Sometimes setting up a Sourcing event in Ariba is very straightforward, but oftentimes the requirements drive the need to stretch Ariba's capabilities to the max. Ariba's Sourcing solution has a great deal of flexibility and options for running complex sourcing events, and we will discuss some of these scenarios and recommended approaches in this session.
You will hear from a customer who has used Ariba to run a complex event, and will also hear from an Ariba Best Practice Center consultant about topics such as how to approach very large events, set ups requiring formulas, and when to use functions like custom offline bidding.
11. Auction Style - Japanese
JAPANESE AUCTION
PRICE POINT
$10,000
◄ All three suppliers bid in 1st round
0
◄ All three suppliers bid in 2nd round
0
$9,000
0 Supplier 1
Supplier 2
Supplier 3
◄ All three suppliers bid in 3rd round
0
$8,000
◄ Supplier 1 declines to bid in 4th round and is not invited to round 5
$7,000
◄ Both remaining suppliers bid in 5th round
$6,000
◄ Supplier 2 declines to bid in 6th round
◄ Round closes and Supplier 3 is awarded the business
$5,000
$4,000
$3,000
1
2
3
4
$2,000
Suppliers are blind to rank and lowest bid
Price starts slightly above highest preliminary bid
Price decreases in increments over a series of rounds
Supplier is awarded business when all other competitors
have declined to bid in the current round/interval
$1,000
1
2
TIME INTERVALS
11
3
4
5
6
7
8
9
10
1 Can be used when preliminary bids are widely divergent
2 Can be used when supplier pool is less than 3
3 This auction style keeps suppliers in the dark as to rank/position
but is not as sudden and cut-throat as a Dutch Auction
19. American Tire Distributors: eSourcing Case Study
Why Ariba?
Challenges
Limited indirect spend visibility and spend management control
Increased focus on sourcing and driving negotiated savings but need to
ensure spend compliance for savings retention
All invoicing done via paper or p-card
No formal mechanisms to enforce policies and procedures
impacting procurement
Limited insight into level of compliance
Limited visibility into what is being spent and with
which supplier
Lack of standardization across business units, field locations,
and geographies
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22. American Tire Distributors: eSourcing Case Study
Retrofit Lighting Case Study: Project Scope, General Approach and
Value Adds
10 locations in our network with metal-halide lighting
CapEx budget approved for project
Evaluate National, Regional and Local (Manufacturers, Resellers and Installers)
Utilization of site survey results, SOW and BOM to level-set supplier
RFP submissions
Estimated operational cost reduction of 40-65% per location
Project ROI realized within 36 months
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23. American Tire Distributors: eSourcing Case Study
Retrofit Lighting Case Study: RFP Strategy and Project Set-up
10 location lots
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3 pricing lots (Turnkey, Materials Only and Installation Only)
30 lots total
Custom Off-line bidding
UI Savings Calculations
Cost Avoidance vs. Budget per location
Cost Avoidance vs. Total Project Budget
Supplier lot selection relative to capabilities vs. invitation by lot
Ariba Discovery
Alternative bid responses (alternative specs (fixtures) and finance options
24. American Tire Distributors: eSourcing Case Study
Retrofit Lighting Case Study: Ariba Project Elements (Custom-offline
bidding, lotting, budget and TCO calculations). (ex. 1 of 2)
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