eBridge News

The 6 Pitfalls of Reverse Auctions

In a white paper published by ThreeCore Purchasing Consultants, the author highlights six common pitfalls of reverse auctions. Below each pitfall, I address the objection and how our services complement each roadblock.

At eBridge we work hand-in-hand with our clients to not just avoid pitfalls, but achieve remarkable results. Take a look at these pitfalls and let us know what you think.

1. Lack of supplier preparation: Prior to the event, eBridge gives one-on-one tutorialsto each pre-approved supplier. Our procurement team is available throughout the process for additional training and to answer questions that will naturally arise.

2. Inviting the wrong suppliers: Although a key part of our process is supplier sourcing and recommendation, the buyer always reviews and approves which suppliers will participate.

3. Including too many suppliers: A common misconception in reverse auction procurement is that the number of participating suppliers determines a successful event. Through eBridge’s sourcing and recommendation process, our team brings an average of 32 suppliers to the buyer for their consideration. On average, 6 suppliers participate per event. A competitive environment is the ultimate goal for our customer.

4. Starting with difficult materials: At eBridge, our team provides the expertise to determine which items are appropriate for the process. Our comprehensive Spend Analysis report provides customers with a full view of the items on their upcoming purchasing schedule that will fit the process. Our analysis clearly defines the items that fit the reverse auction process- and those that do not.

5. Not enforcing the rules: Reverse auction software companies and third party providers do not provide the leadership and guidancenecessary to integrate reverse auctions into your purchasing strategy. At eBridge we recognize that leadership is an integral part of the solution. Our mission is “to provide leadership in reverse auction procurement and process change that creates meaningful value for our customers.”

6. Setting artifically low targets: At eBridge, the cornerstone of our services is to allow the free market to reign. The competitive environment created through our process yields an average net savings of 14%, but ultimately gives customers assurance they are purchasing at market.

Achieving successful change with reverse auctions

Last week on ZDnet.com guest blogger Barbara Kivowitz, shared insights in adopting new technology successfully. Kivowitz writes:

One of the most formidable challenges an organization faces when implementing new technology is simply getting employees to use these tools and the new processes they support. Senior management budgets development costs and training, but typically under-invests in the change management efforts needed to turn technology into the strategic transformation the business expects.

Underestimating the impact of technology-driven process change on employees is a key factor in project failure, even when deploying excellent technology.

Communication, collaboration, and knowledge sharing are the critical factors for achieving project success.

At eBridge, we work with customers to make reverse auction procurement an integral part of their purchasing strategy. And that doesn’t just include running an auction. Our team of procurement professionals work hand-in-hand with our customers, providing the tools to implement the reverse auction process and also the leadership through education and training to achieve long-term success.

In the most literal sense, implementing new technology into an organization requires individuals to perform their job in a new way. While senior management might buy in to the reverse auction process, we also deliver extensive training and education so our customers are comfortable and ready to take on a new opportunity that will achieve remarkable results for their organization.

How is your organization adopting change?

eBridge Joins High Impact Portfolio

High Impact Program identifies Louisville’s top fast-growth companies

LOUISVILLE, KY (April 12, 2011) – eBridge, a leader in fully managed reverse auction procurement services, was recently named to the High Impact Portfolio as one of the top fast-growth companies headquartered in the Metro Louisville Region. The High Impact Program, a public/private partnership between Louisville Metro Government and Greater Louisville Inc.’s (GLI) ENTERPRISECORP, introduced the newest companies selected to the High Impact Portfolio during ENTERPRISECORP’s Signature Event today.

“Fast-growth companies are critical to the continued economic success of our region,” said Bobby Ferreri, Executive Director of ENTERPRISECORP. “The High Impact Portfolio honors those businesses poised to lead our community in job growth over the coming years, and it was exciting to see the variety in this year’s companies.”

eBridge provides fully managed reverse auction procurement services, delivering an average net savings of 14% on purchases and creating efficiencies in procurement operations. eBridge significant growth over the past twelve months is due to an infusion of capital and the addition of seasoned leadership to drive revenue and expand market share.

“It is an honor to be recognized as one of the fast-growth companies in Louisville,” said Jim Headlee, CEO. “We are poised for continued growth thanks to a robust service offering and our team of procurement professionals that lead customers deliver savings and drive efficiencies for our clients.”

The High Impact program strives to nurture the prosperity of Greater Louisville’s growth businesses. Initiated in 2003, the program identifies companies meeting specific criteria, which are then named to the High Impact Portfolio.

Collectively, High Impact Portfolio companies represent $2.3 billion in annual revenues; have a 36 percent average growth rate; have created nearly 3,000 new jobs in our region; and have invested $438 million over the last four years.

About eBridge

Founded in 2002, eBridge Business Solutions, LLC provides fully managed reverse auction services, creating efficiencies and delivering hard dollar savings to the customers’ bottom line. Leveraging years of experience in purchasing, sourcing and spend management, eBridge creates meaningful value for our customers through leadership in reverse auction procurement and process change consulting. For more information, visit: www.ebridgeglobal.com.

About the High Impact Program

The High Impact program strives to nurture the prosperity of Greater Louisville’s growth businesses. The High Impact Program is a public/private partnership, funded by Louisville Metro Government and administered by GLI’s ENTERPRISECORP, that identifies and serves fast-growth companies, companies with the potential for fast growth, and those companies that enable growth in others. The program focuses on companies of these types headquartered in Louisville that have a disproportionately higher impact on the metro area economy. For more information on the High Impact Program, visit www.HighImpactLouisville.com.

eBridge announces partnership with Life in Abundance

African mission organization will receive one percent of corporate profits

National hotel chain uses reverse auction to purchase guest room furniture

A large national hotel chain partnered with eBridge to purchase items for a room renovation project. The first purchase was for furniture (casegoods) in king, queen and double guest rooms.

First, eBridge’s worked with the hotel’s purchasing team to modify the specifications to complement the reverse auction process. Next, eBridge received a list of preferred suppliers from the hotel group. To increase competition the bid, eBridge’s sourcing team recruited additional qualified participants.

Once the suppliers were approved by the hotel group, eBridge conducted one-on-one tutorials for each supplier. In every event with eBridge, suppliers have the opportunity to ask questions throughout the process and receive a personal tutorial to make sure they are comfortable with the system and ready to compete.

During the live event, the three suppliers placed a total of 63 bids on the three line items. First place changed hands 12 times, and at the conclusion of the event, first and second place suppliers were separated by a mere 0.026%, indicating true market value was achieved. The final low bid was 17% below budget!

Republicans Weigh a Federal ‘Reverse Auction’ to Push Clean Energy

On Monday the New York Times featured an article discussing U.S. Rep Kevin Nunes proposed legislation to increase domestic energy production. Any savings would be put in to a trust where businesses could bid, via reverse auction, on funds for research and development of renewable energy sources.

From the article: The provision sits deep in H.R. 909, a bill Rep. Devin Nunes (R-Calif.) proposed in early March. Overall, the bill focuses on ramping up oil and gas production, oil shale and nuclear energy; it also cancels U.S. EPA’s ability to regulate greenhouse gases.

Some of the royalties and fees from the oil and gas production go into a trust fund. The Department of Energy then solicits offers from renewable power generators and awards the funds to those that offer the lowest price.

It’s called a “reverse auction” for renewable energy, and it’s an idea Democrats have floated in past Congresses. Now it comes from a Republican majority that has questioned climate science and pressed for more fossil energy — and could easily have put the cash toward the deficit.

To read the full article click here.

Business alliances will remain a popular strategy

The economic landscape over the past few years has forced organizations to look internally to find ways to create efficiencies in their supply chain and business operations to preserve resources.

A recent study released by CFO research studies surveyed almost 200 global senior finance executives and found that forging partnerships with third parties still remains a top priority. The survey explains that “companies are finding that a partnership strategy born of necessity can also be a valuable part of a growth strategy“.

At eBridge lock arms with our customers by providing fully managed purchasing solutions to deliver measurable results- averaging 14% net savings in everything run through the process and creating efficiencies in procurement processes.

The article concludes by stating, in an uncertain economy the greater risk may be in going it alone.

Is your organization forming strategic partnerships to stay afloat during these uncertain times?

To read the full article, click here.

Importance of ext. relationships in the recovery; likelihood cos. will pursue strategic partnerships

Restaurant Groups Looking for Ways to Create Efficiencies in Supply Chain

Today’s Wall Street Journal features an article about the initiatives large restaurant chains are taking to create efficiencies in their supply chains. Companies like Starbucks, Darden Restaurants (owner of Red Lobster and Olive Garden chains) and Texas Roadhouse are hedging prices on ingredients and looking for ways to purchase cooperatively to give the groups more buying power and more leverage with their suppliers.

“We’re seeing a level of sophistication in supply-chain management that didn’t exist five years ago,” said Dave Donnan, a partner in the consumer products practice at consulting firm A.T. Kearney. “The separation of those that will succeed and those that will fail will be based on attention to detail.”

How is your organization paying “attention to detail” to improve your supply chain?

Click here to read the full article.

Practicing Boldness in Reverse Auction Procurement

Each month eBridge focuses on a character trait to help staff grow personally and professionally- and to exemplify these traits in our daily business interaction with customers. This month we are focusing on boldness- “the confidence to say or do what is true, right and just”.

Each day eBridge provides value to our customers through our leadership in the reverse auction process. Part of this process is encouraging our clients to be “bold”– with their suppliers, internal purchasing teams and with company leadership- to implement a new idea – even if it goes against status quo.

In the same way, we commit to our customers to be “bold”: to do what we say we will and be worthy of their trust. This means operating with transparency and challenging them to be more efficient in their purchasing process.

In our discussion about boldness, one member of our team pointed out, “boldness is like a muscle we exercise. The more we use it, we increase our ability to act with courage in the future.” Another team member pointed out, “fear keeps us from being bold. If you don’t face your fears, you will start making choices to avoid them rather than overcome them.”

We encourage you to join with our team this month and practice boldness by facing your fears and exploring opportunities to challenge the status quo. What areas of growth does your organization have and where can you practice boldness to help achieve more remarkable results?

Keep it Clean: Hospital Uses Reverse Auction for Linen and Laundry Service Contract

A large hospital system engaged eBridge to help establish a three year contract for laundry and linen services. eBridge worked with their procurement team to first identify purchases over the next year that would be appropriate for the reverse auction process. Next, eBridge’s team helped the group develop a set of specifications for the bid.

“It had been several years since the hospital had opened this item up for competitive bidding so they didn’t have a set of specifications that appropriately appealed to a wide group of suppliers,” said Rebecca Flaherty, Senior Procurement Manager at eBridge. “My team collected the requirements as directed by the hospitals’ team and then helped write specifications that were both thorough and clearly defined, positioning the bid to be highly competitive and fair.”

A total of eight suppliers were approved by the hospital’s team and included in the bid opportunity. eBridge’s strategic sourcing efforts brought 6 new suppliers to the table for this event.

The suppliers placed 140 bids with first place changing hands 11 times. At the conclusion of the bid, the hospital had saved 28% versus budget, with the three lowest bidders within a close margin.

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