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CombineNet Sourcing in Reverse Auction Environments

Many companies today have e-sourcing tools in place across their organizations, including RFI (request for information), RFP (request for proposal), and Reverse Auction technologies. Where the goods and services being sourced are well defined, suppliers are pre-approved, and the award decision can be made on lowest price in a winner-takes-all strategy, reverse auctions can be employed effectively. But for larger events and more strategic spend categories, reverse auctions are usually not supportive of the buyer’s strategy or the suppliers’ interests. While reverse auctions create an exciting environment with fast-paced, competitive price bidding, they are poorly suited for spend categories and sourcing events where buyers need to award business on the total value of their suppliers’ responses.

Organizations that leverage Reverse Auctions heavily, even for simple, well-defined spends, often find that they reach a point of diminishing returns after a few cycles of Reverse Auction-driven exercises within their supply base. As supplier margins continue to be squeezed via Reverse Auction, the opportunity for finding additional savings is reduced. And many suppliers become reluctant to participate in further margin reductions, preferring rather to move on to building business with new customers.

CombineNet’s sourcing product, CombineNet ASAP, delivers a best-of-breed complement to those Reverse Auction solutions within your sourcing toolbox. When Reverse Auction-driven sourcing activities have reached a plateau in effectiveness, or have seen a decline in supplier participation and value, CombineNet ASAP’s flexible Expressive Bidding® and real-time Expressive Feedback capabilities can provide your organization with a full-featured competitive sourcing solution that encourages participation from suppliers by allowing them to put their best foot forward to introduce innovation and cost savings to your business. In addition, CombineNet ASAP is ideally suited for spends not suited for a Reverse Auction approach.

For more information on our best-in-class sourcing solution, CombineNet ASAP, in a Reverse Auction environment, please contact us today.

Why do Reverse Auction users choose to add CombineNet ASAP?

• They have spend areas not sufficiently supported by Reverse Auctions, causing buyers to resort to the use of spreadsheets or other manual, inefficient sourcing methods.
• They have mature spend areas where they have hit a limit on reducing costs further.
• They want to take a more strategic approach to sourcing, requiring more robust analytics capabilities that model a broader data set including non-price variables.
• They want to encourage greater supplier collaboration and innovation beyond lowest-price bidding.
• It’s non-disruptive and complementary.

CombineNet ASAP in a Reverse Auction environment gives you:

• Support for More Spend Under Management: Support simple, routine spends to your most complex, largest-scale sourcing events – across indirect spend, direct materials and commodities, transportation, services, and packaging.
• Sourcing Scenario Analytics: Quickly optimize sourcing scenarios based on a variety of constraints, fueled by our proprietary optimization technology holding 17 U.S. patents.
• Expressive Bidding®: Let suppliers put their best foot forward, by collecting both price and non-price terms, allowing buyers to make sourcing decisions based on optimal value with minimal risk.
• Expressive Feedback: provide expressive and timely information to suppliers during bidding cycles to guide them towards more strategic and competitive RFP responses.
• Ease of Use: Improve internal adoption with a Software-as-a-Service (SaaS) product designed for self-service usability and flexibility that drives best practices, standardization, data centralization, and supplier friendliness.
• Ease of Integration: Integrate quickly with your current environment and practices, with features for importing and exporting relevant data, API's, and offering an easy 6-step mapping of existing RFP management templates into CombineNet ASAP.

CombineNet ASAP offers flexible subscription pricing, making us easy to do business with and fast to get up and running in your Reverse Auction environment. We also readily work with your select Systems Integrator/Consulting partner to support configuration, implementation, and roll out of the solution to meet your specific requirements.

Get more information on advanced sourcing solutions in a reverse auction environment: Download the white paper detailing the differences between Reverse Auctions and CombineNet’s Advanced Sourcing Approach.

For more details and a custom quote, please contact us.