What are Alternative Responses in SAP Ariba Sourcing events?
Alternative bids allow suppliers to bid alternate quantities, term values, and/or bundles to show the project owner how to save more money. Suppliers can also be allowed to add their own items.
Alternative Response Event Attributes
- Suppliers must first respond to the original bid before they can submit an alternate bid.
- Three Types of Alternative Responses: Alternative Pricing, Bundles, and Tiers.
The Can participants create alternative responses? rule only appears if the Specify how lot bidding will begin and end timing rule is set to Parallel.
- When bidding is complete, the project owner can award business in that event or create follow-on events, such as an auction, using the quantities, terms, and bundles that will likely yield best savings.
When to use Alternative Responses
Sometimes suppliers would like to respond to your RFP or auction in a slightly different way in order to provide you with better pricing. As experts in providing that particular item or service, they can often make suggestions that can save you money.
When alternative responses are enabled in a sourcing event, suppliers first submit a bid on the items/services and terms that the project owner has created. For example, 100 units of product x in color blue. This is the primary bid. Once the primary bid has been submitted, suppliers can submit an alternate bid such as product x in color red.
Alternative Response Type Overview
- Alternative Pricing allows suppliers to submit an alternate bid by providing a different value for term(s). For example, a supplier may suggest a different brand of an item, an alternate material or component in an assembly, or a different time frame for a service. Suppliers first submit the primary bid based on the term value dictated by the project owner, but then can submit an alternate bid using alternate values as desired.
- Participant Bundles allow suppliers to group the items in the event together as bundles to provide discount pricing. Each supplier could potentially bundle items together differently to offer discounts, depending upon their own unique capabilities and costs. Suppliers must first submit a primary bid based on the items, lots, and/or bundles specified by the project owner.
- Tier Alternatives allow suppliers to create multiple volume tiers for one or more line items and provide a distinct price for each tier. This allows each supplier to communicate where their price breaks are, based on quantity. For example, they could give you one price for quantities 1-100, another price for quantities 101-500, and a third price for quantities 500-1000.