Reverse Auctions on Scout help Buyers achieve savings and gain better transparency for the market price of each line item in an auction.
Multi-lot Auctions offer a solution for Buyers who have been running one large Auction with each Supplier only biding on some of the line items in the Event. With multi-lot Auctions, Buyers can break up and group line items into different lots, adding Suppliers only to the lots that are relevant to them. Multi-lot Auctions allow Buyers to more effectively and efficiently manage an Auction with multiple lots scheduled to start sequentially.
This article will cover:
- Getting to the Auction Lot Builder
- Setting up a Reverse Auction with Multi Lots
- Running a Reverse Auction with Multi Lots
Getting to the Auction Lot Builder
Because Multi-lot Auctions are essentially a way to run multiple Events in one, they must be started from a Project in Pipeline. Navigate to Pipeline and open a new or existing Project.
From the Events tab in the Project, click "Create New Auction" to begin setting up a new multi-lot Auction:
Setting up Reverse Auctions with Multi Lots
The Multi-lot Auction builder is broken in to seven steps.
1. Add Auction Details
In this section you can edit the title of your Auction and include any additional information that your Suppliers may find helpful for this Event. The "Notes for Suppliers" section typically includes information such as guidelines for participation, description of the need, and any additional contact information you'd like to provide.
2. Configure the Auction Settings
Here you can set up your Auction parameters.
- Auction Start - This field is not required; if left blank, your Auction will start as soon as you publish it. To ensure your Suppliers have time to sign up and prepare for the Auction, it is recommended to schedule the Auction ahead of time.
- Auction End - Set the amount of time you would like each lot in your Auction to run for. Please note, the estimated end time shown in this section will update as you add lots to the Event.
- For example, if this field is set to 15 minutes and the Start time is set at 11:30am, the estimated end time will show 12:15pm for an Auction with three lots.
- Auction Extension - Select time extension parameters for your Auction so the Auction will stay open if Suppliers continue to lower their bids. This feature prevents bid sniping and drives further savings.
- Currency - Select the currency you would like the Auction to be in.
- Minimum Decrement - Here you can set a certain amount that Suppliers have to decrease their total bid by each time in order to change their current bid.
3. Set Supplier View Options
This is where you can decide what level of information about their pricing competitiveness Suppliers have access to see during the Auction. For this example Event, the Suppliers will be able to see whether their current price for each line item is the lowest or not, and the rank of their total bid for the lot. You can also choose to check "Include Best Price" for the line items or/and total lot. If checked, all Suppliers will be able to see what the current lowest bid value is for each line item and/or the lowest total lot price throughout the Auction.
4. Invite Suppliers
This is the step where you can add in all Suppliers that will be participating in the Auction. You do not need to worry about which lots each Supplier will participate in yet, and they will not receive invitations until the Auction is published, so feel free to edit your Supplier list as much as you'd like before then.
You can add Suppliers by searching for their email or company name, checking the box by their email, and clicking "Add to Auction". If there is a contact you would like to add that is not currently listed in your Directory, click "Add New Supplier" to enter their information and add them to the Event.
5. Build the Auction Lots
In this section, you will add and set up the worksheet for each lot, then assign which Suppliers will participate in which lots. You may wish to split up your lots by geography, material type, or any other designation that will help increase Supplier participation and competitiveness.
First, decide how many lots will be in your Auction. Click "Add a Lot" to create a new empty lot:
Click "Edit Items" to open the Worksheet Build page for that lot. Add rows to enter item information, unit of measure, and the quantity you are looking for for each line item.
If you want to decide the price at which your Suppliers will begin bidding, you can check the Include Starting Price box. This will add a new column titled 'Starting Price (USD)' to the right of the Quantity column. Here, you will add the price at which you would like the bids to decrease from. By doing this, all Supplier bids must be less than this price. You can uncheck Include Starting Price to allow suppliers to enter their own initial prices.
Make sure each lot you have created has line items entered. To check, look for the notice under the lot number that says how many line items are in the lot and when they were last edited:
We are now ready to assign Suppliers to their relevant lots. To remove a Supplier from a lot, simply click the X by their name:
To add Suppliers, click in to the Space below the lot information and select the applicable Suppliers from the dropdown for each lot:
6. Invite Stakeholders
The final part of building an Auction is inviting your colleagues as Stakeholders. Invite Stakeholders by adding their name and email here to help you build the Auction, view the Auction as it progresses, and/or review the results of the Auction.
Read about Stakeholder Permissions to ensure you are providing your Stakeholders with the intended level of access to the Auction.
7. Publish Auction
Once you have finalized your Auction settings, click the blue "Publish" button to publish your Auction and send notifications to your invited Suppliers. Please note, once your Auction is published you will not be able to add or remove Suppliers from the Event, or edit the lot Worksheets.
A confirmation window will pop up with a summary of your current settings and a reminder to review your Event before publishing:
Running Reverse Auctions with Multi Lots
If you open the Auction before it's scheduled start time, you will see a countdown in black at the top of the page and a list of your scheduled lots on the left. Click on a lot to view it's estimated start and end times, access the "View Worksheet" button, and review the list of Suppliers invited to that specific lot:
You can review your Auction settings any time by clicking on the "View Auction Details" tab above the list of Lots.
Before and during the Auction, you have the ability to communicate with your Suppliers and Stakeholders. At the top of the page, locate the "Team Chat" and "Supplier Chat" buttons. Team Chat will open a side panel where you can live chat with your invited Stakeholders. In the Supplier Chat, you are able to check on the login status of Suppliers as well as select a Supplier to send and view messages from.
When the Auction starts and Suppliers begin submitting their bids, the data will be pulled in to a graph and Auction table to help visualize and track Supplier activity. The table will provide you with a clear breakdown of each Supplier's bids and how much you are saving on their current vs. original bid.
As the Auction progresses, the live lot will be highlighted in blue and display the countdown in the side bar. Keep an eye out for unread messages from the Suppliers which will appear as notifications on the Supplier Chat button.
When a lot closes, all participants will receive a notification and no further bids can be submitted.
Pausing or Canceling a Live Auction
In order to provide more flexibility within Auctions, if issues arise, Sourcing Owners and Read/Write users now can pause and end an Auction early to seek additional support from Scout’s customer success/support teams.
You now have the ability to pause an Auction lot and provide an optional message to the Supplier (if the Suppliers are not invited to the paused lot, those Suppliers are not able to see the message.) Supplier chat continues to work while the Auction is paused. The following is a roadmap of what the process of pausing an Auction looks like in simple steps.
Step 1: The view of Pausing an Auction from the Sourcing Manager’s view:
Step 2: After the Auction is paused, no Bids can be submitted. Suppliers are allowed to continue to draft their Bids. This is what the Supplier will be able to see when an Auction is paused by the Sourcing Team:
Step 3: Lastly, the Sourcing team has the ability to end an Auction event early after pausing:
After the Sourcing Owner ends the Auction, the Auction event is Cancelled. If the previous lot is cancelled, subsequent lots are also cancelled.
This Pause/Cancel Auctions feature allows more control for the Sourcing Owner to better manage any issues that come up during the Auction. The goal is to lower anxiety for everyone involved in Auctions. Due to the fact that Auctions are time bound events, it can be an anxiety inducing process (which is also good to drive down prices) but there are instances when more time is needed to resolve issues, which is what the Pause/Cancel feature is for!
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