Emerging internet‐enabled auction mechanisms in supply chain

Purpose – The purpose of this paper is to present the prevailing auction and bidding mechanisms in supply chain management. The paper aims to critically examine the implications of these auction mechanisms using the example of the transportation sector. Design/methodology/approach – A framework is presented to highlight the role of internet and information systems in the transportation sector. The paper discusses the complexities associated with embracing these internet‐enabled auction mechanisms and presents some research propositions. Findings – In its present state of affairs an electronic marketplace would become nothing but a virtual place where the competing firms would be indulged in price wars to maintain their presence. A prolonged spur of activities in this direction would lead to a stalemate where the winners are losers. Practical implications – In the long run it is important that the decisions associated with electronic auctions must be based on more than bargain‐basement price tags. The business intangibles focused on developing a strong buyer‐supplier relationship, will determine the quality of the purchase contract. Research implications – The propositions presented here could provide initial impetus for future empirical research that gleans insights regarding the link between the use of electronic auction mechanisms and the strength of buyer‐supplier relationships. Originality/value – Provides a comprehensive review and some potential research propositions that could enhance our understanding of supply chain management.