Archive for September 5th, 2008

Reverse Dutch Auctions for Low Rate Loans in New Delhi

September 5, 2008

Today I found an interesting  article about a series of reverse dutch auctions for low rate loans held by an infrastructure finance company called SREI in New Delhi India. 

SREI brings together construction equipment manufacturers on one side, and contractors engaged in construction activities on the other. The manufacturers present the financing for their equipment and the bidding is conducted on the interest rate in a dutch reverse auction. The interest rate will start high, and will be automatically lowered until the first  contractor accepts to buy at that interest rate.

The concept seems to pay off as they are already planning to spread the concept to 9 more cities in India and to other countries abroad.

Here is the full article:

http://profit.ndtv.com/2008/08/23204446/Reverse-auction-for-low-rate-l.html

One Supplier Audit Question You Probably Never Asked

September 5, 2008

Michael Bengtssons post yesterday regarding cost and quality in the teddy bear industry made me want to share a fantastic story regarding cycling manufacturer Bianchi and their factory in Triviglio in northern Italy. In the latest issue of the fabulous cycling magazine Rouleur, british cycling connoisseurs Guy Andrews and William Fotheringham visited the factory to write an article about the 120 year old cycle manufacturer; who’s riders read like a who’s who of cycling greats: Fausto Coppi, Felice Gimondi, Marco Pantani, Jan Ullrich, all have ridden celeste Bianchi’s to victory.

Starry eyed, the authors traverse the factory speaking to old mechanics, frame welders and R & D staff; sampling frames ridden by champions over the years and looking at what the the future may bring (steel frames, carbon monocoque T-cube bikes and even a titanium frame with etched graphics).

They summarize their factory tour with the words:

You’ll be glad to know that today the staff, including [Felice] Gimondi [Who is one of the cycling greats and an Italian icon, one of only four cyclists to win all three grand tours – Giro d’Italia, Tour de France and Vuelta Espana – as well as the world championships, he is the current president of the Bianchi-Gewiss MTB Team], ride their bikes at Treviglio. Bianchi’s management team are keen too, riding daily and taking great pleasure in ripping the legs off unsuspecting journalists. It is a friendly factory, with a devoted team who seem to like what they do.

And if that wasn’t enough, they end their factory exposé in the staff canteen:

Lunchtime in the canteen with relaxed conversations, wholesome Italian food and proper espresso machines: it all makes for a civilized atmosphere.

Proper espresso machines.

Now that might not be a mandatory question for you regular supplier audit, but for the avid cyclists – who are basically romantics with their hearts on their sleeves – I don’t think you could do any better.

Back to Steiff, co-chief executive Martin Frechen said in a Financial Times article that some suppliers only “think in terms of price and volume” and concludes that “for children, surely only the best is good enough – the best design, the best production, the best safety standards”.

To me, this spells out one thing; passion for your business. In a world where cost and volume seem to be the rule of the day; passionate businesses can surely find a niche market and exploit it to the fullest, but it also means that the business must share the same passion as the consumers. Steiff has understood this, and so has Bianchi.