DPW 2022 focused on navigating volatility, and in the interview, Dr Sebastian Wieser elucidates key elements that impact businesses and what it takes to look towards the future.
Key takeaways from the interview:
Ambiguity creates the possibility for change
We are living through incredible times, and our CEO Dr Sebastian Wieser says he hasn’t seen changes such as these in the e-procurement industry in the past 20 years.
In the video interview, he explained why ‘Ambiguity’ in the VUCA world is especially important to him – referring to the acronym VUCA which stands for Volatility, Uncertainty, Complexity and Ambiguity.
Given the volatile situation of fluctuating prices, the uncertainty of not knowing when the situation will end, and the complexity of dealing with the problems leads to Ambiguity. But Ambiguity also creates an immense possibility for change, innovation and adopting more sustainable practices, said Dr Sebastian Wieser.
Using dynamic pricing instead of framework agreements
The Unite Platform has introduced dynamic pricing to help buyers and suppliers deal with this ambiguous situation.
Classical contracts were popular in the last decades. Buyers negotiated with suppliers every couple of years and created fixed prices for products. But that’s not feasible anymore as suppliers cannot offer low prices on such contracts because of market volatility.
Auctioning single low-value baskets helps suppliers mitigate the risk that accompanies long-term contracts. Unite offers the possibility to connect with multiple suppliers at the click of a button and to adapt to market changes quickly. The result is a fair value for the product. In addition, ad-hoc services and quality criteria offered by suppliers can be factored into the auction price to encourage already existing relationships between suppliers and buyers.
Sustainability is paramount
Values can be attributed to constantly evolving criteria depending on numerous factors, from ethical sourcing to sustainable manufacturing. This is a sub-set of preferences, and there can be thousands of them. When a buyer attributes a value to the sustainability criteria, it can be evaluated through the Unite platform in the future, pushing suppliers to do more to fulfil these preferences.
Furthermore, this personal evaluation will help in the day-to-day business operations of the suppliers as they can measure their products’ worth and calculate economic value. It also takes away the risk from suppliers who otherwise might have invested in the wrong features of a product.