If you are thinking about how to deal with the waste of the procurement budget or even how to combat corruption in your purchasing department you will definitely encounter the need to procure goods and services through E-Sourcing events. There would likely be utilized Reverse Auction: the supplier that provides the lowest price proposal wins the contest. This procurement method which is based on competition is only suitable for the purchasing of basic items. But if you are sourcing services, some complex items, or if the purchasing involves long-term contracts with repetitive supplies and additional services, you should not consider only the price criteria. Therefore, you need to utilize other types of sourcing events.

Reverse Auction is one of the most popular types of e-sourcing events. The key goal of Reverse Auction is to source goods or services of a certain quality at the lowest possible price. A Reverse Auction is not a complex sourcing event, and that is why it is used quite often. However, besides the price, there are some other criteria: the delivery timeframe, the payment method, warranties, the shipping method, etc. If the organizer is not satisfied with the results of the Reverse Auction, the organizer may start the rebidding.

Rebidding is one of the stages of a multi-stage sourcing activity. In a framework of rebidding the bidders improve their proposals: reduce the price, increase the warranty period, or provide flexible payment terms.

The best practices of the companies that utilize E-Sourcing platforms or cloud services for purchasing goods or services demonstrate that sourcing activities should not be limited to Reverse Auctions. Sourcing activities are not only the tenders. Sourcing activities also include prequalification, accreditation, surveying, etc.

Which sourcing activities should be utilized to get the most for your business?

The key goal of the sourcing activities is to get the best terms for the supply of goods and services. The most widely used types of sourcing events are RFx and Reverse Auctions.

The main types of E-Sourcing activities:

Utilization of the different types of sourcing events should be included in the sourcing/procurement strategy to maximize profit from the presence of a competitive environment between the suppliers participating in the sourcing events.

Supplier evaluation is a vital part of the sourcing/procurement strategy

The same mechanisms that are used for the evaluation of proposals within sourcing events can be also used for the evaluation of suppliers: their previous experience, capabilities to process the order, meeting the compliance standards, guaranteeing the quality of goods, ability to fulfill the company’s purchasing requirements, etc.

Accreditation is the assessment of a supplier before enabling him to participate in the sourcing activities of the company. Prequalification is an evaluation of supplier suitability for participating in a particular sourcing event. Prequalification is usually used as an evaluation step before the sourcing of critical goods and services for the company.

How to quickly conduct sourcing events, without errors and violations?

Conducting even a basic Reverse Auction with a few dozen participants manually consumes dozen working hours of the purchasing department. Several times more will be spent on conducting multi-stage sourcing activities manually. And it does not guarantee that this time and money spent will result in a positive outcome: manual execution of the sourcing and procurement activities does not exclude errors in the document flow, violations in terms of choosing the awardee (including corruption and discrimination), and inflated prices for goods and services.

Convenient SaaS all-in-one procurement solution that includes a flexible E-Sourcing Module enables the managers to:

  • Run prequalification before conducting the E-Sourcing Event
  • Run regular accreditations, and create and maintain the preferred supplier list
  • Quickly conduct error-free E-Sourcing Events to get the best terms from suppliers: from Reverse Auctions and RFx events to complex multi-stage sourcing activities
  • Access any data of any purchase or sourcing activity through a consolidated dashboard with built-in reports and data visualization charts
  • Ensure the compliance with company’s requirements
  • Conduct sourcing activities according to the company’s standards
  • Eliminate the violations, corruption, overpricing, and supply of low-quality goods
  • Save a significant amount of time by eliminating manual workflow