What is the risk in using reverse auctions for critical production materials?

1. Effective supply-chain management depends on developing tight bonds with a small set of suppliers. 2. A reverse auction awards the job to whoever bids lowest on that occasion. 3. The winner can therefore be a different firm every time. 4. That makes it difficult to establish and build ongoing relationships with specific suppliers. 5. For critical production materials, where reliability and quality matter most, the loss of that relationship outweighs the price saving. 6. So reverse auctions may not be an effective procurement process for critical materials, even though they cut costs elsewhere. _Source: OpenStax Introduction to Business (CC BY 4.0), Ch 10 "Achieving World-Class Operations Management", section E-Procurement, Electronic Data Interchange, and Blockchain_