The coronavirus pandemic has often been described as unprecedented, leaving businesses asking questions as to how best to react and adjust to this new climate. For many businesses, 2020 and 2021 have been their most difficult years to date, with economic crashes, broken supply chains and reduced sales forecasts. For others, however, along with the challenges that have been posed, it has brought about new opportunities. Market Dojo customer Logitech is fortunate enough to be one of the latter businesses that have weathered the storm and in some areas have even had an upturn in business.
Logitech is a global leader in a wide variety of personal peripherals including PC, gaming, Internet communications & digital music. As with most organisations, COVID-19 has brought them some interesting challenges within their supply chain. One such challenge was their need to source 30,000 face masks for one of their factories reopening in Asia. Prices for these elusive items at the height of the pandemic were variable and sourcing them was difficult. Latten recalled, “As soon as the Asia issue was resolved, masks were then needed for all of our European factories!”
Ensuring their staff are looked after is high on Logitech’s agenda. Another challenge that arose was what to do with their assisted sales workforce. As supermarkets were facing an uptime, this was an area where the assisted salespeople could help. However, as with every great company, they also further turned this into an advantage. They took this opportunity to help develop their website and involve those people to help with assisted virtual selling, an initiative that has proven to be very successful.
Over the past 12 months, Market Dojo has assisted Logitech in a number of ways. Firstly by helping the business in increasing engagement levels within their supplier base. For too long, the process for prospective suppliers looking to engage with Logitech consisted of sending an email to whichever Logitech email address they could find in the hope it might find its way to the correct department or individual. This method was proving to be very inefficient and also meant procurement had very limited visibility of potentially innovative suppliers who could add great value. Alongside this, Logitech has recently launched a new initiative to bring about greater diversity within their supplier base, as well as ensuring suppliers carry out business in a manner that reflects their sustainability expectations and good practice requirements. There is a need to be able to collect this data in a consistent format within a centralised hub for regular reporting.
To solve these issues, Logitech has utilised a feature of Market Dojo’s supplier onboarding solution (SIM Dojo) which has the ability to create a portal for suppliers. Suppliers can now visit this portal to explain how they can be of benefit to Logitech, answer a simple questionnaire that can help categorise them as a supplier and glean useful information to help Logitech build a better database for the future.
This solution helps Logitech to not only keep their inboxes clear, but filter out the suppliers that are not of use, and compile those that may be useful in both immediate and future timeframes. The solution fulfills a knowledge gap, is great for suppliers’ ease of use, and strengthens Logitech’s supply chain resilience.
“This solution came from a variety of business drivers, as a procurement team, we didn’t have a web page or a method for recommending suppliers across the business. Typically, suppliers would email into any address they could get access to. Emails from potential suppliers could be easily missed, so we were looking to implement a prospective supplier channel to find those ‘diamond in the rough’ suppliers.
“Our new solution with Market Dojo allows suppliers to find our channel, follow the steps to answer our questionnaires which can then be scored by our internal procurement function to build our bench of suppliers.” – David Latten, Head of Global Indirect Procurement at Logitech
The second way in which Market Dojo has helped in recent months is by reducing costs in areas where many wouldn’t venture. There is a lot of debate among eSourcing skeptics about what categories can and cannot be taken to an eAuction. Market Dojo would put forward the idea that if you can create a specification for it and if you have suppliers willing to engage, then an auction will work no matter the category. David Latten put that to the test with an auction for a marketing agency offering services for Logitech’s Amazon visibility.
This is a complex area where the solutions range from full technology to manually intensive solutions and anywhere in between. Logitech’s team worked hard to develop the SLA and the billing models (Fixed tech fee and a percentage of the budget), based on some assumptions, so all suppliers could bid ‘like for like’.
The resulting auction was a definitive success. Latten saved a surprising 16% from the Marketing Services RFQ. “This was a textbook case of the benefits that can be found with an auction. I don’t believe that any other negotiation method would have been as efficient or successful.” David Latten, Head of Global Indirect Procurement at Logitech
The contract for Amazon marketing services went to a new supplier (although an incumbent provider of other services to them) displaying that from the supplier side, if willing to engage, auctions can offer suppliers opportunities to win new business.
The supplier who won the contract started the auction by pricing at £200k over their RFQ prices. This is a common tactic for suppliers, who through watching their position in the auction can gain more insight into other competitors taking part. However, across the 45 minutes (30-minute auction, with a dynamic close period to allow suppliers to rebid if a bid is placed in the closing minutes), they steadily brought their pricing down to a position good enough to be awarded the business.
Following the auction, Latten has highlighted a couple of key takeaways:
“There’s certainly a lot of other categories we should be auctioning, the experience with the marketing agency has really opened our eyes to see you can auction pretty much anything if you can spec it correctly.” – David Latten, Head of Global Indirect Procurement at Logitech
Lastly, we asked David what he values from Market Dojo. David was looking for someone to partner with who fits nicely with their organisation’s entrepreneurial and dynamic approach.
“Sourcing Dojo’s flexibility of billing through on-demand licencing allows Logitech to try new eSourcing software at a low cost. Most importantly, Market Dojo is not just a tech stack, their real assets are their knowledgeable staff, people who help obtain transformative results.” – David Latten, Head of Global Indirect Procurement at Logitech
Logitech is a great example of how a small team can bring huge benefits to an organisation. This is in a time when the supply chain is under the spotlight more than ever. Market Dojo looks forward to continuing this relationship and they expect great things from their roadmap on SRM and SPM.
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