This is the opposite of an auction sale. It involves
not a seller who offers his services to buyers, but a
buyer who encourages several suppliers to compete.
The biggest and best-known tendering distribution system
is that created by General Electric to satisfy its own
needs in 1994 : GE Trading Process Network-http://www.tpn.geis.com.
GE set up this site in order to save money on its purchases
: by standardising the electronic tendering process, GE
not only simplified and rationalised its buying policy,
but also reduced by 30% the cost of distributing and managing
tenders, as well as reducing the average processing time
from 23 to 9 days, by encouraging competition between
its suppliers, resulting in annual savings of several
The TPN project, which was invented by marketing, buying
and productivity director Orville Bailey, was traditionally
based on industrial products (metallurgy, plastics, chemical
products, packaging, computer and electronic components).
Already in 1995, GE spent 250 million dollars, buying
from 800 suppliers via this system. The following year
the volume quadrupled, to exceed a billion dollars. By
2000, GE's 12 business units will be spending $5 billion
a year through this system.
The success of TPN encouraged General Electric to expand
this service, and since 1997 it has been possible for
industrial buyers to purchase online, via the TPN Mart
electronic catalogue, and in the case of certain companies,
under the definition Fortune 1000, to pay with an electronic
credit card, known as a Procurement Card. GEIS offers
small companies the opportunity to include their range
of products within TPN Mart, thus creating a mini online
store within a matter of hours.
The TPN concept is an interesting one, as it has become
a market place once it opened up to external companies
wishing to use TPN's tender distribution facility. Since
1996, thanks to General Electric, in return for a subscription
and a publication fee, any company can submit a tender
to thousands of suppliers who are listed on the site and
allowed to bid.
Tendering is particularly well adapted to the world of
business-to-business, as it allows sellers to locate customers
who are often difficult to identify by traditional means,
and to manage complex requirements, including in the context
of international commerce.
But tendering and similar processes can also be used
for a sector of the general public : Cybion search-http://www.cybion.fr/search
is a method of making known the demand for old and rare
books to hundreds of bookshops throughout the world, which
works extremely well.
This is one of the forms of mediation which accentuates
the new purchasing power of the customer, who is finally
able to put a significant number of suppliers in competition
one with another.
A few tendering distribution systems