“Clearly our strategy is to build relationships with suppliers,” says Bob Marshall, vice president of purchasing at Blue Bird Corp. in Fort Valley, Ga. To that end, he is using an e-auction tool to help consolidate the company's supply base and transform purchasing from a mainly tactical to strategic operation.

In the year since he assumed his current post with the bus manufacturing company, Marshall has used an e-auction tool of Trading Partners in Chicago to negotiate pricing with suppliers of safety supplies, crib supplies, corrugated packaging and office supplies. While the lowest bidder doesn't necessarily get the contract—quality and delivery are equally important criteria, he says—the tool has helped to reduce costs in some spend categories by 30%.

More important, the tool helps Marshall and his team consolidate the supply base from 15-20 suppliers for some indirect spend categories to one or two. All told, Blue Bird had 2,200 suppliers in 2007 and is looking to reduce this number to 550 by the end of 2008. A consolidated supply base, Marshall says, gives purchasing more time to spend developing relationships with raw materials and components suppliers.

Marshall, who has more than 30 years experience working in purchasing in the auto industry, views Trading Partners, which has conducted more than 20 e-auction events for Blue Bird, as an extension of his purchasing team and sought its expertise when analyzing the company's spending. Blue Bird's database is huge—there are approximately 30,000 part numbers on an average bus.

“Trading Partners has category expertise in areas that may not be significant to us, such as office supplies,” he says. “Office supplies is not our core business so we don't spend a lot of time on it.” Trading Partners expertise is also useful in determining whether the company has competitive pricing in some areas and if a category is a candidate for an e-auction.