Successful eAuctions in the construction industry

Since February 2010 a midlands contractor has successfully run eAuctions on multiple products and services for their construction projects with savings of up to 38%.

The case study describes how a midlands contractor in the UK has run successful eAuctions. James B. negotiates subcontract packages for construction and repair projects within the public and private sector - the packages include for example Brickwork, Painting, Decorating, Mechanical & Electrical installations and Groundworks.

James B. describes how he uses the system

"Since I started using the Scanmarkets eSourcing platform, I have gained more control over the sourcing process and spend less time preparing documentation. We know for certain, that our savings have grown significantly compared with the previous way we sourced."

"The first step is to send out an RFQ containing all sorts of information, like drawings and product descriptions. We then use the quoted prices as the suppliers' starting prices for the eAuction. My experience is that this makes the suppliers very competitive and they fight every inch of the way to be in first place at the end of the auction."

The savings achieved from eAuctions are much higher than before

"We try to eAuction as many packages as possible, because this is where we have seen the largest savings. Whereas in a traditional face to face negotiation we were not able to obtain more than 5% in savings - savings of up to 38% have been achieved when negotiating online."

"When our suppliers participate in an eAuction they instantly know if they have been successful, whereas it could take up to a week using traditional techniques. Furthermore, the feedback we receive is that the system is really easy to use - even for those who are not that IT literate."

The process going forward

"When I recently participated in a Scanmarket user group discussion I became aware of the advantages of conducting supplier training. We found that those suppliers who accepted online training were more competitive when it came to the eAuction, therefore, from now on we will start training our suppliers from the outset." 

"I can strongly recommend Scanmarket. I no longer need to go through each quotation manually; instead the negotiations take place online in just 20 minutes with all suppliers present - saving them and us valuable time."

To learn more about eAuctions and the Scanmarket eAuction module please click here.