Copyright © Siemens AG 2010. Alle Rechte vorbehalten E-Auction presentation Protection notice /...

Copyright © Siemens AG 2010. Alle Rechte vorbehalten

E-Auction presentation

Protection notice / Copyright notice

Seite 2 May, 2010 E O SPRCopyright © Siemens AG 2010. Alle Rechte vorbehalten

E-Auction

What is E-auction


click2procure merges traditional procurement and e-business

Siemens Buyside Marketplace click2procure

e-sourcinge-information e-orderingelectronic 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!


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

CommercialClarification

ProposalEvaluationto 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 (1st/2nd ... - round)

eAuction: final price negotiation (last round)

participants

i.e. short list / ranking

contract award

Result:

Overview eSourcing


Auction types

There are two main auction types:

Reverse (English type) and Forward (Dutch type)

Reverse:This is an auction with decreasing price stepsStart 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


E-Auction

Process


Prerequisites

It is important not to compare apples with pears!

First of all: the items need to be commercially evaluatedScope has to be clear, have time and flexibility

Next step: bid evaluation and normalization

Create Matrix and decide on bonus and malus for specific suppliersBased on supplier evaluation, quality risk, total cost

General: the more competitors the betterFor an eAuction minimum 2 suppliers are requiredSuppliers have to be registered in C4S


Supplier Comparison Factor (SCF)


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 Manager Purchaser


E-Auction

Advantages


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


E-Auction

Examples performed by E O


TEU

R

220

210

200

190

180

170

160

150

140

130

120

110

100 lastoffer

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

159

197

144

211

201

191

Opening price

Reservation price

eAuction-Example (REVERSE)

Supplier IV

192

143


TEUR174172170168166164162160158156154152150148146144142140138136134132130128 last

offer10:30 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

172171

158

Opening price

Reservation price

Auction-Example (FORWARD)

+500 / min.

145

11:00


Challenges

Keys to Success


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


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

Copyright © Siemens AG 2010. Alle Rechte vorbehalten E-Auction presentation Protection notice /...

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