'Be open with suppliers in e-auctions'

15 October 2003
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16 October 2003 | Geraint John

Buyers running e-auctions are mistaken if they think they will get a better deal by withholding information from suppliers, according to one of the leading users of the technology.

Buyers running e-auctions are mistaken if they think they will get a better deal by withholding information from suppliers, according to one of the leading users of the technology.

Rob Hemsley, general manager of European procurement at food giant Heinz, said "bluffing" gave e-auctions a bad name and was counterproductive.

"Our experience is that the more transparent you are, the more you will get suppliers to respond to competitive pressures," he told delegates.

Post-auction negotiation, particularly on price, was to be avoided if at all possible, Hemsley added. "You should try to finish the decision-making process during the event."

Heinz has run over 700 e-auctions in Europe since 2001, saving an average of 7 per cent, he said. By the end of next year, the company expects to have put $1 billion of spend through its e-sourcing programme, with cumulative savings of $50 million.

E-auction software was becoming far more sophisticated, Hemsley noted. Pilots now running at Heinz allow buyers to factor in many more variables than before, and to see instantly the extra costs of using more than one supplier, for example.

SMoct2003

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