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John King on 27 March 2012

The concept of an auction certainly has been tainted in South Africa recently, so perhaps the concept is not as free of manipulation as one would like. I am also not sure that any form of auction would work on the procurement process for ALL goods and services, the more strategic the procurement the less likely the auction process would produce a long term sustainable outcome; commodities are fine, but I can't imagine myself doing a reverse auction for a cardiologist when my day finally arrives.

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Tim Norris on 27 March 2012

I agree entirely with Mr King. Reverse auctions for commodities, raw materials and services are best, where the line items can be completely and accurately specified and the suppliers ability to fulfill their commitments has been established prior to the auction. The 8% average saving that Purchasing Auctions achieved from the R1 Billion worth of reverse auctions over each of the last 2 years in the UK shows that reverse auctions, when properly managed, are a very good tool for saving a lot of money.

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Market Dojo on 25 June 2013

Interesting to read the shear volume of auctions used by Shell. With John's point, it is worth to note that reverse auctions have now become something of a commodity in themselves, and so you can purchase them on-demand for as little as 500 GBP. Therefore you truly can decide when and where to use them, unincumbered by the directive from above as the stakeholders try and see a return on their investment with an expensive consultancy partner or legacy software. We've had clients spend just £500 to run a series of auctions with us in a month and they implemented savings in excess of £300,000. Organisations can just dip and and out as and when they wish.

Tim Norris (South Africa) - Are You Using Reverse Auctions?

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