Reverse Auction Critics Gone Wild

Since I first wrote about reverse auctions in Information Week in 1999, I've been a staunch proponent of their use and effectiveness. But that's not to say that all companies use them correctly or maximize the potential savings and value they can create. Their misuse, has in fact, sparked a small critics' circle that abhors their very existence. This sub-culture counts such pundits as David Stec and Bob Emiliani of The Center For Lean Business Management as card carrying members. Now, this is a free country, and in a true libertarian free market sense, I believe that everyone is allowed to have their own opinion. But all too often, criticism is founded out of self-interest. In my view, as Stec and Emiliani attempt to drive down the value of "sourcing, online sourcing, sourcing event[s], online transaction[s], e-sourcing, supplier e-connection, or strategic sourcing" through their research, they also drive up the potential audience for the "lean" services and training that they provide (they do not, as they point out on the site, provide reverse auction consulting services). A parting thought: while Stec and Emiliani would disagree, I believe that lean and strategic sourcing / reverse auctions are not necessarily in conflict. My wife, who has a Six Sigma blackbelt, co-authored a recent whitepaper arguing this very point. Maybe we can get a good discussion going at Spend Matters about this very topic.

-Jason Busch

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