Comments on: E-Sourcing: Destroyer or Doyen of Value http://blog.hudgeon.com/2009/04/02/e-sourcing-destroyer-or-doyen-of-value/ Procurement, spend analysis and vendor management Sun, 19 Jul 2009 03:30:19 +0000 http://wordpress.com/ hourly 1 By: hudgeon http://blog.hudgeon.com/2009/04/02/e-sourcing-destroyer-or-doyen-of-value/#comment-12640 hudgeon Mon, 06 Apr 2009 10:52:22 +0000 http://blog.hudgeon.com/?p=378#comment-12640 Thanks for the comments Allison. I agree that nothing in e-sourcing necessarily creates a reduction in the flow of information to the vendors but, like overly-restrictive tendering policies, e-sourcing can inhibit the free flow of information that may lead to suppliers providing the most innovative solutions to the buyer. Ensuring this doesn't happen is the responsibility of the buyer in the same way that not shooting your hunting partner is the responsibility of the hunter. Of course, Dick Cheney's love of hunting is no reason to ban rifles. Thanks for the comments Allison. I agree that nothing in e-sourcing necessarily creates a reduction in the flow of information to the vendors but, like overly-restrictive tendering policies, e-sourcing can inhibit the free flow of information that may lead to suppliers providing the most innovative solutions to the buyer.

Ensuring this doesn’t happen is the responsibility of the buyer in the same way that not shooting your hunting partner is the responsibility of the hunter. Of course, Dick Cheney’s love of hunting is no reason to ban rifles.

]]> By: Allison http://blog.hudgeon.com/2009/04/02/e-sourcing-destroyer-or-doyen-of-value/#comment-12639 Allison Fri, 03 Apr 2009 15:45:08 +0000 http://blog.hudgeon.com/?p=378#comment-12639 Doug - Specifically referring to the below comments: "Nevertheless, I agree with a lot of what Tim says because auctions create information flow in only 2 of the 3 possible directions. Data flows from supplier to supplier and from supplier to buyer but it does not flow from buyer to supplier." While I agree that during the course of the event (the period of time in which the suppliers are providing competitive quotes) information is in a dual-directive flow, the buyer has full opportunity to provide information and actually increase communication with the suppliers prior and post the e-sourcing event. Allow me to expand - It is strongly encouraged in most e-sourcing environments that suppliers still be technically capable and their product or service be sourcable in terms of quality. The foundation of quality is unwavering throughout the process. This supports the notion that the buyer-supplier communication line must be fully open prior to an e-sourcing event. The buyer may have already collected initial pricing from the suppliers as well, in which the buyer can give feedback prior to the event - so long as there is equal opportunity provided to all suppliers with this feedback. There are parameters within e-sourcing events that allow the buyer to communicate important factors, ask relevant questions, and encourage suppliers to drive to targets set from the buyer side - not simply compete against the natural market. Really, the important takeaway from my commentary is that suppliers cannot be blindly subject to an e-sourcing event. It destroys both the integrity and honesty of the sourcing process, but can also destroy the validity of buyer communication to the suppliers. It's also crucial on the opposite side of the coin that suppliers ask the right questions, at the same time with the expectation that the buyer is providing them with all relevant and necessary information to participate, fully knowledgeable of their obligation upon winning. Doug –

Specifically referring to the below comments:
“Nevertheless, I agree with a lot of what Tim says because auctions create information flow in only 2 of the 3 possible directions. Data flows from supplier to supplier and from supplier to buyer but it does not flow from buyer to supplier.”

While I agree that during the course of the event (the period of time in which the suppliers are providing competitive quotes) information is in a dual-directive flow, the buyer has full opportunity to provide information and actually increase communication with the suppliers prior and post the e-sourcing event. Allow me to expand –

It is strongly encouraged in most e-sourcing environments that suppliers still be technically capable and their product or service be sourcable in terms of quality. The foundation of quality is unwavering throughout the process. This supports the notion that the buyer-supplier communication line must be fully open prior to an e-sourcing event. The buyer may have already collected initial pricing from the suppliers as well, in which the buyer can give feedback prior to the event – so long as there is equal opportunity provided to all suppliers with this feedback. There are parameters within e-sourcing events that allow the buyer to communicate important factors, ask relevant questions, and encourage suppliers to drive to targets set from the buyer side – not simply compete against the natural market.

Really, the important takeaway from my commentary is that suppliers cannot be blindly subject to an e-sourcing event. It destroys both the integrity and honesty of the sourcing process, but can also destroy the validity of buyer communication to the suppliers. It’s also crucial on the opposite side of the coin that suppliers ask the right questions, at the same time with the expectation that the buyer is providing them with all relevant and necessary information to participate, fully knowledgeable of their obligation upon winning.

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