There is no doubt that e-enabled supply is one of the growth areas in e-commerce. Eversheds has been helping a number of clients in their e-commerce projects, one client saving 47% of its procurement costs by purchasing online.
E-enabled supply takes a number of forms from the traditional closed EDI (Electronic Data Interchange) approach of ordering online, to an integrated supply chain which enables just in time delivery, to various forms of e-auction. This article looks at the reverse auction model.
In reverse auction e-enabled supply the customer usually works out the suppliers it wants to deal with. It then joins them up to an electronic market place and puts into that market place on a regular basis details of the goods or services it wishes to buy. The suppliers then bid against each other and usually the lowest price wins. It is this type of system that can lead to the biggest savings. Usually purchasers not only achieve a reduction in the cost of their raw materials but
