Procure to Pay
Expand Your Commodity Sourcing Reach With an Online Bidding Tool!

As purchasing departments become more challenged to drive down costs when it comes to commodity based sourcing, a fresh new perspective is needed. Purchasing managers and buyers are comfortable with their own internal process for identifying the lowest cost supplier for their goods and services. Unfortunately, these processes may have been around for so long they do not take into account the types of tools that can be used to expand their reach to other suppliers that may provide better products at lower costs.

Most suppliers that are being awarded these contracts are local or regional based vendors that have been working with the department agency for a long time. Because of the amount of effort in conducting a paper based sourcing event, the number of vendors that are invited to participate in these bids may only be less than 10.

Because these events may not have a 100% participation, the vendors that may actually respond may be less than 50% of the suppliers invited. This does not necessarily provide the greatest price variances needed to ensure the organization is being diligent enough in their goals to find the lowest cost.

With the advances in internet technology, online bidding tools are now becoming more accepted and utilized to replace the old bid in the mail process. With tools that allow bidding entities to post and review their bids online, the suppliers who subscribe to these services are now allowing a more competitive landscape with regards to bid opportunities.

A bid that once included 10 vendors, can now easily be sent to hundreds at a time with minimal effort. This in turn helps to affirm the agency is indeed doing everything it can to get the best source for that commodity by expanding their reach through an online sourcing application.

In summary, purchasing managers and their respective management teams should look at e-sourcing applications to broaden the net when running commodity based sourcing events. Strategically, moving the sourcing process off of paper into a more streamline set of applications provides more competition without increasing resources.

Gravity Gardener

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