'Auctions about flexibility, not price'
3 April 2012
Online auctions are less about price reduction and more a tool that allows production flexibility, according to a major US computer manufacturer.
A reverse auction used to "spot buy" direct materials will often cost more than long-term, structured contracts, said Corey Billington, vice-president of supply chain services at Hewlett-Packard in the US. But it also allowed purchasers to devolve risk and manage fluctuations in supply and demand.
"Auctions have a very important role in providing flexibility,...