Did you know that there are hidden risks in the prices of products and services in long-term contracts?

Did you know that there are hidden risks in the prices of products and services in long-term contracts? Let’s look at the five main risk moments:

1. Cost Inefficiency

👉 The first main risk is cost inefficiency. Without constant or regular price comparison, your organization may be overpaying for goods and services. Prices in the market can fluctuate due to economic changes, industry developments, and competition. If you’re locked into a long-term agreement with fixed prices, you may miss out on cost-saving opportunities. Regular benchmarking helps identify cost inefficiencies and renegotiate agreements when needed.

2. Market Changes 

👉 The second main risk is market changes. Markets are dynamic, and prices for products and services can change significantly over time. Long-term agreements might have been negotiated at a favorable rate initially, but market conditions can shift. If you don’t keep tabs on these changes, you may pay more than the current market rate. Benchmarking ensures that you adapt to market shifts and maintain a competitive edge.

3. Supplier Performance 

👉 The third main risk is supplier performance. The quality and performance of suppliers can change over time. While you may have entered into a long-term agreement with a supplier who met your requirements at the start, their performance might decline or improve. With periodic benchmarking, you will have a clear picture of how well your suppliers are meeting your needs. This lack of insight can lead to suboptimal performance and possible missed opportunities to improve service or reduce costs.

4. Technology and Innovation 

👉 The fourth main risk is technology and innovation. Technological advancements and innovation can significantly impact products and services. If your long-term agreements are based on outdated technologies or practices, you could miss the benefits of newer, more efficient solutions. Regular benchmarking helps you identify opportunities to leverage technological advancements and innovation to your advantage, improving your operations and competitiveness.

5. Neglected Contract Terms

👉 The fifth and last main risk is neglected contract terms. Long-term agreements often come with multiple contract terms, such as service levels, quality standards, and performance guarantees. Without consistent benchmarking, these terms might be overlooked or forgotten. This can lead to compliance issues, as both you and your supplier may not be meeting the agreed-upon terms. Regular benchmarking helps you stay on top of contract compliance and ensures that both parties fulfill their obligations.

Recap

In summary, failing to regularly price benchmark long-term agreement products and services can result in cost inefficiency, leaving your organization vulnerable to market changes, supplier performance fluctuations, missed opportunities for technology and innovation adoption, and neglected contract terms. To mitigate these issues, it’s crucial to implement a robust benchmarking process that continuously assesses the cost, quality, and performance of your long-term agreements. This proactive approach ensures that your organization remains competitive, adapts to market dynamics, and maximizes the value derived from your supplier relationships.

Youtube: https://www.youtube.com/watch?v=fEcDvSu0bI0&ab_channel=BzCall

Keywords: #sourcing #supplychain #smallbusiness #procurementprofessionals #Construction #Machining #CNC #sourcingandprocurement #procurement #procurementleaders #supplychainmanagement #savings #costcutting

Written by Gert 

Last time edited: 07.11.2023

We are open!

Tallinn – 22 September 2023

We are happy to finally announce that our procurement auction web application prototype BzCall.com is ready for use. It is a fully functioning platform, where is possible to reduce costs and expenses via the reverse auction method. Please see a short overview of how it works. A properly prepared procurement auction can reduce costs and expenses by 10-30% or even more. There are no limits on which expenditures can be trimmed or no limits for industries. The service pricing is reasonable, with no hidden fees,  clear, and straightforward. 

Main value propositions using the service

  • Reduction of costs and expenses
  • Sourcers will save working time for other tasks
  • Fair and transparent competition
  • Fewer nepotism appearances
  • Reduction of lead times

Keywords: #sourcing #supplychain #smallbusiness #procurementprofessionals #Construction #Machining #CNC #sourcingandprocurement #procurement #procurementleaders #supplychainmanagement #savings #costcutting

BzCall Technology OĂś 

Last time edited: 22.09.2023

How to set up a procurement auction?

The user guide gives a short and quick overview of how easy is to set up a new procurement auction. It does not take more time than 3-4 minutes (the same time as writing one proper RFQ email), but some can do it faster and some slower, which is okay and real practice reduces that time as well. A few minutes of work can save for some 50€ and another one +100k€ depending on the procurement auction scope, details, and nature. Please also watch the demo clip on YouTube.

Here are highlighted 24 fields, that should be paid attention to making a good procurement auction, which should bring delighted results as saved money and time. 

A procurement auction can be done only after registering an account as a natural or legal person. Same story if someone wants to see the open procurement auctions and participate in bidding.


  1. Before making a new procurement auction, please select the correct role such as a natural or legal person.
  1. The new procurement auction tab can be found in the right top corner.
  1. After clicking the new procurement auction button it opens a new sheet with the status bar “Step 1” which has to fill in the described fields below.
  • Selecting proper category
  • Adding quantity
  • Selecting or defining proper units
  1. Clicking the Save and Continue button will take you to the sheet status bar “Step 2” which has to fill in the described fields below.
  • Adding auction start date and time
  • Selecting procurement auction duration and extended end parameters
  • Selecting auction priority as time vs. cost
  • Write a proper relevant auction name 
  • Add auction description and here is the principle more is better. You can also follow left side checklist points if something can be missed.
  • Upload documents if needed such as technical documents, files, pictures, sketches, etc. The suggested file format is *.zip but it can be used in widely used document formats also like samples can be seen
  1. Clicking the Save and Continue button will take you to the sheet status bar “Step 3” which has to fill in the described fields below.
  • Select the proper delivery method
  • Confirm or change the shipment delivery address
  1. Clicking the Save and Continue button will take you to the sheet status bar “Step 4” which has to fill in the described fields below.
  • Confirm or change the billing address
  1. Clicking the Save and Continue button will take you to the sheet status bar “Step 5” which has to fill in the described fields below.
  • Select the anonymity parameters
  • Invite at least two vendors, Here is the principle More is better
  • Confirm that you know invited friends or vendors
  • You can add your budget number to see later the outcome, but it is not mandatory here and leave it as zero
  • Make the final check for the right side column “Procurement Auction summary” and adjust what is needed
  1. In case all is perfect then clicking the Finish button will activate the procurement auction and invitation emails will be sent out according to the auction start date and time. Here can be wished good luck!

Written by Gert 

Last time edited: 28.07.2023

Discover BzCall.com: The Future of Easy-to-Use Procurement Auction Site

As a sourcing manager with years of experience, I’ve always sought an easy-to-use procurement auction site or similar tools (e-auctions or e-procurement sites) to streamline my day-to-day work. The need for such a tool became clear through my various projects. When I couldn’t find a solution on the market, I decided to create one myself, hoping it would help others as well. And so, BzCall.com was born. The main goal? To save on expenditures and free up valuable working time.

Introducing BzCall

  • What is BzCall? The name combines “Business” (abbreviated as Bz) and “Call,” reflecting its purpose: inviting businesses (vendors) to bid on specific jobs. Simple, right?
  • Why Choose BzCall? In today’s competitive business landscape, controlling costs and expenses is crucial—not just for maximizing profits, but for survival. Over the past two decades, I’ve witnessed the ups and downs of the market. You probably have too. Maintaining market share and gaining a competitive edge is essential, especially as product and service life cycles shorten. Complacency is risky; market forces are relentless and can quickly outpace companies that fail to innovate. BzCall.com offers a way to step out of that comfort zone and make procurement auctions by reducing costs by 10-30% (or more with thorough preparation).

Key Benefits of BzCall

  1. Cost Reduction: Significantly cut down expenses.
  2. Reduced Lead Time: Speed up procurement processes.
  3. Vendor Improvement: Encourage vendors to elevate their performance.
  4. Fair Competition: Ensure a transparent and equitable bidding process.
  5. Minimized Nepotism: Reduce favoritism in vendor selection.
  6. Expanded Supplier Pool: Access a broader range of vendors.
  7. Time Savings: Allow sourcing managers to focus on other essential tasks.
  8. Confidence in Deals: Be assured of securing the best market deals.

Who Benefits from BzCall?

  • Sourcing Managers
  • Procurement Managers
  • Buyers
  • Supply Chain Managers
  • Project Managers
  • Small Business Managers and Owners
  • Cost Estimators
  • Technical Engineers
  • NPI Team Members

Summary

BzCall offers an efficient and effective solution to reduce expenditures and save time in procurement processes. Whether you’re a sourcing manager, procurement manager, or small business owner, BzCall is designed to help you thrive in a competitive market.

Discover how BzCall can revolutionize your procurement processes today!

Written by Gert

Last time edited: 11.07.2024

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