In: Operations Management
(43) What are reverse auction tools used for? What benefits do they provide to buyers and to suppliers? Why would an employee for a buyer resist the use of reverse auction tools instead of the ways they typically interact with suppliers?
(44) What are “Enterprise Resource Planning (ERP) systems? What benefits do they provide for a company that is part of a global supply chain? Why would a company be reluctant to use an ERP 5 system?
(43)
What is a reverse auction?
In a normal auction, a seller puts forward the product that he or she wishes to sell and the buyers have to place the highest bid for obtaining the product. The bidding takes place in terms of higher prices. In the case of a reverse auction, however, the role of buyers and sellers are reversed. Here, the sellers compete amongst themselves to get business from the buyer and the bidder with the lowest price wins. More than one seller offers his products for bidding at a price that the buyer is willing to buy.
Advantages to the suppliers:
Advantage for the buyers:
However, an employee for a buyer might prefer the traditional method of interacting with suppliers rather than Reverse auctioning because:
(44)
Enterprise Resource Planning (ERP)
The core processes that are needed to run a business include Sales, marketing, finance, human resources, supply chain services, etc. ERP helps an organization in automating and integrating these processes to enhance its effectiveness. ERP is a business software that is designed to manage enterprise data. This enables employees in different divisions to use the same information for their specific needs.
Today, ERP is a critical component for managing thousands of businesses of all sizes and in all industries.
Benefits of ERP in a business:
However, there are some disadvantages to ERP that can make a company reluctant to implement it:
Hence it might not be a feasible option for many businesses