In the retail market, preliminary price quotes are normally used as part of a Request for Information or RFI process. The actual reverse auction event is normally the Request for Quote phase or RFQ and used for final price compression.

In large retail events with dozens of products such as a prescription drug event, retailers may allow early quoting just do to the magnitude of the information required by suppliers. This process normally takes place several weeks prior to the live reverse auction event. At times, this may also a good practice when there are a large number of new suppliers participating in order to familiarize them with the use of the tool set. For a new supplier auction day can actually be a little stressful. There are many don?t believe that there is a strategy to participating in a revere auction. Seasoned suppliers would argue that point. It is the responsibility of the e-procurement providers to train all suppliers on the use of the tool set. This is generally accomplished with mock training events. This does not however include strategy sessions. I have heard that in other industries preliminary events can be held to help whittle down the participants. I have never really agreed with this process. There really are a specific number of participants that drives the best possible result set and e-procurement providers should be aware of this and suggest a mix during the training phase that supports optimum participation…

Should an RFI be developed for all e-procurement events? This author does not believe so if the proper planning is done prior to the actual event.

We look forward to your comments.

This author believes that the sourcing of suppliers and an access to a quality product specifications library are potentially the most important elements when creating sustainable e-sourcing programs.

Companies already understand very well what they buy and how they buy it. They understand the volume of what they buy and when they need it. Discovery of that information is a relatively simple task if the retailer is already accepting of the e-procurement process. To a somewhat lesser degree do retailers have the specifications for these products readily available or in a written format?

Two elements; specifically that of identifying new sources of supply and providing quality specifications really determines the success of an e-procurement event. The requirements necessary to evaluate and qualify new sources of supply include a sizable database that can provide fresh suppliers on a regular basis. The requirement to move supplier evaluation forward rapidly is an extensive library of readily available product specifications. After a retailer has provided their e-procurement vendor with a list of historical supplier relationships, it is incumbent on the vendor to provide the retailer a variety of sources of supply that they are not presently aware of, and to provide the supplier with a quality product specification for them to evaluate and determine their interest in participating.

Contrary to popular opinion, suppliers can be a variety of sizes, but new blood is a necessity in order to keep events fresh each time they are run, year after year after year. It is simply not true that this number of suppliers does not exist. Once an adequate table of suppliers has been assembled it is incumbent on the e-procurement vendor to analyze these suppliers for historical participation in e-procurement events, safety certifications, environmental and other socially responsible program participation, quality programs, sample evaluation when required, site visits when required and supplier references.

I look forward to your opinion.