eAuction on Cleaning Chemicals - savings of 49.3%

Situation

  • One of Europe's largest grocery distributors and retailers had used the same supplier for more than 80 years
  • Spend €3,750,000 annually
  • Due to the high spend on the category it was decided to go out to tender
  • The project included cleaning chemicals and cleaning equipment like clothes, mops and brooms.
  • Category had not been renegotiated for many years
  • Spend not previously managed and coordinated centrally
  • Internal stakeholders were very reluctant to switch
  • Some specifications were very brand-specific making it difficult for other companies than the incumbent to bid for it
  • No common unit and case sizes for suppliers in the industry

Solution

  • 70 suppliers were contacted
  • 9 suppliers were pre-qualified for the eAuction based on a thorough RFP
  • eAuction lots designed so suppliers with different units of measure, and case sizes and different brands could be compared like-for-like
  • eAuction divided into 8 lots to enhance competition
  • Conducted a Japanese eAuction as the buyer wanted to be free to choose most suitable supplier per lot after the eAuction - resultantly, showing ranking information was not preferable

 


Result

  • 633 bids received in 3 hours and 44 minutes
  • €1,850,000 saved every year