North Tyneside Council Saves 35.5% in First eAuction

Posted on Nov 16, 2004

In its first eAuction, North Tyneside Council has saved 35.5% on the annual value of office and stationery products, demonstrating the tangible savings that innovative eProcurement can deliver to the public sector. The Council worked with UKprocure Systems consultants to identify office and stationery products as a suitable area for eAuction and the Council then harnessed UKprocure Systems reverse auction technology for the tender. The eAuction builds on the efficiency and cost-savings that the Council has achieved from its eMarketplace, which was implemented by UKprocure Systems and went live in February 2003.

A leading authority in the eProcurement project ‘Local Government Online’, North Tyneside now has a one-stop shop for eProcurement provided by UKprocure Systems. The winning supplier from the eAuction was automatically integrated into the UKprocure Systems eMarketplace, bringing further time and efficiency savings to the Council. The cost and efficiency savings from the eMarketplace and the eAuction will be ploughed back into front-line service improvements.

The tender documents included a statement that indicated that an eAuction would be part of the tender process. Returned tender documents were evaluated before the auction. Indicative pricing was requested in the tender documents to ensure suppliers had interpreted how to price the basket of goods correctly. The prices given in the tender response were not binding, but were used to set an opening bid price.

In the reverse auction, five suppliers submitted a total of fifty-two bids, outlining their best bids for office and stationery products. The auction ended with three companies having final bids within £50 of each other. The reverse auction enabled suppliers to transparently view competitor offerings, whilst protecting anonymity, which delivered a highly competitive process and guaranteed the best value for money for North Tyneside Council.

As well as dramatically cutting the cost of procured goods, North Tyneside Council has also achieved big savings by streamlining processing costs through consolidating its supplier base to just one office and stationery supplier for core ranges. The integration of the winning supplier into the Council’s eMarketplace will enable the two parties to engage in fully automated trade.

The Council’s eProcurement solution will assist to significantly reduce the number of invoices received and the cost and time of processing them. It will also eliminate maverick spending and enable officers to concentrate on delivering front-line services. This will deliver further time and cost savings and will reduce the total cost of acquisition of goods and services.

Duncan Olive, Strategic Projects Manager at North Tyneside Council said: “We have worked with UKprocure Systems to put in place a strategic approach to procurement, to give us greater control of our spend and enable us to streamline our processes. UKprocure Systems has delivered a one-stop shop that automates the complete sourcing to invoicing process, as well as providing the eBusiness consultancy to enable us to reap the highest levels of cost and efficiency savings from our move to eProcurement.”

Talking about the benefits of the eAuction, Duncan Olive added: “This event has proved the important strategic role that reverse eAuctions have within the procurement process. By automating the tender process we have cut our own internal procurement costs and the savings of 35.5% on contracted goods that we achieved in the online auction can be diverted back into front-line service improvements.”

The reverse eAuction was hosted by UKprocure Systems and ran on UKprocure Systems reverse auction software, which is based on Oracle’s Exchange and Sourcing modules, from the Oracle E-Business Suite. UKprocure Systems also provided technical training for the Council and suppliers before the event and ensured the smooth running of the event on the day.

Shish Lal, CEO, UKprocure Systems said: “eProcurement is a key driver within the Modernisation Agenda, but more importantly, it makes good business sense. North Tyneside Council provides a great example of the measurable benefits that can be achieved through the innovative use of eProcurement. We’ve worked with them to automate the full sourcing to invoicing process, using our eMarketplace and eSourcing tools. The success of these initiatives has enabled North Tyneside Council to meet the Priority Service Outcomes outlined in the IEG statement and more importantly to deliver value for money and efficient services to local people.”

ends

About UK Procure

UKprocure Systems (www.ukprocure.com) is the leading supplier of end-to-end procurement solutions to the UK public sector, with an emphasis on healthcare, local government and education. UKprocure Systems provides managed services and hosted solutions that support the full procurement process, from sourcing and managing to ordering and invoicing. Its industry-leading eSourcing and eMarketplace solutions, which are based on the robust Oracle platform, are reinforced by UKprocure Systems consultancy services and unrivalled knowledge of the public sector supplier base and business processes. UKprocure Systems enables its customers to achieve dramatic cost savings through the transformation of the procurement process, savings that can be re-deployed to improve front line service delivery. At the same time, UKprocure Systems innovative solutions help public sector organisations meet Government targets for Modernisation, Best Value and Collaboration.

For more information please contact:
Tara Williams
UKprocure Systems
T: 020 7936 9489
M: 07976 906673
E: tara.williams@ukprocure.com

<< BACK