Auctions 

Auctions 1

Introduction 3

Chapter 1- Auction Mechanisms 3

1.1 Auctions Overview 3
1.2 Reverse Auctions 4
1.3 Forward Auctions 5

Chapter 2- Create an Auction Event 5

2.1 Demo: Auction Setup 5
2.2 Demo: Create an Auction 9
2.3 Demo: Create a New Lot 12
2.4 Demo: Decrement & Bidding Range 14
2.5 Scoping a Lot 17
2.6 Demo: Create a Lot with Excel 18
2.7 Demo: Terms & Conditions - The Manual Process 19
2.8 Demo: Finalize and Publish a Lot 20
2.9 Demo: Notify Suppliers 21
2.10 Demo: Supplier View - The Published Lot 21

Chapter 3 - Run the Auction 22

3.1 Demo: Buyer’s View 22
3.2 Demo: English Auction - Bidding 23
3.3 Demo: Messaging 26
3.4 Demo: Available Information 29
3.5 Demo: The End of the Bidding Period 30

Chapter 4- Additional Features 32

4.1 Demo: Duplicate an Auction 32
4.2 Demo: Enable Passwords 33

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 4.3 Demo: Item Level Bidding 34
4.4 Demo: Terms & Conditions - The Automated Process 37
4.5 Demo: Multiple Lots 39
4.6 Demo: Pre-Bids 44
4.7 Demo: Surrogate Bids 47
4.8 Demo: Supplier Weighting Values 47
4.9 Demo: Lot Weighting Values & Savings Calculation 50
4.10 Demo: Automatic Bidding 52
4.11 Demo: Cancel a Bid 54
4.12 Demo: Adjust Parameters for “In Progress” Auction 55
4.13 Demo: Test Auction 56
4.14 Demo: Auction in Sourcing Event 57
4.15 Demo: Block & Unblock Supplier 60
4.16 Demo: Add Supplier to a Published or a Live Auction 61
4.17 Demo: Multi-Currency Auctions 61
4.18 Demo: Trusted Third Party 63

Chapter 5- Other Auction Types 65

5.1 Demo: Multi-Criteria Auction 65
5.2 Demo: Rank Based Auction - Price Only 69
5.3 Demo: Japanese Auction 72
5.4 Demo: Dutch Auction 75
5.5 Demo: Forward Auction 77
5.6 Demo: Forward Dutch Auction 79
5.7 Demo: Index Premium 80
5.8 Demo: Index Discount 82

Conclusion 84

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 Introduction 

Welcome to the Auctions class. We will demonstrate different auction mechanisms available in
the application, and guide you through the configuration process.
Let’s take a look at where this course stands in the Ivalua Academy catalog:
Auctions is an Intermediate class in the Sourcing Module.
Within the same module, there’s a beginner class on Sourcing Overview, Intermediate classes on
Sourcing, and Services Procurement. As well as, Advanced classes on Sourcing Configuration,
and Service Procurement Configuration.
Let’s get started with the Auction class.

Chapter 1- Auction Mechanisms

1.1 Auctions Overview 

[animation]

The Ivalua’s Auction Module allows you to set up and run web-based auction events.

These events allow buyers to post requirements to the market and collect bids from Suppliers.

The bidding process takes place in ‘real-time’ on the internet.

There are two types of online auctions:

1. Buy-Side Auctions: also known as the “Reverse Auctions.” This kind of auction is
typically carried out by Purchasing Departments for sourcing purposes. The process
involves one buyer and many Sellers- the Suppliers. Vendors compete against each other
to obtain the business from the purchaser and prices will typically decrease as the
suppliers underbid each other.

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 2. The Sell-Side Auctions referred to as the Forward Auctions. Forward Auctions can be
used by sellers to sell their items to many potential buyers. Buyers compete to obtain
goods or services by offering increasingly higher prices. In other words, the price
typically increases over time.

In Ivalua, there are different mechanisms for Reverse and Forward auctions, which we will go
into details in the upcoming sections.

1.2 Reverse Auctions  

Ivalua supports 3 Reverse Auction types.

[type1]

English Auctions, ​this is the most common downward auction which the Buyer announces a
starting price, and subsequently, collects bids which must be lower than the price of departure
(the Starting Price) by a minimum decrement. A minimum decrement is typically required to
avoid a supplier from outbidding the current best bid with an insignificant amount.

Suppliers react in real time to the bids placed by their competitors by offering lower prices until
the auction is over, or until when no competing bidder challenges the standing offer.

There are two variations of the English Auctions:

1. Best Offer: The price is the only criterion. The best bid is visible to all Suppliers,
and the lowest bidding price becomes the winner.
2. Best Rank: There are multiple criteria to evaluate a bid proposal, this is also
known as the ‘Multi-Attribute rank based’ auction. The ultimate goal is to have
the best value for money. In this model, Suppliers compete on all dimensions that
are critical to the Buyer, not just the price. The best bid is invisible to the
suppliers but the Buyer can choose to display the ranks.

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[type 2]

Dutch Auctions:​ The Buyer announces a starting price which is automatically incremented by a
defined value at a set time interval; this goes on until some participant is willing to accept the
current amount. The winning participant pays the last announced price.

[type 3]

Japanese Auctions. ​The Buyer sets the initial starting price. The price decreases automatically
according to a predefined time interval and decrement value. Each bidder can withdraw the
auction at any moment when their best bid is reached. The remaining bidder wins the auction at
the price that was reached upon last withdrawal.

1.3 Forward Auctions  

In the case of Forward Auction, the Purchasing Department plays the seller’s role, while
Suppliers compete to buy goods or services. The price of which increases with time.

Bidding begins at the minimum acceptable price to the seller and increases with every new bid
by a fixed increment. The price quoted by each bidder is visible to all the participants, and the
highest price bid acceptable to the seller wins.

Chapter 2- Create an Auction Event   

2.1 Demo: Auction Setup 

Auctions are accessible from the Sourcing Menu, by going to Auctions.

The Auction Browse contains necessary information about the auctions, including:
- An auto-generated ID,
- A label,
- The number of Lots
- The start and end dates,

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 - The Status,
- If applicable, you can also find a link to the Sourcing Event, and to the Project.
- Lastly, the Commodity and Organizational scope of the auction are also visible on the
Browse.

The X allows you to delete an auction.

Let’s open an auction by clicking on the pencil icon.
Here’s where the auction is being set up. Basic information visible on the Browse is available in
the General Information area, Label, Status, and the scope.

We can mark an Auction as a Test Auction by checking the Test Auction box.
This grid contains the lots to the auction. For now, there’s only one lot, as this auction is still in
the Drafted status.

You can add new lots for the auction by using either the New Lot Button.
Or using the Download / Upload Excel Feature. You can use this feature to add new lots or
update the existing ones.

[download the excel file]

Download and open the excel file. The current lots are already in the archive. All displayed
information is in a particular format. We will go into details on this file and how to use it later in
the class.
Once the file is populated, you can upload it into the application by dragging and dropping it in
Import Excel Lots grid area.
It is important to keep in mind that a lot is a collection of items that will be awarded to the same
supplier. If you are open to awarding multiple vendors, you need to set your lots appropriately.
Below, there’s an overview of the auction, divided into tabs:
- Items
- Documents
- Suppliers
- Currencies
- Team

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 - Messaging, the message that can be sent to the supplier before, during, and after the
auction
- Lastly, the Auction Overview Tab contains a summary of the previous tabs.
Each tab contains information that can be used entirely or partially for new lots.

[Items tab]
In the Items tab, you can add an item directly using the Add an Item button.
Or you can export the template with all existing items, make adjustments, whether it’s to add
new items, delete, or update existing ones, then import the file back into the application.
Every item has a code, a label, a quantity and a measurement unit.
You can enter the Item quantity here and create a lot for a subset of this amount. For instance,
there are three items here, but that doesn’t mean every lot should have these three elements
throughout the same auction event. You can create lots with the desired number of items, and
item quantity.

[Document Tab]
The Document tab.
You can add auction contents or RFx commercial documents. You can also create a new
document type to manage the contents in your auctions if the two document types are not
sufficient to cover your needs.

[Suppliers Tab]
The Supplier tab contains Suppliers that will be invited to bid on a lot. You can add additional
Suppliers by typing their names in the Supplier selector or open the supplier selector.
[Currencies Tab]
The Currencies tab lists all acceptable currencies for the auction.
[Team Tab]
In the Team tab, you can specify internal participants for the Auction event, by designating a
particular role.
They can be:
- a Contributor,

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 - a Subject Matter Expert,
- a Responsible
- Or a Trusted Third party.
We will go through these roles in details later in the class.

[Messaging Tab]
In the Messaging tab, you can predefine messages that will use during the auction.
As some auctions are short duration events, it’s a good practice to get the messages ready and
available before the auction begins.

[​addition 1 in the demo​]

To add a message, simply click on the Add a Message button.
Add a Label, write the message, then save and close.
The message is added to the list.

[Auction Overview Tab]

The last tab is the overview of the auction set up, including the following auction components:
Items, Documents, and Suppliers.

[Console hyperlink]
The Bidding Console is where the auction takes place. The Console is accessible through the
Access to Console hyperlink.
You can monitor, view all bids submitted by suppliers while the auction is open.

This grid at the bottom lists all invited Suppliers for the auction, with their online statuses.
- A red dot means the Supplier contact is currently offline, while a green dot signifies the
Supplier contact is online in the auction, ready to bid.

The grid above lists the lots that will take place during the auction, with critical information,
such as the Start and End Date & Time,

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 - the Remaining time, which is very useful when the auction is in progress
- The Best Bid and Best Supplier,
- as well as information on savings.
There are hyperlinks for additional functionalities in blue:
- History,
- Analysis,
- Message History,
- And the Auction Logs.
We will demonstrate these features later in this class.

Before starting the auction, you need to define parameters for the lot in the console.
To do that, click on the pencil icon to open the corresponding lot, and adjust its configuration.

[addition 2 in the demo]

[access console method 2]
There’s another path we can take to access the Bidding Console.
Go to the Sourcing Menu, and navigate to the Auctions Browse.
There’s an Entry Door icon for every Auction event. This icon allows us to access the console
directly upon clicking.

2.2 Demo: Create an Auction 

To create an auction, navigate to Sourcing, and go to Auctions.

There are two ways to create an Auction, by duplicating an Auction or create an auction from
scratch.
[method 2: Create Auction Button]
For this demonstration, we will begin by using the Create an Auction Button.
Enter the General Information:
- The Label
- Organization scope
- Commodity scope
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 - and set default bidding currency

Upon saving, the Auction components are available to be set up.

Let’s get started with the items.
We’ll add an item by clicking on the Add an Item button.
Enter the Item Code, the Label, the Quantity, and the Unit.
To add additional items, follow the same process as we’ve demonstrated.

Moving on to the next tab, we’ll add a technical specification document.

Click on the Add to Auction Library button.
Select Auctions’ Contents from the document type options.
Give a Title to the document,
Provide a version number,
Then drag and drop the document into the Document field.
Now, the document is ready to be published.
You have the option to save the document as a draft and come back to it later.
For our demonstration, we will click on the Publish button to publish the document.
The published document has been added to the Auction Library.

Navigating to the Suppliers Tab.

We will add suppliers to the auction by opening the selector.
The Supplier list is pre-filtered based on commodities defined for the auction.
We can remove this filter to extend our search on other suppliers or select the supplier from this
approved list.

[AUC_02a]
Note, this filter is controlled by a parameter on the application and can be changed easily.
From the Settings Menu, go to Parameters.

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Then search for the keyword “Supplier.”
Here’s the parameter: ‘Limit search to BPM/auction commodities (true/false).’
To remove this parameter, change the parameter value from True to False.

We’ll select a few suppliers and close.

A blocking alert appears prompting us to select the supplier contacts.
Why is this a blocking alert?
It’s required to select the corresponding supplier contacts before running the auction.
Let’s select the associated contacts.
Then save it.
Note, for contacts who don’t have a login; we need to send a login invitation to them before the
auction begins. If there’s a validated supplier contact within the same organization, they can also
generate a login for their colleague from the portal.
The Agreement Signed column is used to keep track of the terms and conditions received for the
auction. Every auction has its rules of engagement, where the Buyer defines the Auction type,
how the winning bid is selected.
The suppliers are expected to sign and return the agreement before the Auction. This way the
Auction Owner can upload the signed agreements in this column.

Let’s move on to the Currencies Tab. The Auction Administrator can define authorized bidding
currencies here to allow suppliers to express their proposals in currencies other than the primary
currency defined.

Going to the Team Tab, we’ll add internal team members to the auction and designate roles.
By default, Scott Price, the connected user and the person creating the auction, is identified as
the auction Responsible and the Subject Matter Expert.

We’ll add a couple of other users. Now Save the selection.

Then we need to specify the roles/profiles for every user.

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The Messaging Tab looks precise, and we won’t add any new messages.

Lastly, let’s move on to the Auction Overview Tab. The items, documents, and Suppliers are
listed here.
We are ready to move on.

2.3 Demo: Create a New Lot 

To create a new lot, just click on the New Lot button.

This screen is critical as it contains all the crucial parameters for the bids.
Let’s begin by entering a label for the lot.
Select the Auction Type. You can select any of the auction types from the drop-down, English,
Forward, Japanese, and more. For this demo, we will choose the English Auction.
You can decide the display of the lots by specifying the order here; this is useful when you have
multiple lots for an auction.
Please be aware that the Order doesn’t define the sequence, just the display. The sequence is
determined by the date and time parameters.
You can enter a Reference Price, this can be the current price for your existing contract, or it
could be the market price.
The Target Price is the price you project to achieve at the end of the auction.
The Starting Price is the amount suggested to open the bidding.
For this demo, we’ll set the starting price to $230,000. The first bid will have to be less than or
equal to $230,000, as this is an English Auction.

Then you’ll need to specify the Start Date and Time for the auction.
As well as the Planned End Date and Time.
The opening and the closing of the bidding period are automatically initiated based on these
dates.
Please be aware. The Planned End Date is just an expected ending time. The Buyer can decide to
extend the bidding period for various reasons.

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On the contrary, the bid submission period can also be extended for last second, last minute
bidding. This circumstance depends on the setting of the lot. We’ll demonstrate how to set it up
in just a moment.

It’s possible to define a Limit End Date, at which the bidding period will be closed
automatically, and extensions will stop.

The auction can be set up to based on Best Offer or Rank.

The Best offer concerns the price only and the bidders can view the best bid.
Whereas a Rank-Based Auction will introduce other criteria that the Buyer has to rate every
supplier on, before launching the lot.
In a rank based auction, the buyer can allow suppliers to view the best bids, meaning the best
price, using one of the options from the ‘View Best Bid’ Dropdown:
- Only Active Bidders means the best bid is available to invited suppliers who have placed
a bid.
- NO indicates the best bid is unavailable to all invited bidders, including the best bidder.
- Yes means the best bid is available to all invited bidders, including those who have not
yet placed any proposal.
For this demonstration, this will be a Best-Offer based auction.

The ‘Rank is visible to’ setting allows you to define who can see their position. The current
configuration permits the best three bidders to view their ranks in the auction event; the rest will
not be available to see their ranks.
This number is adjustable, if you want to allow all suppliers to see their ranks, you need to enter
a number that corresponds to the number of suppliers in the auction.
If you don’t want any supplier to see the ranking, just adjust the number to zero.

You can allow or disable Suppliers to see the number of participants of the auction, by checking
and unchecking the See the Number of Participants box.

The Trigger. The purpose of the trigger is to define a “quiet period” before the bidding period
ends, to make sure all suppliers have submitted their bids.

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It’s also to make sure every competing bidder have enough time to react if a supplier is sniping
by placing a bid in the last few minutes or seconds. The trigger is set to 3 minutes. Meaning,
every bid placed within this last 3-minute duration will trigger a time extension, a renewal
allowing suppliers to counter the bid.
The duration of the extension is defined in the ‘Duration’ parameter.
You can also set the maximum extension in the “Maximum renewals number” parameter. It’s
currently set as 10. Meaning, after the tenth renewal, the bidding period will end regardless of
what will happen in the final 3 minutes of the bidding.

If you need help in identifying the purpose of a parameter, please hover over the tooltips for
information.

2.4 Demo: Decrement & Bidding Range

There are three parameters for decrement: The Absolute Decrement, the Relative Decrement, and
the Maximum Spread Between Minimum and Maximum Decrements. These parameters
determine the Bidding Range, and the primary objective is to avoid supplier from outbidding the
best bid with an insignificant amount and to maintain a bidding range that encourages suppliers
to bid.
In this scenario, we will demonstrate the correlation between the decrement parameters and the
bidding range, as well as to explain the calculation.
[demo]
The Absolute Minimum Decrement is One USD. You can modify this value to an appropriate
number based on the starting price. If we change the amount to $200, that means the next bid
will need to be less than the current bid by at least $200.
The second decrement parameter is the Relative Minimum Decrement, calculated in percentage,
and set at 0.1%.

[animation]
Let’s explain the decrements visually:
This is an English Auction; the starting price is at $230,000. The maximum subsequent bids must
be lower than the starting price, with the restriction of parameters, the Absolute Minimum
Decrement, and the Relative Minimum Decrement, whichever one is higher.

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The greatest subsequent bidding price is the maximum between:
[(last_bid_price) - (absolute_decrement)]
[pronounce: the last bid price minus the absolute decrement]
And
[(last_bid_price) x (1-relative _decrement)]
[Pronounce: the last bid price multiplies the difference of one minus the relative decrement]

If we apply the Absolute Minimum Decrement of $200, the maximum of the subsequent bid is
$229,800.
If applying the Relative Minimum Decrement of 0.1 percent:
$230,000 x (1-0.1%) equals $229,770.

Since $229,800 is higher than $229,770, therefore, the application will apply the Absolute
Minimum Decrement to make sure the maximum price for the next bid cannot exceed $229,800.

[animation]
For your information, the Relative Minimum Decrement will eventually become more useful as
the bidding price becomes lower over time when the Absolute Decrement can’t apply anymore.
For instance, when the auction price reaches $199,999, then the Relative Decrement will kick in.
Let’s do the math:
For the Absolute Decrement: $199,999 - $200 = $199,799
[pronounce: $199,999 minus 200 equals $199,799]

While for the Relative Decrement: $199,999 x (1-0.1%) = 199,799.001

[pronounce: $199,999 times (1-0.1%) equals $199,799.001]

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The maximum bidding price will be $199,799.001, since it’s high than $199,799.

When the bid reaches a much lower price, the difference is more significant.
When the best bid reaches $100,000,
The Absolute decrement will be $100,000 - $200 = $99,800.
While the relative decrement is $100,000 x (1-0.1%) = $99,900.
Now, the maximum bidding price for the next bid will be $99,900.00.

The purpose of the Maximum Decrement and the Relative Decrement is to define the maximum
bidding price for the next bid.
That’s the Maximum of the bidding range, what about the minimum price?

[demo]
This is the ‘Maximum spread between the minimum and the maximum decrement.’ that
determines the minimum bidding price.
The application forbids suppliers to place extremely low bids, and to avoid mistakes such as a
missing a zero in the price.
The range currently set at 15%.
This parameter controls the next bid to make sure the amount is within the 15% range of the
current bid.

[animation]
The minimum price is calculated as such: [the last_bid_price] x [1-(maximum spread)]
[pronounce: The last bid price times one minus the maximum spread]
Which means the bid after the starting price of $230,000 cannot be lower than 15%, which is
$230,000 x (1- 15%) = $195,500.

Now we have the minimum and maximum prices for the subsequent bid.
The first bidding range at the auction start is in between $195,500.00 and $229,800.

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Note, in Best Offer auctions; the decrements are applied to the current best bid. For rank based
auction, as Suppliers cannot always see the best bid but only theirs, the decrements apply to their
last bid.

[demo]
We will demonstrate how this impact the bidding range when we run the auction.
Let’s save the parameters.

2.5 Scoping a Lot 

Upon saving the parameters for the lot, new information appears:
- The items
- Documents
- and the suppliers.
This information derived from the tabs we’ve set up for the auction.
You can select the items, documents, and suppliers to include for each lot.
For this lot, we will scope just the first item.
We’ll include the document, select four suppliers. Upon selection, some parameters appear. We
will go through these parameters later in the class.
For now, we will Save it.
Everything looks good, and we will click on Save and Close to move on.

Please pay attention to the warnings when setting up an auction.

Here, we have an indicator stating some of the supplier contacts don’t have a login. We need to
fix this before publishing the auction.
To do that, let’s navigate to the Suppliers Tab.
This supplier contact doesn’t have a login yet.
To create a login for a contact, click on the supplier’s name to access the supplier record.
Navigate to the Contact tab.

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By clicking on the Key icon, a login Invitation is generated, sending this invitation to the
supplier contact will allow them to log into the application.

2.6 Demo: Create a Lot with Excel 

It’s possible to create a new lot using the Download and Upload Excel feature.
To do that, begin by downloading the template.
Let’s open the Excel file.
The first row consists of the existing lot, and we can update it here if needed.
The mandatory fields are highlighted in pink, including the Label of the lot, the Auction Type,
the Order, and the Number of Decimals.
Additionally, there are optional parameters, that’s why they are not highlighted in pink.
We’ll add a new lot of Monitors.
The Label is Monitors.
For the Auction Type, we will select English from the dropdown list.
We’ll set the order to 2, and the number of decimal places is also 2.
Scrolling to the right, we can enter price information:
The Reference Price: $30,000.
The Target price, we will set it to $18,000.
The starting price is mandatory. We will set it up to $30,000.
We need to enter the Starting Date and time.
As well as the planned ending date and time.
We need to define what is the Auction based on, by indicating whether it’s the Best offer or if
it’s a Rank based auction.
For the demonstration, we will add the additional parameters on who can view the best bid and
participants.
We’ll also set up the decrements and the Maximum Spread value.
When you are done, save the file, and go back to the application.

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Now, we can now upload the Excel file by dragging and dropping it on the designated area.
A popup window will appear to indicate what’s being imported. In this case, we are creating a
new lot, without updating the existing one.
Let’s close the window.
The new lot has been automatically added to the grid.
We can open the lot to check if the parameters are correctly imported.
If it’s necessary, we can make adjustments on this interface directly, and save the changes.
Now, we can scope the new lot by selecting the items, documents, and suppliers that should be
included in this lot.

2.7 Demo: Terms & Conditions - The Manual Process 

Before running the auction, you will need to get your suppliers to agree to the Terms and
Conditions for the auction and sign it.
The Terms and Conditions document is different from one to another as it describes the auction
type, the winning conditions, and so on.
There are two ways to manage the Terms and Conditions in the Application.
We will begin by demonstrating the manual process.
Let’s open the auction, and navigate to the tab Suppliers.
There’s an Agreement Signed column, including a checkbox and a document field.

The manual process is pretty straightforward.

[animation]
As the Auction Administrator, you’ll need to send the Terms and Conditions out to your
suppliers by email.
Once you’ve received the signed version of the Terms and Conditions, you can upload the file.
And place a check in the Agreement Signed box.
This is a manual action, which you need to repeat for every supplier listed.
Now, Save the uploads.

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 2.8 Demo: Finalize and Publish a Lot 

It’s important to double check everything before publishing a lot.

Everything looks good. We can click on the Validate button to move on.
This button doesn’t make the lot visible to the Suppliers. It just performs a check on all necessary
parameters to make sure they are set up correctly, and there is no conflict between parameters.
Once the validation is successful, then we can publish the lot.
The publication of the lot makes it visible to the Supplier.
The supplier can see the content of the lot; however, they won’t be able to bid until the bidding
period opens.
It is a good practice to publish the lot in ahead of time, this way, your suppliers can have a
chance to look at the details and define their best bid before the auction begins.

Upon clicking on the Publish button, the main parameters will be frozen, impossible to edit This
applies to the following parameters:
- The description of the Lot,
- The Starting Price
- The Lot Attributes: items, documents & suppliers.
However, a new action button becomes available: “Add a Supplier’. We will demonstrate how to
use this button later in the class.

The Status of the lot is visible on the grid.

If you have multiple lots to validate, you can select the lots, and click on the Mass Validation
button. The Validation process changes the status of the lot from ‘Drafted’ to ‘Approved.’
Once your lots are approved, you can select them and use the Mass Publish button to publish
them.
The lots have been published.

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 2.9 Demo: Notify Suppliers 

When the auction is ready, you should tell your suppliers.

To notify them, click on the Notify via Email Button.
You can select the Supplier, who needs to be notified.
By default, all suppliers are selected.
You can also adjust the content of the notification, and choose to receive a copy.
Let’s send and close.

We can check the notifications that were sent out, by going to the Administration Menu, and
click on Notifications.
There are a total of 4 notifications being sent out to invite suppliers to participate in the auction.
Other notifications were sent out to Scott Price, Mike Morel, and Matthew Parker, to inform
them the auction is published.
Let’s look at these notifications by clicking on the hyperlink.
This contains the content of the email.
Let’s go back to the auction, and navigate to the team tab.
The message was sent to the Contributors Morel, Parker, and Price. But it wasn’t sent to Mary
Harris, who is not in the Contributor role.

2.10 Demo: Supplier View - The Published Lot 

We are logged in as Adam, the supplier contact for ACER America Corporation.
Adam can view the auctions that his company is invited to, by navigating to the Sourcing Menu
and go to Manage my Auctions.
Laptop auction is visible to Adam with the Lot number, the start, and end date, as well as the
Auction status, which is Open.
Adam can access the auction console by clicking on the Door Icon.
Clicking on the name of the lot opens the Settings of the lot.

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Note, the supplier has a limited view of the Parameters. If desired, the Auction Administrator can
further limit what’s visible to the Supplier.
Scrolling down, we can see the item and the documents.
The Documents can be downloads.
Let's close the lot for now.

The Supplier can send messages to the Buyer using the Send a Message feature.
Enter a message, then click on Send Messaging to deliver the message.

[back to buyer]
Now, we will log in as the Buyer, Scott Price.
As soon as the message is sent, the Buyer received a message.
The Buyer can reply to the message directly here in the popup window.
Let’s write a message, and send it.

The Message History feature available for both the buyer and suppliers, allows you to view all
messages sent, received, responded, as well as the ones pending response.

As the Buyer, you can see the online status of your suppliers. One of our suppliers, ACER, is
currently online indicated by the green dot.

Chapter 3 - Run the Auction   

3.1 Demo: Buyer’s View 

Let’s take a look at an In Progress Auction from a Buyer’s perspective.

We are logged in as the Buyer, Scott Price.
From the Sourcing Menu, navigate to Auctions.
The Laptops Auction is in Progress.

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Let’s enter the auction console.
There are two lots for this auction. The Laptops lot is currently in progress.
The remaining time of the bidding period is indicated.

At the moment, the ACER America Solutions is the only supplier online.
The other suppliers are offline.
The Suppliers can bid on the lot signified by the green Bid Button.

How come the Bid Button is available on the Buyer’s side?

That’s because the application allows the Buyer to submit bids on behalf of a supplier. This
scenario could happen when a Supplier faces technical difficulties during the auction.

3.2 Demo: English Auction - Bidding 

[supplier: ACER]
We are logged in as a Supplier, Adam, who’s the Supplier contact for the ACER America
Solutions.
The Auction is in progress, and the suppliers are allowed to bid.
To submit a bid, begin by clicking on the Bid Button.
The Bidding Screen has two folds:
The left side is for manual bidding, while the right side is for automatic bidding.

Let’s go through the Manual Bidding.

A supplier can enter the bid in the New Bid field. This area is prefilled with the maximum price
allowed.
The Bidding Range is specified in the area adjacent to the field.

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[animation]
How is this Bidding Range Calculated?
Let’s go back to our use case.
Here is the first bid on the auction.
The Starting Price is the Maximum allowed price, which is $230,000.
The Maximum spread is 15 %.
15% of $230,000 is $34,500.
Which means the lowest bid at this stage cannot be smaller than the difference of $230,000
minus $34,500, which is $195,500.
Therefore, the bidding range is in between $195,500 and $230,000

Adam will enter a number, and click on the bid.

Confirmation is needed before the bid submitted.
If the bid is outside of the authorized range, an error message will appear, and this bid will be
ignored.

This time, Adam will submit a bid of $225,000, this amount is within the allowed bidding range.
Upon confirmation, the bid is placed.

Based on the Auction settings, the Supplier can see their Rank, the Best Bid, and the Best
Supplier.
Nicknames are assigned to participating suppliers. The Best Supplier Column will only display
the nickname of the best Supplier. As we are logged in as ACER America Corporation, and they
are ranked first in the auction, therefore they see their name appears in the Best Supplier column.
But for other suppliers, a nickname is displayed for ACER.

[Buyer]
For the demonstration, we will switch over to the Buyer View.
All supplier are currently online, Except CDW, they weren’t invited to this lot.

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The best bid is registered in the grid, including the name of the Best Supplier, and the savings
calculation based on the Reference and Targeted prices.

[Supplier: Dell]
Let’s take a look at another supplier’s auction console.
This is Suzy Sanders from DELL.
Suzy is allowed to bid on the first lot.
The Best Supplier appears as F67 to Suzy, instead of ACER.
This goes back to the point we’ve made earlier, if you are not the Best Supplier, you’ll only see
the nickname of the Best Supplier.

[Buyer]
Going back to the Buyer’s view.
There are additional bids placed.
The best bid is now $199,000, placed by ASUS.

[Supplier: ASUS]
Let’s take a look at the Bidding Console from the ASUS perspective.
ASUS can see their bid. They are ranked as the top first supplier of 4 suppliers.

[Supplier: Dell]
Looking at the interface for DELL.
They are ranked third.
DELL will submit a new bit.

Remember, the default amount on the New Bid field is the highest authorized bid based on the
Absolute and Relative Decrements.

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[Animation]
The current best bid is at $199,000.
Abiding by the Absolute Decrement value, the next bid cannot be above $198,800.
And based on the Relative Decrement Rate, the next bid cannot be more than 0.1% of the current
bid.
[Animation]
Let’s do the math:
0.1% of $199,000 is $199. This is the amount that needs to be subtracted from the current bid. As
a result, the highest bid authorized per the Relative Decrement is $198,801.
Remember, the system will apply the lowest allowed decrement to keep Suppliers bidding.
That’s why the maximum bid is $198,801 instead of $198,000.
At the same time, the minimum value cannot be less than 15% of the current bid, which is
$199,000.
Calculating 15% of $199,000 gives an amount of 29,850. The lowest bid is then $169,150.

Dell enters $185,000 as their new bid.

Now, Dell is ranked first.

3.3 Demo: Messaging  

[buyer view]
We’ve introduced the message board earlier in the class. Let’s take a look at how it works during
the auction.
When a new message is posted by a Supplier, it will automatically pop up in the Console on the
Buyer Side.
Here’s a message from IBM. Louis from IBM seems to have trouble bidding.
Every supplier has submitted at least one bid, except IBM.

When another message comes in, it will appear in another popup.

Vera from ASUS posted a message asking if we can pause the auction.

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The arrival of new messages will show up in the same manner.

There are Two ways to reply to the message:

The Buyer can respond to the messages directly by clicking on the Reply button. Or get a list
view of all messages by clicking on the Message History feature.

Here, we have a grid displaying the context of the message, the time it was received, and the
name of the sender.
If the message has been read, a timestamp of when it was read will appear in the Read column.

These icons represent the status of the messages:

- A Closed Envelope indicates an unread message,
- An Open envelope with a forward arrow means a message has been read and responded.
- An Open Envelop classifies the message has been read.
- And a Closed Envelope with a plus sign is a Reply button.

The Buyer can filter the messages by Suppliers.

The Unread Messages filter will display all unread messages, while the Unanswered Messages
filter will show all unanswered messages.

To answer a message, click on the Reply button.

Enter the Response.
Then click on the Save and Close button to send out the message.

You can reply to all unanswered messages if necessary.

Remember, the message will be sent automatically upon clicking on the Save and Close button,

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Let’s close the Messaging History for now.

[method 2]
There’s still one remaining message on the screen.
This time, we will reply to the message by clicking on the Reply button.
There’s a Messaging Dropdown, this list contains a list of standard messages, which you’ve
defined during the Auction set up.
You can choose a message from the drop-down if it applies to the question.
Or compose a message in the text box.
When you are ready, click on the Send Messaging Button to send out the message.
Upon clicking, a message will appear to confirm the sending of the message.

[Supplier view]
Let’s take a look at the messaging feature from the Supplier point of view.
The Messages also appear in a popup.
For suppliers to reply to a message, they can either click on the Reply button, or by going to the
Message History.
The messaging feature for Supplier is identical to the Buyers. Except the supplier can only see
their communication with the Buyer.

The ergonomics of the Message History is also identical to the Buyer’s view.

[buyer view]
Let’s go back to the Auction console as the Buyer.
As a Buyer, you can send a message to all suppliers.
To do that, select all supplier by placing a check in the select all checkbox.
Or you could just select the one you would like to send a message to.
Then click on the Envelope icon.

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You can either select a predefined message from the dropdown list.
Or compose a message in the text box.
This message will be sent to the selected suppliers upon clicking on the Send Messaging button.

3.4 Demo: Available Information 

The Auction is still in progress.

The Buyer has access to extensive information during, and after the auction bidding period ends.
[auction logs]
Let’s begin with the Auction Logs.
This log chronicles the bidding history, along with some technical information.
All messages are displayed.
And the Audit Trail for the auction is visible here.

[Message History]
The Message History is a hyperlink to all messages exchanged during the auction.
A dedicated Buyer should be active on this page during the auction to make sure all messages are
answered promptly.

[Analysis]
Let’s move on to the Analysis Hyperlink.
This page contains the analysis of the bids and the savings.
You can filter on Auction lots to get precise analysis on a specific lot.
You can extract the analysis result in an Excel file or print it out.

[History]
Lastly, the History hyperlink provides visual representation on the bids.
Including a chart with all bids that have been placed. The chart can be intensified with filters.

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There’s a checkbox to display the lines between the bids.
Show the top x number of suppliers from the top or the bottom. Assign the order by rank or by
the number of bids.
Or you can use the Supplier filter to search for one or multiple specific suppliers.

Rolling the cursor over the dots on the graph will give you details of the bid.
You can zoom in on the graph for a better view, and this is useful especially when you have
several bids within a short period.
To reset the zoom level, just click on the Rest Zoom button.

There are two grids below the graph, one for the Current bids, and the other contains the detail of
the bidding value.
[console]
From the console, you can Pause the lots if needed.
The lot will be resumed with To resume the lot, simply a click.

3.5 Demo: The End of the Bidding Period  

[buyer view]
The Laptops Auction is still in progress.
Let’s open the lot settings.
The planned ending date is specified. However, we can change it quickly.
The change will be applied immediately, reflecting on the remaining time.
A little bit less than 6-minute is remaining for the lot.

[Supplier view]
The Remaining Time is also visible to the Supplier.
Switching over to Vera, the supplier contact from ASUS,

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The Remaining Time is apparent to Vera.

The Supplier can continue to bid before the auction ends.

ASUS will submit a new bid.
After submitting the new bid, ASUS is ranked first.

[Buyer view]
There's approximately 4-minute left for the auction.
When the remaining time drops under 3-minutes, the Remaining time will appear in red.
During the setup of the lot, the Buyer set the Trigger to 3minutes. That’s why the remaining time
appears in red. If a new bid is submitted during this period, extra time will be added to extend the
audition. The duration of the additional time was defined during the setup.

[Supplier view]
Switching over to the Supplier View.
The remaining time also appears in red for the Supplier.
The Suppliers can still submit bids.

Pay attention, at this stage; there is about 2-minutes remaining for the auction.
DELL is going to submit another bid.
Upon placing the bid, the remaining time extended from 2-minutes to 5-minutes.

[Buyer view]
The extra time is added for every participant; it’s also visible to the buyer.
The time is passing by…
The remaining time will appear in red whenever it falls under 3-minutes.
Extra time is added to the Auction.
As ACER just submitted a new bid, it extended the remaining time by three additional minutes.

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However, if a bid is submitted before the last 3 minutes, the remaining time will not be extended.

If there’s no other bid is presented during the final 3-minutes, the bidding period will come to an
end.
The lot is closed now.
A pop-up message is displayed for all suppliers, stating the bidding period is over.

Chapter 4- Additional Features   

4.1 Demo: Duplicate an Auction 

Duplicating an auction is the most convenient way to set up a new auction, as it can save you a
lot of time.
[Demo]
To do that, begin by going to the Sourcing menu, Auctions.
Then click on the Duplicate an Auction button from the browse.
The application displays a list of auctions regardless of their status.
You can select the auction you want to duplicate.
The default label of the duplicated auction is “Copy of” followed by the name of the selected
auction.
You can adjust the name here.
Then define the Data that you want to copy over to the new auction by checking and unchecking
the appropriate boxes in the Data to Duplicate area.
The Application default selects Items, Documents, and Suppliers.
Then click on the Create button to create the new auction.
The new auction is created, and the lot is copied over.
You can make changes as needed.
Everything is editable at this stage.

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 4.2 Demo: Enable Passwords 

We can protect Bid placements for auctions by the use of password system by activating a
password parameter.
This parameter can be found by going to Settings, Parameters.
Searching for the keyword - Password in the search filter will retrieve the ​Use the Password
system of Auctions​ parameter.
To active this parameter, place a check in the associated box.
Then click save to save the setting.

When the password protection is activated, the Auction Administrator will need to issue a
password for every bidder before the auction begins, to allow them to bid online.

For example, we’ve created this new auction.

To issue a bidding password for a supplier:
First, access the bidding console. If the bidding password of one or more suppliers has not been
assigned yet, a warning message appears in the upper part of the console.

Then click on the password icon next to the supplier you wish to issue a password.
A random alphanumeric password will be automatically created and sent to the supplier by
email.
This needs to be done for every participating supplier.

[supplier 1 view]
Now we will switch over to the supplier view to submit a bid.
There’s a field dedicated for the password.
If the supplier submits the bid without entering a password, an error message will appear stating
a password is required for the submission.

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The supplier will need to enter their password before submitting each bid.
This time, the bid has been validated.
[supplier 2 view] [Wrong password]
Switching over to the second supplier, Bob from ABB.
Bob enters a new bid, and the password then places a bid.
The password entered is wrong, the application will prevent the bid from submitting.

[Buyer view]
In case of a wrong password, the buyer can generate another password at any time then notify the
supplier.
To re-generate another password, simply click on the password icon again.
The new password will be sent to the supplier by email.

[supplier 2 view]
Going back to Bob, the ABB supplier contact’s interface, he will bid again.
With the new password, the bid is validated and submitted.

[Animation]
The password system secures the bid placement. Please be aware; the password system will
apply to all auctions once it’s activated. If you are running two auctions at the same time, it’s
impossible to enable the password feature for one auction, and disable it for another.

4.3 Demo: Item Level Bidding 

[Animation]
In the Auction Parameters, there’s an option for ​Item-Level Bidding?
When this option is disabled, it indicates you should bid at the lot level.

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In contrary, if this option is enabled that mean you should bid at the item level.
When bidding at the item level, you need to enter a unit price for each item included in the lot,
even if it’s a single-attribute lot.
The Application will automatically compute the total amount of the bid as the sum of Unit Price
times Quantity.
[Demo]
This lot currently in progress, let’s take a look at the Auction settings for this lot.
The ​Item Level Bidding? o​ ption is checked.

[Supplier View]
Logged in as a supplier participating in the lot, Suzy will submit a bid.
Upon clicking on the Bid button, the bidding screen opens in a pop-up.

As the Item Level Bidding option is checked, the supplier is requested to bid at the unit price
level. Then the application will calculate the total for the quantity of 50 monitors expected for
this lot.
If the supplier bids $500 per unit, the total amount for this lot will be $25,000. This is outside of
the authorized price range, however. The supplier will change the bid to $600 per item, which
sums up to a $30,000 bid.

[Use-case 2]
[Buyer View]
Let’s take a look at another example by navigating to the Sourcing Menu, Auctions.
For this demonstration, we will begin by duplicating an Auction.
The Items are visible on the Items tab, and we will create a lot with both items.

Label the Lot,

Select English as the Auction Type, and define the display Order.
Now, enter the Pricing information and specify the Auction Start date and the Planned End Date.

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This is the Best Offer Auction.
Let’s Save the settings for now.
Now, select to include all items in the lot.
Add the document.
Then select the suppliers you wish to invite to the lot.
Before moving further, we’ll check to enable the ​Item level bidding​ option.
Now, this lot can be Saved and Validated.
The lot is ready to be published.

[Supplier View]
Let’s switch over to the Supplier Portal.
The Auction is Visible to the supplier, labeled as ​Copy of Laptops.​
Please be sure to change the Auction label when it’s created through the Duplication feature.
Otherwise, it might create confusion for the suppliers.
Let’s begin the bidding process by entering the console.

Upon clicking on the Bid button, we can see there are two items to bid on this auction.
This time the Application is not looking for a global amount, but a price per item.
That’s because the ​Item Level Bidding o​ ption is enabled.

The suppliers are bidding at the Item Level. However, the bidding range is calculated on the lot
level. That’s why you can see the authorized amount is in between $221,000 and $260,000.
As a Supplier, we will enter a unit price for the laptops, then a price for the monitors.
Then simply click on Bid to submit the bid.

[Buyer View]
Now, we will switch over to the Buyer Side, and enter the Auction console

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The bid amount appears as an aggregated value.
Let’s keep going with the bidding process.

[Supplier View]
We are logged in as another Supplier to place a bid for the same auction event.

[Buyer View]
Now, let’s go back to the Buyer Portal.
We will open the History Hyperlink.
Scrolling down, there are a few new sections:
Graphs by Items and Bids by Items.
Both of these two sections display details at the item level.
On the graph, we can see the bids for the laptops and the bids for the monitors.

4.4 Demo: Terms & Conditions - The Automated Process

In this section, we will go through the Automatic process for accepting the Terms & Conditions
online.
For this demonstration, we’ve created a new auction.
Navigate to the Suppliers Tab. The Agreement Signed column contains a checkbox and a file
loading area. This interface will change when the automatic agreement process is enabled.

To enable the automatic Terms & Conditions feature, we need to load the right document type.
Let’s check on the document by navigating to Configuration, Documents.
In the Keyword search, search for Auction.
There’s no content available for the Auction Terms & Conditions Document type.
To enable the automatic mode, you’ll need to load a document for this type.

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Let’s begin by going to the Administration Menu, Browse Documents.
Then click on the Create New Document button to create a new document type.
From the list, select the Auctions Terms and Conditions as the document type.
Specify a title.
A Version number.

In the Text field, enter the Terms & Conditions agreement.

Specify the validity Dates.
Then publish it with a click.

Let’s go back to the Auction.

Changes have been made to the Agreement Signed column.
The manual acknowledgment check box is obsolete.

Let’s take a look at the Terms & Conditions Agreement from the Supplier view.
[Supplier View]
We are logged in as a supplier who is invited to participate in the auction.
To access the auctions, begin by going to the Sourcing Menu, Manage my Auctions.
When entering the auction, the system prompts the supplier to read and Accept the Terms and
Conditions. They are not allowed to bid if they refuse the terms.
Rachel will Accept the Terms and Conditions.

[Buyer View]
Going back to the Buyer’s view. The Buyer can see Rachel Baker from CDW accepted the
agreement. The Application indicates the timestamp of the acceptance.
If a supplier refused the Terms and Conditions Agreement, it would show as declined to the
Buyer.
[Supplier 2 View]

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However, the Supplier can change their mind and accept the terms and conditions after the
rejection. Then they will then be able to access the auction.

4.5 Demo: Multiple Lots 

The Multiple Lots Feature allows multiple awards. However, this is not the same idea if you
include all items in the same lot.
Let’s begin from the Auction Browse.
We’ll open this auction.
This auction contains four items.
And there are three suppliers listed for the auction.

There’s one lot at the moment, and this is the first lot of the auction.
It’s an English auction.
The Starting price is $250,000.
We will change the auction starting time to make the auction take place in just a moment.

The parameters are set up correctly. We won’t make any changes.

Let’s save it.

[Duplicate a lot]
Now, we will duplicate the lot using the Duplicate Lot button. This is the second lot we’ll run.
We’ll change the label to Accounting Services.
Modify the display order to 2.
We’ll set the starting price to $150,000 and adjust the starting and planned ending date.
Then select the right item and invite all the suppliers to participate in this lot.
Lastly, adjust the Absolute Decrement to $2,000.
And Save the settings for now.

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Let’s take a look at the After Closing of Lot parameter in between the start and end date.This is
an important parameter when there are multiple lots in an auction. This parameter can be used to
make sure the lots are running in a sequential order.
It is always possible to run multiple lots at the same time, but we will take a look at that shortly
in the demonstration.
If you wish to run your lots in sequential order, the Start and the Planned End date is not
sufficient to enforce it.

Why? Don’t they end on time?

The previous lot might be extended for various reasons. Suppliers continue to bid during the
Quiet Period, which consequently extends the bidding period.
The Auction Administrator can also extend the bidding period manually during the auction due
to technical difficulties faced by the suppliers.

This parameter indicates if this lot should wait until the closing of the other lot before starting,
regardless when the starting date is.
For the tutorial, we will suggest that this lot cannot start until the Advisory Services lot is closed.
This way, Even if the Advisory Services Lot runs over time, it won’t affect or overlap with the
Accounting Lot, as it will not begin until the Advisory Lot ends. However, the End Date is not
adjusted automatically, if a delay occurs. But you can change it manually before or during the
auction.

For this demonstration, we will continue to duplicate lots, until we have a total of four lots in the
auction.
[Duplicate a lot #3]
The third lot is Tax Services.
We will leave the starting price as is.
This lot will begin after the closing of the Accounting Services lot.
Then adjust the start date, and the planned end date.
Select the item for the lot.

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Then we will Save this lot.

[Duplicate a lot #4]

Finally, we will Duplicate the fourth lot.
The label for this lot is IT Services. And we will leave the Order display as 3.
We’ll adjust the Starting Price.
Select the item for the lot.
Specify the participating suppliers.
Change the Absolute minimum decrement to $1,500.
Then save the lot.
We will specify that the IT Services will begin after the closing of the Tax Services lot.
Then Save and Close to continue.

[Mass Validation]
Here are the four lots we’ve just created. We will use the Mass Validation feature to validate and
publish them.
We can select all lots, then click on the Mass Validation button.
For this class, we will begin by choosing the first two lots, then click on the Mass Validation
button.
Upon validation, the first two lots are now in the Approved status, while the other two lots are
still in the Drafted status.

We will select the last two lots, and Mass Validate them.

[Mass Publication]
Now, publish the lots by selecting them and click on the Mass Publish button.

We will enter the auction console.

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Here we can see the lots are organized in rows.
Lot 1 is currently in progress. Suppliers can begin to bid.

[Supplier View: ABB]

We’ve created four lots, and there are only three visible to this supplier, ABB. They are not
invited to bid on the IT Services lot.
ABB will submit a bid of $245,000.

[Buyer View]
Switching over to the Buyer view, ABB is currently the best supplier.
The Green Consulting group just placed a bid, and they are ranked first.

[Buyer View: 2 lots running simultaneously]

We will open the Accounting Services lot and change some parameters to make it run
simultaneously with the first lot.
We will remove the value from the ​Start after the closing of ​ Parameter.
Then adjust the starting time to launch the auction now.
We will go back to the console by clicking on Save and close.

Both the first and the second lots are currently open, and we have two lots running at the same
time.
ABB and the Green Consulting group are invited to both lots, and they can bid on both lots at the
same time.

[Supplier View: Bidding on 2 lots simultaneously]

Let’s switch over to the Supplier view as ABB.
ABB can bid on both lots.
They will submit a bot for the first lot. Then bid on the second lot.

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[Buyer ABB: Bidding on 2 lots simultaneously]
The bids submitted for both lots by ABB are visible on the console from the Buyer’s perspective.

[Supplier Green consulting View: Mass Bid]

Let’s take a look at Green Consulting. This time, we will demonstrate how to submit Mass Bid
when you are invited to participate in multiple lots.

To submit multiple bids, let’s begin by clicking on the Mass Bid Button.
The Bidding Screen will appear with a line per lot. The Supplier can place a bid for each lot.
When the amount is specified, we can submit the bids by clicking on the Mass Bid button.
[Buyer View: Mass Bid]
Looking at the Buyer’s view, we can confirm that both bids have been submitted for the Green
Consulting group.

[Supplier ABB View: Mass Bid: Global Modifier]

Let’s switch over to ABB.
When using the Mass Bid feature, the automatic bidding feature is disabled. However, the
Supplier can use the Global Modifier field. This area is used to specify the percentage of
decrement that will be applied to the lots.
For instance, if we enter 3% and click on the descending arrow, the price for each lot is
decremented automatically by 3%.
Every time you click on the arrow, the price will be decremented by an additional 3%.
If you accidentally over clicked on the decrement arrow, you can either readjust the bid manually
or cancel the bid and perform the operation again.

The application will neglect all withdrawn entries, as long as you don’t click on the bid button.
This time, we will specify 2% in the Global Modifier field, and submit the Mass Bid.

[Buyer View: Mass Bid]

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We will switch over to the Buyer View.
You will need to explain all of the features mentioned above for Multi-Lot auction to your
suppliers during the test Auction.

4.6 Demo: Pre-Bids 

The Preliminary Bids, or Pre-bids, is a feature we can enable for auction events.
The Preliminary Bidding period occurs before the scheduled auction starting time. This interval
is used to gauge the market condition concerning the requirements set out by the Buyer; and
whether suppliers are willing to bid blow a set reserve price.

Let’s begin from the Auctions Browse. We will open this auction for the demonstration.
Upon opening the lot, we can see the starting price set to $150,000.
[Buyer View: Reserve Price]
We’ll enter a reserve price. This price is visible to the Suppliers. b The purpose is to indicate the
maximum amount that we, as a buyer, will accept for this deal.
Setting a Reserve Price at $120,000 is a way to inform the Suppliers that we will not proceed
with the deal if the price is above $120,000.
But how can we be sure this is the acceptable price within the market range?
This is when the Pre-Bid option becomes useful.
It’s almost like a survey for the Buyer to check if their reserve price is within market range.
If the pre bids are too far off from the reserve price, the Buyer should reconsider their reserve
price. As well as to carefully check the conditions and technical specifications on why the market
is not ready to go down to the reserve price.

[Buyer View: Pre-Bid Option]

Let’s place a check in the Pre-Bid Option checkbox. Then Save the settings.
The lot has been scoped.
Now, we can validate the lot.
Publish, and close it.

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Let’s access the Auction Console.
First, we can see the status of the lot is Published. Since we checked the pre bids option,
Suppliers can access the auction and submit pre-bid, even the auction is not currently in progress.

[Supplier View DELL: Pre-Bid]

Switching over to a Supplier and open the auction, the Bid button is available despite the fact
that the auction is in the Published Status.

By clicking on the Bid button, we can place a bid as we did for In Progress auctions.
We will cancel it for now.
The Supplier can open the lot to get more information on the Lot settings.
The Reserve Price is $120,000, and we can strategize to pre-bid within this range or higher.
Please keep mind. The auction is about what the competing suppliers will do. If you pre-bid at
$120,000, while all competing suppliers pre-bid at this price or lower, this will not encourage the
Buyer to revise the Reserve Price.
For now, let’s place a pre-bid for $140,000.

[Buyer View: Pre-Bid Option]

Switching over to the Buyer. The pre-bid is displayed as an actual bid on the Console.

[Supplier View CDW: Pre-Bid]

Now, we will switch over to Rachel’s interface from CDW.
Rachel will also place a pre-bid.

[Buyer View: Pre-Bid Option]

Back to the Buyer console, the pre-bid submitted by CDW is also visible.
[Supplier View DELL: Pre-Bid Option]

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The Supplier can submit as many pre-bids as they want. Caution! Only the last one you placed
before the auction opening will be considered valid. And the valid bid will also be used as the
starting bid when the auction begins.
[Supplier View CDW: Pre-Bid Option]
Switching over to CDW, we will place another pre-bid.

[Buyer View: Pre-Bid Option]

Pre bids are NOT mandatory.
For instance, IBM did not participate in pre bid, but that won’t exclude them from participating
in the auction.
Let’s click to open the lot settings.
We’ve set the starting price to $150,000.
While the Price Reached is $138,000, this is the best pre bid we’ve received.

The Bidding period will begin as soon as the start date is reached. The Auction Status will be
changed to Auction in Progress.

[Supplier View DELL: Pre-Bid Option]

Let’s login as DELL.
The first bid for Dell has to be less than $138,000, which was the best pre bid submitted by
DELL.
[Supplier View CDW: Pre-Bid Option]
Let’s switch over to CDW.
The current best bid is $132,000.
The first bid for CDW has to be less than the current best bid, and at the same time less than
$142,000, which is their best pre bid.
[Supplier View: Pre-Bid Option]
The process for the auction from now on will be identical to what’ve seen previously.

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 4.7 Demo: Surrogate Bids 

Surrogate Bids are bids that are placed by a Buyer on behalf of a Supplier.
This is useful if a supplier doesn’t have access to the application at the time of the auction and
uses some other means to communicate the bid to you.
[Buyer View]
Let’s take a look at this In Progress Auction. As a Buyer, you can place surrogate bids in
auctions for any invited supplier.
Let’s submit a bid for EZ Connect.
The appearing bidding screen contains the same structure as what a supplier would get by
submitting a bid on their own.
We can place a bid for the supplier, and we can even place an automatic bid.
For now, let’s enter an amount of $120,000 and bid.
The bid has been placed. EZ Connect has the best offer at the moment.

[Supplier View: EZ Connect]

Switching over to EZ Connect’s view, the bid placed by the Buyer on their behalf is reflected as
My Bid. The application treats surrogate bids in the same way as if the bid was placed by the
Supplier.

[Buyer View]
Let’s go back to the Buyer view and open the Bid History.
The buyer’s name is listed next to the surrogate bid for EZ Connect, indicating the bid was
submitted by the buyer, instead of the supplier contact, Joseph Rigney, from EZ Connect.

4.8 Demo: Supplier Weighting Values 

[Principle animation]
The Auction Administrator can assign weighting values to participating-suppliers. This is a way
to make all supplier bids comparable.

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For instance, you may have a supplier who can provide the best price for the product, however,
with a higher shipping cost due to distance.
There are also cases where some suppliers may also involve additional taxes, which your
organization can exempt from if you choose local suppliers.
These are factors that need to be taken into account in order compare bids and make the best
decision.
[Coeff. a & Coeff. b]
There are two types of weighting factors:
Coefficient A, or the Multiplier Coefficient.
● It allows the buyer to incorporate the variable costs, such as taxes, currency conversion.
● For Example, if the multiplier is 1.1 for Dell, if they place a $100 bid, the application will
apply the coefficient and recalculate the bid to $110.

Coefficient B, the adder.

● It allows the buyer to add a fixed cost, such as transportation cost.
● For instance, if IBM has an adder of $15 and they placed a bid of $100, the application
will automatically recalculate the bid to $115.

The Buyer can combine the two coefficient for the same supplier, in that case, both the
Multiplier and the Adder will be applied.
For example, the buyer imposes a multiplier of 1.1 and an Adder of $15 for Dell.
If Dell places a bid of $100, the amount of their bid will be recalculated:
$100 x 1.1 +$15 = $125.
$125 is the total amount of Dell’s bid.

[Demo: Buyer View]

Let’s take a look at the weighted bids from the Application.
We will begin by creating a new lot for this auction.
This new lot is an English Auction.

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Enter the Display Order, the Starting Price, the Start Date, and the Planned End Date, then Save
it.

The Coefficients will appear upon selecting suppliers.

For CDW, we will enter 1.1 for Coefficient A. And $5,000 for Coefficient B.
Let’s Save the parameters for now. Then Validate and Publish the Lot.

Now, we will enter the Console.

Both Dell and CDW are currently online, and the Auction is In Progress.
CDW submitted the first bid for $159,000.
The second bid is from Dell, for $140,000.
CDW placed another bid for $137,000.
[Supplier View: CDW]
Switch over to CDW’s screen; we can see they put a bid of $120,000.
The amount of $137,000 appears on the Buyer’s view is a recalculation from the application by
applying Coefficient A and B.

[Buyer View]
Let’s return to the Buyer’s auction console.
The calculation detail is available when rolling the cursor over CDW’s bid:
$120,000 x 1.1 + 5,000 = $137,000.

[Supplier View: DELL]

The auction continues.
Now, Dell will submit a bid of $135,000.
Since the buyer didn’t impose any coefficient for Dell, this amount will be the amount visible to
the Buyer.
[Buyer View]

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From the Buyer’s perspective, we can see the actual amount submitted by Dell, $135,000,
without any recalculation.

[Supplier View: CDW]

Let’s switch over to CDW’s perspective.
The bidding range has been calculated to include the coefficients. Despite the current bid,
$135,000 and the decrement, CDW needs to bid less than $118,180.81 to beat Dell’s bid.

[Supplier View: Dell]

If we take a look at the bidding range for Dell.
Dell can submit a higher bid and still win the auction.
[Supplier View: CDW]
Let’s submit a bid of $105,000 for CDW.

[Buyer View]
The $105,000 dollar bid becomes a $120.500 dollar bid after applying coefficients, which is a
better bid than Dell’s last bid.
Note Suppliers can see coefficients applied to them in the lot settings.

4.9 Demo: Lot Weighting Values & Savings Calculation 

Let’s begin this demonstration by opening this drafted auction.

We’ll add a lot.
The Auction type is English Auction. Specify the display order.
In this demonstration, we will focus on these two parameters:
The Bid Multiplier and the Bid Adder.
The objective of these two parameters is to allow the buyer to factor in various considerations
such as additional costs that you need to account for in your saving analysis.

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For example, we will add a multiplier of 1.5 to account for the transportation cost.
Include an adder of $3,000 since the additional tax is expected, as we are not purchasing these
machines locally.

Now, let’s enter the pricing information:

We will enter $250,000 for the Reference Price.
And set the target price to $150,000.
The starting price for the auction is $230,000.
Lastly, we’ll set the reserve price at $170,000.

Now we’ll enter the dates.

Adjust the decrements.
We’ll leave the other parameters as is, and save.
Let’s scope the lot with the item, select both suppliers and Save and Close.
Everything is ready. Let’s validate and publish the lot.
We just need to wait for the opening of the auction now.

[Supplier View: ABB]

We are currently looking at one of our supplier’s interface.
The Auction is currently open, and we can place bids.
This is a standard English auction. The process is the same as we’ve previously demonstrated.

[Supplier View: EZ Connect]

Let’s switch over to the other supplier, EZ Connect.
They will submit a bid as well.

[Supplier View: ABB+EZ connect]

The bidding will continue.

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[Buyer View]
We are almost at the end of the auction, entering the Quiet Period.

Now the Auction is closed.

The best bid is $165,000.
We can see that we have different amounts for the Net and the Gross Savings.
To calculate the Net Savings, we need to apply the multiplier and the adder to the Reference
Price:
1.5 x $250,000 + $3,000 = $378,000.
For a $250,000 dollar bid, the actual cost of the lot is $378,000.
Since the Supplier’s best bid is $165,000, which means our Net Saving is $213,000.

The Gross Savings doesn’t include the multiplier into account. It’s calculated based on the
Reference Price and the Best Bid. In that case, the Gross saving is:
The Reference Price of $250,000 minus the Best Bid, $165,000, which gives the Gross Saving
amount of $85,000.
The percentages are the quotient of the Savings Amount divided by the Reference Price:
The Net Savings divided by the Reference Price gives us 85.2% for the Net Savings.
And the Gross Savings divided by the Reference Price gives us 34% for the gross Savings.

4.10 Demo: Automatic Bidding 

[animation]
We’ve seen how the supplier can place a manual bid, in this section, we will demonstrate how to
submit automatic bids. Automatic Bidding is also known as the Proxy Bidding. This method
allows the supplier to set the floor price that you are willing to accept. Your floor price is not
visible to other bidders.
When you define a proxy, the application will place bids on your behalf in response to bids
placed by other suppliers.

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[Demo]
Let’s use this auction to demonstrate the automatic bidding feature.
This auction is currently In Progress. And 3 Suppliers are participating in this auction event:
CDW, Dell, and IBM.
Currently, CDW has the best bid for an amount of $30,000, while IBM is ranked second.

[Supplier: IBM]
Let’s switch over to the IBM perspective and use the Automatic Bidding feature.
We’ll place a check in the Automatic Bidding checkbox.
Then set up the bid in the New Proxy bid field.
Let’s say $25,000 is IBM’s floor price. We are going to enter the amount here and click on the
Bid Button.

Upon confirming the bid, the bid amount is adjusted so that your offer remains the lowest while
taking into account the minimum decrement defined for the lot. The system goes on placing
decreasing bids until you win the auction, or you reach your floor price
[Buyer]
We will take a look at the Buyer's Console.
We can see the system recorded IBM’s floor bid for $25,000.
At the moment, IBM has the best offer.
[Supplier: CDW]
We will switch over to CDW’s interface.
CDW will place a $27,000 dollar bid.
As soon as the bid is placed, IBM’s automatic bidding process will place a lower bid
immediately.
The decrement is only $1 for this lot. The best bid automatically becomes $26,999.
[Buyer]
IBM’s automatic bid of $26,999 has also been recorded on the Buyer’s auction console.

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[Supplier: CDW]
CDW can continue to bid downward.
However, IBM is still the best supplier.
This time, CDW will place a bid of $24,000.
As this is below IBM’s floor price, IBM’s automatic bidding process stopped.
[Buyer]
CDW will remain first until another supplier outbids them with a better bid.
IBM can also submit a manual bid or adjust their floor price for automatic bidding.
[Supplier: IBM]
We will change the automatic bid to $20,000.
[Buyer]
Looking at the Buyer’s Console, CDW placed a bid of $22,000. However, IBM outbid it with
the adjusted automatic bid.
Suppliers can set up and revise their automatic bid at any time.

4.11 Demo: Cancel a Bid 

The Auction Administrator, the authorized user can cancel a bid.

The authorization to delete a bid is ‘auth_auc_bid_delete.' This permission is only given to
internal users. Withdrawing a bid is a rare situation, but it can happen if the supplier made a
mistake in their submitted bid.
Let’s look at this in progress auction, and open the History of the bids.
All Bids are visible in the Value Details area.
The current best bid is placed by CDW, for an amount of $19,000.
For this demonstration, we will delete this submission.
To remove this bid, click on the X icon associated with the desired bid.
The application requires a confirmation for the deletion. Upon confirmation, the application will
re-determine the best bid.

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As we can see, IBM has the best bid for $20,999.

Opens the History again, we will search for all bids placed by CDW.
The current best bid placed by CDW is $21,000.
The previous one is $22,000, and the one before is $24,000.
This time we will delete the $24,000 dollar bid.
Upon confirmation, $26,000 becomes CDW’s best bid. Which means, the application deleted the
$24,000 dollar bid, as well as the two subsequent submissions.

4.12 Demo: Adjust Parameters for “In Progress” Auction 

We will use this In Progress Forward auction for our demonstration.

There are already bids placed by the participating Suppliers.
There’s still about 17 minutes remaining for the auction.
Since we are still within the bidding period, the lot parameters can still be adjusted.
A lot of parameters are still open for editing, including the possibility to hide parameters that
have been made visible to the Suppliers by unchecking the corresponding checkboxes. The
visibility parameters will be applied upon the next refresh on the supplier side.

However, it’s impossible to change the auction type or what’s the auction based on, once the
auction is published.
The decrement, in this case, the increment can be adjusted, we will enter a higher Relative
Increment to make the Absolute Increment becomes the smallest.
Click on Save and Close to apply the change.
The adjusted decrement will be enforced for the next bid.

[supplier: EZConnect]
Let’s switch over to EZConnect and submit a bid.
The $2,000 Absolute Minimum Decrement now applies.

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The Current bid is $120,000. This supplier is only allowed to bid within $132,000 and $149,500.
This is a Forward Auction, but the same principle applies to a reverse auction.

[supplier: ABB]
ABB will also submit a bid.
The visibility parameters will apply at the next refresh of the page on the supplier side.

[Buyer]
Switch over to the Buyer’s view. The auction is still In Progress.
There’s a little bit more than 16 minutes left for the bidding period.
Let’s reopen the lot. We can also change the Planned End Date or add a Limit End Date.
Let’s change the planned end time to make the auction ends faster.
Upon saving, the remaining time has been adjusted. The Auction will be closed in about 40
seconds.

4.13 Demo: Test Auction 

We can mark an Auction as a Test Auction by checking the Test Auction box.
If you are running an auction for the first time with suppliers, it may be a good idea to use the
Test Auction feature to simulate an auction. This way, your suppliers can also get familiarized
with the interface before the actual auction, especially if you are planning to run a short auction.

Let’s begin from the auction browse and open this auction.
To mark the auction as a test auction, place a check in the Test Auction checkbox.
Test auctions run in the same manner as an actual auction would.
[supplier: ABB]
Let’s switch over to the supplier, ABB’s view.
The Supplier has to accept the terms and conditions, before bidding.
The test auction is indicated with a TEST tag.

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Let’s submit the bid.

[Buyer]
Let’s take a look at the console from the Buyer side.
The Bid submitted by ABB is registered in the Test Auction console.

[supplier: Green Consulting]

Let’s switch over to the second supplier.
Let’s enter the auction, Accept the terms and conditions and start bidding.

[Buyer]
Note, Test auctions are marked with a TEST tag in the Auction browse.

4.14 Demo: Auction in Sourcing Event 

In complex sourcing events, the Buyer can decide to run an auction before the award to get a
better price from the shortlisted suppliers.
Let’s look at this sourcing event for Electrical components.
[View RFP Activity tab]
Open the View RFP Activity tab. We can see this sourcing event has a lot with one round.
There are two suppliers, who have already submitted their bids. Let’s open a bid.
Open and look at the items, there’s 1 item being quoted.
Here’s the Unit Price quoted by ABB.
And this is the Unite Price Quoted by Siemens.

[Price Synthesis Pivot Tab]

Navigate over to the Price Synthesis Pivot tab, the amount submitted by the two suppliers are
pretty close. In this case, it’s worth running an auction to get a better price.

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The auction can be initiated in the RFx process.
[Reverse Auction Tab]
To create an auction, begin by navigating to the Reverse Auction Tab.
Click on the Duplicate or the Create Auction button.
Give a label to the auction.
We will copy the Suppliers, the Team, and the Items to the auction.
Then select the RFP that's subject to this auction. This is very important when you have multiple
RFx in the same sourcing event. The RFP is what the system would use to determine the starting
price for each supplier. The system won’t allow suppliers to bid a higher price than the one
they’ve already submitted during the RFP process.
Then click on Create to create the auction.
The auction has been initiated. You can open the lot and edit the parameters.
We’ve configured all parameters. We will Save it.
Then Validate it, and Publish it.
[Auction Screen]
We are redirected to the auction screen.
We will Click on the Notify via Email button, to notify the participating suppliers about the
auction.
Let’s click to access the console to monitor the auction.
The Auction is In progress.
[Supplier ABB]
Let’s switch over to ABB and submit a bid.
The bidding range for ABB is in between $9.35 and $11.

[Supplier Siemens]
The supplier, Siemens will also submit a bid.
The bidding rang is different here, it’s between $8.93 and $10.50.
[Supplier ABB + Siemens side by side]
How come the two suppliers have different bidding range?

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Remember, suppliers cannot place a bid with a higher price than the one they’ve already
submitted during the RFP process.

[Supplier ABB]
ABB will place another bid.

[Buyer]
Back to the Buyer’s auction console, the auction is still in progress. The Bidding continues
between the two suppliers.
The bidding period is about to end.
The auction is closed.
Siemens has the best bid in this auction.
[Award Button]
When the auction is over, the award button will appear at the top of the screen.
You can use this button to export the auction results for your sourcing event.
Before that, let’s take a look at the Sourcing Event.
The Auction is visible and accessible from the Sourcing Event.
Navigate to the View RFP Activity Tab; there’s one RFP and one Round.

Let’s go back to the auction.

This time we will click on the Award Button.
In the Award Auction Screen, we can see the bids placed by the two suppliers.
Select the associated RFP.
Then click on Award and Close.

Navigate back to the Sourcing Event.

We can see Round 2 is created for the RFP, and this is triggered by clicking on the Award
button. The application archived the closed auction and named it Round 2.

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Click to open the submitted bids, the prices offered during the auction are registered in the
Submitted bids column. And it became the prices on the RFP.
The Buyer can proceed to the Analyze & Award Tab to evaluation the RFx.
They can confirm and award the RFP here by clicking on the Confirm Award button.

4.15 Demo: Block & Unblock Supplier 

[Buyer]
We will use this In Progress Auction to illustrate how we can block and unblock a supplier from
bidding.
You can prevent a supplier from bidding during the auction by clicking on the corresponding
connection status icon.
A supplier’s access will be disabled by clicking on the green dot.
Upon clicking, you’ll see a Stop sign, indicating this supplier has been blocked.
When the supplier’s access is disabled, the supplier cannot view or bid anymore. If they have the
automatic bidding set up, it will be disabled automatically as well.

[Supplier]
Let’s take a look at the Supplier portal.
The Bid button is disabled and they received an automatic message stating they have been
blocked.
The supplier can reply to the message, request for their access.
[Buyer]
Switching over to the Buyer’s view. The Buyer received a message sent by the supplier and they
can respond directly to the message.
To restore, unblock the Supplier access, simply click on the dot again.
Then send the message to notify the supplier.
[Supplier]

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We can see the Bid button is available to the Supplier again.

4.16 Demo: Add Supplier to a Published or a Live Auction

It’s possible to add a supplier to a published auction, or an In Progress Auction using the Add
Supplier Button.

We will demonstrate this feature using an In Progress Auction.

[In Progress Auction]
This is an In Progress Auction, we will begin by navigating to the Suppliers tab.
Here we will select the supplier we’d like to add from the Suppliers dropdown. Note, the supplier
must be on the Supplier tab for this action to happen.
Then we will open the Lot. Click on the Add a Supplier Button and add the supplier.
The Supplier has been added to the auction.
Enter the Auction, we can notify the new supplier about the auction using the Notify via Email
button.
At this stage, some suppliers have already placed their bids.
[Supplier: Jabra]
The Supplier we’ve just added will also submit a bid.
Note, the newly added supplier will not get any extra time or additional benefits from being
added to the auction after the Auction is published or In Progress.

4.17 Demo: Multi-Currency Auctions 

When you have international Suppliers in your auction event, it may be difficult for them to bid
in a foreign currency. In this case, you can set up the currencies authorized for the auction.
To do that, navigate to the Currencies Tab and enter the authorized currencies that International
Suppliers can bid with.
Currently, the default currency of this auction is US Dollar. We will add Chinese Yuan to the
auction.

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The latest conversion rate would normally retrieve and display on the tab upon selecting the
currency. However, you will have to manually enter the conversation rate if the conversation rate
is unavailable.
Note, even if the default conversation rate is available, you can override it with the conversion
rate of your choice.
Now, we will save the currencies and create a New lot.
This new lot will be an English Auction.
When the lot is ready, we will Save and Validate the lot.
Upon validation, the application warns us to select the suppliers before proceeding.
We will select the Items, the Suppliers, and Save.
Then let’s click on the Publish button to publish the lot.
[Notify via Email Button]
We will Notify the Suppliers about the auction.

Now we will enter the Auction Console.

The Auction is currently In Progress.

Let’s switch over to ABB and see how the Multi-Currency Auction looks like.
[Supplier: ABB]
The Supplier can choose the currency they want to bid with.
ABB will submit a bid in US Dollar.
[Supplier: China Best Components]
Switching over to China Best Components’ portal.
They will change the currency to Chinese Yuan, and place a bid.
[Buyer]
Let’s take a look at how the Multi-Currency bid works from the Buyer’s perspective.
We will click and open the Auction Logs.
The Application converted the bid into the main bidding currency, US Dollar. Here we can see
the original currency, the conversion rate applied, as well as the converted amount.

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Only the Converted amount appears on the Auction console.

[Supplier: ABB]
ABB will submit another bid in USD.
[Buyer]
Now, the Buyer will place a surrogate bid for China Best Components.
The Bidding Range is different for the two currencies.
We will place a ​¥​29,000 Yuan bid.
Upon placing the bid, we can see the bid is converted to $4,420.73.

Opening the Auction Logs again, we know the buyer placed the bid and the currency
conversation of the bid.

4.18 Demo: Trusted Third Party 

[Principle]
We’ve mentioned about auction profiles in the Team Tab. In this section, we will go through the
Trusted Third Party profile.
The Trusted Third Party is a neutral entity, independent from both the buying organization and
the participating suppliers. They are responsible for ensuring a smooth auction event. The
Trusted Third Party has the required authorizations to host the event. Let’s take a look at how
this works.

[Demo]
Let’s begin by navigating to the Admin Menu, Browse Users.
From the Profile filter drop-down, we’ll search for the Trusted Third Party (Auction) Profile.
At the moment, we don’t have any users with this profile. Let’s reset the search.
We will select a user with the Buyer profile, let’s begin with Anna.
And add the Trusted Third Party profile to their account.

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Return to the User Browse, we will add the same profile to Adam Smith.

Now we have two suppliers with the Trusted Third Party global profile.
Let’s navigate to the Auction menu to create a new auction from scratch.
The Label for this Auction is Cell Phones.
The Organization is Clarity Corporate.
And the Commodity is Telecom Voice.
The currency for this auction is US Dollar. Then click Save to continue.
[Item Tab]
Now, we will add an item to the Auction.
Moving on the Supplier tab. We will select two Suppliers.
Specify the Main Contact for the two suppliers. Save it.
[Team Tab]
Let’s navigate to the Team Tab.
Here we can see both Anna and Adam have been added to the Auction with the Trusted Third
Party profile. Users with this global profile will be added to the auction team automatically by
default.
The Auction Owner can decide if they want to remove or keep these Trusted Third Party users
for their auction.
For this demonstration, we will keep Anna and remove Adam from the team, then save the
changes.
Now, let’s create a new lot to demonstrate the Trusted Third Party portal through Anna’s View.
This is an English Auction.
We will setup the Parameters and Save the lot.
Then we will Validate and Publish the lot.
Lastly, we will send an email to notify our Suppliers about the auction.
[Trusted Third Party: Anna]
Now, we will shift over to our Trusted Third Party, Anna’s view.

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Anna will be monitoring the auction.
Let’s Enter the Cell Phones auction console and open the lot.
We can see Anna has access to all the parameters that the Auction Owner has access to.
Anna can change the decrement, the dates, and any other open parameters.
Now we will click on the Save and Close button, and wait for the opening of the auction.

The Auction is currently in Progress.

Anna can monitor the auction in the exact same way as the auction owner.
CDW submitted a bid.
As Trusted Third Party, Anna can place a surrogate bid on behalf of a Supplier.
Anna can also access to all the necessary features:
The History of the Auction.
The Message Feature. Anna can respond to any incoming messages with the predefined
messages or compose a new one.
She has access to the Message History. The Auction Logs. The Analysis. As well as the history
of the Auction.
Let’s take a look at the profile configuration by navigating to the Configuration Menu, Profiles.
From the Functional Module, search for Auctions.
We’ll use the Compare Two Profiles function to compare the Auction Responsible Profile and
the Trusted Third Party Profile.
This will provide a comprehensive view of the activities that the Trusted Third Party is
authorized to perform.

Chapter 5- Other Auction Types 

5.1 Demo: Multi-Criteria Auction 

There are times you may want to include criteria other than the price to precisely evaluate the
bids. The Price is not the only component of the decision. The idea is to get the best value for
money, and not solely the best price.

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This type of auction involving multiple criteria is simply referred to as the Multi-Criteria
Auction.
Let’s begin this demonstration by creating a new auction.
This auction is Consulting Services for the New York Office. The commodity is the Consulting
Financial Services. The default currency for this auction is USD.
We will Save the General Information to move on.

[Items Tab]
In the Items Tab, we will add a few items for the Auction.
1,000 hours of Advisory Services.
500 hours of Accounting Services.
And 500 hours Tax Services.

[Suppliers Tab]
Moving over to the Suppliers Tab, we’ll select the participating suppliers:
ABB
The Flaur Consulting Group
and the Green Consulting Group
We’ll specify the contact for each supplier.

[Team Tab]
Let’s navigate to the Team Tab and add a few internal contacts.

Now let’s create a new lot for this auction event.

We’ll name this auction as Consulting Services.
This is an English Auction.
The starting price for this auction is $600,000.

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Let’s enter the Start and the Planned End Dates.
In the Auction Based On field, we will change the value from Best Offer, which is price only, to
based on Rank, which includes different criteria.
A Criteria area appears.
Upon saving, the Criteria Area has a selection of different criteria that you can keep as is or
adjust to your needs.
We’ll delete some of these criteria.
Then let’s add a new one - Functional Expertise, and Save.
The sum of the criteria must be added up to 100%.
The price weight must be greater than 0%. We will have 60% for the Price.
20% for the Technical Expertise and 10% for the Functional Expertise.

Upon saving, the application is projecting an error as the total of the weight is not equal to 100%.
Let’s adjust this by deleting the Safety criteria.
Then add a References criterion for 10% and Save it.

We will adjust the Absolute Minimum Decrement to $5,000 and the Relative Minimum
Decrement to 0.50%.

Now let’s scope our lot by selecting the items and the Suppliers. Since this is a multi-criteria
auction, you can see that you are expected to rate the non-price criteria individually for each
supplier.
Let’s begin with ABB.
The Technical Expertise is 8 out of 10.
7 for Functional Expertise,
and 4 out of 10 for References.

We’ll rate the other suppliers as well.

When you are done, click Save to save the parameters.

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Now, let’s validate and Publish the auction.

Let’s enter the Console and wait for the auction to begin.
The Auction is currently in progress. And we’ve already had some submitted bids.
The console contains information including:
The rank of the Supplier: the Flaur Consulting Group is currently listed first.
The rating of the supplier: Flaur has a score of 6.18. This score is calculated by the
application.
And the current price: $560,000.

[Supplier: ABB]
Let’s log in as ABB and open the lot.
Here the Supplier can see the weight of their criteria. This is enabled through the checking of the
View His Mark ​option, available in the lot settings.

The bidding process for a Multi-Criteria Auction is the same.

We’ll bid $550,000 for ABB, which places them in the first rank.

[Supplier: Flaur]
Switching over to Flaur Consulting Group, they will place a bid.
The bidding process will continue until the auction is closed. The winner will be the Supplier
who has the top rank.

[Animation]
Please keep this in mind, in rank based auction the Supplier may not know the best bid.
If the supplier is not in the top rank, they can trigger an extension of the bidding period by
placing a bid during the final countdown of the auction.
To ensure only relevant bids can generate an extension, a parameter is available to use.
[Buyer, file 42]

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Let’s begin by duplicating the laptop auction and create a new lot.
The Auction type is English Auction.
Enter 1 for the display order.
Specify the dates.
Then specify the Auction is Based on Rank.

Upon selection, we see this parameter appears in the bottom of the screen.
This parameter is referred to as: ​And if bid is in the top (?) ranks [​ pronounce: And if bid is in the
top x ranks]

We’ll enter 3. What does this mean?

[Animation]
We have a 3-minute trigger for an extension of 3-minute extra time for the auction. If the
supplier submits a new bid during the extension period and this supplier is not within the top 3
ranking, the trigger will not apply.
Let’s save.

5.2 Demo: Rank Based Auction - Price Only 

[Animation]
Depends on the country at which you’re running your auction from, the regulation might allow
you to run a rank based auction with only one criterion, the price.
In this case the application gives you the ability to run the Best Offer auction without displaying
the best price to the Bidders.

Let’s begin with this auction we just created from duplication.

We’ll create a new lot.
The Label for this lot is Laptops.
The Auction Type is English Auction.

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Let’s enter a Display Order.
The pricing information and the dates.
This Auction is a Rank based auction, we have the option to display the Best Bid to the
participating bidders, but we will select ‘NO’ to hide the best bid from the bidders.
We will also uncheck the See His Weighting Values field.
Adjust the Absolute Minimum Decrement, as well as the Relative Minimum Decrement.
Since this is a rank based auction, the application introduced two parameters, which we haven't
encountered so far in this class.

[1. Protect the Best Bid from the Top]

The Protect the Best Bid from the Top, this is the High Protection for the best price, which it’s
referred to as the ​Back Buffer​.
This parameter prohibits competitors from outbidding the best bidder with a slightly higher price.

[2. Protect the Best Bid from the Bottom]

Protect the Best Bid from the Bottom, this is the Low Protection for the best price, also known as
the ​Front Buffer​.
This parameter prohibits competitors from bidding slightly lower than the best bid.
[1&2]

In a Rank based auction, as suppliers may not always see the best price, therefore, they can place
a bid that’s very close to the best bid.
If we are in a Rank based auction with multiple criteria, this will not matter much since the rank
is managed by the combination of multiple criteria. However, in this auction, there’s only one
criterion, the price. Therefore we want to make sure a new bid is distinguishable from the current
best bid.
But why can’t we use decrements for that?
The two parameters have a similar concept as the decrements. But remember, we are in a rank
auction, the decrement applies to the last bid of the supplier, instead of the current best bid.
Under this premise, the decrement won’t be able to get a bid that is significantly different than
the current best one.

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Note, the value for these two parameters must be lower than the absolute minimum decrement.
Let’s enter 2,000 USD for both filters.
Let’s Save it and continue.

We will delete all criteria, except the price with 100% weight.

Let’s finish the auction settings and Save.

Then Validate and Publish the auction.
Notify the suppliers by clicking on the Notify Via Email button.

The bidding period has begun.

The Supplier, Dell USA placed a bid of $210,000 and they are ranked first.

[Supplier CDW]
Switching over to Rachel, our supplier from Computer Data Warehouse.
The Best Bid is not visible to her since we are in a rank based auction.
If Rachel places a $209,000 dollar bid, the Front Buffer will apply and prevents her from bidding
at this price.
It’s the same if she tries to bid at $208,500.
She can bid at $208,000 as it’s matching the minimum Back Buffer.

[Buyer]
The Best Bid is currently at $203,000.

[Supplier Dell USA]

Let’s take a look at what’s going on with Dell USA.

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If Suzy from Dell USA tries to bid at $204,000, the application will stop her because of the back
buffer. She needs to bid less than $201,000 to be aligned with the back buffer.

5.3 Demo: Japanese Auction 

Different than the English Auction we’ve seen previously, suppliers are in passive roles for
Japanese Auction. All they have to do is to monitor the displayed price changes continuously and
drop out at the moment when the displayed price dropped below their floor price.b
We will demonstrate the Japanese Auction using this Auction Event.
Let’s begin by creating a new lot.
Then select the Japanese Auction Type.
Enter the Display Order.
We’ll enter the starting price, the Start and the Planned End date of the Auction.

[Japanese Auction Parameters]

The interface on the left is a bit different than what we’ve presented.
As we’ve selected the Japanese Auction type, we are presented with parameters that are specific
to the Japanese Auction.
The Decrement Value, for the purpose of this demonstration, we will enter $1,000 in this
field.
For the Duration Field, let’s enter 30 seconds.
This Means for every 30 seconds, the price will decrease by $1,000. The Supplier can withdraw
at any moment when their best price is reached. In another word, the supplier can withdraw at
each step, the bidder who remains last wins the auction at the price that was reached upon the
last withdrawal.

[End of the Auction Parameter]

The last parameter, End of the Auction is a drop-down field containing two selectable values:
At the Second Price: ​Final bidder wins, and pays the price at which the second remaining bidder
dropped out.

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At the Best Price: The final bidder pays the price at which they dropped out.
During the Japanese Auction, suppliers are not able to see when the competing bidders
drop out from the auction. With the At the Best Price option, the final bidder will
continue to bid against their own until their floor price is reached.
We’ll select the At the Best Price option for this auction.
Now, let’s scope the auction.
Validate and Publish it.
The auction is in the Published Status
[Supplier Dell]
Before the auction begins, let’s take a look at the auction from the supplier, Dell’s perspective.
The Bid Button has been replaced by the Participate button.
Hover the cursor over the tooltip, a reminder will appear with the rules of the auction.

Upon clicking on the Participate Button, the application prompts the suppliers to confirm their
participation.

[Buyer]
Let’s go back to the auction console as the Buyer.
We can see CDW is currently online.
Now, the Auction is In Progress.
DELL is the only participant who has confirmed their participation at the moment.

[Supplier: CDW]
Let’s switch our view over to CDW.
CDW will click on the Participate Button, and confirm their participation.

Now, the red Drop Out Button is the only button accessible by CDW. This button is used when a
supplier wants to leave the auction when the price dropped below their floor price.
The current price is indicated in the Current Amount column.

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It’s currently at $250,0000. The price will be dropped in the next 8 seconds, to $249,000.
Now, the Next step will be $248,000, which will take place in 30 seconds.

[Buyer]
Let’s look at the console from the Buyer’s view.
We can see the accepted price is $249,000 for now and the two suppliers are still participating in
the auction.
[Supplier]
Looking at the Supplier’s view, the auction is still in progress and the displayed price continues
to decrease.This is what is going to happen until the end of the auction.

[Supplier2]
To drop out from the auction, simply click on the Drop Out button. Then confirm the action.
[buyer]
Once they have dropped out, they are not allowed to re-enter the auction.

From the buyer console, we can see CDW dropped out from the auction, while Dell is still
participating in the auction. Remember, they cannot see when the competing bidders drop out
from the auction. And since we’ve defaulted the auction to Best Price at the end of the auction,
they will be in the bidding arena until they dropped out.

[Supplier Dell]
Switching over to Dell’s view, the click is still ticking. This won’t be the case if we choose the
At the Second Price​ option for the End of Auction field. Dell would have won the auction at the
price of $245,000. The Drop Out Button wouldn’t be available to them either.

The displayed price will continue to drop until Dell decided to drop out.
The currently displayed amount is at $243,000.

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Dell dropped out when the price became $242,000.
The auction is over.

When setting up the parameters, you need to calculate the decrement and the duration accurately
to make sure the cadence of the price drop is appropriate. And that the Suppliers have enough
time to consider the current price.

5.4 Demo: Dutch Auction 

A Dutch Auction is a type of auction where the buyer sets a starting price which is automatically
incremented by a defined value at fixed time interval. This goes on until some participant is
willing to accept the current amount. The winning participant pays the last announced price.

Let’s begin by creating a lot for this auction.

Give this lot a name by specifying a Label.
From the Auction Type dropdown, we will choose Dutch. The Displayed Order is 1.
Then we will enter the starting price, the Auction Start Date, and the Planned End Date.

[Dutch Auction Parameters]

Moving over to the right, there are three parameters for the Dutch Forward Auction.
The Increment Value: This particular amount will be incremented at a set time interval, let’s set
this value to $5,000.
Duration: This parameter defines the frequency of the automatic increases. For this
demonstration, we’ll set this parameter to 30 seconds. You should set this parameter to a value
that will provide enough time for the supplier to consider the current price.
Lastly, the Number of Bidders: This parameter defines the number of suppliers who are allowed
to bid on the same set price at the same time (with 1-second latency).
Having more than one supplier bidding on the set price allows you to gain insight on which
suppliers are willing to bid at that price. The first one to bid will win the auction.
For the purpose of this tutorial, we’ll leave the parameter as is.

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Let’s save the settings and scope this auction.
We will invite CDW and Dell to this auction.
Now, let’s validate and publish the auction.

[Supplier CDW]
Switch over to CDW’s portal, the auction hasn’t started yet.
[Buyer]
Let’s go back to the Buyer’s Side and enter the auction console
CDW is the only supplier online at the moment. DELL is also online now.
The auction is still in the ‘Publish’ status. Let’s wait until it begins.
Here we go, the auction is currently In Progress.

$150,000 is the starting price and we can see that the next displayed amount will be $155,000 in
just a few seconds. Remember, we set the increment duration to 30 seconds for this
demonstration.

[Supplier CDW]
Let’s look at what is going on on CDW’s side.
The Bid Button is available to them. By clicking on the Bid button, means they accept the
Current displayed Amount, $150,000.
In about 10 seconds, the price will go up to $155,000. The following price will be $160,000.

[Buyer]
Let’s take a look at the console from the Buyer’s side.
The Duration for the next new bid is counting down and we are now at $160,000.
In another 30 seconds, the current amount will become $165,000. Here we are.
At this stage, we haven’t received any bid from the suppliers. This means the current price is not
acceptable to them yet.
They are going to wait until the price becomes higher.

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[Supplier CDW]
Retaking a look at CDW.
If CDW’s acceptable price is $180,000, they will continue to wait and monitor the price. Hoping
the competing suppliers won’t bid before them.
This is a waiting game.
The displayed price is about to reach $180,000, CDW will get ready to bid.
We are currently at $180,000, it’s time for CDW to bid.
Let’s just click on the Bid button and confirm.
Upon bidding, the auction will be closed automatically at this acceptable price.

[Supplier DELL]
Let’s take a look at DELL.
As they didn’t bid, they lost the auction. They can see the auction is closed. Even though it’s not
visible on the portal they know at which price amount CDW won the bid since they were also
monitoring the auction.

5.5 Demo: Forward Auction 

The Forward English Auction is a sell-side auction. The Supplier organizations place their bids
on items in a live auction held for a limited duration of time, such as an hour. The auction is
normally allotted to suppliers that offer the highest price.

We will use this Drafted Auction for the demonstration.

There is an item in this auction. As well as there are a few invited suppliers.
Let’s create a new lot.
We will select the Forward Auction Type.
Enter the Displayed Order, the starting price, as well as the dates.
This is the Best Offer Auction.
We’ll leave the Trigger and the Duration in their defaulted value and change the value for
Absolute Minimum Increment to $2,000. And adjust the Relative Minimum Increment.
Now Save the settings.

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Select the Items and Suppliers for the auction.
Now we will Save, Validate, and Publish the auction.

Let’s enter the console.

The suppliers are currently offline.
[Supplier]
Let’s switch the view of a supplier.
They will first need to accept the terms.
The auction hasn’t started yet.
[Buyer]
Going back to the Buyer Console, we can see the Suppliers are currently online, waiting for the
auction to begin.
Here we go! The auction is currently In Progress.

[Supplier EZConnect]
Let’s login as EZ Connect to place a bid.
The first possible bid is $100,000, which is the starting price set out by the buyer.
You can see the supplier can only bid with higher amounts as the authorized bidding range is
currently between $100,000 and $115,000. We’ll place a $105,000 dollar bid.

[Supplier ABB]
Switching over to ABB’s portal, they can place a bid up to $120,750.
Let’s bid $110,000 and confirm.
[Buyer]
Let’s place a bid for EZConnect.
The auction will continue and Suppliers can continuously bid for the items they are interested in.
Eventually, the highest bidder wins the item.
Settings for Forward Auction can also be adjusted during the auction. Let’s open the Lot settings
and adjust the Relative Minimum Increment to a higher value.

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[Supplier EZConnect]
Switching over to EZ Connect, we will place a $135,000 bid.
[Supplier ABB]
Now, we will log in as ABB and place a bid.
[Buyer]
Note the ‘Quiet’ period also applies to Forward auctions, if it has been configured.
If a supplier bids during the final three minutes, the bidding period will be extended.

5.6 Demo: Forward Dutch Auction

In a Dutch Forward Auction, the auction opens with a specified start price and decreases by the
price change value, amount or percentage, after a fixed interval. The start price decreases until
any supplier places a bid. Then the auction will be closed.

Let’s begin the demonstration by creating a lot for this auction.

We’ll select the Dutch Forward Auction type.
Let’s enter the starting price and the dates.
Let’s take a look at the Dutch Forward Auction parameters on the right side.
There are three parameters:
We will set the Decrement value at $2,000.
For the purpose of this demonstration, we will set the Duration between two decrements to 30
seconds.
The number of bidders, the value of this field defines the number of bidders that are allowed to
bid at the same price at the same time (1-second latency). The mechanism for this field is the
same as Dutch auction: The first one to bid will win the auction.

Let’s save the settings.

Scope the auction and Save it.
Now validate and publish the auction.
The Auction has begun.

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[Supplier EZ Connect]
Logging in as EZ Connect, we can see the price starts at $100,000. The next occurrence will be
at $98,000 in just a few seconds.

[Buyer]
Back to the Buyer’s Auction Console, the price continues to go down in every 30 seconds.

[Supplier EZ Connect]
As soon as the price reaches the Supplier’s floor price, the Supplier will place a bid on it.
EZ Connect is going to bid at $94,000.
Upon confirmation, the auction is closed.

EZ Connect won the auction.

5.7 Demo: Index Premium 

[Principle]
The Index Auction type is used to buy commodities that are subject to frequent market price
fluctuations. Index auctions follow the same principles of an English (or Forward) auction. The
only difference is this auction type deals with percentages, instead of currency amounts.
[use case]
The scenario for this demonstration will be an auction to purchase sugar. The price for sugar is
subjected to high market price fluctuations. In index auction, we, as the buyer agreed to pay the
Market price, plus a premium determined based on a percentage.

[use case-example]
For example, if the market price for a certain quantity is $10,000.
The Buyer will pay $10,000 plus a percentage based premium that is subject to the Index
Premium Auction. The lower the percentage is, the better the price becomes.

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If the premium percentage is 10 percent, the buyer will need to pay 10 percent of the $10,000
dollar on top of the $10,000 dollar, which is $11,000.
If the premium is 5%, then the buyer will have to pay $10,500.

[Demo]
We’ll begin by opening this drafted Auction for Sugar.
There’s an item in this auction. As well as two suppliers.
Let’s create a new lot.
We’ll label the lot as Sugar.
From the Auction Type drop-down, select the Index Premium Auction. Enter the Displayed
order.
As we’ll be dealing with percentages in this auction, it will make more sense to change Number
of Decimal Places, increase it to 3.
This time, the price values are measured in percentages.
Let’s put 10 percent Reference, a Starting Price at 9 percent, and a target percentage of 3 percent.
Let’s enter the dates.
Moving over to the right side, we will adjust the decrements.
Let’s set the absolute decrement to 0.2 percent and the relative decrement to 0.5 percent.

We’ll leave the trigger as is to prevent unfair behaviors during the auction.
We will save the settings to continue.
Make sure to scope the auction with the Item and the Suppliers. Save it
Now, we can validate and publish the auction.

Then notify the suppliers by clicking on the Notify Via Email button.
We will enter the console and wait for the auction to begin.
The auction is now In Progress.

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[Supplier ABB]
Let’s enter the Supplier Portal for ABB to start bidding.
Upon clicking on the bid button, the Supplier is requested to enter a percentage. Three decimal
places are allowed for the bid. The decrements apply to the percentage values as well.
We’ll bid for 9%.
[Buyer]
Back to the Buyer Console, we can see the other supplier just bid 8%.
[Supplier ABB]
Returning to the ABB portal, we’ll keep bidding.
The authorized range is from 6.8% to 7.96%.
This upper limit is determined based on the decrements. Remember, as a buyer, we set up the
Relative Decrement Value with 0.5 percent.
Applying 0.5 percent to the current best bid, 8 percent submitted by the other supplier, gives a
7.96 percent.
We’ll bid 6.8 percent.

[Supplier Sugar Green]

Typically, when we reached the acceptable limit for the supplier, bids will start to be more
accurate. This time we will bid for 5.850 percent.

[Supplier ABB]
Now, ABB will bid for 5.555 percent.
[Buyer]
The auction will continue until the bidding period is closed or when the Suppliers stop bidding.
ABB won the auction as they offered the lowest premium at 4.2%.
If the market price is $10,000 for the desired quantity, then the buyer will have to pay $10,420
for the item.

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 5.8 Demo: Index Discount 

The principle of an Index Discount Auction is somewhat similar to Index Premium.

In Index Discount Auctions, supplier bids on a discount percentage that will be applied to the
market price.
For example, if the market price is $10,000 and the Discount Index is 5%. The buyer will have to
pay 95% of the market price. The higher the discount is, the better it is for the buyer.
Let’s demonstrate this kind of auction.

[Demo]
Let’s begin by duplicating the Sugar auction.
We’ll create a new lot.
We will call this lot - Sugar Discount.
Let’s select Index Discount for the Auction Type.
Enter the displayed order and change the number of decimal places to 3.

Moving on to the price settings, prices are entered in percentage and you should target the
highest possible percentage.
We’ll set the reference price at 3%, the target price at 10%, and the starting discount at 4%.
Next, enter the start and planned end date of this auction.
In the Index Discount Auction settings, we will change the decrement values.
0.25% for the absolute minimum decrement and 0.5% of the relative minimum decrement.
We’ll leave the other parameters as is and Save it.
Before we validate the lot, we will scope the auction with the item and the supplier.
Then we will save, validate, and publish it.
Now, click on the Notify via Email to notify the suppliers.
Click to enter the console to monitor the auction.
The auction just began.

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[Supplier Sugar Green]
We will switch the view over to Sugar Green and start bidding.
The bidding range is expressed in percentage.
The Supplier who proposed the highest percentage, discount, will win this auction.

[Supplier ABB]
Let’s keep bidding.
The bidding value will increase over time.

[Buyer]
The auction will continue between the suppliers. The goal here is to get the best discount for the
buyer.

Now we are in the quiet zone.

The auction is ending in the next few minutes, if no other supplier place a bid, ABB will win this
auction.
Here we go! The auction is now closed.
ABB won the auction with a 6% discount. Which means for a desired quantity of sugar, if the
market price is at $10,000, the Buyer will only have to pay 94% of $10,000 to ABB, which is
$9,400.

Conclusion
This concludes the Auction class. Thank you for your attention and thank you for choosing
Ivalua. We hope to see you in other Ivalua Academy courses.

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