13 February 2003 | Robin Parker
GlaxoSmithKline (GSK) is promoting online auctions as a key tool in helping to close factories and cut jobs worldwide.
The pharmaceutical giant will host 500 e-auctions this year as part of a plan to bring a quarter of spend online by December.
The company sees the savings and efficiencies created by automating sourcing processes as a step towards meeting a three-year goal to reduce its global headcount.
Its e-sourcing portal helped to consolidate the company's manufacturing plants from 108 to 99 after SmithKline Beecham and Glaxo Wellcome merged in 2001.
Tim Davies, global e-sourcing director, told the Extended Supply Chain conference in London that $2 billion of GSK's global spend will be put through online auctions and requests for quotations this year.
Last year, 160 auctions saved $125 million on $500 million of spend. One auction saved as much as 74 per cent.
Davies said purchasers should not look at online auctions in isolation, or as quick wins, but as a normal part of the business.
"We want the business to run online auctions and requests for information ultimately for all spend," he said.
"The ideal would be for all non-procurement buyers to perform spot buys using templates set up by the global sourcing team."