Small team, big impact
The coronavirus pandemic has often been described as unprecedented, leaving businesses asking questions as to how best to react and adjust to a new climate. For many businesses, 2020 and 2021 were their most difficult years to date. For others however, along with the challenges, it brought about new opportunities.
Market Dojo customer Logitech is fortunate enough to be one of the latter businesses who weathered the storm and in some areas even had an upturn in business. Logitech are global leaders in a wide variety of personal peripherals including PC, gaming, internet communications and digital music.
Over the past 12 months, Market Dojo has assisted Logitech in a number of ways: increasing supplier engagement, building a prospective supplier portal, and delivering savings through innovative eAuctions in categories many wouldn't venture into.
Challenges
Pandemic supply chain pressures
As with most organisations, COVID-19 brought Logitech some interesting challenges within their supply chain. One such challenge was their need to source 30,000 face masks for one of their factories reopening in Asia. Prices for these elusive items at the height of the pandemic were variable and sourcing them was difficult.
"As soon as the Asia issue was resolved, masks were then needed for all of our European factories!"
Inefficient supplier engagement
For too long, the process for prospective suppliers looking to engage with Logitech consisted of sending an email to whichever Logitech email address they could find in the hope it might find its way to the correct department or individual. This method was proving to be very inefficient and also meant procurement had very limited visibility of potentially innovative suppliers who could add great value.
Alongside this, Logitech recently launched a new initiative to bring about greater diversity within their supplier base, as well as ensuring suppliers carry out business in a manner that reflects their sustainability expectations and good practice requirements. There was a need to collect this data in a consistent format within a centralised hub for regular reporting.
What Our Clients Say
There's certainly a lot of other categories we should be auctioning. The experience with the marketing agency has really opened our eyes to see you can auction pretty much anything, if you can spec it correctly.
Solution
A prospective supplier portal
To solve these issues, Logitech utilised a feature of Market Dojo's Supplier Onboarding solution which has the ability to create a portal for suppliers. Suppliers can now visit this portal to explain how they can be of benefit to Logitech, and answer a simple questionnaire that can help categorise them as a supplier and glean useful information to help Logitech build a better database for the future.
This solution helps Logitech to not only keep their inboxes clear, but filter out the suppliers that are not of use, and compile those that may be useful in both immediate and future timeframes.
"This solution came from a variety of business drivers. As a procurement team, we didn't have a web page or a method for recommending suppliers across the business. Typically, suppliers would email in to any address they could get access to. Emails from potential suppliers could be easily missed, so we were looking to implement a prospective supplier channel to find those 'diamond in the rough' suppliers."
"Our new solution with Market Dojo allows suppliers to find our channel, follow the steps to answer our questionnaires which can then be scored by our internal procurement function to build our bench of suppliers."
If you can spec it, you can auction it
The second way in which Market Dojo helped was with reducing costs in areas where many wouldn't venture. David Latten put that to the test with an eAuction for a marketing agency offering services for Logitech's Amazon visibility.
This is a complex area where the solutions range from full technology to manually intensive solutions and anywhere in between. Logitech's team worked hard to develop the SLA and the billing models (fixed tech fee and a percentage of the budget), based on assumptions, so all suppliers could bid 'like for like'.
Results
16% savings on marketing services
The resulting auction was a definitive success. Latten saved a surprising 16% from the Marketing Services RFQ.
"This was a textbook case of the benefits that can be found with an auction. I don't believe that any other negotiation method would have been as efficient or successful."
The contract for Amazon marketing services went to a new supplier (although an incumbent provider of other services to them), displaying that from the supplier side, if willing to engage, auctions can offer suppliers opportunities to win new business.
The supplier who won the contract started the auction by pricing at £200k over their RFQ prices. This is a common tactic for suppliers, who through watching their position in the auction can gain more insight about other competitors taking part. However, across the 45 minutes (30 minute auction, with a dynamic close period), they steadily brought their pricing down to a position good enough to be awarded the business.
Opening eyes to new possibilities
"There's certainly a lot of other categories we should be auctioning. The experience with the marketing agency has really opened our eyes to see you can auction pretty much anything, if you can spec it correctly."
Key takeaways
Following the auction, David highlighted a couple of key takeaways:
If you can spec it, you can auction it. Taking agency marketing work to auction shows you can do a lot more than just your standard office supplies and IT hardware auctions.
A small team can make a real difference. As a small central procurement team in an entrepreneurial company, this exposure helps strengthen their profile and shows how they can help other stakeholders within the company.
Lastly, we asked David what he values from Market Dojo.
"Market Dojo's flexibility of billing through on-demand licensing allows Logitech to try new eSourcing software at a low cost. Most importantly, Market Dojo is not just a tech stack, their real assets are their knowledgeable staff, people who help obtain transformative results."