تنظیم آنلاین B2B مزایده معکوس از طریق کدهای رفتار داوطلبانه

In response to real and perceived abuse by market makers, buyers, and sellers, some industry trade groups representing suppliers have developed voluntary codes of conduct, white papers, and other forms of guidance for online reverse auction participants. The intent of these guidelines is to improve both the reverse auction process and relationships between buyers and sellers. This paper examines the rationale for creating guidelines and codes of conduct, and examines their efficacy in regulating reverse auctions to achieve improved outcomes for market makers, buyers, and sellers. Data from primary and related secondary sources indicate that industry-specific codes of conduct and guidelines have not had a favorable impact.

Business-to-business (B2B) online reverse auctions, also called “e-reverse auctions” or simply “reverse auctions,” have become a common method to source production and non-production goods and services by Fortune 2000 companies since 1995 (Richards, 2000 and Tully, 2000). Widespread use of this tool by buyers is of great concern among incumbent suppliers due to potential negative outcomes such as margin erosion and loss of sales volume to other suppliers (B2BRC, 2003, Berning & Flanagan, 2003, Emiliani, 2000, Emiliani & Stec, 2002a, Kobe, 2001, Leonard, 2004, MHEDA, 2003, Stein et al., 2003 and Tulder & Mol, 2002). Additional incumbent supplier concerns relate to whether or not buyers and the “market makers”–companies that provide reverse auction services–give adequate consideration to other important factors such as quality, service, technology, or production capabilities (Bartholomew, 2001, Bartholomew, 2002 and Brindley, 2000) or total costs (Emiliani & Stec, 2001, Emiliani & Stec, 2002a, Emiliani & Stec, 2004 and Emiliani & Stec, 2005b). Previous studies have shown that reverse auctions–with rare exception; e.g. purchase of industry standard commercial goods (Smart & Harrison, 2003)–damage supplier relationships and create distrust among incumbent suppliers (B2BRC, 2003, Beall et al., 2003, Emiliani & Stec, 2004, Emiliani & Stec, 2005b, Jap, 2001, Jap, 2003, MHEDA, 2003 and Smeltzer & Carr, 2003). There is a widespread perception among incumbent suppliers that reverse auctions are not fair and have been abused by buyers and market makers (Brindley, 2002a, EU, 2004, Glimm, 2003 and Morris, 2003). It has been characterized as an unfair bidding process used by large corporations as a substitute for poor purchasing practices (Brindley, 2002b, Emiliani & Stec, 2002a and Emiliani & Stec, 2002b). In addition, the value proposition for incumbent suppliers, to this day, remains un-addressed, save for the coercive threat of losing business (Emiliani & Stec, 2002b, Emiliani & Stec, 2004, Emiliani & Stec, 2005b, Leonard, 2004, Richards, 2000, Stein et al., 2003 and Tulder & Mol, 2002). New suppliers, of course, stand to gain important business from new customers, provided they understand customer requirements, their costs, and do not underbid. Previous studies of simple and complex commodities have also shown that the benefits of reverse auctions for both buyers and suppliers do not exist or have been greatly overstated by market makers and buyers (CLBM, 2004, Emiliani & Stec, 2002a, Emiliani & Stec, 2004 and Emiliani & Stec, 2005b). For suppliers, they purportedly include: • Reduce operating, selling or customer acquisition costs • Improve buyer–seller relationships • Compete on a level playing field • Access to new customers • Increase sales • Access to new markets. While for buyers, they purportedly include: • Fast return on investment • Achieve quick savings • Obtain market price • Reduce sourcing cycle time from weeks to hours • Streamline the sourcing process • Make better buying decisions • Improve supplier relationships. In most cases reverse auctions over-promise and under-deliver, whether for complex custom or simple standard goods or services. Not surprisingly, the outcome is: • The poor financial performance of leading market makers (Ariba, 2004, Butters & Bennett, 2002, Kisiel, 2002a, Kisiel, 2002b, Kisiel, 2003 and Ryan, 2003), • Closure, merger, or sale of market makers such as CommerceOne, Cordiem, Covisint, eScout, FreeMarkets, and PurchasePro (Barlas, 2004a, Barlas, 2004b, Ericson, 2003 and Ericson, 2004) • Reverse auctions are typically used for less than 15% of total corporate purchases (Beall et al., 2003) • Flat or declining use of reverse auctions among large industrial buyers (Hannon, 2003a) • Declining levels of supplier participation (Emiliani & Stec, 2004 and Emiliani & Stec, 2005b). Despite this, senior managers of many Fortune 2000 corporations continue to believe in the efficacy of reverse auctions to reduce unit prices (Emiliani & Stec, 2005b, FreeMarkets, 2003, Grant, 2003, Judge, 2001 and Reason, 2001). That is partly because the common metric used to determine unit price savings–purchase price variance–is easily gamed (Emiliani, Stec, & Grasso, 2004). Accurate measurement of total cost would reveal that reverse auctions, in most cases, yield unfavorable results (Emiliani & Stec, 2002a). Reverse auctions have been shown to be a technologically assisted form of power-based bargaining (Carbone, 2004, Emiliani, 2003, Emiliani, 2004, Emiliani & Stec, 2001, Emiliani & Stec, 2002a, Emiliani & Stec, 2002b, Emiliani & Stec, 2004, Emiliani & Stec, 2005b, Jap, 2001, Jap, 2003, Stein et al., 2003 and Tulder & Mol, 2002). As such, it is subject to abuse principally among buyers and market makers (Beall et al., 2003, OESA, 2002 and Sawhney, 2003). The different forms of abuse include: • Ambiguous or shifting auction rules • Threatening incumbent suppliers to bid or risk losing the work • Changing contract terms and conditions between RFQ and award • Phantom bidding (buyer or market maker pretends to be a supplier) • Drive down unit prices with no intention of switching sources • Allowing unqualified suppliers to bid • Showing the identities of the bidders and their bids • Post-auction renegotiation • Awarding only portions of the items in a bid package • Forcing supplier to honor unreasonably low prices • Providing incomplete or inaccurate specifications • Allowing specification relief to winning bidders • Including internal departments as bidders • Repetitive re-bidding to drive down prices • Not informing bidders of outcomes. However, new and incumbent suppliers could also abuse reverse auctions by: • Not abiding by auction rules • Not adhering to request for quote parameters • Placing bids with no intention of honoring them • Bidding when the supplier is in fact unwilling or unable to assume the business if it were awarded to them • Known inability to meet contract terms and conditions • Collusion (legal or illegal, depending upon country laws) • Win new business and charge high prices for “extras”.

This paper examined how voluntarily codes of conduct, white papers, and other forms of guidance for market makers, buyers, and sellers have been developed and deployed. Results from primary and related secondary sources indicate that they have not been successful at expanding the use of reverse auctions. They also appear to have had little impact on regulating buyers to achieve improved outcomes, such as less abuse and greater trust, because reverse auctions are, by their very nature, a destructive power-based bargaining tool whose application may not be correctable through codes of conduct, guidelines, etc. (Emiliani & Stec, 2005a). Codes of conduct for reverse auctions do not constitute a “best practice” in supply chain management. They are essentially an afterthought intended principally to placate supplier's concerns and improve strained relationships between buyers and sellers. In addition, this form of e-procurement has had a negative impact on supply chain management because it strongly reinforces the “price-only” focus typically associated with large-scale industrial purchasing. It is perceived by incumbent suppliers as an attack on profit margins, unfair use of buyer power, and devalues non-price factors such as quality, service, technology, or production capabilities. Therefore, reverse auctions do not “Promote positive supplier relationships…” nor do they “Enhance the stature of the supply management profession” (ISM, 2002). Whether in the context of e-supply chains or not, collaborative problem solving does constitute a “best practice.” Remarkably, only a small number of large companies practice collaborative problem solving effectively, due in part to the disciplined use of established processes and decades-long commitment over generations of senior managers. This yields improved results with respect to interorganizational capability building, process improvement, cost reduction, innovation, and long-term competitiveness. However, to be strong at collaborative problem solving with external suppliers, buyers must first learn how to cooperate internally. The effect of industry-specific codes of conduct and guidelines on reverse auction usage, abuse, and trust among participants presents opportunities for future research, including: • How have industry-specific codes of conduct and guidelines been put into practice, how often have they been used, and which elements have been difficult to apply? • Have they been successful at reducing market maker, buyer, and seller abuse? If so, how, and for what goods or services? • How have violations by reverse auction participants been addressed? • What other actions have market makers and buyers take to reduce abuse and improve trust? If successful, then why? • Why didn't the market makers proactively collaborate in the mid-to-late 1990s to establish a uniform code of conduct applicable to any industry segment? Would it have made any difference?