 educational blog posts relative to e-procurement issues of importance.
2. Over 1500 useful procurement related wiki terms and definitions.
3. Added an average of more than one new customer for every month in business.
4. Grew our supplier data base to greater than 380,000 retail suppliers
5. Sourced 100’s of categories from commodities to finished goods and services.
6. Sourced categories as small as $5K with savings > 30%.
7. Sourced categories as high as $80M.
8. Never held an e-negotiation event that did not result in savings.
9. Conducted every process in e-procurement including RFI, RFP and RFQ.
10. Installed our product in Asia in a multi lingual implementation.
11. Averaged over 24% savings over two years.
12. Developed a unique process for sourcing small spends for the retail mid market.
13. Grew our database to over a terabyte of data.
14. Helped companies source with environmental and social consciousness
15. Today released SafeContract™ a fully featured hosted Contract Management System.
To our customers thank you for your support. We endeavor to earn your business every day. To our business partners thank you for your guidance during a tough economic period. To the retail industry our goal is to be your best vehicle for reducing costs and improving earnings with an increased focus on corporate social responsibility.
Thank You.
Posted in B2b Reverse Auction, B2b Supply Chain, Business Sourcing, E-procurement, E-procurement Solutions, E-procurement Tools, E-supply Chain, Eprocurement Auction, Global E-procurement, Green eProcurement Practices, Online Procurement, Online Reverse Auction, Procurement Auctioning, Procurement Company, Procurement Outsourcing, Procurement Purchasing, Procurement Solutions, Procurement Tool, Product Procurement, Retail Supply Chain, Reverse Auction, Reverse Auction Procurement, Sourcing Safe Foods, Sourcing Safe Products, Sourcing Strategy, Strategic Sourcing, Supply Chain Procurement
Monday, April 19th, 2010
There really is no reason to shy away from taking any product or service to reverse auction as part of your overall e-negotiation strategy to compress pricing.
There are however some simple questions companies can ask themselves when considering any product, service, or category for consideration in the e-negotiation process. Several but not all of those questions would certainly include the following three.
1. How many suppliers are available and willing to bid on your business?
It’s obvious your company is already aware of your incumbent suppliers. The more important question is what other suppliers are available and how can you find them.
Several will exist within you own geographical area that you are not even aware of. Many others may be located across the country that are also very interested in earning your business.
2. Does your company have the complete detailed product specifications for this product or service readily available or are you familiar with a source from which you can get them easily?
Are your products specifications kept in some form of central repository or are they in the mind of your buyer? This is the single largest obstacle to successful e-negotiation events.
3. How much of the product or service are you willing to commit to buy over what period of time?
What period of time are you buying for? Is there an opportunity to contract for a longer period of time in order to raise volumes? Is there an opportunity to aggregate dissimilar products in order to increase the e-auction size?
If you are well prepared, there are suppliers willing to bid for your business that offer quality equal to or better than what you are presently receiving for your products and services at a better price and with better service. That’s win-win-win.
We always look forward to and appreciate your comments
Posted in E-procurement, E-procurement Solutions, E-procurement Tools, Online Procurement, Online Reverse Auction, Procurement Auctioning, Procurement Solutions, Strategic Sourcing
Thursday, April 1st, 2010
I was speaking to a senior vice president and head of a procurement organization yesterday that said what SafeSourcing really offers us is access to suppliers that we do not know exist or where to find them. He went on to say that his team and himself personally spend all day negotiating contracts and there are just many projects that they do not have the time to conduct the necessary research or solicitation of all the information including bids that SafeSourcing has ready access to.
A logical focal point for hosting a competitive reverse auction is to assemble all of your present vendors for a particular category that you hold in good standing. These would be suppliers from whom you have historically sourced products using traditional means. In general the principal is that the more vendors or suppliers you have participate, the greater your potential results.
However the above does also require strategic thinking because your company is beginning a process that you wish to use on a recurring basis. As such inviting the same suppliers again and again may initially seem to make sense. However this may not encourage the long term results you are looking for; and is a critical reason why it is important to have the most robust supplier data possible available for your regular review.
By way of an example to support the above let’s suppose you can only find six local suppliers for a particular category you wish to take to reverse auction. For the most part they will all show interest in participating in your auction the first time around. However a key issue to consider is what will encourage them to participate the next time and the time after that?
Please check back tomorrow for Part II of Is critical thinking in supplier selection a key to quality and sustainable retail reverse auctions?
We look forward to and appreciate your comments
Posted in B2b Reverse Auction, B2b Supply Chain, E-supply Chain, Online Reverse Auction, Procurement Auctioning, Retail Supply Chain, Reverse Auction, Reverse Auction Procurement, Sourcing Strategy, Strategic Sourcing, Supply Chain Procurement
Wednesday, March 24th, 2010
Posted in B2b Reverse Auction, B2b Supply Chain, Business Sourcing, E-procurement, E-procurement Solutions, E-procurement Tools, E-supply Chain, Eprocurement Auction, Global E-procurement, Green eProcurement Practices, Online Procurement, Online Reverse Auction, Procurement Auctioning, Procurement Company, Procurement Outsourcing, Procurement Purchasing, Procurement Solutions, Procurement Tool, Product Procurement, Retail Supply Chain, Reverse Auction, Reverse Auction Procurement, Sourcing Safe Foods, Sourcing Safe Products, Sourcing Strategy, Strategic Sourcing, Supply Chain Procurement
