DaimlerChrysler
has just conducted what was, according to the company, the largest online auction
to date at an Internet exchange. The Internet-based bidding process took place
last week and determined the prices of parts for future products.

The five participating suppliers took part in bidding that ‘proved to be very
competitive’. Over four days, 1,200 parts were traded in 80 combinations worth
up to euro 2 billion a piece. The total volume of orders that will be placed
as a result of the event was in the region of euro 3.5 billion. Covisint provided
the Internet application for the bidding and successfully managed the event
without any technical problems.


Strategic
Review-


DaimlerChrysler


The company maintains that online bidding considerably streamlines and shortens
procedures, both for DaimlerChrysler Purchasing and for suppliers. Last week’s
exercise appears to have confirmed that was the case.

To date, online bidding processes have mainly involved uncomplicated ‘universal’
parts that can be standardised, such as car batteries, starters or oil baffles.
DaimlerChrysler maintains that last week’s online auction has ‘proved that this
process can successfully be used for situations where complex orders must be
placed.’

On the basis of the results of the online bidding event, DaimlerChrysler Purchasing
will now make the final decision regarding the placement of orders. Factors
such as the technology, logistics and quality performance of the bidders are
also taken into account during this process.

Johannes Rudnitzki, head of Purchasing – Passenger Cars for Mercedes-Benz and
Smart, commented: “We are extremely satisfied with the results of this event.
Online bidding has proven to be an outstanding purchasing tool even when the
placement of the orders is this complex. But the precondition for this was a
detailed description of the object of the bidding. Without a doubt this promising
tool will now be widely used by our purchasers.”

In addition to the use of Internet-based catalogues, the online bidding processes
are among the most important e-procurement activities at DaimlerChrysler. They
form a central component of the DCXNET initiative.


To view related research reports, please follow the links
below:-

Automotive
b2b – Strategic threats and opportunities in the automotive supply chain

EProcurement:
Successful Strategies for the emarketplace