RESOURCES

5 Online Bidding

- Starting price: Avoid both “too low” (excluding potential viable bids and market Intel) and “too high” (signaling the incumbent’s price is low)

- Choose decrement to allow significant price savings without slowing auction too much

- Schedule the offerings so that bidders are not overwhelmed or confused

- Be available to answer supplier questions

- Ensure I.T. is available if technical problems occur

- Consider time zones when setting auction time

Reverse Auction Best Practice

In the past few years, we have been invited by many professional organizations and universities in Hong Kong and Mainland China to present e-Sourcing best practices and share our experience with large buying organizations in the region. Here we are sharing with you some important best practices about e-Sourcing. 

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Cases

Medical components

Lighting components

Consumer products

Extruded gaskets and seals

Wire shields and guides

Thermoformed plastics

Extruded appliance parts

Blow molded auto parts

Plastic hose and pipe

Compression molded plastics

Boots and grommets

Rubber seals and gaskets

Treads and tires

Rubber and silicone hoses

Die cut foam and felt

Automotive and other belts

Exterior automotive parts

Interior/decorative auto parts

Folding cartons

Printed cartons

Corrugated boxes

Flexible films

Drums

Flexible-Intermediate-
Bulk-Containers (FIBCs)

Preformed bags

Thermoform Glass

Labels

Substrate films

Bottles and closures

Contract Packaging

Slipsheet

Wire harnesses

PCs

Peripherals

Connectors

PCBs

PCBAs

Solenoids

LCDs

Transformers

Power cords

Electrical/Electronic

Relays

Switches

Wire and cable

Fuses

Lighting

Motors

Batteries

Power supplies

Semiconductors

Metal decking

Power cable

Modular building

Line pipe

Metal cutting equipment

Steel plate

Fork trucks

Injection molding machines

Process columns

Structural tubulars

Transformers

Heat exchangers

Rail cars

HVAC equipment

Roofing materials

Motors

Thermal insulation materials

Dump trucks

Storage tanks

Line pipe installation

Cleaning services

Fleet leasing and management

Transportation ServicesInsurance

Printing services

Telecommunications

Web hosting services

Legal services

Plant maintenance

Security services

Software

Tax preparation

Waste management

Electrical supplies

Janitorial supplies

Lighting and fixtures

Office equipment

Safety supplies

Uniform

Bidding Categories

Here we are sharing with you some of the commodities that have been sourced through our platform. If you could not find what you want to know about e-Sourcing, you are more than welcome to contact us at support@TacticaCommerce.com .


2 Supplier Analysis 


- Start immediately gathering information on potential suppliers, & on their qualificati Scrub supplier list ahead of the auction

- Think how online auction will integrate with requisition process

- Determine level of supplier qualification & make sure all suppliers meet that requirement prior to auction

- Craft an enticing invitation message to suppliers, focused on the opportunity for them to gain business. Consider sending it to top sales management or even to CEO


3 Request For Quotation (RFQ)


- Group parts, but only similar ones; not too few, not too many

- Think like a supplier – what would make the package more attractive to them, without increasing your cost or the difficulty to run the event?

- Make sure all invited suppliers can provide all parts in a lot bid

- Remember: order frequency, quantity and value are drivers

- Make sure to set “Reserve” price at a level above which you will not place the business

- Set the “Target” price at a level below the “Reserve”, and at a level you really would like to obtain

- Tell suppliers what type of pricing they are to submit: individual item prices or lot prices

- Load data well in advance; account for time necessary to revise documents if necessary

- Establish clear, written rules – Bind suppliers to them

- Plan ahead - your auction package may need review by Legal, Environmental, Logistics

4 Online Bidding Preparation


- Give suppliers adequate time to prepare for an event; first ones require more

- Avoid Mondays; Thursday pm is best

- Post all information 4-5 days ahead, so suppliers can gain connectivity and review data

- Suppliers must see your approach, event and actions as consistent, open and fair

- Post FAQs to address usual questions

- Tell suppliers to know their costs ahead of time – total cost and incremental costs

- And to have their decision-maker available during the auction. Most companies would rather retain business at a slightly lower margin, than lose it. If you are auctioning a large package, remind the suppliers that your business can positively change their cost structure (overhead costs spread over a larger volume).

- Make sure new suppliers have gone through training; hold practice session for new suppliers, or do an RFI

- Have suppliers use same computer/browser in training & mock auction as for when a real auction

- Some international suppliers must sign terms, in order to be bound

- If less than 50% of your invited suppliers accept your invitation, your online auction has a greater chance of failure - consider revising your event or question your choice of suppliers

6 After the Auction

- Feedback to non-awardees on what they can do to win

- Suppliers must ultimately get the business they earned through bringing attractive prices to the e-auction

- After each e-auction, summarize your lessons learned. Search for root causes to issues

- Don’t permit stakeholders to pose objections based on success factors or supplier criteria not initially disclosed

- Realizing the savings that were negotiated – that’s the key task


1 Saving Opportunity Analysis


- Online Bidding (Auction) is not a replacement for a strategic sourcing process - sourcing strategy becomes more important

- Is now the time to hit the market? Is it a buyer’s or seller’s market? What is driving the suppliers?

- Challenge your “strategic supplier” relationships – Are you really benefiting? Are they competitive? To what part of your business strategy do they contribute? How?

- Use of a reverse auction is not necessarily an alternative to catalog buying or strategic relationships; it may be a precursor.

- Online auction may be a transitioning device for a relationship commodity – from one relationship (from which you may not be benefiting) to one with greater benefit for you.

- Use online auction to test the competitiveness of long-term supplier (make sure that there is competition and excess capacity in the market)

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