Reduced cycle times This could lead to a greater ability to capitalize on vendor discounts related to payment terms or electronic interfaces. Reduction of errors This implies less rework, thus greater productivity and efficiency. Data entry error and unsynchronized item data with the vendor can lead to higher transaction costs resulting from the incremental labor required to handle exceptions. Auctions, both standard and reverse, can dramatically reduce your product or service costs as well as the transaction costs identified above. Expanded markets for private label sales and raw material procurement Reducing the overhead and marketing costs associated with private label sales by minimizing transaction costs and expanding access to new markets are key benefits from B2B exchanges.
Opportunities abound for auctions and reverse auctions.
Virtually all of the benefits found through productivity and efficiency, increased capture of vendor discounts for EDI and meeting payment cycles, and reduced product and services costs for commodity items can be captured by the grocery industry. First, you must understand your B2B strategy in light of your overall business strategy. For instance, if quality and freshness are part of your business strategy, you may not want to pursue cost savings from accessing lower tier produce suppliers via one of the many produce procurement web sites. Second, pick an area for implementation that is small and somewhat contained. This will help you minimize the scope of the effort, which will result in a faster trial program.