Sunday, September 16, 2007

Save your money via reserve auction

Business market getting competitive nowadays and most business owners wish to increase their profitability in order to remain competitive in a global marketplace. This same goes to my current company where my boss is trying to cut costs in many field, just to make sure our profit able to maintain within budgeted amount in monthly basis. However lately my company profit margin showed deficit figure and this make the board of director started questioning my boss. They want a recovery plan that able to bring back the profit margin on track like previous quarter. Now my boss in big trouble coz he personally not sure what’s go wrong with the operation cost as well as the administration costs. He called up a cost effectiveness meeting, hoping that each Head of Department can tell him how to save cost in each department. Unfortunately their proposal cannot work at all and the deficit still show in the P & L in next month report.

I guess one of the reasons why my company is not making profit over the months is due to he spend a lot of money for the new factory expansion. The purchasing costs for the machinery that my boss lately invested is very high, thus resulting the company over spent over the month. He ordered few types of machineries for the factory expansion but he only seek for quotations from 2 suppliers. Thus the quotations that he is getting are not competitive enough as if you compare with more than 2 suppliers. I think if my boss is using the service of Reverse Auction, then perhaps he can save some money.

The Reverse Auctions are an ideal way for buyers to reduce purchasing costs and streamline procurement when purchasing capital equipment, raw materials as well as services from suppliers around the world. After we initiate the auction by sending out our purchasing specifications that we want; suppliers will compete against each other in Web-based, real-time auctions to win our business. Thus it will drive down the price indirectly.

It is too late for my boss to try out reserve auctions now. If there is any new factory expansion in future, I will remind him to try this service!