 |
|
Groceries Sourcing
CommerceZone is Africa’s foremost e-Procurement Solution Provider, delivering BEE procurement, strategic sourcing and online sourcing services to a growing list of customers. These services have revolutionised its customers’ 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 ChallengeMany companies spend more than budgeted for on office groceries – not only on actual price paid, but also in terms of wasted time and productivity.
One reason is that it’s easy for anyone in the organisation – from a driver or messenger to the chairman’s personal assistant or procurement manager – to quickly go to the supermarket to buy tea or milk or toilet paper. The challenge for the procurement team is to track that spend and to control it.
While purchasing a product that’s ‘on special’ at a supermarket today could well be cheaper than ordering from a supplier who specialises in servicing the corporate sector, and with which the purchasing company has negotiated a supply contract, the real cost of the purchase in terms of time wasted in going to the supermarket, as well as the cost of paying cash or by credit card, is seldom considered.
Neither is the cost associated with the inability to accurately include that spend in the company’s own BEE scorecard calculation for preferential procurement.
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 office groceries suppliers that would:
SolutionCommerceZone utilised its e-RFI (a web-based Request for Information tool) and e-Bidding (a customisable web-based reverse auction tool) solutions to:
The CommerceZone sourcing team identified 35 potential suppliers. These included all suppliers from which CommerceZone customers had obtained supplies in the past 12-month period as well as several identified independently by the CommerceZone team. Many suppliers came with glowing recommendations and testimonials for being ‘absolutely the cheapest’ for one or more commodity.
The identified suppliers were invited to participate in the sourcing process by completing the e-RFI document.
Using this information, 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 - a real-time, online e-Bidding process.
Based on this information, seven suppliers who met CommerceZone’s predetermined minimum requirements relating to their commercial capacity and BEE credentials were permitted to proceed to the next stage.
The ProcessThe seven short-listed suppliers were invited to participate in a real-time, online e-Bidding process involving a total of 75 line items. These ranged from popular brands of instant coffee and tea to dishwashing liquid; from long-life milk to toilet rolls; sugar to plastic teaspoons.
An opening-bid price was set by CommerceZone for each line item. Suppliers could either meet or better that price. As suppliers submitted their bids online, 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. Interestingly, none of the suppliers touted as being ‘the cheapest’ could claim that title by the end of the e-Bidding process.
Following the e-Bidding event, the CommerceZone sourcing team evaluated the suppliers’ responses and four suppliers were shortlisted based on their bid prices as well as their pre-determined commercial and BEE scores.
These suppliers then met with the CommerceZone sourcing team for further presentations and negotiations. Based on these meetings, three suppliers were awarded contracts as the preferred office groceries suppliers to CommerceZone customers.
ResultsCommerceZone customers can now choose from which of the three suppliers they wish to obtain their groceries, basing their decision on price, BEE and service levels.
By purchasing from any one of these contracted suppliers identified through the strategic sourcing exercise, CommerceZone customers not only benefit from consistently competitive pricing, they also have the convenience of front door delivery and workflow approval, enabling all spend to be accurately managed. In addition, because these suppliers’ BEE ratings have been verified, purchasers can claim a significant percentage of all their spend on groceries towards their BEE scorecard.
|
|
 |
 |