In May 2000, Sonia had Syngal, director of sourcing strategy and supplier relations at Sun Microsystems, to make a critical decision. Under Syngal leadership, the company had just completed his first “Dynamic Bidding” pilot tests and as a result, cut its procurement costs by 30%. Given these results, the potential for cost savings through the implementation of a dynamic bidding system on a wide scale in the sun was enormous, on an annual basis, the company was currently investing about $ 9 billion … Read more »

In May 2000, Sonia had Syngal, director of sourcing strategy and supplier relations at Sun Microsystems, to make a critical decision. Under Syngal leadership, the company had just completed his first “Dynamic Bidding” pilot tests and as a result, cut its procurement costs by 30%. Given these results, the potential for cost savings through the implementation of a dynamic bidding system on a wide scale in the sun was enormous, on an annual basis, the company currently has about $ 9 billion direct material procurement. Although the potential to reduce costs significantly, it was clear Syngal had to consider some other aspects, including: 1) Sun suppliers and the potential impact of a dynamic competitive bidding program on the Company’s critical relationships, 2) the implementation of the Sun’s internal components, namely its goods directors who had been trying for years, in order to identify the most effective way to work with the company’s suppliers, and 3) the selection of the best software providers that would be difficult in a crowded room
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from
Chuck Holloway,
Andrea Higuera
Source: Stanford Graduate School of Business
18 pages.
Publication Date: Aug 27, 2002. Prod #: OIT34-PDF-ENG
eSourcing Strategy at Sun Microsystems HBR case solution

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