A recent article in Procurement Leaders magazine, “Are e-auctions all they are cracked up to be?”, concludes “by taking the personal touch out of the bidding process, you’re losing the opportunity to leverage your face-to-face skills to get really [to] know a potential supplier.” The article seems to be founded on the premise that e-auctions (reverse auctions) might typically be run in circumstances where buyer-supplier relationships are important.
I have been a long-standing critic of indiscriminate use of procurement e-auctions. Reverse auctions do have an important place in the procurement toolkit but are often misused. So, what constitutes misuse? What can go wrong? And when is it appropriate to use reverse auctions? Continue reading