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While significant improvements in price can be

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Unformatted text preview: us its prior cost level. Anyone who has participated in an auction for antiques or art or other merchandise knows that the environment can become emotionally charged and that bidding sometimes exceeds rational or sustainable levels. While significant improvements in price can be obtained, buyers need to be careful since it doesn’t do any good to accept a low bid submitted online by a supplier only to find out later that they don’t have the capability to deliver the volume and quality you need. Indeed, the most important activity in these reverse auctions is the work that occurs before the auction actually takes place. You may need to pre-qualify suppliers who have the capacity, quality levels, and track record to serve your business, and invite only that select group to participate in the auction event. Do you really want anybody with a Web browser to be able to bid for your business? In addition, without a strong knowledge base of what your company purchases, from whom, at what prices, and for what uses, it is nearly impossible to derive the full value from e-procurement and other “upstream” supply chain initiatives. Many companies still don...
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