eSourcing includes the use of online auctions – reverse, forward and dutch auctions that are proven tools to negotiate better rates with vendors. Adopting the right process before and after the auction is equally important to ensure aggressive participation from suppliers during a live auction.
Competitive RFPs can also play a significant role in ensuring competitive bids are received during the RFP process. Suppliers can see their Rank and/or Best Bid as soon as they submit their RFP response and the market feedback gets them to revise and place lower bids.
Supplier-specific ceiling prices can also be used effectively to get a lower price from new suppliers.