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Challenge
A large retailer wanted to conduct an e-auction on selected cheese products. One supplier had previously held the contract exclusively with annual spend of €5,676,150. After conducting an RFI, the incumbent supplier did not even qualify for an e-auction as prices were not competitive enough. Two new suppliers qualified, but the client wasn't sure if that was enough competition to secure substantial savings.
Solution
A Reverse auction format was selected based on the client's objectives. To enhance competition, several products were pooled into one lot so suppliers were competing on total lot sums instead of individual items.
Result
A Cherry Lot eAuction was implemented on the Scanmarket platform with two lots and very close price structure per lot. 128 bids received in 29 minutes saving €1,134,740 (19.99%) in 29 minutes.
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