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E-Auction presentation
Protection notice / Copyright notice
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E-Auction
What is E-auction
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click2procure merges traditional procurement and e-business
Siemens Buyside Marketplace click2procure
e-sourcinge-information e-orderingelectronic sourcing tools
- e-RfQ- e-bidding/e-auction
web-based purchasing information
- supplier database click4suppliers incl. supplier evaluation system
electronic order processing
- direct / indirect (MRO) material- with / without catalogs
click2procure is the e-business workspace of the buyer!
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eSourcing- wording
Inquiry of commercial documents
Currently not applicable for Internet / Extranet solution
Review done face to face
Partially automated within eRfQ
eBidding via Siemens Buy Side Marketplace
eRfQ via Siemens Buy Side Market-place with standardized Forms
Inquiry for proposal from potential suppliers
CommercialClarification
ProposalEvaluationto Short List
Price Neg-otiation to Contract Award
... ..eAuction via Siemens Buy Side Marketplace
eRfQ: First request to suppliers (who should quote)
eBidding: preliminary price negotiation (1st/2nd ... - round)
eAuction: final price negotiation (last round)
participants
i.e. short list / ranking
contract award
Result:
Overview eSourcing
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Auction types
There are two main auction types:
Reverse (English type) and Forward (Dutch type)
Reverse:This is an auction with decreasing price stepsStart from price x and lower down to y – suppliers can place multiple bids in one auction;
Forward:This is an auction with increasing price steps – price steps will be increased automatically by the system – only one bid can be placed in one auction; no interaction between suppliers
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Prerequisites
It is important not to compare apples with pears!
First of all: the items need to be commercially evaluatedScope has to be clear, have time and flexibility
Next step: bid evaluation and normalization
Create Matrix and decide on bonus and malus for specific suppliersBased on supplier evaluation, quality risk, total cost
General: the more competitors the betterFor an eAuction minimum 2 suppliers are requiredSuppliers have to be registered in C4S
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Supplier Comparison Factor (SCF)
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Process Steps
Contact supplier and inform them that the negotiation will be via eAuction Clear any commercial and technical issues with suppliers and cross-functional
team (including determining possible Bonus/Malus)
Register eAuction with central services and get time slot Write event rules and invitation and send to suppliers Set up eAuction on platform Provide trainings to suppliers Moderate auction Summarize and Report auction
eProcurement Manager Purchaser
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Advantages of eAuctions
Transparent and formal communication
Commercial issues cleared in advance
Clear and transparent decision process for supplier
Commitment of all stakeholders in advance
Award via e-Auction avoids long lasting negotiations
Possibility of accommodating other issues beside price
through bonus/malus
All offers are comparable
Conformance to compliance requirements
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E-Auction
Examples performed by E O
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TEU
R
220
210
200
190
180
170
160
150
140
130
120
110
100 lastoffer
15:30 15:34 15:38 15:42 15:46 15:50 15:54 15:58 16:02 16:06 16:10 16:14 16:18 16:22:16:26 16:30
extentions
á 2 min.
15 min. core
auction time
Supplier I
Supplier II
Supplier III
159
197
144
211
201
191
Opening price
Reservation price
eAuction-Example (REVERSE)
Supplier IV
192
143
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TEUR174172170168166164162160158156154152150148146144142140138136134132130128 last
offer10:30 10:34 10:38 10:42 10:46 10:50 10:54 10:58 11:02 11:06 11:10 11:14 11:18 11:22 11:26 11:30
Supplier I
Supplier II
Supplier III
172171
158
Opening price
Reservation price
Auction-Example (FORWARD)
+500 / min.
145
11:00
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Challenges
Keys to Success
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Challenges
Some suppliers refuse to negotiate via E-auction
Suppliers which loose seems sometimes more disappointed
Huge changes may be added prior to the PO
Suppliers to understand the concept
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Keys to Success
The challenge lies within the organization. Persuade the Buyers!
Market successful eAuctions to upper management
Include cross-functional team members in your success stories
Assign one person as eProcurement Manager (+ one reserve)
One entry and exit point for suppliers and buyers
Buyers are relieved from negotiations and trainings
Event rules make the negotiation and award transparent
Savings immediately measurable