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Supplier consolidation and 60% cost savings through eAuction for gaming machine company


Sector: Leisure Industry

Client: The UK’s leading operator of gaming machines

Region: UK

The challenge:

This customer operates tens of thousands of pay-to-play gaming, betting and entertainment terminals in pubs, clubs, bingo, licensed betting offices, casinos, family entertainment centres, universities, airports, motorway services and seaside arcades across the country.

To support the business the company runs 23 offices around the country. And like any office, they require telecoms, IT, stationary, and other equipment to function on a daily basis.

These items can mount up, especially when, as the case was with this company, they were being purchased at an individual office level.

The solution:

The company’s central purchasing department decided to look for economies of scale in terms of stationary suppliers. After consolidating and analysing spend information for stationary, the department decided that it could make time and cost savings by using an eAuction.

It consulted with Trade Interchange, experts in this area. The Trade Interchange team advised that an overall stationary supply contract be broken down into four sections: Office Consumables, Branded Toners, Compatible Toners and Paper. On behalf of the company, Trade Interchange then held a separate auction for each one. 17 suppliers took part with eight suppliers bidding in all four auctions. The eight suppliers were then invited to bid in one final auction for the whole combined contract. In all auctions ceiling prices were fixed below current price levels to ensure an initial saving.

The results:

  • The original contract value was £806,500 per annum. The lowest total bid value after the first four auctions was £417,000, representing a saving of 48%
  • After the final auction for the whole combined contract, the lowest bid was £325,000
  • Total savings of £481,500, or 60%, were implemented within three months
  • The central purchasing team also benefited from significant time savings in price negotiation phase
  • The company was also able to consolidate to a single supplier, compared to nearly 15 in the previous procurement process, creating of economies of scale