eAuction on Plastic Bottle Preforms - Big Savings come from Unexpected Sources

Situation

  • Our client - a large European retailer - ran an eAuction on preforms for colored plastic bottles. A Cherry Picking Auction format was chosen so that the buyer could award to multiple suppliers. Since not all suppliers were able to provide  all of  the desired preforms, blindfolds were applied on certain lines. Despite limited experience with eAuctions the suppliers were very competitive and bid aggressively against each other, extending the auction more than two hours past its original time frame
  • This was the first eAuction run by the buyer, so there was a lot of uncertainty about suppliers´ willingness to participate
  • The suppliers had no previous experience with eSourcing events

     


Solution

  • 4 suppliers were pre-qualified for the eAuction based on the bids submitted in 2-rounds RFQ
  • The prequalification bids were transferred into the eAuction as Individual Start Prices
  • Suppliers were shown their position in the eAuction via a green/yellow/red traffic light system
  • Once the format of the eAuction was decided, all suppliers were offered individual training sessions
  • During the eAuction, the messaging function was used extensively to support suppliers and encourage the bidding activity
  • After the auction, a final evaluation of the bids was made, and winners chosen.

 


Result

  • Very high bidding activity - 256 bids submitted
  • The eAuction lasted 158 minutes including 64 extensions of 2 minutes
  • Messaging was used to drive competition and increase bidding activity
  • Achieved savings of 7.9% compared to the RFQ prices