In less than two months CKS, through its subsidiary CKS Auctions, has helped a major equipment manufacturer with the resourcing of its main European transportation flows – by ocean as well as by road.
The approach consisted of revolving the whole process around an e-auction from the outset. The gains were numerous.
Some figures
- 34 routes
- 5 m€ FY spend 2019
- 8 m€ FY spend 2020
- 20 carriers involved
Challenge
In competitive markets, such as the transportation of goods, purchasing managers often face difficulties in striking a balance between the timely award of the market and the correct assessment and comparison of suppliers’ offers in order to negotiate the best prices.
Our mission was therefore to find a way to obtain the best prices for the routes with the highest spend while contacting all suppliers of the panel, in record time.
Unlike other purchasing families where suppliers can bring innovation and added value to the company, the transportation of goods is rather standardized and, as long as the carrier complies with the requested schedules, the conclusive argument is of financial order. But in this environment, it is often hard to bring forward arguments in order to convince carriers to decrease their prices.
The organization of an auction appeared to be the most effective way to put all carriers into competition simultaneously and to avoid spending time and energy into negotiating prices one by one.
Our approach
- Opportunity analysis along with the purchasing managers to determine the areas of potential savings
- Definition of a strict schedule to meet the deadline of award
- Design of an RFQ template to standardize suppliers’ answers and easily establish a base of comparison
- Building of an optimal allotment
- Guidance in the most appropriate auction strategy to undertake
- Challenge the current procedure to propose a sustainable improvement, if any
Our solution
For this mission, the service provided exceeded the one offered for a classic organization of an auction. Benefiting from a strong experience in organizing auctions within the Transportation sector, CKS has been able to :
- Help our client with the selection of the most relevant suppliers
- Provide the best-in-class method to quickly and effectively compare suppliers’ offers
- Advise our client on the best way to communicate with the suppliers at every stage of the process
CKS Auctions, acting as a partner in the organization of the auction and a trusted third-party, provided its client with an auction platform and proceeded with the following tasks :
- Definition of the auction and optimal allotment strategy
- Draft of the auction contract
- Personal training to each supplier, during which a simulation of the auction is performed and all questions answered in order to maximize the efficiency on the auction event
- Administration of the auction
- Support for all parties throughout the whole process
In addition, our team proceeded to a regular follow-up to guarantee that the deadlines were met and acted as an intermediary to coordinate all parties involved (purchasing director, purchasing managers, and suppliers).
Our commitment
- Provide active support towards the purchasing manager as well as the suppliers throughout the whole process
- Promote a fair and equal treatment for all parties involved
- Ensure legal compliance of the auction process
- Advise on the best auction strategy according to the context and the purchasing family thanks to our experience
Example from Batch 1: Carriers make real-time bids and see how they are ranked against other participants. The carriers lower their prices as often as necessary in order to be ranked first at the end of the allotted time.
