State lottery promotional items purchased through reverse auction, saving 17%

Today, eBridge facilitated a bid for a state organization’s purchase of lottery promotional items.  Items included pens, t-shirts, mugs, hats and bags.

Prior to the bid eBridge worked with the purchasing organization to create specifications, this allowed for multiple vendors to bid on the contract.  eBridge’s team also advised the client to structure the bid with both line item pricing and lump-sum.

One of the strongest differentiators in a reverse auction bid versus a traditional bid is the pre-qualification of suppliers.  In this case, each supplier submitted samples of the company’s items.  Suppliers were also pre-qualified to ensure they could fulfill the order requirements and meet delivery deadlines.

eBridge sourced multiple vendors and ultimately, the purchasing organization approved four suppliers to participate in the event.  First place changed hands eight times.  First and second place suppliers were separated by 0.33%, indicating that true market value was achieved.

Final low bids came in 17% below the state’s anticipated budget.

Using Reverse Auctions to Purchase Water Treatment Chemicals

A water district partnered with eBridge to purchase three different chemicals for their water treatment plant via reverse auction.  Originally, the bid was for a two year contract.  However, the water district and eBridge collaborated and determine the best strategic approach would be to bid the project for just one year because chemical pricing was trending higher than average.

The three chemicals were bid per pound.  Eight suppliers placed a total of 188 bids on the three line items during the bid.  First place changed hands 35 times.

At the conclusion of the event, the buyer saved 10% versus their previous contract, with one chemical’s pricing coming in higher than expected.  Due to the volatile nature of chemical prices, reverse auctions are ideal for this type of commodity, giving the buyer confidence they are buying at market.

Reverse Auctions for Hotel Room Furniture

Last week eBridge ran a second event for a large hotel chain to purchase furniture for their second phase of rooms.  These rooms were larger, therefore different styles of furniture were outlined in the specifications.  The same suppliers were approved to bid on the project.  Each had set up a demo room in the hotel so the purchasing team could visualize the set up and evaluate the quality of the goods prior to the companies responding to the bid specifications.

The live event ran just over an hour, with the three suppliers placing 43 bids total.  First place changed hands 26 times and first and second place bidders were separated by a mere 1.5%, indicating that true market value was achieved.  At the conclusion of the reverse auction event, the final low bid was 16.95% below budget.

The hotel organization is slated to run several more bids this month including other building and renovation materials.

The 6 Pitfalls of Reverse Auctions

In a white paper published by ThreeCore Purchasing Consultants, the author highlights six common pitfalls of reverse auctions.  Below each pitfall, I address the objection and how our services complement each roadblock.

At eBridge we work hand-in-hand with our clients to not just avoid pitfalls, but achieve remarkable results. Take a look at these pitfalls and let us know what you think.

1. Lack of supplier preparation: Prior to the event, eBridge gives one-on-one tutorialsto each pre-approved supplier.  Our procurement team is available throughout the process for additional training and to answer questions that will naturally arise.

2. Inviting the wrong suppliers:  Although a key part of our process is supplier sourcing and recommendation, the buyer always reviews and approves which suppliers will participate.

3. Including too many suppliers:  A common misconception in reverse auction procurement is that the number of participating suppliers determines a successful event.  Through eBridge’s sourcing and recommendation process, our team brings an average of 32 suppliers to the buyer for their consideration.  On average, 6 suppliers participate per event.  A competitive environment is the ultimate goal for our customer.  

4. Starting with difficult materials:  At eBridge, our team provides the expertise to determine which items are appropriate for the process.  Our comprehensive Spend Analysis report provides customers with a full view of the items on their upcoming purchasing schedule that will fit the process.  Our analysis clearly defines the items that fit the reverse auction process- and those that do not.

5. Not enforcing the rules:  Reverse auction software companies and third party providers do not provide the leadership and guidancenecessary to integrate reverse auctions into your purchasing strategy.  At eBridge we recognize that leadership is an integral part of the solution.  Our mission is “to provide leadership in reverse auction procurement and process change that creates meaningful value for our customers.”

6. Setting artifically low targets:  At eBridge, the cornerstone of our services is to allow the free market to reign.  The competitive environment created through our process yields an average net savings of 14%, but ultimately gives customers assurance they are purchasing at market.

Achieving successful change with reverse auctions

Last week on ZDnet.com guest blogger Barbara Kivowitz, shared insights in adopting new technology successfully.  Kivowitz writes:

One of the most formidable challenges an organization faces when implementing new technology is simply getting employees to use these tools and the new processes they support.  Senior management budgets development costs and training, but typically under-invests in the change management efforts needed to turn technology into the strategic transformation the business expects.

Underestimating the impact of technology-driven process change on employees is a key factor in project failure, even when deploying excellent technology.

Communication, collaboration, and knowledge sharing are the critical factors for achieving project success.

At eBridge, we work with customers to make reverse auction procurement an integral part of their purchasing strategy.  And that doesn’t just include running an auction.  Our team of procurement professionals work hand-in-hand with our customers, providing the tools to implement the reverse auction process and also the leadership through education and training to achieve long-term success.

In the most literal sense, implementing new technology into an organization requires individuals to perform their job in a new way.  While senior management might buy in to the reverse auction process, we also deliver extensive training and education so our customers are comfortable and ready to take on a new opportunity that will achieve remarkable results for their organization.

How is your organization adopting change?

eBridge Joins High Impact Portfolio

High Impact Program identifies Louisville’s top fast-growth companies

LOUISVILLE, KY (April 12, 2011) – eBridge, a leader in fully managed reverse auction procurement services, was recently named to the High Impact Portfolio as one of the top fast-growth companies headquartered in the Metro Louisville Region.  The High Impact Program, a public/private partnership between Louisville Metro Government and Greater Louisville Inc.’s (GLI) ENTERPRISECORP, introduced the newest companies selected to the High Impact Portfolio during ENTERPRISECORP’s Signature Event today.

“Fast-growth companies are critical to the continued economic success of our region,” said Bobby Ferreri, Executive Director of ENTERPRISECORP.  “The High Impact Portfolio honors those businesses poised to lead our community in job growth over the coming years, and it was exciting to see the variety in this year’s companies.”

eBridge provides fully managed reverse auction procurement services, delivering an average net savings of 14% on purchases and creating efficiencies in procurement operations.  eBridge significant growth over the past twelve months is due to an infusion of capital and the addition of seasoned leadership to drive revenue and expand market share.

“It is an honor to be recognized as one of the fast-growth companies in Louisville,” said Jim Headlee, CEO.  “We are poised for continued growth thanks to a robust service offering and our team of procurement professionals that lead customers deliver savings and drive efficiencies for our clients.”

The High Impact program strives to nurture the prosperity of Greater Louisville’s growth businesses. Initiated in 2003, the program identifies companies meeting specific criteria, which are then named to the High Impact Portfolio.

Collectively, High Impact Portfolio companies represent $2.3 billion in annual revenues; have a 36 percent average growth rate; have created nearly 3,000 new jobs in our region; and have invested $438 million over the last four years.

About eBridge

Founded in 2002, eBridge Business Solutions, LLC provides fully managed reverse auction services, creating efficiencies and delivering hard dollar savings to the customers’ bottom line.  Leveraging years of experience in purchasing, sourcing and spend management, eBridge creates meaningful value for our customers through leadership in reverse auction procurement and process change consulting.   For more information, visit: www.ebridgeglobal.com.

About the High Impact Program

The High Impact program strives to nurture the prosperity of Greater Louisville’s growth businesses. The High Impact Program is a public/private partnership, funded by Louisville Metro Government and administered by GLI’s ENTERPRISECORP, that identifies and serves fast-growth companies, companies with the potential for fast growth, and those companies that enable growth in others. The program focuses on companies of these types headquartered in Louisville that have a disproportionately higher impact on the metro area economy. For more information on the High Impact Program, visit www.HighImpactLouisville.com.

eBridge announces partnership with Life in Abundance

African mission organization will receive one percent of corporate profits

 Louisville, KY- April 5, 2011- eBridge Business Solutions, LLC today announced a partnership with Life in Abundance (LIA), an African-founded Christian community development organization.  LIA equips local churches to respond to the needs of their suffering neighbors and empowers them to break the cycles of poverty in their midst.

This year eBridge will donate one percent of its annual profits to LIA, to coincide with the organization’s initiative to develop partnerships with businesses in the United States.  Funds will be used to help individuals start businesses in the local communities where LIA serves through micro-financing opportunities and training programs.

“eBridge’s business model and objectives typify the type of corporate partners we seek,” said Justin Narducci, Director of Partnerships and Resources for LIA.  “They have strong leadership, committed staff members and a mission that serves the needs of their clients. We look forward to providing many micro-enterprise opportunities in Africa because of this partnership.”

“Each day eBridge works to create value for our customers by delivering excellence in reverse auction procurement practices,” said Jim Headlee, CEO.  “But we believe our work has a greater calling than only reverse auction procurement which is why we are partnering with LIA.  Through this partnership, we hope to enrich those living in the impoverished communities LIA serves and set an example for our staff and customers to make a difference in the lives of others.”

To learn more about Life in Abundance, please visit www.liaint.org or  www.ebridgeglobal.com/social-responsibility.

National hotel chain uses reverse auction to purchase guest room furniture

A large national hotel chain partnered with eBridge to purchase items for a room renovation project.  The first purchase was for furniture (casegoods) in king, queen and double guest rooms.

First, eBridge’s worked with the hotel’s purchasing team to modify the specifications to complement the reverse auction process.  Next, eBridge received a list of preferred suppliers from the hotel group.  To increase competition the bid, eBridge’s sourcing team recruited additional qualified participants.

Once the suppliers were approved by the hotel group, eBridge conducted one-on-one tutorials for each supplier.  In every event with eBridge, suppliers have the opportunity to ask questions throughout the process and receive a personal tutorial to make sure they are comfortable with the system and ready to compete.

During the live event, the three suppliers placed a total of 63 bids on the three line items.  First place changed hands 12 times, and at the conclusion of the event, first and second place suppliers were separated by a mere 0.026%, indicating true market value was achieved.  The final low bid was 17% below budget!

Republicans Weigh a Federal ‘Reverse Auction’ to Push Clean Energy

On Monday the New York Times featured an article discussing U.S. Rep Kevin Nunes proposed legislation to increase domestic energy production.  Any savings would be put in to a trust where businesses could bid, via reverse auction, on funds for research and development of renewable energy sources.

From the article:  The provision sits deep in H.R. 909, a bill Rep. Devin Nunes (R-Calif.) proposed in early March. Overall, the bill focuses on ramping up oil and gas production, oil shale and nuclear energy; it also cancels U.S. EPA’s ability to regulate greenhouse gases.

Some of the royalties and fees from the oil and gas production go into a trust fund. The Department of Energy then solicits offers from renewable power generators and awards the funds to those that offer the lowest price.

It’s called a “reverse auction” for renewable energy, and it’s an idea Democrats have floated in past Congresses. Now it comes from a Republican majority that has questioned climate science and pressed for more fossil energy — and could easily have put the cash toward the deficit.

To read the full article click here.

Business alliances will remain a popular strategy

The economic landscape over the past few years has forced organizations to look internally to find ways to create efficiencies in their supply chain and business operations to preserve resources.

A recent study released by CFO research studies  surveyed almost 200 global senior finance executives and found that forging partnerships with third parties still remains a top priority.  The survey explains that “companies are finding that a partnership strategy born of necessity can also be a valuable part of a growth strategy“.

At eBridge lock arms with our customers by providing fully managed purchasing solutions to deliver measurable results- averaging 14% net savings in everything run through the process and creating efficiencies in procurement processes.

The article concludes by stating, in an uncertain economy the greater risk may be in going it alone.

Is your organization forming strategic partnerships to stay afloat during these uncertain times?

To read the full article, click here.

Importance of ext. relationships in the recovery; likelihood cos. will pursue strategic partnerships