eAuction on Flour - savings of 12.55%

Situation

  • With this eAuction our client aimed at having the existing supplier decrease the price significantly or switching supplier, if a more competitive price could be achieved
  • Additional costs would however emerge if the eAuction resulted in a supplier switch.
  • Annual Spend €1.227.114
  • 4 suppliers invited to the eAuction - one winning supplier preferred for the entire order
  • Current supplier was not as competitive in the pre-quote as new suppliers but had lower transportation costs
  • Switching to a new supplier would mean additional costs such as switching costs and higher transportation costs

 


Solution

  • Suppliers were asked to submit pre-quotes prior to the eAuction
  • More products were being purchased, but the buyer preferred one supplier, so List Auction was chosen
  • Switching costs were added as parameters in the eAuction and hereby considered in the total offer submitted by new suppliers
  • During the eAuction Messaging was used to encourage suppliers to bid and make them aware of that only the best offer would win

Result

  • Total saving € 153.992 - 12.55% savings
  • Bidders were very active from start till end and 170 bids were submitted within 31 minutes
  • A new suppliers was the most competitive on the total offer, so the eAuction resulted in a supplier switch