1. E-Auction presentation
Protection notice / Copyright notice

2. E-Auction
What is E-auction

3. click2procure merges traditional procurement and e-business
Siemens Buyside Marketplace click2procure
e-information
e-sourcing
e-ordering
web-based purchasing information
- supplier database
click4suppliers incl. supplier evaluation system
electronic sourcing tools
- e-RfQ
- e-bidding/e-auction
electronic order processing
- direct / indirect (MRO)
material
- with / without catalogs
click2procure is the e-business workspace of the buyer!

4. Overview eSourcing
eSourcing
- wording
... ..
Inquiry of commercial documents
Inquiry for proposal from potential suppliers
Commercial
Clarification
Price Neg-
otiation to Contract Award
Proposal
Evaluation
to Short List
Currently not applicable for Internet / Extranet solution
eRfQ via Siemens Buy Side Market-place with standardized Forms
Review done face to face
eBidding via Siemens Buy Side Marketplace
eAuction via Siemens Buy Side Marketplace
Partially automated within eRfQ
Result:
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

5. Auction types
There are two main auction types:
Reverse (English type) and Forward (Dutch type)
Reverse:
This is an auction with decreasing price steps
Start 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

6. E-Auction
Process

7. Prerequisites
It is important not to compare apples with pears!
First of all: the items need to be commercially evaluated
Scope has to be clear, have time and flexibility
Next step: bid evaluation and normalization
Create Matrix and decide on bonus and malus for specific suppliers
Based on supplier evaluation, quality risk, total cost
General: the more competitors the better
For an eAuction minimum 2 suppliers are required
Suppliers have to be registered in C4S

8. Supplier Comparison Factor (SCF)

9. 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

10. E-Auction
Advantages

11. 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

12. E-Auction
Examples performed by E O

13. eAuction-Example (REVERSE)
TEUR
220
210
200
190
180
170
160
150
140
130
120
110
100
15 min. core
auction time
extentions
á 2 min.
Supplier IV
211
Supplier III
201
197
Opening price
192
191
Supplier II
Reservation price
Supplier I
159
144
143
last
offer
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

14. Auction-Example (FORWARD)
TEUR
174
172
170
168
166
164
162
160
158
156
154
152
150
148
146
144
142
140
138
136
134
132
130
128
11:00
172
171
Supplier III
158
Supplier II
Reservation price
Supplier I
145
+500 / min.
Opening price
last
offer
10:30 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

15. Challenges
Keys to Success

16. 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

17. 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