Stainless Steel Components
A Scanmarket Savings Snapshot on Retail
Retail Client improves processes and saves 1.52% with Cherry Picking auction during difficult market conditions.
Challenge
A Scanmarket client wanted to improve their processes for purchasing stainless steel products every quarter. The total pilot project included 130+ product lines with a total projected spend of €200,000.
Solution
The client had not collected updated information on prices, products and volume, so it was decided to start the process with an RFQ round for the 4 qualified suppliers to collect information prior to running an eAuction.
As a result of the RFQ round, good competition was identified on 10% of the lines, which were taken to an eAuction. 3 suppliers were invited to bid in a Cherry Picking auction for a total value of €50,000 to increase competition, with the best bid per line awarded the contract.
To make the most of the process, the lines that did not qualify for the eAuction were further negotiated via a second round RFQ. The client values long-term relationships and they therefore nominated 90% of the business to 2 main suppliers and one additional supplier for the remaining 10%.
Result
The auction drove total savings of 1.52%. The savings were not the most important results as the current market conditions for these products are difficult. However the streamlined process saved the client a lot of time and made the overall process of 2 RFQs and an eAuction much faster and easier to manage than a manual process.