The game of the B2B game

More large companies are now buying their requirements through electronic exchanges such as SourcePilipinas.com. On the one hand, buyers are able to cut down on their purchasing costs, depending on the item and volume purchased. On the other hand, suppliers are able to save on administrative, marketing, delivery and other overhead costs largely resulting from increased order volumes and a more efficient inventory system.

Just recently, San Miguel Corp. awarded a contract for its PC requirement through SourcePilipinas. SMC’s auction yielded a winning supplier that bested 56 bids from 11 suppliers. The winning bid reflected a 17% discount on SMC’s last purchase price.

Another company, Pepsi-Cola Products Phils. Inc,. purchased its filtration requirements through SourcePilipinas. Five leading suppliers fielded 41 bids, yielding a winning bid that was 21% lower than its previous purchase price early this year.

"Transaction values have been fluctuating due to the seasonality of our members’ purchases," said Christine Yap, chief operating officer of SourcePilipinas.

Some members have already purchased their entire 2001 requirements in December 2000, while others have a policy of purchasing their needs every quarter.

"Our members have been taking advantage of the great purchase discounts resulting from conducting auctions for bulk purchases. Total savings from successful auctions average 15% to 25%," said Yap.

Trading partners

To date, SourcePilipinas has more than 400 buyers and suppliers registered as trading partners, 300 of which actively transact through the exchange. Most of these buyers and suppliers are local companies, which, in turn, account for the bulk of total transactions.

"We have an excellent mix of large companies, institutions, small and medium enterprises, manufacturers and distributors as members. This is in keeping with our strategy to initially develop a firm foothold in the country," said Yap.

To date, the response among SourcePilipinas members have been positive. Buyers have realized significant savings and the suppliers have had the chance the market their products to new buyers. "Our success is directly influenced by the value we bring to our participants, both buyers and suppliers," Yap said.

To attract more companies, SourcePilipinas is investing heavily in training and education. It has teams assigned to specific industry groups. Each team spends time with participant-companies to help them migrate their expenditure to SourcePilipinas.

"We are working with a number of companies that offer value-added solutions and services to our participants. This allows SourcePilipinas to extend its services beyond procurement transactions," said Yap.

For one, members are provided with a procurement platform that allow companies to streamline their procurement process, thus increasing efficiency, productivity and profitability.

For another, members gain access to an exhaustive catalogue of general items such as office supplies and equipment, communication and computer equipment and accessories, cleaning and construction materials. SourcePilipinas also features an online bidding facility that allows for open, sealed and blind auctions.