Using the Internet

BOC Edwards' North America has developed two separate programs for buying supplies and selling overstocked items through the Internet. One program concentrates on eReverse auctions with suppliers bidding against each other by submitting quotes. The other involves selling overstocked items collecting dust in warehouses.

Making suppliers competitive

During the past two years, BOC Edwards has saved more than $250,000 by conducting eReverse auctions. Qualified suppliers receive bid packages and specifications a few weeks before the event and are asked to bid on-line and against each other during a specific period of time. If any supplier bids within the last minute, an overtime period is usually allotted to give others the opportunity to respond.

BOC Edwards piloted its first auction two years ago with a sheet metal item. "Because we realized a 12 percent cost reduction, we were encouraged to continue the practice with other applications," said Tom Connelly, supply manager, North America. "We've run nine auctions, involving six different locations, on products ranging from sheet metal to safety supplies."

Connelly said more auctions are being planned for the Kachina cleaning operations in Hillsboro, Ore., Phoenix, Ariz., and Austin, Texas. "We have also targeted marketing items, chemicals, pump frames and fittings for the next 18 months as just some of the areas in which we feel we can reduce our costs through the use of eReverse auctions."

Clearance site off to a good start

What began as a way to reduce some overstocked inventory may wind up being another regular purchasing channel available to BOC Edwards customers in the future.

BOC Edwards launched its clearance web site last July and sold more than $63,000 of stock in the first four months. Start-up costs were extremely low and the site was marketed to customers through internal publicity, a monthly email newsletter, and via a link on the homepage of the corporate web site.

"This may not seem like a large sales number," said Garrett Rent, eCommerce marketing specialist, "but it's a great alternative to the scrap heap, which was the only option in the past."

Rent noted that many of the pumps offered for sale had been remanufactured during the last 12 months. "They have been disassembled and restored to their original working specifications. Some stay in our pump pool inventory to help run the pump exchange program, and others are offered to customers through the clearance web site."

He said the project was planned as a six-month test to see if overstocked clearance inventory could be liquidated over the Internet. While most of the items sold have been rotary vane pumps and scroll pumps, plans are being considered to expand the test to include additional items that have depreciated in value since manufacture.

"Prior to having access to the site, customers could not see the items kept in our 'clearance' warehouse. The site allows customers to view pictures of items, technical data, warranty information, and item condition. Customers can purchase items on-line via purchase order or credit card."