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Lowering Total Cost Through Reverse Auctions

By Wes Guillemaud Ceo, Dan Hooper and Vice President


Abstract. Reverse-Auctions offer the opportunity to greatly expand your sourcing reach while reducing the manual administration and unit costs. Depending on which reverse-auction model you use, it can even deliver you a better price faster. This session dispels the mystique of reverse auctions and enables purchasing professionals at all levels to understand the benefits and risks of reverse auctions. This joint industry-academic presentation is intended to educate and guide the purchasing professional in the alternatives and opportunities of reverse auctions. The Opportunity. A key principle furthering professional purchasing is the use of information to reduce uncertainty and thus reduce total cost. Purchasing professionals have always had to manage the trade-off between limiting the number of suppliers receiving an opportunity to quote to a manageable number versus ensuring and maintaining a broad range of potential bidders to capture the best total market price. The Internet offers the ability to fulfill both objectives through the use of Internet-based reverse auctions. Reverse-Auctions are one of the advanced tools enabling purchasing professionals to shift from “conducting and administering ” the procurement process, to “managing and monitoring

Year: 2011
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