Casturn Systems

1821 Words8 Pages
Casturn Systems (A) (B) Group Case #3 1. What went wrong with Casturn’s first two auction attempts? Casturn hired a consulting company that possibly didn’t have the best interest of Casturn as its core motivation. The consulting company was paid on POTENTIAL cost savings and identification instead of a results oriented contract. Due to this structure, it became about quantity of parts that can be included in the bid instead of identifying the top say twenty percent of parts that, if managed well, could have yielded both companies a lucrative cost savings in the resourcing effort. In addition, the consulting company exited the process after the initial stages giving no one accountability to carry the resourcing effort to fruition.…show more content…
This probably further solidified the attitude that auctions were not going to be something Casturn takes seriously and therefore bidders would in turn not be committed to participating in the effort. 2. Can e-RAs be used for sourcing highly engineered parts? As seen in the cases above with castings and O-rings, even the simplest of parts can pose complications in the auction process. Potential for successful reduction in cost can be recognized with a more concentrated event and management effort. This can be true for engineered parts as well but on a less likely basis. The primary key to success to an auction of this nature would be to not have any surprises or to anticipate suppliers’ behavior. Building on this idea would be to truly know your suppliers, which can get cumbersome in a company with a lot of growth through acquisitions and locations. However, with regional procurement managers, it is not impossible. There should not have been a question “if” an incumbent was going to bid, good vendor management would have assured that a last minute entry by way of an incumbent would not have happened. Applying this thought to the engineered parts, an auction would only be effective if suppliers invited to bid have been fully vetted. An auction can speed up the process of getting time sensitive information to suppliers, but it also may open
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