eSourcing Strategy at Sun Microsystems

By Andrea Higuera, Charles Holloway
2002 | Case No. OIT34
In May 2000, Sonia Syngal, director of procurement strategy and supplier relations at Sun Microsystems, needed to make a critical decision. Under Sonia’s leadership, the company had just completed its first “dynamic bidding” pilot tests and as a result, cut its sourcing costs by 30 percent. Given these results, the potential for cost cutting via the implementation of a dynamic bidding system on a widespread scale at Sun was enormous; on an annual basis, the company was currently spending about $9 billion in direct materials procurement.. While the potential to significantly cut costs was clear, Sonia had several other issues to consider, including: 1) Sun’s suppliers and the potential impact of a dynamic bidding program on the company’s critical relationships; 2) The reaction of Sun’s internal constituents, namely its commodity directors who had spent years trying to identify the most effective way to work with the company’s suppliers; and 3) Selecting the best software vendor, which would be difficult in a crowded space.
This material is available for download by current Stanford GSB students, faculty, and staff, as well as Stanford University alumni. For inquires, contact the Case Writing Officeopen in new window. Download