Friday, April 25, 2014

Bidding for Dollars - Turn Your Procurement Model Around

Have you taken advantage of or another online auction site to get the best deal possible on a product? Well the web has revolutionized procurement and purchasing much in the same way. 

Freedom of information

We are living in world which allows small to medium enterprise businesses to compete on exactly the same footing as huge conglomerates. No longer do you have to go through a formal leveraged buying exercise to deliver the best possible combination of price and service when buying products.

Creating competition with the web

Utilizing the web and your MDS software, you are able to essentially create competition on each individual order and procurement is a very different, much better process, because you can create fundamental competition and a broader supply chain.

Using the MDS Tender and Bid Systems a user can interact with suppliers and actually review information provided easier because they all deliver it in standardized format. This allows you to compare apples with apples. This is fundamental to proper procurement.
Using The MDS Tender/Bid  System Users will: 
  • Create tenders or requests for quotations  
  • Select from a pre-approved list of vendors
  • Send those vendors  the list of products 
  • Enter the bids received from vendors. 
  • Compare the bids received and 
  • Have the system automatically review and select the best vendor to purchase from

Since we are able to capture every element of the interaction. We can create a service agreement or a contract which is the combination of everything submitted over the web, all the detail around the conversation.

One type of procurement model that delivers best value is restricted tendering, which limits the request for tenders to a number of select suppliers. This is also sometime called competitive bidding. From a procurement perspective, if the due diligence is done in creating your list of approved suppliers, then ultimately the bid response is going to be very high and accurate.

The other model would be Open tendering or a more generic auction concept , There are many disadvantages to open tendering (a type of auction); including limited time frame for completion; but the primary issue is that it focuses only on cost as a solution. IE Lowest Total Bid/Price.
If it is price driven then it stifles innovation, and that is a major risk to choosing the wrong type of approach.

Restricted tendering has clearly been shown to be better over and above any other tendering process, it certainly has delivered value for money and enhanced innovation.  Restrictive tendering delivers value. The right suppliers get invited to tender, the procurement process is really informative and it doesn't begin and end with price.

By changing your procurement model to a competitive bidding process you can build a resilient, cost effective and sustainable supply chain for the future.  

For more information on TSH or MDS call The Systems House, Inc. at 1-800- MDS-5556. Or send a message to

Click here and tell us how we can help you with your business solutions.

Friday, April 4, 2014

How distributors can compete against

Distributors looking to fend off Amazon need to make sure to have an e-commerce plan that offers sufficient products and excel at customer service, by ensuring that your e-commerce solution is deeply integrated to inventory, pricing and customer data you can offer a completely personalized online shopping experience that will surpass anything Amazon can provide. 

To succeed you need the right tools
Our Remotenet B2B Ecommerce Suite gives you the tools to compete.

Amazon recently announced a new branch called Amazon Supply that aims to take on the role that distributors have been doing for decades.  It’s an intriguing new possibility, with the site being built with many of the same consumer-facing features, such as detailed product information and ease of use, and online ordering that have driven Amazon's success. 
Amazon Supply’s stated goal is “to provide earth’s largest, easiest-to-research, discover, and access selection of professional products required to support the maintenance, repair, operations, and project needs of business and professional customers.”

 The site offers competitive prices, fast shipping and a large selection of more than 1,250,000 products, including everything from office equipment to lab and scientific items for businesses. But distributors need to think ahead and prepare for how these changes  will affect their operations, and how it will change the way that businesses buy and sell from each other. 

There are a lot of companies that are worried about losing business to Amazon Supply, and rightfully so. In a recent study by Acquity Group on millennials, statistics showed that 90 percent of buyers age 18-35 purchase online, 63 percent have ordered from Amazon Supply at least once and 40 percent purchase frequently from Amazon Supply. These statistics are significant and are present in other age demographics as well, with lower statistics as the age increases. So, this is both a wake-up call and a rallying cry for businesses to establish their own e-commerce presence.

Everyone says customers want an Amazon-like experience. 
But what are some of the key elements of what makes that experience? 
Ease of buying? 
Extensive Product Images? 

My thoughts are that B2B buyers not only want a B2C-like customer-centric experience that is intuitively designed and loaded with rich content and interactive functionality, but they also want their B2B business process, policies, and programs from the distributor reflected in the site.

From a B2C features standpoint, that would certainly include merchandising tools like product comparisons, customer reviews, buying lists for future shopping trips, custom pricing and robust search capabilities.

From a B2B standpoint, customers are looking for tools that allow them to streamline and automate their purchase order processing. Punchout , for example allow a buyer to access your web site from their e-procurement system, which can eliminate double-entry of orders. Order workflow with multiple levels of purchasing approval, request for quote, customer administration and budget/contract management are other key features now coming into prominence that can differentiate your company and your offering.

The first thing companies can do to compete against Amazon is to not try to be Amazon. If you read the recently published “The Everything Store: Jeff Bezos and the Age of Amazon you will learn that even Amazon only focuses on the customer, not the competitor, in an effort to provide what customers need and want, when and how they want it. 

If they order an Otoscope don't forget the bulbs!! 
So listen to your customers and customize the site and tools to their experience, work with your customers to design a website specific to them.  Ensure that your e-commerce solution is deeply integrated to inventory, pricing and customer data including order history purchasing quantities and units of measure, Kitted items and common sense shopping. 

Although Amazon Supply has some clear advantages in the world of e-commerce, wholesaler and distributors  alike still have an edge over the newcomer: Your established B2B customer relationships, product knowledge and expertise, and a considerably wider product assortment within their vertical.

By leveraging each of these advantages, both manufacturers and distributors will be able to combat the impact of the Amazon Supply strategy and continue to grow their business in the future.

For more information on TSH or MDS call The Systems House, Inc. at 1-800- MDS-5556.
 Or send a message to

Click here and tell us how we can help you with your business solutions.