Premium Essay

The Benefits of Electronic Reverse Auctions (E-Ras) in the Procurement Process

In: Business and Management

Submitted By mrvice
Words 936
Pages 4
The Benefits of Electronic Reverse Auctions (e-RAs) in the Procurement Process

The nature of business competition is changing drastically. One of the most profound changes currently transpiring in the world of business is the introduction of electronic commerce. The impact of electronic commerce (ecommerce, or EC) on procurement, shopping, business collaboration, and customer services as well as on delivery of various services is so dramatic that almost every organization is affected. In this paper, I will show how electronic reverse auctions (e-RAs) is very significant in the federal procurement process by saving money, time and maximizes supplier competition.
Reverse auctions gained popularity with the emergence of Internet-based online auction tools. Today, reverse auctions are used by federal, state and private agencies to purchase raw materials, supplies and services.

The Reverse Auction Process

In the traditional auctions, also referred to as forward auctions, a seller offers a product that is demanded by several buyers who compete and bid up the price. The highest bidder wins and buys the product. In a reverse auction, it is the buyer who is in control of the process. The buyer is interested in an item offered by a number of sellers who compete and lower their price in order to get the deal. Unlike traditional auctions that occur at physical locations, reverse auctions are accessed online, through web browsers, via private software companies known as “market makers.” The market makers facilitate the auction process and provide support, training and all necessary software to suppliers participating in the bidding process. The reverse auctions process starts with the buyer preparing and posting an electronic request for quote (RFQ) to a web site. Through the use of RFQs, the company electronically communicates its expectations to prospective…...

Similar Documents

Free Essay

Frugal E Reverse Innovation

...L’internazionalizzazione della Funzione Ricerca e Sviluppo Indice 1 - Introduzione 3 2 - L'Internazionalizzazione dell’unità R&S 5 2.1 - I Motivi dell’Internazionalizzazione 5 2.2 - Evoluzione delle Forme di Internazionalizzazione 6 2.3 - Strategie Tecnologiche su Scala Internazionale 9 3 - Dalla Globalizzazione alla Reverse Innovation 12 3.1 - Frugal Innovation 14 3.2 - Reverse Innovation 17 3.3 - Perché fare Reverse Innovation 19 3.4 - Il caso: “The 300$ House” 20 1 - Introduzione Con il termine internazionalizzazione si indica l’espansione dell’impresa al di fuori del proprio mercato nazionale. Si tratta di un fenomeno di natura composita, che non si riduce alla sola sfera degli scambi e delle transazioni economiche ma che abbraccia gli ambiti della politica, della società e della cultura. L’internazionalizzazione è un processo oggi inesorabile e di dimensione crescente, che si è trasformato in un motore estremamente potente di integrazione e al contempo di cambiamento della nostra società, alimentando quel fenomeno pervasivo che molti definiscono globalizzazione. Le imprese, attraverso il processo di espansione internazionale, ricercano in nuovi mercati gli stessi vantaggi di tipo tecnologico e manageriale sfruttati pienamente nei mercati domestici attraverso ingenti......

Words: 6995 - Pages: 28

Free Essay

E-Procurement

...* Table of Contents 1 Introduction 1 2 Elements of E-Procurement 1 2.1 Systems 1 2.1.1 ERP 1 2.1.1.1 The implementation process and life cycle 2 2.1.1.2 Key success factors (KSFs) 3 2.1.1.3 Project preparation 3 2.1.1.4 Technology selection 4 2.1.1.5 Implementation/ development: 5 2.1.2 EDI 5 2.2 Necessary Support Technologies 7 2.2.1 E-Catalogues 7 2.2.2 E-Auctions 8 2.2.3 Market Places 11 3 Strength and Weaknesses of Implementing E-Procurement 13 3.1 Strengths 13 3.2 Weaknesses 14 4 Critical Success Factors for the Implementation of E-Procurement 15 4.1 Supplier and contract management 16 4.2 End-user behavior and e-procurement business processes 16 4.3 Information and e-procurement infrastructure 17 5 Case Study 18 6 Future Outlook/ Conclusion 19 List of References II Introduction During the last decade and especially in the last couple of years, the internet has finally found its position in business operations. While the use of internet has been rather the exception than the norm, it is now becoming more and more common to streamline processes and eliminate wasteful processes through the use of the internet. This can especially be seen in the purchasing operations of many firms nowadays, as many companies see the importance of efficient procurement and change from slow and often expensive, paper-based orders to e-procurement. It seems as though this style of procurement can be of great advantage to every firm, but there are also drawbacks. The...

Words: 6990 - Pages: 28

Premium Essay

Erp Procurement Process

...Chapter 4 The Procurement Process Multiple Choice Questions | 1. |Which one of the following is not a type of organizational data that is utilized in the procurement process? | | | | | |Client | | |Company Code | | |Storage Location | | |Purchasing Organization | | |Manufacturing Plant | | | | | |Answer: e Difficulty: Easy Page Reference: 2 | | |Section: Organizational Data Practice: ...

Words: 3775 - Pages: 16

Premium Essay

Reverse Auction

...They fail to see how their contribution would be realized in systems thinking. To overcome this paradigm, the goals and rewards systems must be changed. Identify a company that uses either a cost leadership or a differentiation strategy. Describe the companies’ value propositions. Identify its core competencies. Using Figure 3.6, identify one decision for each cell in the function/resource matrix that would support the company’s strategy. How do information sharing and performance measurement support the strategy?   Apple uses a differentiation strategy. 1 I really did not understand the identify one decision for each cell that support the company’s strategy. Use MLA format in answering these questions. Endnotes 1. Fawcett, Stanley E, Ellran, Lisa M and Odgen, Jeffrey A (2007). Supply Chain Management: From Vision to Implementation. New Jersey: Pearson Prentice Hall...

Words: 443 - Pages: 2

Premium Essay

E-Procurement

...kind of planning, strategizing and measuring that seldom goes recognized and rewarded. The work involved with inventory control fits tightly within that description. In many hospitals today, it is easy for inventory control to go astray and become uncontrolable. This is the case with I Care Healthcare System. Too many people with too much access to too much product procurement are controlling supplies and equipment coming into the facility without any regulation or little oversight. While the blame for over-ordering is frequently pointed at nursing staff, famous for squirreling away unseen, already paid-for stocks of goods, they are not the only offenders. More accurately, when it comes to inventory, it's the system that fails a hospital, not its people, over what is essentially an asset management issue. Currently I Care Healthcare System uses a mainframe that was develped internally with an outdated materials management system that allows you to generate purchase orders, but is lacking in running reports that track the usage. This is not uncommon in the hospital materials management environment. The process I mainly manual where requisitions are generated from the department, sent to purchasing, a purchase order is then generated and is faxed or called in to the manufacturer or Med/Surg distributor. Although the distributor has the ability to run reports for I Care and does so periodically, the hospital system is so antiquated it makes it difficult to confirm......

Words: 1626 - Pages: 7

Premium Essay

Electronic Procurement

...right number. Human Resource Forecasting provides Various benefits to the organisation like; * Production and Scheduling Human resource forecasting plans for labor needs change as sales rise and fall. For that human resources manager should keep in close touch with sales manager to be aware of any spikes or declines in sales that affect labor needs. This prevents falling behind on order fulfillment or paying idle workers. A simple example of labor forecasting is a restaurant that has nights with many bookings and large parties and other nights when few diners make reservations. The manager forecasts the restaurant’s wait staff, bar and kitchen needs. * Succession Human resources forecasting helps to avoid long-term holes in staffing needs by keeping on top example employees might be retiring, leaving or asked to leave. Using that information, Human Resource managers plans to fill holes with internal staff or prepares for a quick recruiting effort. * Budgeting In addition to forecasting labor needs, human resources forecasting helps you plan budgets based on your future staffing levels. For example, demand forecasting might show a need for more seasonal workers. An HR review might determine the best way to handle this is with part-time workers or paying overtime to current employees. If your labor needs won’t change next year, you might still have increased employee costs based on annual raises and benefits increases. Your HR manager forecasts your personnel......

Words: 1421 - Pages: 6

Premium Essay

E-Procurement

...management over the years. This scenario is attributed to the exploitation of emerging Information & Communication technologies to realize the potential of revolutionizing, streamlining and improving supply chain operations (Patterson, Grimm & Corsi, 2003; Cagliano, Caniato & Spina, 2003). Particularly, electronic procurement or e-procurement has been established as a significant aspect of electronic business operational excellence (Barua, Konona, Whinston & Yin, 2001). Prior to commencing, one should first define the term e-procurement used in this context. According to Davila, Gupta & Palmer 2003, any ICT contrived to expedite the acquisition of goods and services over the net by either a public or private organization can be defined as e-procurement. These include software, B2B market exchanges, B2B auctions and purchasing consortia purported to atomize workflow, influence organisational spend, as well as seek out contemporary sourcing opportunities virtually (Davila et. al, 2003). E-procurement is evident as several norms. Some of the general types include, but are not limited to; - Electronic systems supporting conventional procurement such as - Web- enabled Electronic Data Exchange (EDI-IT) - EDI functions as an application that enables the transmission of messages between computer programs of 2 differing entities. The migration to open networks allows messages to be communicated in batches and eliminates for data duplication. A concern with EDI would be the......

Words: 2886 - Pages: 12

Premium Essay

Reverse Auctions

...The Benefits of Electronic Reverse Auctions (e-RAs) in the Procurement Process The nature of business competition is changing drastically. One of the most profound changes currently transpiring in the world of business is the introduction of electronic commerce. The impact of electronic commerce (ecommerce, or EC) on procurement, shopping, business collaboration, and customer services as well as on delivery of various services is so dramatic that almost every organization is affected. In this paper, I will show how electronic reverse auctions (e-RAs) is very significant in the federal procurement process by saving money, time and maximizes supplier competition. Reverse auctions gained popularity with the emergence of Internet-based online auction tools. Today, reverse auctions are used by federal, state and private agencies to purchase raw materials, supplies and services. The Reverse Auction Process In the traditional auctions, also referred to as forward auctions, a seller offers a product that is demanded by several buyers who compete and bid up the price. The highest bidder wins and buys the product. In a reverse auction, it is the buyer who is in control of the process. The buyer is interested in an item offered by a number of sellers who compete and lower their price in order to get the deal. Unlike traditional auctions that occur at physical locations, reverse auctions are accessed online, through web browsers, via private software companies known as “market......

Words: 918 - Pages: 4

Free Essay

E-Procurement

...e-procurement e-procurement e-procurement e-procurement e-procurement e-procurement e-procurement e-procurement e-procurement e-procurement e-procurement e-procurement e-procurement e-procurement e-procurement e-procurement e-procurement e-procurement e-procurement e-procurement e-procurement e-procurement e-procurement e-procurement e-procurement e-procurement e-procurement e-procurement e-procurement e-procurement e-procurement e-procurement e-procurement e-procurement e-procurement e-procurement e-procurement e-procurement e-procurement e-procurement e-procurement e-procurement e-procurement e-procurement e-procurement e-procurement e-procurement e-procurement e-procurement e-procurement e-procurement e-procurement e-procurement e-procurement e-procurement e-procurement e-procurement e-procurement e-procurement e-procurement e-procurement e-procurement e-procurement e-procurement e-procurement e-procurement e-procurement e-procurement e-procurement e-procurement e-procurement e-procurement e-procurement e-procurement e-procurement e-procurement e-procurement e-procurement e-procurement e-procurement e-procurement e-procurement e-procurement e-procurement e-procurement e-procurement e-procurement e-procurement e-procurement e-procurement e-procurement e-procurement e-procurement e-procurement e-procurement e-procurement e-procurement e-procurement e-procurement e-procure......

Words: 1040 - Pages: 5

Free Essay

E-Procurement

...sciencedirect.com Government Information Quarterly 25 (2008) 155 – 180 E-government policy and practice: A theoretical and empirical exploration of public e-procurement Catherine A. Hardy ⁎, Susan P. Williams Information Policy and Practice Research Group, Discipline of Business Information Systems, Faculty of Economics and Business, The University of Sydney, Sydney, NSW 2006, Australia Available online 19 April 2007 Abstract The purpose of this paper is to theoretically and empirically explore how public e-procurement policies are translated into practice. The theoretical argument draws on actor network theory (ANT), coupled with Colebatch’s [Colebatch, H. K. (2002). Policy (2nd ed.). Maidenhead, Open University Press.] social construct of policy, to analyze the actors, actions, and circumstances through which understanding of public e-procurement comes to stabilize (or not) into a coherent policy for action. Drawing on three case studies of central government agencies in Italy, Scotland, and Western Australia, we suggest new intellectual perspectives and methodological heuristics that may assist researchers and practitioners analytical efforts in examining sociotechnical change and the implications for policy development and implementation. © 2007 Elsevier Inc. All rights reserved. Keywords: E-government; E-procurement; Actor network theory; Social construction of policy 1. Introduction Public e-procurement, as an information system (IS) enabled innovation in......

Words: 12195 - Pages: 49

Premium Essay

E-Procurement

...FACTORS INFLUENCING E-PROCUREMENT PRACTICES IN PARASTATALS IN KENYA. (A Case Study of the New Kenya Cooperative Creameries.) BY KINYUA ANTONY NJERU BBM/5285/12 A RESEARCH PROPOSAL SUBMITTED TO KARATINA UNIVERSITY, SCHOOL OF BUSINESS IN PARTIAL FULFILMENT OF THE REQUIREMENTS FOR THE AWARD OF A BACHELORS DEGREE IN BUSINESS MANAGEMENT. JULY, 2015 DECLARATION I hereby declare that this research proposal is my original work and has not been presented for a degree in any other university. Sign……………………………… Date……………………………….. Antony Njeru Kinyua BBM/5285/12 This proposal has been submitted to the School of Business for examination with my approval as University supervisor. …………………………………….. Date…………………………………….. Ms Ester Maina. DEDICATION I dedicate this work to my parents, brothers and sister. I also dedicate this work to my fiancée and to all my business partners. ACKNOWLEDGEMENT I hereby take this opportunity to acknowledge with gratitude Karatina University for providing me with the opportunity to pursue my bachelor’s degree in Business Management. My special thanks go to my supervisor Ms. Ester Maina for the invaluable support and insightful guidance in the production of quality work. I acknowledge my colleagues for their encouragement during the time of study. I am highly indebted to my family for their facilitation and encouragement, in ensuring that I carried up with the course and project preparation successfully.......

Words: 5174 - Pages: 21

Premium Essay

Procurement

...Introduction In today’s world, E-business has become part and parcel of everyday life in many business circles as a large number of organizations are involved in one form of e-businessor another such as e-procurement. The effect of e-business and in particular e- procurement on internal customer service is being addressed in this study because e- business and internal customer service are all important issues in today’s globalisedworld which is characterised by stiff competition among organisations.One of theResearch suggest that e-business activities bring three types of benefits to theorganization: value benefits (perceived by both buyers and sellers as a result of reducedsearch and costs), revenue benefits (allowing the organization to exploit newopportunities such as disintermediation, free service, etc.), and logistics benefits (finding the proper position in a supply chain).Procurement is an important part of the supply chain and does not only affect external stakeholders but also internal stakeholders. This entails that it has potential to add value not only to the external side of the supply chain but also to the internal supply chain. The electronic application of procurement (e-procurement) has had many benefits to organizations such as cost savings and profits. It thus makes it an important area of study and this particular study addresses how e-procurement is affecting internal customers in organizations and goes further to determine how external customers are......

Words: 2493 - Pages: 10

Premium Essay

Benefits and Limitations of E Commerce

...QUIZ 1: Explain the benefits and limitations of E-commerce. Ecommerce or electronic commerce: involves carrying out business over the Internet with the assistance of computers, which are linked to each other forming a network.  To be specific Ecommerce would be buying and selling of goods and services and transfer of funds through digital communications. THE BENEFITS OF USING E COMMERCE Benefits to Organizations • Using E-Commerce, organization can expand their market to national and international markets with minimum capital investment. An organization can easily locate more customers, best suppliers and suitable business partners across the globe. • E-Commerce helps organization to reduce the cost to create process, distribute, retrieve and manage the paper based information by digitizing the information. • E-commerce improves the brand image of the company. • E-commerce helps organization to provide better customer services. • E-Commerce helps to simplify the business processes and make them faster and efficient. • E-Commerce reduces paper work a lot. • E-Commerce increased the productivity of the organization. It supports "pull" type supply management. In "pull" type supply management, a business process starts when a request comes from a customer and it uses just-in-time manufacturing way. Benefits to Customers • 24hour support. Customer can do transactions......

Words: 976 - Pages: 4

Premium Essay

Procurement Process

...Procurement Process Deanna Thele CPMGT/302 January 30, 2012 Pamela Hill Procurement Process Procurement management is the processes to purchase or acquire the products, services or results needed from outside the project team to perform the work. Project Procurement Management involves not just purchasing products, services or results, but also ensuring that those that are purchased are right for the project, meets standards and is based on project requirements. This life cycle includes tracking from order through deployment and completing with invoice reconciliation. All projects are defined by the purpose, objectives and deliverables. Properly defining these, as well as the other aspects of the project management plan will allow you to properly define the resources needed to successfully execute the project. Deliverables can take many forms. Hardware and software as well as services such as consulting can be deliverables. Each of these should be identified, and a determination needs to be made by the project team as to what the most effective method of obtaining the required resources. Once the initial interviews and requirements begin to be gathered, the Project Manager starts to evaluate the impact of the information gathered on the other knowledge areas in order to facilitate the planning processes. This process is continuously applied throughout the project, constantly evaluating the requirements of the project against the work being performed, using your......

Words: 1299 - Pages: 6

Free Essay

Supply Chain Mangement-Reverse Auctions

...Reverse Auctions: A reverse auction is a type of auction in which the roles of buyer and seller are reversed. In an ordinary or forward auction, buyers compete to obtain a good or service by offering increasingly higher prices. But in a reverse auction, the sellers compete to obtain business from the buyer and the participants place lower and lower bids, until the lowest bidder wins. A reverse auction is similar to a unique bid auction as the basic principle remains the same, however a unique bid auction follows the traditional auction format more closely as each bid is kept confidential and one clear winner will emerge at the completion of the auction. . The reverse auction has been widely used by many organizations and is aimed at reducing costs and sourcing services or products at the lowest possible price from the participating suppliers. Some of the benefits are: A reverse auction provides buyers with the most competitively priced solution to their needs by pitching suppliers against each other to be the one offering the lowest-priced bid. It saves time in the procurement process and also streamlines the procurement process as well as reduces the need to send a different request for proposal to each potential supplier. It equally has some disadvantages that makes it a bad method like creating problems when proper controls are not put in place. Competition for the lowest price can make some suppliers to cut corners to maximize benefit or even send them out of......

Words: 295 - Pages: 2