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Copyright © Siemens AG Alle Rechte vorbehalten E-Auction presentation Protection notice / Copyright notice
Seite 2 May, 2010 E O SPR Copyright © Siemens AG Alle Rechte vorbehalten E-Auction What is E-auction
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!
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
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
Seite 6 May, 2010 E O SPR Copyright © Siemens AG Alle Rechte vorbehalten E-Auction Process
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
Seite 8 May, 2010 E O SPR Copyright © Siemens AG Alle Rechte vorbehalten Supplier Comparison Factor (SCF)
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
Seite 10 May, 2010 E O SPR Copyright © Siemens AG Alle Rechte vorbehalten E-Auction Advantages
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
Seite 12 May, 2010 E O SPR Copyright © Siemens AG Alle Rechte vorbehalten E-Auction Examples performed by E O
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
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
Seite 15 May, 2010 E O SPR Copyright © Siemens AG Alle Rechte vorbehalten Challenges Keys to Success
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
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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