What is reverse auction in SAP SRD-SRM-SC - SRM-Sourcing and Contracting?

SAP Term: reverse auction

• Component: SRD-SRM-SC

• Component Name: SRM-Sourcing and Contracting

• Description: A procurement method in which a buyer asks mutiple vendors to submit successively lower bids until the buyer agrees to pay the vendor offering the lowest price.

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• Key Concepts: 
  Reverse auction is a type of e-sourcing process in SAP SRM-Sourcing and Contracting. It is a process in which suppliers compete against each other to offer the lowest price for goods or services. The buyer can set up the auction parameters, such as the number of suppliers, the duration of the auction, and the criteria for selecting the winning bid. 
  
  How to use it: 
  In SAP SRM-Sourcing and Contracting, reverse auctions can be used to quickly identify the best supplier for a particular product or service. The buyer can set up the auction parameters and invite suppliers to participate. During the auction, suppliers can submit bids and view their competitors’ bids in real time. At the end of the auction, the buyer can select the winning bid based on criteria such as price, quality, delivery time, etc. 
  
  Tips & Tricks: 
  When setting up a reverse auction in SAP SRM-Sourcing and Contracting, it is important to ensure that all suppliers have equal access to information about the auction and that all bids are treated fairly. It is also important to set realistic expectations for suppliers so that they are not discouraged from participating in future auctions. 
  
  Related Information: 
  Reverse auctions are just one type of e-sourcing process available in SAP SRM-Sourcing and Contracting. Other types of e-sourcing processes include request for quotation (RFQ), request for proposal (RFP), and request for information (RFI). Each type of e-sourcing process has its own advantages and disadvantages, so it is important to choose the right one for your specific needs.