Sheercost
automated reverse auctions
Sheercost is cloud-based system which automates the full procurement process, including the creation of online reverse-auctions between suppliers, thereby enabling buyers to receive the lowest price for every order
How does it work?
The solution: Sheercost offers a turnkey solution for procurement management, from soliciting supplier quotes to the ordering process.
The system allows suppliers to update their pricing based on to the competition, and notifies them on price changes and on how attractive their quote is in comparison with the competition.
The client benefit is therefore double; the procurement manager purchases at the lowest price with every new order, while saving the time needed to conduct a market survey.
The problem: Using the tools available today, business owners and corporate buyers do not have the time and resources to perform all the procurement activities required to attain the lowest asking price.
The result: They forego the full procurement process, therefore paying higher market prices.
Target audience: Sheercost can support all forms of regular procurement, with implementation abilities that match any industry. The relevant market therefore, is huge.
A food industry pilot conducted with Excel sheets simulating part of the automated reverse auctioning process brought a 15% decrease in procurement costs to the business tested, with savings of more than 200,000 NIS out of a 1.5 million NIS annual budget.
The restaurant, coffee shops and bars industry accounts for 8,000 businesses in Israel. A similar number of kitchens operate in other businesses and institutions such as hotels, catering companies, event venues, hospitals, factories and big companies.
The Israeli food industry has an annual value of 12 billion NIS, 4.8 of which are spent on routine procurement. In the U.S., the industry accounts for 1 million businesses and $800 billion market, of which $320 billion are allocated for procurement.
The number of procurement actions executed daily is huge, and as of now, most are still being carried out with outdated technologies such as phones, fax machines and email.
Milestones:
2016 – Conducted a pilot within the food industry, simulating the automated procurement process. The pilot generated savings of more than 200,000 NIS out of a 1.5 million NIS annual budget.
2017 – Version 1 will go live in the 3rd quarter, including all of the automated interfaces.
2017, phase 2 – adding features allowing business reports and data sharing in groups and online communities.
2017, phase 3 – developing an algorithm to create Machine learning, which will forecast price and market trends using big data.
Business model:
Sheercost generates revenue by charging a monthly subscription in two plans:
1. A standard plan offering access to the automated system and with an ordering option.
2. A premium plan including an addition of managerial reports, price forecasts and exposure to potential suppliers.
Suppliers can benefit from a targeted advertising among prospective clients and access to new client supply lines.
