Global shipping company saved 11% on paint using a structured eSourcing approach.
Our client, a global shipping company, wanted to source the market for new potential suppliers of paint for their fleet of ships. The current frame agreement was close to expiring and the client wanted to include several other types of paint in the tender, which historically were purchased on the spot market in order to secure the best Total Cost of Ownership. A structured eSourcing process (eRFP and eAuction) was initiated. In the past, the company had spent nearly 2.000.000 USD a year on several types of paint.
An RFP was conducted as a pre-screening for the eAuction and as clarification of TCO. A bidding template was created covering all types of paint, systems, technical data, expected docking, ports, volumes etc.
Surcharges were identified in regards to expat inspectors. Documents like General Terms of Purchase, Standardized commercial terms etc. were uploaded to the RFP. Based on incoming answers in the RFP surcharges and quality was included as parameters in the eAuction - securing an evaluation based on TCO.
The process was very structured and organized. 4 suppliers were invited to participate in the RFP and all of them were approved for further participation in the eAuction. The total duration of the eAuction was 66 minutes including 18 time extensions and resulted in generated savings of 11%.