Krinati Solutions

  Reverse auctions are a great tool for buyers to save money, but many suppliers tend to be apprehensive about participating in them. Suppliers do not like participating in reverse auctions because they are typically viewed as a race to the bottom in terms of pricing.  There are more apprehensions which we will articulate in this article. We will also take a look at the remedial measures a buyer must take to ensure auctions are competitive and the best bid is placed by the most capable supplier. Understand suppliers’ apprehensions about participating in reverse auctions When it comes to participating in a reverse auction, suppliers are wary about who else will be in the pool of participating vendors. Suppliers fear that they will be pitted against unqualified or inexperienced vendors who will try to undercut their prices, compromising the quality of the product or service. Incumbent suppliers may also worry about the fairness of the auction. They may feel that their knowledge ...

  Reason 1: Inviting unqualified suppliers to the auction event Auctions should immaculately be the final step in the negotiation process. Negotiating with suppliers post the auction is a big no-no. Also, qualifying suppliers post the auction has its drawbacks too. Assume the smallest-ranked supplier is disqualified post the transaction. The coming ranked supplier will misdoubt the veracity of the event and will probably be irritated. Reason 2: Poor supplier management Suppliers would much rather fight in a transparent and fair market, where their capabilities can be fairly estimated. They prefer to join the auctions with capable suppliers. They doubt an unclear selection and shortlisting process. Having a simple auction tool is critical to ensure suppliers aren’t discouraged from joining online auctions. Some common supplier queries are the following: Why is the buyer even conducting  reverse auction sourcing ? We’ve serviced them well over the times and delivered good value,...

What is eSourcing? The process of Sourcing involves looking for new suppliers, assessing their capability, comparing their products and their offerings with the demand or with the incumbent supplier’s offering, uniting with all suppliers to receive marketable bids, researching the bids, and negotiating for the optimum price & capability mix. Depending on the strategic nature of the goods or service being sourced, some stages of the sourcing process assume more importance, say brainstorming sessions to decide on cost reduction regulators, inputs from manufacturing and quality teams on issues faced and framing an approach that addresses them. eSourcing platform  helps to digitalize the entire Sourcing process through an online platform that’s penetrated by both the buying team and the suppliers. eSourcing result generally delivers 3 functionalities viz. 1. Request for Information( RFI) A questionnaire that suppliers respond to. Given the strategic nature of the sourced ...

  What is eSourcing? The process of Sourcing involves finding new suppliers, evaluating their capability, comparing their products and offerings with the requirement or with the incumbent supplier’s offering, collaborating with all suppliers to receive commercial bids, analyzing the bids, and negotiating for the optimum price & capability mix. Depending on the strategic nature of the goods or service being sourced, some stages of the sourcing process assume greater prominence, say brainstorming sessions to decide on cost reduction levers, inputs from manufacturing and quality teams on issues faced, and framing an approach that addresses them. eSourcing helps to digitalize the entire Sourcing process through an online platform that is accessed by both the buying team and the suppliers. eSourcing solution  typically delivers 3 functionalities viz.: 1.  Request for Information (RFI ) A questionnaire that suppliers respond to. Given the strategic nature of the sourced cat...

  Procurement teams often face a scenario where they have to compare bids from suppliers that aren’t exactly similar. What do we mean by that? Here are some scenarios where bids received from suppliers aren’t comparable. Shipping costs are incurred by the buyer and are different for each supplier i.e. supplier provides goods ex-works and the buyer is responsible for the transportation of goods. Payment terms are different Quality and esourcing services levels are different Switching costs are incurred with a new supplier Preference is given to incumbent suppliers plus others If we need reverse auctions to be conclusive in themselves, then they cannot be applied in such scenarios. This can be a challenge for companies trying to establish reverse auctions as a norm for supplier negotiations. The way to address this is via Transformed Price bidding. How does that work? The bids placed by suppliers are transformed by applying ‘Price Transformation Factors’, thus normalizing the bids r...

  Reason 1: Inviting unqualified suppliers to the auction event Auctions should ideally be the final step in the negotiation process. Negotiating with suppliers post the auction is a big no-no. Similarly, qualifying suppliers post the auction has its demerits too. Assume the lowest-ranked supplier is disqualified post the auction. The next ranked supplier will doubt the veracity of the event and will likely be peeved. Reason 2: Poor supplier management Suppliers would much rather compete in a transparent and fair market, where their capabilities can be fairly evaluated. They prefer to participate in auctions with similarly capable suppliers. They doubt an unclear selection and shortlisting process. Having a simple auction tool is critical to ensure suppliers aren’t discouraged from participating in online auctions. Some common supplier queries are the following: Why is the buyer even conducting a reverse auction? We have serviced them well over the years and delivered terrific valu...

  A combination is formed when businesses agree to act together for an anti-competitive purpose rather than contending against each other. The combination-forming companies divide the requests and guests between themselves and agree on prices. The consequences are increased prices and deteriorating quality of products and services. Several profitable studies and legal opinions of antitrust authorities have planted that the median price increase achieved by cartels in the last 200 times is around 25. Principal Procurement Officers (CPOs) are demoralized with the demanding task of relating to and breaking these cartels. Competition laws frequently prohibit private cartels. Identifying and breaking up cartels is an important part of the competition policy in utmost countries. As Chief procurement officers (CPOs), you're demoralized with the demanding task of relating and breaking these cartels, especially in a reverse transaction process. Still, it's important for you to take into...