Etiket arşivi: purchasing

Are E-Auctions too Price focused?

Unless you are one of those who when at the point of making a purchase, especially online would settle for the first and only option you are provided without seeking alternative brands and price offerings, then I don’t think this is a fair question to ask. Given the vast and endless opportunities provided by the internet, procurers will definitely seek out the best options available to them before settling to buy. Although there is more to online procurement than just pricing, negotiating so as to get the least price possible is definitely top priority for any smart procurer.

Online auctions take advantage of the internet to allow procurers arrive at the true market prices for goods and services being sought for. Most online auctions usually go the route of the “reverse auction” whereby  suppliers in a bid to win over customers tender bids that are lower than those of her competitors and this is the practice that seems to make e auctions appear too price focused. This Increased participation for a buyer’s business would naturally drive down the price. Nevertheless, this doesn’t imply that the lowest price will automatically win the bid; modern day auction technology allows the procurer and supplier to consider factors other than pricing. Factors such as quality, brand, reliability, guarantees,  experience, delivery speed, Warranty, volume discount, technical specifications, delivery dates, shipment methods, legal conditions, customer support, financing options e.t.c. All these are additional specifications that buyers can build into their RFQs and present electronically via the internet to an endless list of suppliers.

e- Auction tools are beneficial to both sellers and buyers. In the long term sellers will benefit by seriously pruning down their sales force since most of their sales will be performed online, saving huge staff costs and other incidental costs associated with maintaining a workforce. Likewise in the short term, buyers can immediately experience reasonable savings from online procurement options.

Other Benefits of e-Auctions

The advantages are extraordinary. In spite of the fact that e-auction tools are different based on individual suppliers, e-autions normally permit purchasers to consult with a good number of suppliers and vice versa all at the same time rather than in a sequential order as in physical procurement. This tends to save the procurer and supplier a lot of time and resources. Purchasers taking an interest in the site’s offering possess the capacity to reduce negotiation periods from about two months to as little as two weeks, empowering e-procurement administrators to focus more attention on other projects and tasks rather than a staggering amount of paperwork

Similarly, there is no need any longer for e-procurement managers to spend hours and hours in one-on-one meetings with potential suppliers sometimes even travelling and arguing over contract terms and details.  Instead, a buyer is simply expected to fill an RFQ (of which several e-negotiation platforms already have templates available) that he submits online. Likewise, suppliers are also capable of replying such requests electronically by submitting online proposals that provides detailed information such as price discounts, delivery dates and shipment methods. E-Auction platforms that has e-negotiation features essentially creates a level playing field for all suppliers who are provided the opportunity to compete, as most times e-auction processes are transparent and the results are clearly visible for all to see

It’s now obvious that there are other reasons that drive the demand for e- auctions  other than significant cost-savings, hence it would not be fair to say that e-auctions are too price focused. Unlike online auctions whereby it is the person with the lowest bid that wins, e-auction activities that feature e-negotiation tools is a huge leap towards a much broader seller – buyer online collaborations. In fact there currently appears to be a shift in focus from price based bargains to quality and performance based bargains amongst procurement professionals, so the argument that e-auctions are too price focused no longer hold water.

There’s even more, e-Auction solutions also provide a fair competing ground for all suppliers to compete for business. Buyer’s can deliver RFQs electronically and can even adopt readymade templates with only a few adjustments and likewise suppliers can deliver their proposals to the buyer via the same medium saving both parties a lot of time and resources. These proposals can also be evaluated electronically based on buyer’s specification thereby easily eliminating unqualified applicants saving also time and making sure that only the exact specifications are considered for purchase.

There is no denying of the numerous impacts that e-Auction technology has had, and will continue to have, in this industry. Buyers and sellers are no longer relying on e-marketplaces to just simply play matchmaker. But with huge opportunities at significant cost and time savings, better quality, stronger collaborations, self-empowerment, more functionality, and improved supply chains, e-auctions will continue to be the way to go in the procurement industry both now and in the near future.

Steel Casting Cost Factors

Steel Casting Cost Factors

According to  Emcasting company, there are 5 factors that are affecting steel  casting part price

1-Geometry and shape of part

Internal cavities, quantity and thickness of cores, thin walls, long parts, complicated shapes, more than one parting line requirement, non linear parting lines, reverse angles and non symmetrical parts etc. will increase sand casting piece prices.

Mentioned complexities will increase casting defects such as cold lap, core replacement, flash, mismatch, raised core, deformation etc.

2-Alloy and alloying elements

The alloying element(Silicon, manganese, Chromium, Titanium, molybdenum, nickel, niobium and vanadium etc) quantity and tight  standards will also increase the prices.

3-Order quantity,yearly volume,

Low volume means higher pieces prices.

4-Required Mechanical properties and heat treatment

Annealing and normalizing are usual heat treatment of steel parts that are used to homogenizing micro structure and decreasing solidification stresses.

In some cases to achieve required properties, multiple and costly heat treatments are used. 

5-Requested tests according to safety and critical application

ASTM’s nondestructive testing  techniques used to detect and evaluate flaws in materials and objects without destroying the specimen at hand. Such tests include radiographic, ultrasonic, electromagnetic (eddy-current), X-ray, acoustic, and tomographic techniques. These tests are costly and might increase the cost of  steel  casting part price.





Iran as Low cost country sourcing

Lets take a look at the figures of Iran automotive manufacturing.

Iran has around 2 million production capacity.

Iran is one of the key player in middle east in automotive industry.

Please visit our web site to find  reliable manufacturers from Iran.


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Here you can find abbreviations for supply chain and procurement.

BOM=Bill of Material

PO=Purchase order

QA=Quality Insurance

ERP=Enterprise Resource Planning

HVAC=Heating Ventilation air Conditioning

LCC=Life Cycle Cost

PDM=Product data Management

RFQ=Request for quotation

RFI=Request for quotation

RFP=Request for proposal

GTC=General terms and Documentation

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