2-15.15 Quadrant Approach

A quadrant approach classifies all Postal Service purchases into four categories, depending on their impact on Postal Service core competencies (noncore versus core) and complexities (standard versus custom). Reverse auctions rely on competition driving prices down, so the less complex or specialized the good or service to be purchased, the greater the chance for a successful auction. Simple commodity items or services that can be clearly defined and have a wide range of potential suppliers will be best suited to the auction process. Reverse auction suitability may be dependent on the quadrant the need falls into, illustrated in Figure 2.9.

Figure 2.9

Quadrant Approach

2-15.15.1 Quadrant I: Custom/Noncore Purchase

Reverse auctions would be less suitable for these purchases because the supply market is very restricted. To have an effective reverse auction, a large supplier base is preferred.

2-15.15.2 Quadrant II: Custom/Core Purchase

Reverse auctions would be less suitable for these purchases because the products and services are complex and specialized. Reverse auctions rely on competition driving prices down, so the less complex or specialized the good or service to be purchased, the greater the chance for a successful reverse auction.

2-15.15.3 Quadrant III: Standard/Noncore Purchase

Reverse auctions would be less suitable for these purchases because the focus is on reducing purchase effort and associated costs.

2-15.15.4 Quadrant IV: Standard/Core Purchase

Reverse auctions are suitable for purchases in Quadrant IV because there are many supply market options.