Everyday hundreds of organizations conduct competitive bids to pick the best supplier to meet their needs.
Unfortunately, too many organizations are using the wrong tools for the wrong job – often resulting in selecting the wrong supplier or developing a contract that is misaligned with the organization's objectives. Simply put, using the wrong competitive bidding method is like putting a square peg in a round hole. Forcing it to fit is myopic and inefficient.
To further complicate things, newer more collaborative approaches have emerged which tout the benefit of allowing buyers to gain insight and improved supplier innovation. The question arises – which tool is the right tool for my situation? We believe today's sourcing professional should understand and enthusiastically embrace the entire suite of tools in their sourcing toolkit to carefully select the technique that is most appropriate for their situation.
Purpose of this Paper
This paper is a collaboration between several experts in both private and public procurement. It is not an academic paper-rather it is a practitioner's guide to help procurement professionals better understand each of the various competitive bidding methods and when the use of each are most appropriate. We have one goal: to help bring awareness to procurement professionals throughout the world of the various tools and when to use them. In short, we are "unpacking" competitive bidding methods-referred to in shorthand terms as RFx processes.
Structure of this Paper
This white paper explores the various solicitation techniques. We review six different methods – ranging from those to be used in a highly competitive commodity "market" such as electronic auctions to highly collaborative requests for solution and requests for partner techniques. It has four sections:
– Part 1 provides insights into the changing landscape of strategic sourcing. In this section we explore some of the most prevalent trends that are impacting strategic sourcing and show why procurement professionals need to insist on challenging their thinking and embracing more collaborative techniques.
– Part 2 is an introduction to the RFX methods where we provide a high level overview of each of the various RFX methods most commonly used in practice today.
– Part 3 "unpacks" the various RFX methods in more detail, reviewing what, why, when and how each method is used.
– Part 4 offers a conclusion and a challenge for procurement professionals to embrace more collaborative methods when appropriate.
We hope you'll find this white paper a valuable resource to help you shift your thinking to an environment that demands strategic sourcing in a new economy.
More from the University of Tennessee and research partners:
– Unpacking Pricing Models: Make you get what you pay for Real for Business Relationships
– Unpacking Collaborative Bidding: Harnessing the Potential of Supplier Collaboration While Still Using a Competitive Bid Process
– VESTED for Success Case Study – Transforming Healthcare Outsourcing: How Vancouver Health Used Vested to Drive Innovation in Outsourcing
Categories: Whitepaper
SRC Type: eSourcing and Tools, Evaluation and Selection, Procurement Operations, Sourcing, Strategy