Mention the phrase "reverse auction" and three separate groups emerge. The "pros", the "cons" and the "I don't knows." "Pros" favor the idea as an additional vehicle in which costs can be reduced. "Cons" dislike the concept, as margin levels can be affected. The "I don't know" group is caught in the middle trying to glean usable information being tossed between groups. Anything you have heard about reverse auctions is or was true at some point. Cost reductions can be obtained, some margins were affected, unethical practices occurred; new supplier-buyer relationships formed, etc. Regardless, one thing is certain: a reverse auction event is just one tool used to obtain the lowest total cost of ownership, and it is a tool that will continue to be used in the foreseeable future.
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