Procurement

[smallend]

All
I'm just looking for a bit of feedback on what people's perceptions/experiences have been with regards to 'reverse auctions'.

I may well soon have a vested interest in your opinions so I would be very grateful if people have come across this process (either as a Supplier (being involved in the bidding process) or as a Client (looking for reduced cost supplies)).

All views welcome!
Thanks

[Jubal]

Having been involved in loads as an IT supplier I'd say they are the spawn of the devil, in our industry at least. Designed solely to remove the subjective view of value from the equation and hand the final decision over to the purchasing team.

That said, there's plenty of suppliers out there who need the revenue more than they need the margin so they do work at driving costs down. Great if that's the objective and you want to work with a company who needs revenue so badly they'll write business at all costs.

[smallend]

Jubal
Thanks for your response.
Do you think that it is possible for an external consultancy (for want of a better word) to be able to add value to the supply chain by really engaging with both the suppliers and the end client?

I have experienced reverse auctions in the past, and was not particularly impressed, but it was some time ago and I think things have probably moved on since then.

Has anyone used this method to drive down costs?
What views have your suppliers given of the process after the fact?

[Jubal]

Loads of consultancy companies in our industry already do exactly what you are talking about in complex procurement exercises. They write ITTs, run the process on behalf of the client, assist with eval and due diligence etc etc.

I've rarely seen reverse auctions used in this process though. They tend to be for more commodity based requirements.