Sector: Industrial Supply

Client: A major supplier to industrial and domestic buildings trades

Region: UK

The challenge:

With around 5,000 employees and a reputation for excellent nationwide logistics, it is essential for a major supplier to specialist trades, such as domestic plumbers, heating engineers and industrial contractors, to keep its house in order.

This includes keeping on top of the essential ‘upkeep’ of its network of 450 or so depots across the UK and Ireland. Among the organisation’s maintenance priorities is to take care of its external shutters and doors. It was therefore keen to review and re-negotiate a contract to maintain and repair these essential elements throughout every depot.

As well as appointing a supplier which could meet the brief, the organisation was looking to drive down costs.

The solution:

The organisation approached Trade Interchange to set up an online questionnaire and eAuction event with potential suppliers. By providing a single platform, our client was able to assess costs and other aspects of each supplier’s proposed service in one go.

To do this, we set up and managed:

• A supplier eRFX (online questionnaire) which was completed by the incumbent supplier, along with a further 11 potential service providers. This acted as a pre-qualification exercise prior to an eAuction.
• Invitations to seven suppliers, who successfully qualified at the eRFX stage, to participate in an online eAuction.
• An online eAuction, which took place 10 days after the closing of the eRFX, and ran for an initial period of 25 minutes. This was followed by a sealed bids stage lasting a further five minutes. Bidding in the auction was competitive, especially during the extension period – when the auction clock was automatically re-set several times to allow all bidders to respond to competitive bids being placed towards the end of the first auction stage.
• A full report was produced, which covered details of all bids placed in the auction following completion of the event.

The results:

Results and benefits included:

• A good selection of alternative service providers which were able to present detailed information, in an easy to analyse and store format, through their participation in the eRFX
• Prices quoted in the eRFX stage were in-line with expectations, based on existing pricing
• During the eAuction stage all bidders made significant reductions in their prices, including the incumbent supplier
• The lowest price bid in the auction was 32% below the existing contract price.