Creation of E-Auction in Aerchain

1. Purpose

The purpose of this SOP is to provide step-by-step guidance for creating and configuring an E-Auction within the Aerchain procurement platform. This SOP ensures accuracy, compliance, and consistency in auction creation, thereby enabling effective supplier participation, competitive bidding, and transparent procurement decisions.

2. Scope

This SOP applies to all procurement users, category managers, and sourcing professionals who are authorized to initiate and manage auctions within the Aerchain platform. It covers the navigation, data entry, configuration, and validation required to set up an E-Auction.

3. Responsibilities

  • Auction Creator (Procurement User): Responsible for initiating auction creation, entering details accurately, and configuring rules based on business needs.

  • Category Manager/Approver: Reviews auction details, ensures compliance with internal guidelines before release.

  • Suppliers: Participate by adhering to the auction rules configured.

4. Prerequisites

  • Valid Aerchain user credentials with auction creation rights.

  • Approval from Category Manager to initiate an auction.

  • Defined sourcing strategy, type of auction, invited supplier list, and necessary commercial details.

5. Procedure

Step 1: Navigation to Auction Creation

  1. Login to Aerchain platform with your authorized credentials.

  2. Go to the Modules section in the left-side navigation panel.

  3. In the search bar, type “New Auction”.

  4. Click on New Auction to enter the Auction Creation Page.

Step 2: Auction Creation Page Structure

The Auction Creation Page in Aerchain is divided into the following sections:

Section 1: General Settings

Enter all required auction details in this section.

  1. Subject (Mandatory):

    • Input a clear and descriptive auction subject (Free Text).

    • Example: “Procurement of Steel Coils – Q3 FY25”.

  2. Type (Mandatory, Dropdown):

    • Defines auction methodology. Options include:

      • English (Forward/Reverse)

      • Japanese (Forward/Reverse)

      • Dutch (Forward/Reverse)

    • Select Reverse Auction if the objective is to reduce supplier prices.

  3. Allowed Currency (Mandatory, Dropdown):

    • Select applicable transaction currency (e.g., INR, USD, EUR).

  4. Frequency (Mandatory):

    • Defines whether an auction is One-time or Recurring.

  5. Estimated Award Date (Optional):

    • Enter anticipated contract award date.

  6. Payment Terms (System Field - Auto-Fetch):

    • Payment terms preconfigured from ERP or sourcing template.

  7. Reference (Optional, Free Text):

    • For any internal identifier, note, or RFQ/PR reference number.

Section 2: Dimension Settings

  1. Billing Address (Mandatory): Provide billing address of the organization.

  2. Delivery Address (Mandatory): Specify delivery location where goods/services are expected.

  3. Company (System Generated): Entity is auto-populated based on the user's organizational setup.

Section 3: Advanced Settings

Fine-tune auction rules and configurations.

  1. Payment Terms & Conditions: Option to specify or override default conditions if required.

  2. Auto Release Auction (Yes/No):

    • Yes: Auction automatically becomes live on scheduled start date/time.

    • No: Requires manual release by user.

  3. User Mappings: Assign auction responsibilities like auction owner, co-owner, or reviewers.

Bidding Rules Configuration

  • Accept Pre-Bids (Yes/No): Allow suppliers to submit bids before the auction start.

  • Accept Tie Bids (Yes/No): Decide if equal bids from multiple suppliers are acceptable.

  • Enable Sealed Bid (Yes/No): Restricts bid visibility until auction closure.

  • Pre-Bids Visibility (Yes/No): If enabled, suppliers can view submitted pre-bids.

  • Bid Improvement Condition (Mandatory, Dropdown): Specify improvement rules:

    • No Improvement Required

    • % Basis (supplier must improve bid by defined percentage)

    • Value Basis (fixed currency value decrement)

    • Value with Lead Bid Basis (must undercut current lowest bid by defined value/%)

  • Bid Improvement Value: Enter value/percentage for improvement rule.

  • Minimum Bid Change Multiples (Yes/No): Restricts suppliers to multiples of specified bid increment/decrement.

  • Supplier Market Feedback (Dropdown): Decide what suppliers see during bidding:

    • Bid Rank Only

    • Bid Rank with Lead Bid

    • Bid Rank with All Bids

    • Highest/Lowest Bid Disclosure

    • None

Timing Rules

  1. Bid Start Time: Define exact date and time when the bidding window opens.

  2. Bid Run Time: Specify duration of the auction.

    • Define the time unit in Minutes/Hours.

  3. Auction Extension Rules:

    • Auction gets extended automatically if:

      • A competing bid is submitted within the last ‘X’ minutes.

      • Define parameters:

        • Extension Duration (Minutes)

        • Bid Rank Up-To (Position/Rank eligible for extension)

        • Trigger Window (Last X minutes)

    • Max Extension: Limit the maximum cumulative extension allowed.

Section 4: Line Item Details

  1. Product/Service Name: Define material or service to be bid.

  2. Item Type: Choose Goods, Services, or Custom.

  3. Quantity (QT): Specify required quantity.

  4. UOM (Unit of Measure): Define measure (e.g., MT, KG, Hours).

  5. Ceiling Price: Upper price limit per unit (system does not accept bids above this).

  6. Minimum Improvement: Define minimum decrement requirement for each successive bid.

Section 5: Notes & Attachments

  • Option to upload supporting documents (technical specs, drawings, T&Cs).

  • Notes section for additional clarifications to suppliers.

Section 6: Supplier Addition

  • Add invited suppliers to the auction event.

  • Suppliers must be pre-registered and approved within the Aerchain vendor base.

  • Map supplier-specific details if required.

Section 7: Terms & Conditions

  • Include standard contractual terms.

  • Additional T&C Input Box: For any special clauses, compliance requirements, or legal notes.

6. Validation and Release

  1. Review all filled information before finalizing.

  2. Validate mandatory fields (system prompts if incomplete).

  3. If Auto Release = No, manually release the auction at configured start time.

  4. Once released, suppliers receive system notifications with auction details and login links.

7. Post-Auction Activities

  • Monitor live auction for supplier participation.

  • Download bid logs and supplier response summary post closure.

  • Proceed with award evaluation as per procurement guidelines.

8. Control Mechanisms

  • Data Checks: Ensure accurate details to avoid auction errors.

  • Audit Trail: All actions auto-logged in Aerchain for compliance.

  • System Safeguards: Mandatory fields ensure no incomplete auction is created.


Live-Auction Submission Process

3. Responsibilities

  • Suppliers: Accept terms, submit bids, monitor auction performance, and ensure compliance with bidding rules.

  • Buyers: Monitor supplier engagement, track savings, maintain transparency, and close auctions as required.

  • System: Enforce auction rules, validate bids, maintain audit trails, and ensure fairness.

4. Process Workflow

4.1 Auction Submission & Notifications

  • Buyer submits auction.

  • Suppliers receive:

    • Email notification.

    • In-app notification with auction details.

  • Buyer dashboard displays a countdown timer until the auction start.

4.2 Supplier Actions Before Auction Start

  • Accept Terms

    • Supplier must accept Terms & Conditions to participate.

    • Without acceptance, supplier cannot bid.

  • Prepare for Bidding

    • Review auction details: items, notes, attachments, configurations.

    • Verify correctness of information and confirm willingness to participate.

4.3 Supplier Dashboard (During Auction)

4.3.1 Auction Header

  • Displays: Auction ID (e.g., AUC-MXB-25-11), status ("Live"), and timer (with auto-extension).

  • Action: Supplier must monitor timer and place timely bids.

4.3.2 Bid Rank & Lead Bid

  • Rank indicates supplier’s bidding position.

  • “Lead Bid” confirms lowest bidder status.

  • Action: Supplier should strive for Rank #1.

4.3.3 Item-Level Bidding Panel

  • Displays: Product, Quantity, Ceiling Price, Current Bid, Suggested Bid, Item Rank.

  • Supplier actions:

    • Review current & suggested bids.

    • Place a new bid within allowed decrement/ceiling rules.

    • Submit using Update Bid.

4.3.4 Bid Logs

  • Record of all bids with version, timestamp, items, and amount.

  • Action: Suppliers must confirm bids appear in logs.

4.3.5 Supplier Responsibilities

  • Monitor auction timer actively.

  • Submit competitive, valid bids.

  • Follow all auction terms (delivery timelines, no advance payment, etc.).

4.4 Buyer Dashboard (During Auction)

4.4.1 Auction Header

  • Shows Auction ID and status.

  • The buyer can close the auction manually if needed.

4.4.2 Live Auction Trend Graph

  • Displays bid progression and supplier activity.

  • Includes reference lines: Ceiling Price, Base Value, Best Bids.

4.4.3 Insights Panel

  • Remaining auction time, auto-extension notifications, and savings metrics (% Savings vs Ceiling/Base).

4.4.4 Table Items (Products/Services)

  • Item details: ceiling price, live bids, lead supplier.

  • Shows total bid values and cost impact.

4.4.5 Supplier Information

  • Displays rank, bid value, and activity status.

  • Buyer tools: send reminders, block suppliers, monitor activity.

4.4.6 Live Updates Panel

  • Shows real-time bid feed with timestamps.

4.4.7 Bid Logs

  • Complete audit trail: supplier name, version, time, items, bid amount, and IP.

4.4.8 Bid Value by Item

  • Shows supplier bids at item level for comparison.

4.5 Buyer Responsibilities (During Auction)

  • Monitor supplier participation and bidding activity.

  • Ensure fairness, compliance, and transparency.

  • Review savings and performance metrics.

  • Use reminders for inactive suppliers.

  • Ensure bid logs are maintained for records.

  • Close auction manually if necessary.

5. System Responsibilities

  • Validate bids against decrement and ceiling price rules.

  • Enforce timing, including auto-extension logic.

  • Maintain comprehensive bid history for audits.

6. Key Notes

  • Auto-extension ensures fairness by preventing last-second bids.

  • Audit logs (timestamps & IP addresses) maintain transparency.

  • Rankings update dynamically after each valid bid.

  • Buyers must observe only and avoid influencing suppliers.


Sequence Diagram




Comprehensive Guide to Auctions in Aerchain

1. Introduction

Auctions in Aerchain enable organizations to procure goods and services efficiently by engaging multiple suppliers in a structured, competitive bidding process. The platform supports multiple auction formats, offers flexibility in configuration, provides supplier training and monitoring tools, and includes advanced post-auction analysis features.

This document outlines:

  1. Guidelines for auction creation, monitoring, and analysis

  2. Types of auctions supported by Aerchain

  3. Steps for auction creation (customer perspective)

  4. Supplier participation process

  5. Post-auction analysis and reporting

2. Auction Creation Guidelines

Effective setup of an auction is critical to maximize supplier participation and achieve competitive outcomes.

? Advance Auction Creation

  • Auctions must be created at least one day before the scheduled start time.

  • Benefits:

    • Suppliers get sufficient time to review details and prepare.

    • Procurement teams can finalize details and address queries.

? Strategic Bid Improvement Value

  • Define a minimum increment/decrement (bid improvement value).

    • Too Small: Weakens competition, lowers engagement.

    • Too Large: Discourages suppliers from submitting further bids.

  • Optimal value depends on market conditions, product category, and expected competition level.

? Pre-Bid Enablement

  • Pre-bid allows suppliers to submit initial bids before live auction starts.

  • Deploy selectively:

    • Suitable for experienced suppliers familiar with the process.

    • Provide clear guidance to avoid confusion.

? Supplier Setup

  • All participating suppliers must be added during setup (cannot modify later).

  • Ensure correct supplier details and portal access to eliminate last-minute issues.

? Supplier Training

  • Share a short training guide/manual or conduct brief sessions.

  • Ensures suppliers understand: bid logic, submission process, rank visibility, and rules.

? Communication (Notifications & Reminders)

  • Notify suppliers immediately when the auction is created.

  • Send timely reminders prior to start time.

? Review Auction Details

Double-check before release:

  • Start/end times

  • Bid improvement condition

  • Supplier list & access permissions

3. Auction Monitoring Guidelines

Once live, active monitoring ensures smooth execution and timely supplier participation.

? Log In Before Start

  • Procurement team should log in 1 hour before auction.

  • Verify supplier readiness:

    • Accepted → confirmed & ready.

    • Pending → follow up.

    • Rejected/Declined → explore alternatives.

? Ensure Supplier Alignment

  • Confirm they understand rules:

    • Login and bidding procedure

    • Updates and ranking display

    • Unique auction-specific conditions

? Reinforce Bid Improvement Logic

  • Suppliers must improve bids by the defined decrement or multiples.

  • Example: If decrement = $500 → bids must reduce by $500, $1,000, $1,500, etc.

  • Send reminders shortly before the auction starts.

? Real-Time Monitoring

  • Track activities and bid submission patterns.

  • If suppliers remain inactive for long periods:

    • Contact them immediately to encourage participation.

4. Auction Analysis Guidelines

After the auction closes, structured analysis ensures the best strategic supplier decision.

? Select the Most Relevant Scenario

  • Compare auction outcomes via different perspectives (lowest price, best value, supplier terms).

? Download Reports

  • Use reporting features for audit, data insights, and management communication.

? Select Best Supplier

  • Evaluate not only price point but also compliance with requirements, payment/flexibility, and supplier reliability.

5. Types of Auctions Supported by Aerchain

Aerchain supports multiple auction formats, offering flexibility to suit market dynamics:

  1. English Forward – Price Based

    • Auctioneer sets base price; bidders bid upwards; highest bidder wins.

  2. English Forward – Percent Based

    • Similar to above, but increments are percentage-based.

  3. English Reverse – Price Based

    • The auctioneer sets a high starting price; bidders reduce prices; lowest bidder wins.

  4. English Reverse – Percent Based

    • Similar to above, but decrements are percentage-based.

  5. Japanese Forward

    • Price increases consistently at intervals.

    • Bidders may exit at any point, but once exited cannot return.

    • The last remaining bidder wins.

  6. Japanese Reverse

    • Price is reduced at regular intervals.

    • The first supplier to accept wins immediately.

  7. Dutch Forward

    • Starts at the highest price; price decreases at intervals until someone accepts.

    • First acceptance = winning bid.

  8. Dutch Reverse

    • Starts at lowest bid; bidding rises until conclusion.

    • Reverse mechanics of Dutch Forward.

6. Auction Creation: Customer Workflow

Steps for Buyers / Procurement to Create an Auction:

  1. Log in to the Aerchain customer portal.

  2. Navigate to Modules → Auctions → New Auction.

  3. Complete the form fields:

    • Auction type (forward/reverse, price/percent)

    • Allowed currency, payment terms, timelines

    • Supplier list and access rights

    • Item details (product name, type, description, UoM, price settings, taxes, ceiling price)

  4. Set runtime, extensions, and pre-bid/tie-bid conditions.

  5. Click Submit (or Save for later release).

Note: Forward auctions cannot be directly converted into PO/RC.

7. Supplier Participation Workflow

Steps for Suppliers to Join an Auction in Aerchain:

  1. Receive invitation email from Aerchain.

  2. Log in via supplier portal.

  3. Navigate to Notifications → Auction Invite.

  4. Accept terms & conditions → Confirm participation.

  5. Before start:

    • Optionally place pre-bid.

  6. During live session:

    • Click Join Live Auction.

    • Submit bids iteratively until the auction closes.

  7. Once completed, results are visible only to the buyer; the supplier awaits further communication.

8. Post-Auction Analysis in Aerchain

Aerchain provides a dedicated Analysis Tab with detailed breakdowns:

Auction Comparison

  • View and compare all bids.

  • Add or bulk upload scenarios.

  • Award quantities directly through interface.

Bid Versions

  • Track multiple bid revisions submitted by suppliers.

  • Compare versions both tabular and graphically (price trend, rank movement).

Item-Level Analysis

  • Drill down by individual items.

  • Data points include: Qty, price, amount, lead time, % bid reduction.

Supplier-Level Analysis

  • Evaluate supplier performance across all items.

  • Factors: Price, revisions made, delivery terms, % savings.

Reports & Export

  • Options to download/export analysis for management review.

  • Templates can be saved or re-used.

9. Key Takeaways

  • Plan ahead: Create auctions at least one day prior.

  • Right configurations: Carefully set bid increments, runtime, extensions, pre-bids.

  • Engage suppliers: Provide training and reminders.

  • Monitor actively: Track real-time bidding activity.

  • Analyze comprehensively: Use Aerchain’s built-in tools to balance cost, quality, lead time, and compliance.

? Conclusion

Aerchain’s auction platform empowers organizations to run various auction types, manage supplier engagement effectively, and analyze outcomes with advanced features.
By following structured creation, monitoring, and analysis practices, procurement teams can ensure maximum competitiveness, transparency, and value realization.