2 Replies Latest reply on Nov 25, 2011 8:25 PM by Gourish Birajdar

    Reverse Auction:  Percentage of Procurement Spend impacted

    Jaclyn Prince Apprentice
      I'm looking to benchmark reverse auctions (what % of total spend should use reverse auctions).  If anyone knows a good source for this type of information and data (by industry), I'd appreciate your response. 
        • Re: Reverse Auction:  Percentage of Procurement Spend impacted
          jlitvak Apprentice

          Hi Jaclyn,

          I am wondering if you found the answer to your question.  I am interested to know the answer as well.  I am guessing that this is a difficult subject since almost 10,000 people read your question and no one answered.

           

          Regards,

          Julia

          • Re: Reverse Auction:  Percentage of Procurement Spend impacted
            Gourish Birajdar Novice

            Hi Jaclyn,

            In responce your question, my feeling is its really difficult to generalize the same. I would like to explain the same taking exaple of following two sectors

             

            1. Banking sector,:-

                 In this particular industry, majority of spend in on Infrastructure, Capital Equipments, Printing, Services & promotiona expenditure.

            All these categories can go through revese Auction. We can say 90%, as some of the spend would be difficult to address due to various reasons like Value not being attractive, too specific requirement of product or services.

             

            2. Manufacturing Sector.

            In any Manufacturing Industry major categories of the spend can be generalized as Direct Material (60 - 70%), Indirect Material (20- 30%) & Other Expences/ Admin  (10 -20%). Out of these categories nearly 90 % of Indirect Spend & Almost all the other expenses Can be Addressed through Reverse Auction. Also form the direct material 40-50% of the spend can be addressed through Reverse Auction. But dealing with Direct Material will be strategic call, as the decision will impact the productions directly.

             

            So to conclude this we can say that to benchmark reverse auction for a company, we need to analyse the type of industry thery are dealing in.

             

            Hope my explanation would be helpful to you.

             

            Regards,

            Gourish