eAuction on Pallets - savings of 12.99%

Situation

  • Pallets provided for production sites in North and South America
  • Normally traditional face-2-face negotiations were conducted with incumbent supplier plus 2 or 3 more per site
  • This was the clients first eAuction with pallets and they were nervous with how the results would end
  • The Client had 6 incumbent suppliers. They did not aim in consolidating suppliers, as this is difficult for pallets. Pallets are very expensive to transport to different sites/countries, so purchasing from a local vendor is preferred
  • Several suppliers had never participated in an eAuction

Solution

  • Scanmarket sourced for new suppliers and 107 were invited to prequalification round
  • 16 suppliers were qualified for the eAuction
  • CherryPicking Auction was selected, due to the many locations and picking per pallet/per site
  • Ranking and Leading/Not Leading event settings were used
  • Spent time sending messages to the suppliers indicating that they were close to leading, to increase bidding activity

Result

  • The bidding activity was steady, the encouragement via the Messaging tool was helpful
  • The eAuction ran with an additional 12 minutes from 6 extensions
  • All 16 qualified suppliers participated
  • $287,064.07 savings identified - 12.99%