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Bidding, quoting and reverse auctions—is this the wave of the future?

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Strategic Sourcing: Now playing in a theater near you. We have gotten so tech-focused, with sophisticated software, aggressive purchasing groups and an app for everything, that personal communications suddenly appears to be less important. It is now evident that experienced vendor relationships are slowly being diluted. Have we gotten to a place where relationships have little or no place in fleet management? Where we are bidding for everything? Is bidding a style that now has become commonplace and more exciting or is it a lack of social skills forcing the new wave of negotiating?

I’ve always thought that part of being successful was the ability to have relationships, leverage contacts and learn together. In my experience, this is all more important that filling out an Excel sheet bid box. In the past, you would discuss what was going to be quoted and understand all the needs and potential gray areas that could put you in harm’s way. Then you would place your bid for parts, services or contracts and provide those in a winner-take-all type program. You had only one shot, and you had to make it your best.

But now the rules have changed: you bid online with three round re-bid opportunities to change your price. It’s more of a reverse auction than a bid process. And these over-sophisticated programs to take bids are usually managed by non-industry type younger generation app managers. Once the bids come in and they are reviewed, then emails suggest where you may be high–my guess is you are never told where you are low. The third round to get your bid right for final submission. Of course, this is all after the request for information (RFI), request for proposal (RFP) and request for quote (RFQ), meaning lots of time back and forth through email and Excel sheets.

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Along with this new method, there are some new questions that require answers that I have seen in this process. I have seen questions that I would consider not relevant and, quite honestly, none of their business and not relevant in buying brake chambers. This ranges from wanting a copy of the company’s P&L, business statements, personal guarantees, where you get your parts from and what you pay for those, and what you pay for your vehicle’s components.

So is this the wave of the future? Will this new process render long-standing relationships irrelevant? Is the aggressiveness of a wannabe new player more important? Does this eliminate a business relationship of, say, 10 years of loyal service? Where is the box to check for that on these automated bid programs?

The newer generations that build “relationships” through Facebook or Twitter with no direct, face-to-face contact say that business is business. But, without personal relationships this business could start to get pretty cold.

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