We have been successful with auctions in Commercial Print and Promotional Items
Always looking to hear suggestions for best practices.
While I don't know the nature of your business, we've seen success recently with several customers in the spaces of IT Hardware, Temporary Labor and Property Assessments.
I would encourage a discussion of your categories in mind here on Exchange; often times our teams are able to provide more specific information around categories ripe for Sourcing; and the Ariba Category Management team releases "Top 5 Categories to Source Now" on a regular basis.
Best of luck!
I've recently seen separate customers achieve higher than expected savings in office supplies, temp labor, and office equipment (multi function devices). All went to reverse auction after preliminary RFP.
Hi following are the categories:Office supplies, consumables, indirect materials.
Some of the categories, that we are seeing more frequently in auctions than others are:
- Transportation (Road: FTL, LTL, Groupage; Air/Sea: FCL, LCL, Groupage)
- IT Hardware (Server, Notebook, Desktop, Printer, MFD)
- Packaging (Pallets, Films, Corrugated,..)
- Promotional and other Printed Items
- Office Supplies and Office Furniture
- Toner and Ink Cartridges
- Telecom, Internet
But please keep in mind: the auction itself is not the sole magic!
If you don't set the ground for low margin calculation, you will not get any - it doesn't matter, if you auction or not.
Don't ask what the suppliers may do for you, ask what you may do for the suppliers.
Whenever I get internal SLAs from my clients, I try to turn it around and define it supplier friendly. Moreover once internal departments get to know the cost assosiated to one of their not very well-defined requirements within the preliminary RFP/Q, they tend to drop it frequently.
But please keep in mind: there are plenty of other variables to include!
(1) Internal Success Factors
- Your degree of standardization
- Your Buying Power (your spend in relation to the market)
- Your Attractiveness (of your company / brand as a customer)
(2) External Success Factors
- Number of available suppliers (or approved?)
- Market Structure (oligopoly vs. polypoly)
- Market Access (product availability)
Besides these more generic factors, I also like to consider:
Some break it down to a supplier and market portfolio analysis, where strategic and development suppliers will pot. not be auctioned.
The complete summary of those variables and especially exceptions would probably take a whole book.
Personally I like to auction most categories.
Having heard from many companies about their auction strategies/tactics I would be wondering, what the community thinks about
- what percentage of your company's total spend is auctionable?
- what percentage of your company's direct spend is auctionable?
- what percentage of your company's indirect spend is auctionable?
Please also include in your answer approx. how many auctions you have run, in how many years - thank you.