Reverse Auctions and the automotive industry: A history of discontent?

Posted on June 13, 2011

1


This was a memorable keynote to more than 200 senior automotive industry executives from the supplier side of the industry if for no other reason than it was at the height of the tensions between the manufacturers and their supply base as a result of Covisint and other failed initiatives.

Within the context of the present day SaaS platforms that utilize advanced algorithms to streamline both the procurement process itself as well as the corresponding results, the at times acrimonious and adversarial relationship between manufacturing buyers and their suppliers of that era have ceded to a more collaborative approach.

My belief is that this atmosphere of cooperative interaction only became possible when the costly, monolithic ERP-based initiatives crumbled under their own weight of unrealized expectations.  This alone is what freed the manufacturers to focus on getting the relationship with their suppliers’ right, versus having to ramrod a misaligned application through as a means of justifying an ever increasing capitalized expenditure.

Of course what is even more interesting is that a 2001 study by the software industry had predicted the fall of traditional ER-based licensing models.  Unfortunately this knowledge was confined to the industry players and therefore was not made available to the larger market.  I wonder how many tens if not hundreds of millions of dollars could have been saved had this information been more readily accessible . . .

Reverse Auctions and the Automotive Industry (Part 1)

30