Web exchanges must offer guarantees, warns expert

4 July 2001
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05 July 2001 | Mark Whitehead

Companies launching Internet-based trading exchanges must give a strict assurance that they will not try to influence bidding, or suppliers will refuse to take part, a leading figure in the automotive industry has warned purchasing professionals.

Heinrich Reidelbach, vice-president of purchasing services at DaimlerChrysler, said it had bought items worth more than e4 billion (£2.4 billion) through its own marketplace, DCX, including car body parts, generators and computer components.

Feedback from suppliers had confirmed the mutual benefits of online bidding, he told the European Purchasing Directors' Forum, held near Newport, South Wales.

But he said firms must make sure all participants are given the same information and that their anonymity is guaranteed.

They should also give a cast-iron assurance that they will keep out of the online process and not try to influence bidding.

"Suppliers may worry that you've put in your own low bid to try to pull the price down, but you have to establish that this will not happen," Dr Reidelbach told the forum.

"You have to make sure suppliers are convinced you will act fairly, otherwise in three months you will not be able to do online bidding any more because there will be nobody who will participate."

Christopher Barrat, head of purchasing at the Chlor-Chemicals division of Ineos Chlor, appealed to purchasers to pay more attention to how suppliers see them.

"If you make yourself attractive to your suppliers, you will get better deals," he said.

SMjul2001

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