The result is that many companies are willing to pay a premium for a reliable supply. After all, they reason, how much could really be saved by shopping around for what is nothing more than a commodity with the price pretty much determined by the manufacturer.

 

CommerceZone set out to test this assumption.

CommerceZone 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 64 potential suppliers – an indication of just how complex the printer consumable market is. These suppliers were invited to complete an online RFI (Request for Information) document. Initially, 16 indicated a willingness to participate but eventually only seven actually submitted e-RFIs.

 

The e-RFI required the disclosure of information relating to the suppliers’ BEE credentials and commercial capabilities, including geographic footprint. This information was verified by the CommerceZone team as the suppliers moved on to the next stage in the process - the real-time, online e-Bidding reverse auction. 

 

An opening-bid price had been set for each line item by CommerceZone and 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. Bidding continued for almost one hour.

 

Following the e-Bidding event, the CommerceZone sourcing team evaluated the suppliers’ responses and awarded each supplier a score. These pricing scores were then added to the suppliers’ BEE and commercial scores. From this, four prospective suppliers were short-listed and invited into further negotiations with the CommerceZone team. 

 

Based on these meetings, two suppliers were appointed as preferred suppliers for printer consumables.

The strategic sourcing and reverse auction exercise conducted by CommerceZone on behalf of its customers realised average savings of around 10% across a basket of their top moving 50 line items. The 50 line items represent 20% of the products purchased which, in turn, constitute 80% of their spend.

 

Apart from the lower price realised through the sourcing process, CommerceZone customers are assured of obtaining their printer consumables from suppliers with excellent service credentials that have been checked by the professional sourcing team at CommerceZone.

 

In addition, the suppliers contracted as a result of the process have impeccable BEE credentials - thus boosting CommerceZone’s customers own broad-based Black Economic Empowerment (BBBEE) scorecard.

 

CommerceZone customers can choose which of the two suppliers they wish to obtain their printer consumables from, basing their decision on price, BEE and service levels.