After the initial concern of businesses putting the breaks on spending to evaluate the current COVID-19 crisis, data from our platform suggests that businesses are using Market Dojo to run more eSourcing events than ever. Our eSourcing solution, Market Dojo, is on course for the most monthly events we have seen in the last 6 months.
How does this compare to previous months?
In comparison to the month of February as illustrated in the graph below, March saw an increase of 21% in the number of live events created. This could indicate that whilst COVID-19 is having a significant impact, businesses are still tendering and negotiating during the current crisis.
However if we compare the number of live events created this year in comparison to last (see graph below), you’ll notice that the figure increases even further to a 55% increase in the number of live events.
Whilst it’s too early to identify the exact reasons for the increase in popularity of running eSourcing events. It could be due to organisations implementing both proactive and reactive measures.
With rapid changes in the supply chain, companies need to be looking at alternatives and options with a continual shifting supply. eSourcing is a perfect tool to uncovering options efficiently.
Another area we have seen action are cost mitigation activities, such as online negotiation. This maybe simple multistage tenders or via Reverse Auctions. By utilising a method such as an eAuction, it would allow buyers to identify and negotiate with suppliers via an auditable, dynamic and time-effective method whilst maximising the competition between suppliers. We have seen auctions run in the areas of PPE where suppliers have used the crisis as an opportunity to hike prices.
It should be said that generally, the increased use of the tool is just focused on gathering information and trying to find areas of risk and risk mitigation.
Another contributing factor towards the uptake in usage, could be our COVID-19 RFI initiative. Since the template was uploaded, it has been used by a large number of users that feature both new and existing clients. We introduced this measure to help businesses around the world, mitigate risk and understand the impact of COVID-19 on their supply chains.
Our COVID-19 specific template helps to make running RFI’s more efficient and easier to manage. The template is tailored to help both parties understand each other’s situation and identify any potential collaboration opportunities or contingency plans.
Market Dojo has also seen a spike in the number of companies running sealed bids through the Market Dojo solution, likely due to offices being closed. Our sealed bid feature enables our clients to request suppliers to submit sealed bids virtually and is a popular alternative to the traditional sealed bid method (postal, paper bids).
What particular spend categories have we seen?
In the last week, we’ve seen competitive tenders and auctions for everything from parking cameras, steam cleaners, training, forklift batteries, canned fish and meat to evaporated milk.
Our Quick Quotes solution is being utilised by organisations who are looking to quickly obtain supplier quotes or understand changes in market pricing. With more companies’ supply chains and production lines affected, it’s likely that the need for procurement teams to identify alternative suppliers is going to increase.
In the coming weeks, we are anticipating the growing trend of usage to continue with a consistent demand for the sourcing of specific categories that are currently integral to the operation of supply chains. Examples such as PPE to keep employees safe, Logistics and Freight to keep delivery and production moving and IT hardware, to ensure employees are able to work effectively from home.
However, it’s likely that many businesses will be implementing a consolidation phase. In which the primary focus is understanding the current conditions and adjusting organisational strategies. It is our belief that we will see a continual rise in the number of sourcing events, as procurement teams react and identify alternative suppliers who are able to meet their changing demands for goods or services. With the focus at this time being on deliverables rather than price.
For more information on how Market Dojo can help you during this difficult period, get in touch with us at Info@marketdojo.com or give us a call on +44 (0) 117 230 9200