e-Sourcing Facts: The Truth about e-Auctions Part 1

Dave Henshalle-sourcing, Strategic Sourcing

e-Auctions Can Strengthen Supplier Relationships

e-Sourcing Facts: The Truth about e-Auctions – After more than a decade of e-Auctions, there is still a lot of adverse dialogue surrounding e-Auctions. See Fig 1 for the main myths we will tackle in coming post.

In this post, we counter this perception and argue e-Auctions can strengthen supplier relationships.

e-Sourcing Facts: The Truth about e-Auctions

e-Auctions and Supplier Relationships:

e-Auctions themselves don’t damage a relationship. They are a tool used at the most appropriate point in the sourcing process. In fact, e-Auctions can provide suppliers significantly more open feedback than they would normally gain from a standard negotiation.

eAuction Myths vs. Reality

Fig 1: e-Auction Myths vs. Reality

It is when inadequate resource or a poor process is applied that leads to e-Auctions being seen in a negative light. When the buyer follows best practice, with efficient communication and participation management, then all parties involved gain a better understanding of requirements and sourcing decisions that can lead to a stronger relationship.

Additionally, the winning supplier can immediately commit to a comprehensive contract driven by the clarity and detail of the e-auction Event specifications.

With robust processes in place, the e-Auction Event can provide valuable insight for both the supplier and the buyer. For example, value improvement opportunities suppliers can consider, and buyers can gain a better understanding and visibility of the key cost drivers.

With this increased diligence on preparation, documentation, open communication, and more transparency, e-Auctions are fast becoming a very efficient and effective way to conduct business for both Buyers and Suppliers.

Nuff said …

You can read Part 2 here

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