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Aerospace parts suppliers’ reaction to online reverse auctions

Aerospace parts suppliers’ reaction to online reverse auctions Presents the results of a survey conducted among aerospace part and sub-assembly suppliers to quantitatively assess their reaction to online reverse auctions and its impact on their business policies and practices. Findings are compared to the qualitative benefits identified for suppliers by third party online reverse auction service providers. Determines that incumbent suppliers do not realize the benefits suggested by online reverse auction service providers. Identifies new sources of costs which accrue to buyers and are not accounted for in so-called "total cost" request for quotes, including retaliatory pricing practices, less cooperative relationships, and sourcing work back to the original supplier. Concludes that both buyers and sellers participating in online reverse auctions will likely encounter unfavorable outcomes, thus questioning the effectiveness of this new purchasing tool as a means of reducing the unit price of buyer-designed engineered components. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Supply Chain Management: An International Journal Emerald Publishing

Aerospace parts suppliers’ reaction to online reverse auctions

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Publisher
Emerald Publishing
Copyright
Copyright © 2004 Emerald Group Publishing Limited. All rights reserved.
ISSN
1359-8546
DOI
10.1108/13598540410527042
Publisher site
See Article on Publisher Site

Abstract

Presents the results of a survey conducted among aerospace part and sub-assembly suppliers to quantitatively assess their reaction to online reverse auctions and its impact on their business policies and practices. Findings are compared to the qualitative benefits identified for suppliers by third party online reverse auction service providers. Determines that incumbent suppliers do not realize the benefits suggested by online reverse auction service providers. Identifies new sources of costs which accrue to buyers and are not accounted for in so-called "total cost" request for quotes, including retaliatory pricing practices, less cooperative relationships, and sourcing work back to the original supplier. Concludes that both buyers and sellers participating in online reverse auctions will likely encounter unfavorable outcomes, thus questioning the effectiveness of this new purchasing tool as a means of reducing the unit price of buyer-designed engineered components.

Journal

Supply Chain Management: An International JournalEmerald Publishing

Published: Apr 1, 2004

Keywords: Electronic commerce; Aerospace industry; Auctions; Purchasing techniques; Suppliers

References