Reverse auctions – grounded theory from the buyer and supplier perspective

Supply chain relationships are increasingly impacted by the use of the Internet and the adoption of logistics technology. In this paper we report the results of a large-scale field study of a diverse group of buyers and their suppliers who have participated in a unique and recently adopted Internet technology: electronic reverse auctions (e-RAs). We examine the barriers to implementing e-RAs, as well as such consequences as cycle time and productivity. We also investigate the parameters that affect the savings that occur during a specific e-RA event, including lotting strategies and the degree of supplier visibility.