I hope that you have enjoyed the article “What eSourcing Is & How To Get Started.”
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This article is based on a 30-minute podcast I did with Jason Busch, Editor of spendmatters.com. That podcast had lots of nuggets of good information and I only had space for a few excerpts in the article. So, I highly suggest that you check out the podcast on the Next Level Purchasing Association Podcast page.
Though the article took a rather basic look at eSourcing, the podcast did include some even more elementary material that I think could help procurement professionals who really haven’t yet got started looking into eSourcing or reverse auctions for their organizations. Yes, though eSourcing and reverse auctions have been around for a solid decade-and-a-half, there are some (actually, a lot of) procurement organizations who still haven’t added those tools to their toolboxes.
Therefore, I am dedicating this post to an excerpt from the podcast that ended up on the proverbial cutting room floor for the article, but still may be helpful.
eSourcing & reverse auctions save money and streamline the sourcing process. But what is eSourcing? What is a reverse auction? And what’s the difference?
A reverse auction is an online event “in which there is true price-based competition [among suppliers] in real-time,” according to Jason Busch, Founder and Managing Director of Azul Partners and Editor of the supply chain blog spendmatters.com. “So, when a supplier submits a bid, they know where they stand” and is able to quickly adjust that bid downward, producing savings for you.
Reverse auctions are a subset of eSourcing. Busch suggests that eSourcing describes “a broader category of tools” that includes bidding formats ranging from reverse auctions to multiple-round events where bids are evaluated privately to a variety of other types of events. To Busch, the factor that distinguishes reverse auctions from other types of eSourcing events is the “real-time feedback” that suppliers get.
Comments
If the goal is to transfer resources to the charity, one might question why charities go through the hassle of hosting an auction.
Great article ! Some allow you to do reverse auctions between suppliers.