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Esourcing at Sun Microsystems

Sun Microsystems was considering implementing dynamic bidding, or reverse auctions, to lower their cost of goods sold which was half of their revenue. While dynamic bidding could achieve the best prices and save time and money in negotiations, it also risked jeopardizing supplier relationships and potential technical problems with a new system. To address these issues, Sun Microsystems planned a gradual implementation starting with low-risk product categories, choosing a reliable software vendor, and maintaining open communication internally and with suppliers.

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Ajay Kaushik
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122 views8 pages

Esourcing at Sun Microsystems

Sun Microsystems was considering implementing dynamic bidding, or reverse auctions, to lower their cost of goods sold which was half of their revenue. While dynamic bidding could achieve the best prices and save time and money in negotiations, it also risked jeopardizing supplier relationships and potential technical problems with a new system. To address these issues, Sun Microsystems planned a gradual implementation starting with low-risk product categories, choosing a reliable software vendor, and maintaining open communication internally and with suppliers.

Uploaded by

Ajay Kaushik
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPTX, PDF, TXT or read online on Scribd
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ESOURCING AT

SUN MICROSYSTEMS
BY
AJAY KAUSHIK – 006
VIRAJ RAUT - 123
BACKGROUND
 After reviewing the past financial record it was
agreed upon that some trends are consistent.

 COGS was half of their revenue.

 50% gross margin.

 Idea of reverse auctioning appeared to be a great


strategy.

 Hence concept of dynamic bidding was followed.


SHOULD DYNAMIC BIDDING BE IMPLEMENTED

PROS CONS
FASTER POTENTIAL TO JEOPARDIZE
RELATIONSHIPS
BEST PRICE ACHIEVED POTENTIAL FOR TECHNICAL
PROBLEMS
SAVES TIME & MONEY IN NEW SYSTEM IMPLICATIONS
NEGOTIATIONS
HANDLING ISSUES
 Choose the right software vendor.

 Gradual implementation.

 Open communication with suppliers &


internal team.
CHOOSING A VENDOR

SOFTWARE ATTRIBUTES VENDOR ATTRIBUTES


RELIABILITY RELIABLE
FLEXIBILITY LEVEL OF SERVICE
FUNCTIONAL REPUTATION
GRADUAL IMPLEMENTATION
Products to be included in the next phase
 High number of suppliers.

 Low strategic importance.

 Low risk.

 Eg. Drives , removable devices


 Eg. Enclosures , power suppliers
COMMUNICATION STRATEGY

INTERNAL – GCD EXTERNAL - SUPLIERS


KEEP INVOLVED AND INFORMED OPEN COMMUNICATION
MEETING – VIEWS AND OPINION BENEFITS
TRAINING RATIONALE
 THANK YOU

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