$12M was sitting in spend nobody had capacity to test
SMTC's buyers could run about 11 competitive bids in 30 days by hand. That ceiling is why 44 direct-material parts had never been tested, and why the suppliers on them had never moved off list price. Cronwell staged all 44 in a single hour.
Parts were chosen with the buyer team and suppliers pre-qualified before the clock started. SMTC set the rules: award criteria, floor behavior, and the one-hour window.
Eight qualified suppliers placed 120 bids. The featured part fell from $5.1M to $2.7M. Suppliers who had never moved off list price competed in real time. They saw their rank, not their rivals.
$12M saved across the 44 parts, a 32% average reduction, in one hour of competitive bidding, against 11 bids in 30 days the manual way.
Reverse auctions are not new technology. What SMTC did not have was a reason to believe any particular part was worth running one on, and no team can test 44 parts eleven bids at a time. That is the half the PO record solves: real paid prices per part and per supplier, so the parts carrying the most air rise on their own. The auction collects the savings. Finding them is the harder part.
“We were totally blown away. Our first toe in the water.”
Sources — Results from a live SMTC Corp. sourcing event; figures confirmed by SMTC Corp. Named with permission.