Situation
- A Major European Retailer needed to source Men’s Thermal Underwear for the cold season
- Company preferred one supplier for all the products, therefore bidders were asked to provide their best possible offer for each product
- In addition to price, other elements such as quality, trading, flexibility, logistical setup needed to be incorporated
- Three suppliers were invited to all eAuctions, including the incumbent supplier
- The start price was based on eRFx information collected prior to negotiation
Solution
- Two Japanese Auctions and a CherryLot Auction were used in the negotiation
- Japanese format was chosen due to limited bidder pool
- First Japanese Auction included six product line items; the second had only three products
- Bidders were allowed three consecutive bid rejections prior to closing
- The CherryLot Auction contained one lot and three product lines
- Traffic light system provided feedback to bidders on their positioning
- Parameters such as office fees, transit costs, and Duty Paid on Carriage were applied for all auctions
- The order allocation was announced within 2 weeks of bid close
Result
- The Japanese Auctions generated strong savings (12,03% & 13,82%)
- The CherryLot Auction had 2,30% Savings
- All suppliers submitted their bids in all the organized auctions
