Craig said that track record and the volume of business already transacted were key criteria when evaluating the online buying services. Craig declined to put a value on the cost savings that Pilkington hopes to gain by using FreeMarkets, but she is confident that these will be significant. We are getting true market prices by this mechanism, she points out. Also important is that we are widening our supplier outreach. The auction process has identified suppliers in Poland, for example, of which the manufacturer was previously unaware.
Online procurement is also quicker than the traditional approach.
The number of bids you can get in two hours is phenomenal, she notes. And since Pilkington prequalifies bidders, it has some control over the quality of the online auctions it uses. We only get interested in suppliers when we see they are competitive, which is what online competitive bidding does, she maintains. Furthermore, there is still a certain amount of risk involved in going this route, she acknowledges. Still undecided is to what extent the organization can accommodate the shift to global online buying and to using an external agency to provide a vital piece of its procurement infrastructure.