A European retailer needed to find new sources of supply for multiple men's wear items. Their RFI/P efforts had identified 7 qualified suppliers. Initial supplier pricing indicated strong competition on some line items and limited competition on others. To maximize savings potential from the event the client wanted to use eAuction.
To take advantage of the competitive landscape, the 7 lines were split into 2 eAuctions:
- The Cherry Picking format was used for 4 lines with strong competition
- The suppliers had full visibility to bids
- And there were position (rank) indicators
A Japanese Auction was used for the remaining 3 lines with limited competition. There was no visibility on bids, nor were there any position indicators.
The Cherry Picking Auction lasted for 40 minutes and provided 3,79% in total savings compared to the current price. The Japanese Auction lasted for 55 minutes and provided 14,40% in total savings compared to the current price.
By thinking out of the box and splitting the eAuction into 2 different eAuction types, the client maximized the available competition and achieved savings on all products.