Archive for the ‘Reverse Auction Procurement’ Category

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The benefit of a large retail supplier database

Monday, October 19th, 2009

Many retailers have told us that they do not have continuing success when running prior e-negotiation events the 2nd time around. One area of commonality they frequently discuss is a lack of new suppliers. Another is the price being too high for the same event that has already been built and will result in lower savings the 2nd and 3rd time around.

There is a proper way to insure the sustainability of your e-negotiation events going forward. Following these guidelines will also encourage senior management to consider placing more spend under the control of e-negotiation tools and specifically reverse auction tools. Armed with a robust retail supplier database and related tools:

1. Conduct a detailed category discovery
a. Learn all there is to learn about the way a company conducts their business.
b. Walk distribution centers and warehouses
c. Walk an array of stores and understand all formats of the enterprise.
d. Compile a list of all corporate categories
2. Rank categories by
a. Total spend
b. Importance
c. Sourcing frequency
d. Quality objectives
e. Look for aggregation opportunities.
3. Conduct supplier discovery
a. Rank suppliers
i. Size
ii. Experience
iii. References
iv. Environmental certifications
v. Safety Certifications
4. With the above in hand; develop a three year game plan
a. Identify suppliers for each event over the three years
b. Develop savings targets by category
c. Develop a three year time line for all categories
5. Role Play internally the first year for a test category
a. Ask the following questions
i. How will you award the business
ii. Review alternate scenarios
iii. Review savings by scenario
iv. Determine which suppliers will be invited back
v. Determine what new suppliers from your database search will be invited to participate next year

We appreciate and look forward to your comments.

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Twenty steps to running high quality e-procurement events.

Monday, May 19th, 2008
Regardless of the naming convention used there are certain rules which if followed will create higher quality events for?both?the retailer and the supplier? This will result in creating better savings opportunities or cost avoidance in? tough markets. The importance of focusing on a clear process will increase event participation. This focus on quality will be recognized by your existing trading partners and potential new sources of supply, and will keep them coming back in the future to compete fairly for your business.
Below are twenty?steps that are mandatory if you wish to have success with e-notitation events and specifically? reverse auctions.??
  1. Executive sponsorship is mandatory.This is required at the CEO, CFO, CPO, CLO or head of the supply chain.
  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 cost of goods, expenses and improvement in corporate earnings. Be sure to combine this with a business partner that knows your business.
We ?look forward to and appreciate?your comments.

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