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Copyright © Siemens AG 2010. Alle Rechte vorbehalten E-Auction presentation Protection notice / Copyright notice.

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Presentation on theme: "Copyright © Siemens AG 2010. Alle Rechte vorbehalten E-Auction presentation Protection notice / Copyright notice."— Presentation transcript:

1 Copyright © Siemens AG Alle Rechte vorbehalten E-Auction presentation Protection notice / Copyright notice

2 Seite 2 May, 2010 E O SPR Copyright © Siemens AG Alle Rechte vorbehalten E-Auction What is E-auction

3 Seite 3 May, 2010 E O SPR Copyright © Siemens AG Alle Rechte vorbehalten click2procure merges traditional procurement and e- business Siemens Buyside Marketplace click2procure e-sourcing e-information e-ordering electronic 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!

4 Seite 4 May, 2010 E O SPR Copyright © Siemens AG Alle Rechte vorbehalten 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 Commercial Clarification Proposal Evaluation to 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 (1 st /2 nd... - round) eAuction: final price negotiation (last round) participants i.e. short list / ranking contract award Result: Overview eSourcing

5 Seite 5 May, 2010 E O SPR Copyright © Siemens AG Alle Rechte vorbehalten Auction types There are two main auction types: Reverse (English type) and Forward (Dutch type)  Reverse: This is an auction with decreasing price steps Start 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

6 Seite 6 May, 2010 E O SPR Copyright © Siemens AG Alle Rechte vorbehalten E-Auction Process

7 Seite 7 May, 2010 E O SPR Copyright © Siemens AG Alle Rechte vorbehalten Prerequisites It is important not to compare apples with pears!  First of all: the items need to be commercially evaluated Scope has to be clear, have time and flexibility  Next step: bid evaluation and normalization  Create Matrix and decide on bonus and malus for specific suppliers Based on supplier evaluation, quality risk, total cost  General: the more competitors the better For an eAuction minimum 2 suppliers are required Suppliers have to be registered in C4S

8 Seite 8 May, 2010 E O SPR Copyright © Siemens AG Alle Rechte vorbehalten Supplier Comparison Factor (SCF)

9 Seite 9 May, 2010 E O SPR Copyright © Siemens AG Alle Rechte vorbehalten 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 ManagerPurchaser

10 Seite 10 May, 2010 E O SPR Copyright © Siemens AG Alle Rechte vorbehalten E-Auction Advantages

11 Seite 11 May, 2010 E O SPR Copyright © Siemens AG Alle Rechte vorbehalten 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

12 Seite 12 May, 2010 E O SPR Copyright © Siemens AG Alle Rechte vorbehalten E-Auction Examples performed by E O

13 Seite 13 May, 2010 E O SPR Copyright © Siemens AG Alle Rechte vorbehalten TEU R last offer 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 Opening price Reservation price eAuction-Example (REVERSE) Supplier IV

14 Seite 14 May, 2010 E O SPR Copyright © Siemens AG Alle Rechte vorbehalten TEU R last offer 10:30 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 Opening price Reservation price Auction-Example (FORWARD) +500 / min :00

15 Seite 15 May, 2010 E O SPR Copyright © Siemens AG Alle Rechte vorbehalten Challenges Keys to Success

16 Copyright © Siemens AG Alle Rechte vorbehalten 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

17 Copyright © Siemens AG Alle Rechte vorbehalten 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


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