Success Stories
Summary
At ARG Supply Tech, we engage technology with a prime purpose of augmenting the conventional sourcing process thereby increasing its effectiveness. Proposal for deployment of an e-Auction tool was received by the senior management with a little uncertainty when one of our senior advisors went furnished the details for their review. After more than 5 years post successful implementation of the tool the management is more than happy to have approved the deployment proposal. The returns on the investment are pretty impressive considering the savings in capital expenses over the said period. If you want to learn more about the details
Details
Whenever a buyer and a supplier sit across the two sides of a negotiation table, the level of confidence may not be par optimum. In a free market economy, both sides expect to get the best deal through competition in a transparent manner but confidentiality of bids is also important throughout the process for the obvious reasons. Hence, there are two possible outcomes from the negotiation process – • Either the buyer doesn’t get to the best deal a supplier is able to offer but could not be tapped, • Or the supplier loses the business for lack of knowledge about the value offered by competition. When one of ARG senior team member was faced with this dilemma, he decided to deal with that situation rather than just giving it a pass. He explored available resources including his own past experience in multi-national corporations and the best practices followed by the industry. He found that e-Auction can be one of the probable tools. Now challenge was that there weren’t quite a few success stories for e-auction implementation in the past for the size and segment of the company where he belonged then. He decided to give it a chance still and went ahead with the calculation of initial IRR workings and next with a detailed project report. Interestingly, he found that the idea was not implemented so far as buying professionals did not think that the solution can be customized to their needs. When he approached to a leading e-auction tools provider, it was understood that not only the solution could be customized while retaining important standard features but also the price for the investment could be lowered if certain unwanted modules could be dropped from the suite. Secondly, the tool could be globally deployed while being managed from India which meant that additional spend could be covered within the same cost as per the total allocated events as per the pricing agreement. The spend performance improved much more as compared with earlier offline negotiations. As an important added advantage, supplier relationships improved remarkably. Sourcing efficiency in terms of turn-around-time (TAT) saw an immediate boost. There sat our senior advisor with a smile for he had achieved the saving KPIs as well as improvement in the team morale - by relieving them from monotonous tasks and making time available for them to concentrate more on strategic sourcing.