Product details

In May 2000, Sonia Syngal, Director of Procurement Strategy and Supplier Relations at Sun Microsystems, needed to make a critical decision. Under Syngal''s leadership, the company had just completed its first ''dynamic bidding'' pilot tests and, as a result, cut its sourcing costs by 30%. Given these results, the potential for cost cutting via the implementation of a dynamic bidding system on a widespread scale at Sun was enormous; on an annual basis, the company was currently spending about $9 billion in direct materials procurement. Although the potential to cut costs significantly was clear, Syngal had several other issues to consider, including: (1) Sun''s suppliers and the potential impact of a dynamic bidding program on the company''s critical relationships; (2) the reaction of Sun''s internal constituents, namely, its commodity directors who had spent years trying to identify the most effective way to work with the company''s suppliers; and (3) selecting the best software vendor, which would be difficult in a crowded space.