Latest e-auction cuts costs for Whitbread by 16%

Its auction saw four international companies bidding to provide Whitbread with potato wedges, mashed potato and chips for 2009 for its 500 UK-based Premier Inn Hotels and Whitbread restaurants – enabling the company to avoid a 16% price hike, which equates to a saving of nearly £400,000 per year. Paul Farrow, head of procurement for Whitbread, says that the process saved huge time and effort – with Oracle Sourcing and eThree’s hosted platform enabling the firm to receive 60 bids from the four vendors and complete the entire process within one hour. “We are delighted with the outcome of this e-auction, because it vindicates our belief that such technology can delivery significant value to the bottom line for our business,” says Farrow. “With commodity prices rising significantly, the pressure on margins for the hospitality industry is immense, so we’re particularly pleased to be able to mitigate such substantial cost increases through the use of technology. It will help us to stay ahead of the competition by managing our costs more efficiently and to continue to pass on value to our customers.” He also explains that Whitbread was able to remove itself from the negotiations by setting the parameters for the bidders and allowing prospective vendors to evaluate the criteria, then submit bids which could be ranked. For the participating suppliers it was a clear process, as they could quickly understand if their bid slipped in the ranking and needed to re-enter their bid. For Whitbread the process allowed a complete and transparent overview of the bidding process as it happened without requiring further involvement from them, he says.