Online auction lift-off gives ROI to seat maker

Aircraft ejector seat maker Martin Baker has trialled e-auctioning for direct goods and gained a return on investment (ROI) of...

Aircraft ejector seat maker Martin Baker has trialled e-auctioning for direct goods and gained a return on investment (ROI) of 200%-400% per event.

According to the company, the biggest hurdle in setting up such a system was preparing suppliers for the cultural change brought by operating in an e-auction environment.

The company ran three auction trials in September using Clarus software. Unlike most e-purchasing projects, these auctions were for precision-machined goods.

According to Chris Hudson, senior contracts officer for Martin Baker, the auctions were held in real-time over a period of an hour. The first auction achieved an ROI of 220% and the second 430%.

"We found that one of the biggest challenges was cultural," said Hudson. "We met with suppliers face-to-face beforehand to reassure them that they would not be 'screwed down'."

The company has reaped savings from procuring cheaper goods, and the streamlined buying process requires only one administrator from Martin Baker. It is also benefiting from exposure to new suppliers.

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