Optimizing B2B transactions using the marketplace competitive analyzer

In a business-to-business (B2B) environment, most if not every large company interacts with suppliers, customers, and competitors on one or more Net markets, connecting to both ends of the supply chain, the supplier side and the customer side. To support purchasing agents, analysts, and managers in evaluating their purchasing decisions, a new analytical tool is presented, the Marketplace Competitive Analyzer (MCA). The MCA is a component of a total supply chain solution. It is supportive of the supplier relationship management (SRM) concept and extends its functionality into electronic marketplaces. In this way, the MCA solution expands the SRM concept into the B2B world of online exchanges. MCA is also of value in the selling end of the supply chain, though this paper mainly focuses on the buying end of the supply chain. MCA analyzes the past transactions for a given commodity in a Net market using Data Envelopment Analysis (DEA), a nonparametric efficiency analysis technique based on linear optimization. DEA and MCA are used to analyze the efficiency of each buy position in the Net market. This helps the decision maker discover possible tradeoffs while considering the terms of the purchase, such as price, lead time, quality and quantity. MCA can be used to design optimal spot buy bids in the supplier end of the chain, so that the procurement activities are better supported. As a result, MCA helps the analyst to design an efficient and advantageous spot buy offer.