On September 24, 2020, Paul van Veen wrote that a master student from Eindhoven University of Technology would be conducting an analysis of the #supplychallenge concept. Now, January 15, the project is fully underway and we can start to offer new insights into the methodology.
That companies are dissatisfied with the result of traditional or one-dimensional tendering (lowest price) quickly became apparent from literature and interviews with people from the business world. The question, however, was what then? For my research I looked at Best Value by Dean Kashiwagi and Vested Outsourcing by Kate Vitasek and compared these methodologies with the #supplychallenge. All this to take a critical look at the supplychallenge and how to improve it.
All three methods assume that the requesting party must give its suppliers the space to demonstrate their expertise. The way in which this is encouraged or ensured differs. All this depends on the attitude of the requesting party, who will have to leave behind the habits of one-dimensional tendering.
The supplychallenge helps the requesting party to take this step and to enter into the conversation in an open manner. By applying elements such as the “live briefing”, “live clarification” and the “dot rating” suppliers are challenged to show where their expertise lies. This approach ensures that not only the winning, but also the losing party/parties can look back on the tender with its head/their heads held high. In addition, the supplychallenge offers tailor-made feedback, an opportunity for parties to improve themselves and their future proposals.
After realizing the choice for the right solution with the right partner, an average saving of 12 percent on the annual spend, or the project scope, turns out to be a great achievement. All in all, the supplychallenge is a method that can offer a solution for companies that want to get rid of low performance, usually as a result of choosing the lowest price. The supplychallenge is therefore not only a logical way of tendering, but also an effective one!
The research is currently in its final phase, and more and more insights are being gathered. Of course, the findings from the research, and possibly elements of the other methodologies, will be used to strengthen the supplychallenge concept even further. In this way, the supplychallenge can become the industry standard of the future.
Koen Hofstraat
