Online auctions take off for KLM

1 November 2001
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01 November 2001 | David Arminas

Dutch airline KLM has embarked on three-month project to identify areas for electronic procurement after three test online auctions gained savings of around 30 per cent.

The auctions, which took place in March, July and October, were for engine maintenance. But widespread savings through e-procurement are a long way off, Angelica Jarnaker the airline's e-sourcing manager, corporate purchasing, told summit delegates.

Purchasing staff had concerns about e-auctions, she said. "They thought 'if I suddenly get 30 per cent reductions, my boss will think I have not been doing my homework for the past five years'," Jarnaker said.

Consultancy PwC established how much was being spent by KLM departments. Then an "e-team" was set up and found some suppliers were selling to different divisions at different prices, so commodity managers were appointed to consolidate spending and suppliers.

The next stage is for KLM to set up e-sourcing software. A provider will be chosen at the completion of the current three-month project.

SMnov2001

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