This reverse auction is one of many examples of engineered items successfully reverse auctioned. The most important factor in the success of the event was the excellent specifications provided by engineering. The requirements were very clear to all participants.
- 9 Companies participated (US, CN, MX,TW)
- 51 bid revisions
- 36 minutes
- Consolidation opportunity from 4 to 1 supplier
- Savings: 14%
While qualification and testing of these products may take longer than 6 months, it is not a barrier to conducting the reverse auction. The longer time frame may make the project less attractive in the priority list of opportunities (your savings funnel), it still presents an excellent opportunity to quickly generate savings. As Buddha said, “the best time to plant a tree is 10 years ago.”
To ensure high quality reverse auctions of engineered items, start with the prints. We typically review client prints for basic information like material specifications and dimensions. You might be surprised at how often basic information is missing. Another common missing factor is referenced prints or standards called out but not sent to be included in the bid package. One last tip is to compare prints against each other - it can help you ask the right questions before the bid package is released.
In summary, achieving savings of 14% or more on engineered items through the use of a reverse auction is common. It just takes a bit of additional preparation.