3 click2procure merges traditional procurement and e-business Siemens Buyside Marketplace click2procuree-informatione-sourcinge-orderingweb-based purchasing information- supplier databaseclick4suppliers incl. supplier evaluation systemelectronic sourcing tools- e-RfQ- e-bidding/e-auctionelectronic order processing- direct / indirect (MRO)material- with / without catalogsclick2procure is the e-business workspace of the buyer!
4 Overview eSourcingeSourcing- wording.....Inquiry of commercial documentsInquiry for proposal from potential suppliersCommercialClarificationPrice Neg-otiation to Contract AwardProposalEvaluationto Short ListCurrently not applicable for Internet / Extranet solutioneRfQ via Siemens Buy Side Market-place with standardized FormsReview done face to faceeBidding via Siemens Buy Side MarketplaceeAuction via Siemens Buy Side MarketplacePartially automated within eRfQResult:eRfQ: First request to suppliers (who should quote)eBidding: preliminary price negotiation (1st/2nd round)eAuction: final price negotiation (last round)participantsi.e. short list / rankingcontract award
5 Auction typesThere 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
7 PrerequisitesIt 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 flexibilityNext step: bid evaluation and normalizationCreate Matrix and decide on bonus and malus for specific suppliersBased on supplier evaluation, quality risk, total costGeneral: the more competitors the betterFor an eAuction minimum 2 suppliers are requiredSuppliers have to be registered in C4S
9 Process StepsContact supplier and inform them that the negotiation will be via eAuctionClear any commercial and technical issues with suppliers and cross-functional team (including determining possible Bonus/Malus)Register eAuction with central services and get time slotWrite event rules and invitation and send to suppliersSet up eAuction on platformProvide trainings to suppliersModerate auctionSummarize and Report auctioneProcurement ManagerPurchaser
11 Advantages of eAuctions Transparent and formal communicationCommercial issues cleared in advanceClear and transparent decision process for supplierCommitment of all stakeholders in advanceAward via e-Auction avoids long lasting negotiationsPossibility of accommodating other issues beside price through bonus/malusAll offers are comparableConformance to compliance requirements
16 Challenges Some suppliers refuse to negotiate via E-auction Suppliers which loose seems sometimes more disappointedHuge changes may be added prior to the POSuppliers to understand the concept
17 Keys to SuccessThe challenge lies within the organization. Persuade the Buyers!Market successful eAuctions to upper managementInclude cross-functional team members in your success storiesAssign one person as eProcurement Manager (+ one reserve)One entry and exit point for suppliers and buyersBuyers are relieved from negotiations and trainingsEvent rules make the negotiation and award transparentSavings immediately measurable