CombineNet V: Expressive Bidding (in Combinatorial Optimizations)

I know I ended my last post indicating that my next post would put BoB in perspective by extolling the virtues of POE, but I’m getting really tired of CombineNet over-hyping Expressive Bidding and so I’m going to explain why Expressive Bidding and Expressive Commerce has nothing to do with the price of fish when we’re talking about BoB. (Don’t worry, this does not have to be a series of finite length, so I will discuss the virtues of POE eventually so that you can put the virtues of BoB in perspective.)

In Paul’s 2007 – The Year of the Supplier post, he says Expressive Bids can include conditional (if/then) offers, volume discounts, packages of items (bundles), and other creative offers that take advantage of their strengths and/or recent innovations and with Expressive Bidding, suppliers drive the inefficiencies out of their own business and share the savings with buyers, simultaneously strengthening strategic relationships for long-term supply chain efficiencies and competitive advantage.

First of all, there’s nothing here that you couldn’t do self-serve with MindFlow’s application back in 2000/2001, which was two years before CombineNet started using the terminology and filing for trademarks / copyrights / etc. Secondly, pieces of this functionality existed before that in Emptoris’ offering, FreeMarket’s failed effort, i2′s early technology, etc. Thirdly, operation researchers have known how to do if-then constraints for at least two decades using the Theory of Logical Variables and its precursor instantiations. Fourthly, the same holds true for tiered bids (and every discount can be transformed to a tiered bid with a minimum buy if-then constraint and vice versa), which operations researchers have been accomplishing for even longer using piece-wise linear constraints. Fifthly, these bid styles existed long before the introduction of optimization technology, so there is fundamentally nothing new about what is being supported. Sixthly they’re not the first company to come up with a wizard-like interface (although it looks like theirs may be better than most). I could go on, but you get the point.

I’m not saying that Expressive Bidding, Real-World Bidding, Comprehensive Bidding, or whatever-you-want-to-call-it-today-bidding is not important, it is, because, without it, any optimization application with any degree of sophistication will be quite difficult to use, just that it’s not the greatest thing since sliced-bread, which CombineNet’s marketing materials would leave to believe.

What’s important is:

  1. The ability to support all of the relevant costs and cost tiers.
  2. The ability to support all of the fundamental constraint types required for true strategic sourcing decision optimization.
  3. The ability to generate a model that accurately represents all of the relevant costs and constraints.
  4. The ability to optimally solve the model in a realistic time frame.

Where CombineNet really stands apart from the rest of the pack is with respect to:

3. Their ability to generate a model that accurately represents all of the relevant costs and constraints.
4. Their ability to optimally solve the model in a realistic time frame.
5. Solve larger models than the majority of their competitors.

So tomorrow we’ll discuss these required capabilities and what BoB truly is, and, more importantly, what CombineNet’s offering really is and what is just annoying marketing hype.

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