Global pharmaceutical company achieves significant savings through largest PC auction ever

Situation:

A $20B pharmaceutical company launched an ambitious, $100 million project to deploy 49,000 new PCs in 10 countries over 12 months. The company wanted to source as many of the elements as possible, including stringent services and leasing terms. One of the major issues the company grappled with was gathering the necessary data from suppliers to ensure that suppliers were bidding against the same specifications and requirements. This challenge was exacerbated not only by the global nature of the project and tight time constraints but also the high level of importance the pharmaceutical company placed on supplier service. In order to keep the project on schedule, a sourcing strategy needed to be developed and executed in 20 working days.

Solution:

ICG Commerce brought sourcing and category expertise with leading eSourcing tools to facilitate the strategic sourcing process. ICG Commerce and the pharmaceutical company identified and rigorously evaluated a number of qualified suppliers and then utilized ICG Commerce's online reverse auction tool to manage the final price negotiations. The comprehensive approach took into account the suppliers' ability to coordinate efforts across multiple divisions around the world and serve as a true global distributor. The company's service requirements also included disposing of all the old PCs as well as tracking and registering the new equipment and loading basic software onto each PC. ICG Commerce worked with the customer to organize the disparate service requirements and ensure that the suppliers were evaluated equally on the elements of the business.

Results:

The sourcing initiative was completed in 4 weeks including a 90-minute reverse auction conducted online. Final winning bids produced savings of $16.9 million, or 17.3%, over the term of the leases. At the time this sourcing initiative was completed, it was the largest online auction for PCs ever.