Etiket arşivi: online auction software

Indirect Spend Categories to Make Cost Reduction

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Over the past five years, purchasing/supply groups in well-managed companies have made significant progress in reducing the price of inputs. Since specific direct materials are often associated with distinct Strategic Business Units (SBUs), managing this spend is usually accomplished through center-led commodity groups, with sourcing decisions and administration occurring at the SBU. Though most companies are generally satisfied with the efforts they have made in strategically sourcing their direct goods and services, most companies are still attempting to gain comparable control and results with their indirect spend.

Indirect spend is receiving increased attention from the senior management of large corporations. On average, indirect spend equals about 50 percent of a company’s purchases. Unfortunately, a significant amount of indirect spend is not purchased using the organization’s purchasing/supply function or purchasing processes. Senior management has realized that reducing or eliminating indirect spend offers an opportunity to favourably affect a company’s cost structure. Examples of indirect spend include: professional services, utilities, company travel, office products, and waste Management, facility management e.t.c However, spend that is indirect for one company may be direct for another. Furthermore, segmenting direct and indirect spend can be very difficult, particularly for service companies.

With increased outsourcing of non-core capabilities, the growth of the service sector, and increasing cost pressure, the importance of managing indirect spend is increasing.  A recent survey conducted by The Aberdeen Group recently reported that about 70 percent of procurement executives cite indirect spend as a top focus for controlling and reducing cost. Procurement executives know that indirect category management now presents a significant opportunity for cost management, gross profit and margin growth. More procurement groups now seek to drive a larger volume of contracts through their organizations. They want to manage and negotiate better rates and achieve tighter compliance with both financial and regulatory controls. And they believe that more attention to indirect spend and the multitude of suppliers in those categories can yield savings without distracting management attention from compliance or strategy.

Some of the top 5 Categories where companies can successfully achieve significant savings in indirect spend include:

Marketing Services

Marketing spend is defined as `external expenditures on services related to marketing’. Marketing spend categories usually include printing services compatible to goods,  agency/creative services, and other non-creative services,  Buying Marketing Services is often regarded as one of the highest budget areas within an organisation, hence the role for Procurement has increased considerably in recent years focusing on improving quality, delivery times and innovation.

 

Waste Management

Waste management is the “generation, prevention, characterization, monitoring, treatment, handling, reuse and residual disposition of solid wastes”. There are various types of solid waste including municipal (residential, institutional, commercial), agricultural, and special (health care, household hazardous wastes, sewage sludge). The term usually relates to materials produced by human activity, and the process is generally undertaken to reduce their effect on health, the environment or aesthetics.

 

Professional Services

Organisations often employ professional services for assistance with strategy, management, and other functional services such as legal, Human Resources etc.  Procurement can demonstrate value by providing insight to spend, supplier sourcing, realising savings and organising efficient, economical purchasing processes.

 

Office Supplies

Office Supplies can be defined as all items which have the objective of retaining or restoring a piece of equipment or system, to a state in which it can perform its required function. These are items which are used in production but do not become part of the end product and include hand tools, spare parts, lubricants and cleaning supplies e.t.c. They are goods acquired for the purpose of current operation; items that are consumable, sometimes perishable or short lived, and are subject to material change. They could also be items of a durable nature such as wastebaskets, small tools, bookends, file cabinets, chairs, calculators.

 

Facilities Management

Procurement is often involved with many of the services bought in, to support the building and people within an organisation – often referred as Facilities management (FM). FM is a significant area of spend for most organisations, traditionally defined as soft (people focused) and hard (engineering focused). Approaches for managing FM may be centralised or decentralised, either through several direct contractors or via an integrated FM supplier which provides all services.

Eauction Trends in Retail Businesses

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Online auctions are transactions that result from a competitive bidding process usually conducted over the Internet. Whether the sales take place between individuals, between consumers and merchants, or between businesses, online auctions have enjoyed rapid growth with the spread of Internet access. Historically, e-auctions were designed to ensure the best prices for commonly used low cost goods such as stationary or component parts. However, the practice has since evolved into an important asset in procurement’s toolset and can provide exceptional value when applied in the correct circumstances, one of which being retail businesses.

Retail markets are highly dynamic and very competitive, having to deal consistently with very tight margins due to the huge amount of resources it takes to keep product quality high. Procurement/sales teams in these sectors need to be on top of their game in order to compete and remain financially viable.

Retail Businesses today aren’t finding it easy, but in the face of all these pressures, many of them are still thriving mostly by incorporating an e-auction strategic approach to its sales/sourcing as part of her overall business strategy. Beyond driving operational efficiency and cutting costs, this approach to can help even the best-performing retail businesses enhance customer/vendor relationships, increase product and ingredient quality, reduce spending and find new sources/outlets of sales/supply, which ultimately equips them to generate more value for their organization and become more efficient and effective.

Some other notable benefits associated with e-auctions for retail businesses include:

  1. Big data. The potentials for big data have become evident in all areas of business and the case is also the same for the retail businesses. Businesses that capture and analyse the huge amounts of data generated around shipment and transport will continue to improve efficiency. Companies that take advantage of collaborative solutions to process and analyse this data will reap the benefits of cost reduction, capacity control and risk management.
  2. Responsibility and traceability. As businesses expand globally, they are realising the need for transparent and traceable sales and supply chains. Businesses will continue to put their global these chains in the hands of a safe and secure IT platform.
  3. Digitisation of the supply chain. Supply chain analytics will allow businesses to create useful key performance indicators and incubate innovative ideas to successfully manage service levels. Daily monitoring, sharing, and interpretation of analytics will help businesses plan.
  4. Product Specification: Another key benefit of e-auctions is the early focus on requirement specification. The latter forms the basis of any successfully run e-auction and ensures that suppliers are aware of exactly what they are expected to provide. This transparency is beneficial to both parties and will help ensure a sustainable client/customer relationship.

However, there are still a few specific challenges retail companies face today which include:

  1. Getting the most value out of every part of the procurement process and ensuring an alignment between the results and overall business goals
  2. Navigating mega market trends: consumer demand for product transparency, empowered and well-researched consumers, health and safety issues and supply price hikes. These market forces are putting customer loyalty and brand reputation at stake and pushing retail businesses to rethink the way they source and bring products to market.
  3. Creating an enterprise-wide sourcing program in order to create a more efficient and unified supply process
  4. Maintaining an independent self-sufficient sourcing and procurement department

HOW TO IMPROVE COMPETITION WITH FEW SUPPLIERS

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The use of on-line auctions (e-auction) has increased rapidly in the last few years. Since they came onto the purchasing scene in the late 1990’s through the development of internet-based applications but just like with every other breakthrough events and technologies, e-auctions too come with its attendant risks and it is important that buyers and suppliers understand what these risks are so as to mitigate against its effects. Some of these risks are;

  • Bids not having enough qualified and competent suppliers;
  • suppliers not being able to demonstrate the overall value of their product or service and
  • Oversimplification of requirements to ‘fit the system’.

Without effective change management expectations may never be reached and inexperienced suppliers may bid below a sustainable price which makes the entire process unattractive to qualified and competent bidders. If a supplier suffers from a bad e-auction experience, then it is likely they may be reluctant to enter into the process again. Try to make sure that before rolling out an e-auction programme, the process is as fair and transparent as possible and has been approved by a pilot group including suppliers and that feedback from the pilot process is enacted on.

Some of the reasons why suppliers may be reluctant to participate in an e-auction bidding include;

  1. Unsuitable commodity/service – this might be an item where there is no competition in the market place, or that is too complicated to specify or largely cannot be specified
  2. Lack of competitive supply base – if a product or service does not have at least three suitable suppliers, then the e-auction process is not generally suitable
  3. Poor training of buyer/supplier – getting things right first time is imperative to build trust amongst suppliers in your company’s e-auction process
  4. E-Auction timing – If you are inviting suppliers to participate from a different country and time zone, take care that if the timing chosen to run the auction is convenient to those suppliers.

So what if you are running a bidding process and there are not enough suppliers to make the process as competitive as you would want, what do you do?

Highlighted below are some of the strategies you can adopt to find your way around that problem

1.Supplier implementation

Firstly the best good advice I can give to you is that it is important to get supplier input during the pre-bid (for example through participation in building the RFx) to ensure that they feel a part of the process. One key advantage of this is that this dampens emphasis on pricing and buyers and suppliers can focus on understanding and meeting technical elements of the bid, i.e. meeting the customer’s real needs and this can help to produce the desired results even when participation is not very robust.2.

2.Getting supplier buy-in

There is more supplier acceptance of online auctions than there once was, but still you need to tread carefully to get their buy-in. Visit suppliers or invite them to briefings to explain carefully the principles not just of auctions, but more broadly of online sourcing. They will have concerns, but they will have useful input too: they know their businesses better than you do, and what they tell you will help you optimise your strategies for online bidding events. As a result of hard talking up front, online sourcing will help you to create precise and detailed RFQs that will improve communication and reduce business risks further down the road.

3. Driving Best Practise

In order to improve on the numbers and achieve a more competitive bidding process, a procurer needs to put some people, process, performance measurement and knowledge capabilities in place. The first requirement is a clear understanding of the supply base and the criticality of each supplier to the business. Typically an organisation can segment between strategic partners, value-added suppliers and commodity product suppliers. One will also need to build up market intelligence in order to gain a clear understanding of the dynamics of the market sectors and to define sector strategies – for example properly crafted online RFQs and RFPs can help expedite the communication between buyer and suppliers and can help drive a standardised sourcing process across the organisation.

4.Training

Lastly the importance training and retraining of suppliers as to the workings of your online procurement process cannot be overemphasized. Many buying organisations underestimate the amount of time it takes to educate suppliers in online auction tools. Suppliers with less tech-savvy sales teams may need some extra handholding through their first events, and here the assistance of the auction technology provider can be invaluable. Bidders need feel more comfortable about participating in the process especially when there is a limited number of them.

E- İhale ,Elektronik İhale Nedir?

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Artık günümüzün en popüler kullanım ağı internet. Bütün işlerimizi gördüğümüz  ve bütün ihtiyaçlarını karşılayan en büyük mecra diyebiliriz. Sadece çok büyük uluslararası şirketler değil aynı zamanda orta seviyede hatta yeni kurulumunu tamamlamış şirketler bile artık görüşmelerini internet üzerinden güvenceli şekilde gerçekleştiriyor.

Şirketler hakkında bunlardan bahsettikten sonra E-ihale sisteminden de bahsetmek lazım.

E-ihale yine yukarıda belirttiğimiz gibi şirketlerin zamandan kazanmak ve satın alma işlerini hızlı şekilde birçok tedarikçiye ulaştırmak amacı ile oluşturulan bir platformdur. En büyüğünden en küçüğüne kadar tüm şirketler bu elektronik ihaleye katılabilir ve fiyat teklifinde bulunabilir. Satın alma yapan firmalar kazancını kaybını çok iyi hesaplayabilir.E-ihale platformunun en büyük yararı ise zamandan büyük kazanç sağlamasıdır. Zamandan kazanç bir şirket için çok büyük avantaj anlamına gelmektedir. Aynı zamanda ulaşabileceğinizden fazla şirkete satın alma işleminde ulaşabilirsiniz. Çünkü bütün tedarikçi firmalar sizin elektronik ihalenize bir bilgisayar ile ulaşabilecektir.

Günümüzde e-ihale yöntemini kullanarak işlerini geliştiren bir şirkete örnek verecek olursak, şirket bu yöntemin bütün tedarikçilere adil bir rekabet ortamı sağlandığını da açıklıyor. E-ihale yöntemi  sadece birkaç saat bazen de 10 dk gibi kısa sürede gerçekleştirebiliyorlar. Bu yüzden teknolojinin avantajlarını çok iyi kullanmayı başarabiliyor. E-ihale yöntemi ile tedarikçilerinize adil bir satınalma ortamı oluşturabilirsiniz.

Elektronik ihale platformunda rakipler birbirlerinin fiyatlarını ya da sıralamalarını görebildikleri için kendi fiyatlandırmalarını da düzeltip değiştirme imkanı bulabiliyorlar. Bu sayede Tedarik Zinciri’ni oluşturulmasını isteyen firma için büyük mali kazanç meydana geliyor. Bütün firmaların satın alma fiyatını görmek ve bunu bir platformda düşünerek süzgeçten geçirmek önemlidir. E-ihale yönteminde tedarikçi  firmalar ihaleye verdiği teklifi görebiliyor. Her şey büyük bir şeffaflık içerisinde gerçekleşiyor.

Yurtdışıda oldukça yaygın olarak kullanılan elektronik ihale Türkiye’de henüz istenilen seviyeye gelmedi gibi görünüyor. Tüm şirketler kendi büyümelerinin daha hızlı olmasını istiyorsa elektronik ihale yöntemine uyumunu da hızla oluşturmalıdır. Bu sayede gelişim ve kazanç sağlanabilir. Avrupa’da ve Amerika da  şirketlerin  yoğun olarak kullandığı bir sistem e-ihale yöntemi.

E-ihale yöntemi ilk olarak 2002 yılında başladı. 2006 yılında ise büyük ölçüde gelişimini tamamladı. 2008 yılındaki büyük krizden sonra ise artık tamamen yaygınlaştı ve şirketler tarafından kullanılmaya başlandı. Çünkü dediğimiz gibi amaç büyümeyi ve maddi kazanç devinimini hızlandırmaktı.  Dünya’da ve Türkiye’de profesyonelleşmiş şirketler e-ihale sistemini kullanmaya başladılar.  Bu şirketler tedarikçi firmalar için e-ihale hizmeti sunuyor ve ortamı oluşturuyor. Bu konuda danışmanlık almak, profesyonel  kişilerden eğitim almak da öneli bir konu haline geliyor.

Bu platformda ihalenizi açmanız için e-ihale hizmeti alacağınız şirkete bilgileri vermeniz yeterli oluyor. Artık ihale gününü bekleyip ihale sonucu size ulaştırılıyor. Sonrasında ise gerekli adımlar izlenerek ihale sizin için kazançlı olarak sonuçlanıyor.

E-ihale yaratmak istediğiniz zaman ilk olarak şartnameleri ve e-ihaleye katılmasını istediğimiz tedarikçilerin listesini e-ihale hizmetini aldığınız şirkete bildiriyorsunuz. Tedarikçiler belli bir tarihe kadar şartnameleri inceliyor ve e-ihale için tekliflerini hazırlamaya başlıyorlar. Daha sonra belirlenen tarih, ve saatte e-ihale başlıyor. Yeni bir teklif revizyonu gelmemesi durumunda ihale sonuçlanıyor. Şirket tarafından ihale size raporlanıyor.

Understanding the Basic Procedures Involved in E-auction software

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In every e-auction software or electronic auction event, bidders and auctioneers conduct business on an electronic marketplace. The process is quite simple. The main requirement is an auction site. Commodities, goods, or services are offered by the auctioneer, and bids are submitted by anyone who is interested in the product. The offer is usually given for a limited period only. Buyers and suppliers utilize this platform to negotiate terms of contract. The interactions available include business to consumer, business to business, and consumer to consumer.

Despite widespread practice and participation from members of the buying public and the community of sellers, there are a few recognized limitations of e-actions. There are issues related to security and the possibility of fraud. Moreover, the process has a long cycle time. Concerns about auction software and equipment for buyers also arise periodically

What are the basic types?

There are two major types of e-auctions, namely forward auction and reverse auction. The more common practice that occurs online nowadays falls under reverse auction. This procedure involved reversal of the typical roles of buyers and sellers. Instead of a single seller offering a product or service to competing buyers who bid the price upward, which is what forward auctions are all about, the prices decrease as sellers compete to obtain something that they covet from a buyer. The sellers try to undercut each other and this is why prices get lower as the process continues, instead of getting higher.

What is a traditional RFQ or request for quotation and how is it relevant to e-auctions?

Purchasers need to accomplish a document known as the RFQ or request for quotation so that they can obtain offers for products or services. The data included in this document are item price, terms of delivery, and other relevant conditions surrounding the specific product. Essentially, the RFQ is a document that must be submitted by an organization to suppliers as a means of eliciting quotations.

Traditional RFQs are still used; however, the procedures associated with these documents are often tedious and labor-intensive. Online RFQs are preferred because they are easier to process and less prone to error. They are also more efficient. A request for quotation is a solicitation document is necessary in both a negotiated purchasing process and in a firm-bid purchasing process. If the requirements are more complex, another document must be used, and this is known as the RFP or request for proposals.

In the dynamic bidding process, activation of the RFQ is the signal for suppliers to submit their bids. While the RFQ is active, the initiator has the prerogative to review the current bids. The alternative option is to wait until all the bids are received. Bid evaluation for simple RFQs may be conducted online. For complicated RFQs, the evaluation is usually done offline. The RFQ process is completed only when the winner of the bid has been determined.

E-auctions are increasing in popularity these days since both businesses and consumers find the process advantageous for them. Other terms used interchangeably with e-auction are e-sourcing, sourcing event, procurement auction, and e-procurement.

eSourcing and eProcurement Software, Don’t just buy it, Use it!

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We all have different criteria for what we think deserves our money. If your goal is to save any money at all, however, one rule can always help: if it’s going to end up in a junk drawer or cupboard, just don’t buy it. Most organisational change programmes fail to achieve all of their objectives. There’s no single reason for this – lack of leadership, poor planning and unreasonable timescales can all contribute. But often the failure comes down to taping into the inability to engage the workforce or senior team (or both) with the change. And this often boils down to poor communication.

For eSourcing devotees, the benefits of using eSourcing are well known. eSourcing has a long and proven history of providing improvements in savings, efficiency, cycle times, transparency and compliance. However, there are still parts of your business that haven’t “seen the light” such as exposure to the benefits of eSourcing tools and techniques. Resistance to e-Sourcing can be reduced by clearly communicating the shift to a collaborative sourcing technique with a focus on process transparency and quality, knowledge sharing, interaction with stakeholders and to ensure that they follow strict rules and stick to commitments.

Given the technological advances and results reported by the eSourcing pioneers, it is somewhat surprising that these tools are still not pervasive throughout Fortune 1000 companies. Research by A.T. Kearney shows that while more than 75% of companies report that their procurement organisations have used these tools at least once, only a small fraction report using them in any significant way (Defined as more than 200 RFXs or reverse auctions per year). Fewer than 5% of companies report having reengineered their sourcing process to fully embed and leverage these tools. The story is no brighter on the sales side where only a few companies may have introduced these tools with great fanfare; they neither changed their business nor trained their staff to use them effectively. Highlighted below are some of the best practises that can enable an organisation deploy and successfully integrate an efficient eSourcing system.

Best Practises

  • Establish a centre of excellence:

Ensure to set up a centre of excellence from which you deploy eSourcing tools, starting small with highly visible pilots and very quickly training power users (rather than relying on external partners) to support other users. This helps you to invest significant time and funds towards training activities. Companies also need to design and implement a comprehensive change management strategy for how to deploy the tools more broadly while encouraging adoption.

  • Build a Meaningful governance Model:

Governance is vital to supporting and guiding a new programme, engaging stakeholders and defining the “rules of engagement” can be used to change the conversation from one of “prove to me why we should use these tools” to “prove to me why we should not”

  • Design and Deploy Metrics:

Measurement is very essential. Defining targets of the programme and tracking progress against those targets ensures that these targets are translated into individual annual performance for stakeholders and sourcing team members. These metrics should go beyond tracking savings to also include the number and types of events completed, the number of suppliers and stakeholders engaged , supplier compression achieved: among others.

  • Adhere to Highest Ethical Standards:

Learn to focus on the design, deployment and maintenance of these programmes, never giving suppliers or stakeholders any reason to question the integrity of the process or how the tools are deployed. Although mistakes can happen, there should never be any appearance of unethical practises. One of the advantages of eSourcing tools is the audit trail they provide, take advantage of it!

Pitfalls

As with all change efforts, one does not often achieve success without first encountering a few failures along the way. Understanding where the potential pitfalls are and how best to navigate them can help de-risk a new programme.

  1. Say No to pay-per-use:

Charging stakeholders for the cost of the technology or the sourcing staff’s time to support the technology is a bad idea. For the most part, stakeholders view these eSourcing tools as a risky proposition to start with, so charging them a hefty fee to use them can stop the programme before it gets off the ground.

  1. Don’t wait for people to opt in:

This is a recipe for disaster. Success depends on programme metrics tied to individual performance metrics that clearly communicate expectations.

  1. Forget the Flavour of the Day:

Merely rolling out the tools and some directives on how to use them will make the programme just the latest flavour of the day. Investments should be a long term, holistic change management programme in order to encourage use and adoption of eSourcing tools.

  1. Resist supplier Push backs:

Change is difficult for most people so do not be surprised if suppliers push back and try to circumvent, postpone or eliminate the process. Companies that stood Firm in their commitment to the process and tools and invested resources to communicate this stance to their suppliers were able to get past this hurdle. More suppliers have realized that access to these eSourcing tools provide them with access to critical information needed to compete for existing and new business.

In Conclusion

The past 20 or so years have been an exciting time for procurement leaders. Companies that Invested    in eSourcing tools to automate transactional activities and negotiations in order to reduce sourcing cycle times are well positioned to take their organisations to the next level. For those that have not, and are now in the catch up mode, consistency and perseverance seems to be a big problem as regards deployment and successful integration of these tools into business procurement operations. Procurement leaders have done a great job charting a roadmap to success, identifying best practises to emulate and pointing out the pitfalls to avoid, so you don’t have any excuse why not to take full advantage. Why not get on board and see how e-sourcing tools could change the outlook of how you do business, but remember; it’s not enough to deploy it, you must see it through till the end. Don’t just buy it, ensure you use it.