CommerceZone is Africa’s foremost e-Procurement Solution Provider, delivering BEE procurement, strategic sourcing and online sourcing services to a growing list of clients.
These services have revolutionised their clients’ procurement practices, eliminating many paper-based and labour-intensive processes while ensuring transparency and improved control. CommerceZone also leverages the combined spending power of its clients in order to achieve significant and tangible cost savings. In effect, CommerceZone enables the delivery of quality goods and services at the most competitive prices. CommerceZone is committed to sourcing and delivering an ever-widening range of commodity products to clients at the lowest possible cost from commercially sound suppliers with verifiable BEE credentials, thereby assisting clients to meet their own BEE targets.
Business Challenge
One commodity product utilised by every business is cut photocopy paper. There are numerous suppliers in the market as cost of entry is low. As a result, pricing is extremely competitive.
In line with its commitment to deliver quality goods and services to clients at a competitive price, CommerceZone sought to contract with a cut photocopy paper supplier that would:
- Meet the volume requirements of CommerceZone clients (currently estimated at over 500 tons per annum)
- Be able to deliver to CommerceZone clients speedily and effectively
- Supply the most popular product lines (specifically A Grade 80gsm cut paper)
- Have solid, verifiable BEE credentials
- Hold agreed pricing levels for a specified period (at least six months)
Solution
CommerceZone utilised its e-RFI (a web-based Request for Information tool) and e-Bidding (a customisable web-based reverse auction tool) solutions to:
- Identify appropriate suppliers
- Secure the best possible pricing
The CommerceZone Cut Photocopy Paper sourcing team identified nine potential suppliers. They were invited to participate by completing an online RFI document. Six suppliers who met the following minimum requirements, according to the criteria determined by the sourcing team, were permitted to proceed to the next stage of the process:
They all had:
- the ability to supply A grade, 80gsm, A4 white photocopy paper
- BEE status certified by an independent, third party Verification Agency
- supplied company financial results
Each of the suppliers was evaluated in terms of their BEE and Commercial credentials. These scores were added together, to give each supplier an aggregate score which would later be used in determining the short list of suppliers to take further part in the process.
The Process
Having met CommerceZone’s criteria, the six suppliers were invited to participate in a live, online e-Bidding process which lasted just less than 60 minutes. An opening bid price was set by CommerceZone and suppliers had to meet or better that price. As suppliers submitted their bids, they were informed only whether or not theirs was the lowest bid. If their bid was not the lowest, they could adjust their bid throughout the event and improve their bidding position if they so chose.
Following the event, CommerceZone could view a comprehensive report enabling the sourcing team to evaluate the suppliers’ responses. At the conclusion of the bidding process, two suppliers were short-listed based on their bid prices AND their commercial and BEE scores. These suppliers then met with the CommerceZone sourcing team for further presentations and negotiations. Based on these meetings, a final recommendation was made.
Results
The online sourcing process has enabled CommerceZone clients to procure A grade, 80gsm, white, cut A4 photocopy paper at significant cost savings:
- 6,46% saving for orders of less than one ton
- 13,56% saving on orders of more than one ton
In addition, the supplier will:
- hold these prices firm for a period of six months
- guarantee specified lead times for delivery – and incur penalty costs if these are not met
- provide paper to CommerceZone clients in the CommerceZone branded wrapper
- supply the entire CommerceZone product range (in addition to A4 paper)
- deliver competitive prices on all products