Ultra Electronics had the only (at that time) successfully operating electronic supplier market in the CIS. Today the X5 Retail Group — the giant of the retail — is looking closely at similar technologies. So deliberately that it makes snails feel respected.

 

The supplier market allowed the company’s purchasing to propel to the next level by excluding the human factor from routine processes, shifting the burden onto suppliers and the information system to the max. Buying decisions are made by the robot based on offers" ratings in points, which minimized the propensity for corruption between buyers and suppliers.

Every morning (the frequency can be set to as often as hourly) the dia$par automatically generates requirements in stock items based on:

• sales speed and estimated time to sell the remaining stock;
• whether various stock items are interconnected and can be substituted;
• turnover target ratio;
• maximizing marginality of stock.

The requirements are automatically corrected in regard to logistics — warehouse capacities and other factors.

Before 2 P.M. suppliers publish their proposals — terms of delivery to the customer warehouse and prices. Every supplier has its own rating– reliability of deliveries, convenience, warranty and financial terms in points.

The supplier’s rating, prices and delivery terms generate the final point rating of the offer (the impact that delivery terms have on the rating is calculated on the fly, depending on the current stock of the product). The auction is carried out according to the weight of each offer. dia$par suggests suppliers which parameters need changing to increase the weight of their offers.

At 2 P.M. the auction is closed; dia$par analyses its results, automatically generates orders and sends them over to suppliers with their product codes.

The time when the auction stops can be automatically adjusted depending on the urgency of demand for a specific product, thus further optimizing supplier offers.

For obvious reasons, we can’t reveal all the functionality here.

The electronic market allowed easy handling of offers from over 500 suppliers by seven employees only, while the range of products consisted of over 30 000 items. They managed to keep the monthly stock turnover between 2.5 and 3.5 — while the total stock amount was several tens of millions of dollars, distributed over tens of warehouses that were sited in various geographic locations in European Russia.

Innovations are already here and can be bought for a reasonable amount of money?.