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How Keelvar Can Help Clients Optimize Efficiency

June 7, 2013

Alan Holland

Keelvar can find cost savings for clients by gathering enhanced bid data from suppliers. By using Keelvar’s unique procurement software product it is possible to reason about conditional offers to compute the most economically advantageous outcome. Suppliers often have opportunities for realizing cost savings when they can work with buyers, but in large scale tendering these possibilities are lost without a more sophisticated software driven approach to reason about cost efficiencies. Thus, our innovative Sourcing Optimization software is central to our service delivery, complementing existing e-procurement solutions.

Clever Tender Design leads to Better Results

Firstly, our sourcing optimization software allows for the construction of a new price schedule to replace historical Excel spreadsheets. The previous limitation with the spreadsheet approach is that suppliers are forced to bid on lots independently when their true cost for servicing multiple lots depends upon what combinations of contracts they are awarded in the tender. An online interface that is tailored for a specific spend category replaces the spreadsheet.

Communication of Efficiencies

Our tailored modules for specific spend categories gather information from suppliers about their preference structures and how they would like to construct their bids in order to express dependencies between the contracts for the different goods. Often, suppliers wish to secure nearby locations and offer discounts of the form “If I supply 80% of the western region we will offer a 5% discount on both”.

The missing piece in typical tenders concerns elicitation of information concerning price dependencies across lots. With Keelvar, bidders are invited to submit richer price information in a bidding language tailored to their spend category.

For example, responders in a taxi services tender could communicate cost reductions on routes subject to being awarded pick-up rights at the destination. In essence, Keelvar facilitates more expressive bidding so that synergies can be identified and complementary lots for suppliers can be serviced at a discount in a win-win outcome.

Searching for the Best Outcome

Keelvar’s background in computer science research and PhD level knowledge of algorithms and Artificial Intelligence provides a key competitive advantage in terms of our ability to search for an optimal outcome given the richer bid data provided in the tendering exercise.

We also provide the purchaser with the means of scoring and viewing the most economically advantageous outcome when the tender is closed (MEAT).

In summary, Keelvar’s approach is very much grounded in offering a solution that can increase competition while ensuring that the outcome is one that winning suppliers are comfortable with.

See how Keelvar’s sourcing optimization solution works.

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