Competitive Tendering & the Internet of Things (IoT)

In a recent LinkedIn post we asked: Where do you sit on the scale of how the Internet of Things (IoT) impacts your business today and tomorrow?

  • Don’t understand IoT impact & over all this change stuff?
  • Will investigate the impact in the future?
  • Understand/aware but cannot identify impact at this time?
  • Understand/aware – Customer demands/insight driving us to embrace IoT?
  • Understand/aware – leveraging impact for competitive advantage?

Important questions but the answers are more important. A business model caste in stone can become a tombstone!

Answers from your major suppliers on the impact of IoT can also be important for for the digital insight they can provide.  

In a recent food tender project, Cost Management Specialists:

  • increased ROI through a supply agreement providing certainty on inputs, outputs and performance outcomes
  • improved quality and accountability by streamlining the order to delivery process
  • achieved lower cost in two distinct areas of supply with incumbent suppliers.

In evaluating a food tender, the following issues, which all benefit from digitalisation, were significant:

Order Management – better commitment to planning and information sharing with suppliers to avoid unnecessary cost and the risk of error.

Supply List – too many pick list items. Use a tender to agree a pruned approved list at agreed tender price without precluding additions following a cost: benefit analysis.

Order Quantities – where they have the ability to on sell, some suppliers prefer early over orders revised down in an advance Purchase Order.

Portion Control – essential to margin management. Best done when time permits, labour rates are low, space is available & automation reduces variance & waste.

Utilising Suppliers’ Expertise – benefit from suppliers expertise in streamlining the order to delivery process & acting on their insight on unproductive purchasing patterns.

Learn from suppliers who digitally transformed their supply chain. Expect to better leverage ROI on service, quality, price, information and integration criteria.   

Digitally transformed suppliers know their margins & how important each client is to their top and bottom line.  Partner with them Leverage a win-win outcome.

Competitive tendering exposes a laggard supplier’s inability to embrace digital innovation and share the benefit with their customers. Their competitors relish the competitive advantage opportunity.

A competitive tender process gives the tenderer the benefit of digital transparency including unproductive purchasing patterns, buying in the wrong market, lack of integration in invoicing/reporting or identifying innovative market options available. 

In a digital world, customers expect a positive customer experience through digital transformation and best value in the supply chain. Deliver ‘on time and in full’ with lower cost of goods, greater transparency and added value along your value stream.  Enjoy increased confidence in your ability to provide a positive customer experience. 

Digital transformation is not an option but a necessity in an ever increasingly competitive world. 

A competitive tender process exposes major suppliers who are laggards and can reward the digitally transformed. Laggards who get their ‘periscope up’ have much to learn from early adopters. The supply market provides a terrific learning opportunity.

Tendering identifies major suppliers who can deliver greater benefits through their  insight from digital transformation as the foundation of a successful partnership!

Where an incumbent falls short in a competitive tendering process, the outcome will  identify alternative suppliers who:

  • increase ROI through clarity on inputs, outputs and performance criteria
  • improve quality and accountability in a streamlined order to delivery process

Benefit from specialist expertise in leveraging the supply market through skilled expertise in tender preparation/evaluation/implementation. 

Contact John Cleary on +61 411522521 or at roi1@costms.com.au.                 

 

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