Daily Archives: December 14, 2009

Browser Wars — For the Techie in All of Us

A recent visualization over on Axiis, the open source data visualization framework, displays the W3.org’s Historical Browser Statistics from January 2002 to August 2009. It’s definitely worth checking out … you can see the rise and fall of Mozilla, Netscape, IE, AOL, Opera, Firefox, Safari, and Chrome over time.

Hat-Tip to Matthieu Cormier, of Cocoa Mondo, a fellow Haligonian.

New and Upcoming Events from the #1 Supply Chain Resource Site

The Sourcing Innovation Resource Site, always immediately accessible from the link under the “Free Resources” section of the sidebar, continues to add new content on a weekly, and often daily, basis — and it will continue to do so.

The following is a short selection of upcoming webinars and events that you might want to check out in the coming weeks:

Date & Time Webcast

10:00 GMT-05:00/CDT/EST

Overview of Nanotechnology Developments in the UK & China

Sponsor: SME


11:00 GMT-08:00/AKDT/PST

How Microsoft Dramatically Increased Spend Under Management Globally, Presented by Microsoft and Denali Group

Sponsor: SIG


12:00 GMT-05:00/CDT/EST

Virtualization and Cloud Security Fundamentals

Sponsor: Altor Networks


8:30 GMT-08:00/AKDT/PST

EU REACH For Article Manufacturers – an in-depth introduction

Sponsor: Design Chain Associates, LLC


11:00 GMT-05:00/CDT/EST

Why Being Demand Driven Matters for Retailers

Sponsor: AMR


14:00 GMT-05:00/CDT/EST

Urgent Purchasing: How One Procurement Professional Took Matters into his Own Hands to Get Spend Under Control

Sponsor: Coupa Software


10:00 GMT-05:00/CDT/EST

Tracking and Tracing Serialized Items With SAP Solutions for Auto-ID

Sponsor: RFID Journal


14:00 GMT-05:00/CDT/EST

ECM in 2010

Sponsor: AIIM


14:00 GMT-05:00/CDT/EST

How to Take Control of Your Physical and Virtual Data Center

Sponsor: EMA


13:00 GMT+08:00/AWST

Enhance Business Agility through Demand-Driven Strategies

Sponsor: AspenTech


11:00 GMT-05:00/CDT/EST

Field Study Results Discussion: Who owns the practice of Risk, Quality and Compliance in Retail?

Sponsor: AMR

Dates Conference Sponsor
2010-Jan-11 to


Retail’s Big Show

New York, New York, USA (North-America)

2010-Jan-12 to


Negotiating in Tough Times: Navigating Challenging Negotiations During an Economic Downturn

Minneapolis, Minnesota, USA (North-America)

Corpoate United
2010-Jan-17 to


The Leadership Forum 2010

San Diego, California, USA (North-America)

2010-Jan-18 to


World Future Energy Summit

Abu Dhabi (Middle-East)

Reed Exhibitions
2010-Jan-19 to


SMC3 2010 Winter Conference: Supply Chain’s Look Ahead

Atlanta, Georgia, USA (North-America)

2010-Jan-21 to


Supply Chain & Logistics Roadshow in Tianjin

Tianjin, China (Asia)

2010-Jan-22 to


Lean: The New Business Technology Imperative

* virtual * (North-America)


They are all readily searchable from the comprehensive Site-Search page. So don’t forget to review the resource site on a weekly basis. You just might find what you didn’t even know you were looking for!

And continue to keep a sharp eye out for new additions!

The Role of Optimization in Strategic Sourcing – Optimization and Reverse Auctions

This series discusses the recent report from CAPS Research on the role of optimization in strategic sourcing. The primary goal is to highlight, clarify, and, in some cases, correct parts of the report that are important, confusing, or incorrect to insure that you have the best introduction to strategic sourcing decision optimization that one can have.

In this chapter, the benefits of using optimization with reverse auctions are discussed and a number of case studies are presented. Specifically:

  • Fasteners #1
    Before the event, which was conducted as a reverse auction followed by an optimization-based analysis, the suppliers were projecting a 20%+ price increase. After the two-stage event, the end result was an increase of 11%, which was split among one new supplier and two incumbents, while two incumbents lost business.
  • Fasteners #2
    A company decided to centralize its buy across eight business units. A reverse auction followed by optimization-based analysis identified savings of over $80,000.
  • Shelving
    A shelving buy for 35 stores covering 150 items from 10 different sources realized a total savings of 10% when optimization was applied after a reverse auction.

Next, the chapter discussed the challenge of tiered and bundled bids. They are challenging in a number of respects — they are a challenge to define, they can be a challenge to explain, they are often a challenge to “normalize”, and they can be a big challenge to implement for even sophisticated developers — but not as challenging as the report would have you believe. After all, a few providers support both of these bid-types, and at least two do so in their self-service tools.

The statement that only after the model is solved can it be discovered if the business allocated to a supplier would have been sufficient to earn a discount is false! While the specific solution being used, by the company in the example, may not have supported discounts, a number of solutions on the market fully support tiered and volume discounts, which include the type described within the example. These solutions support models which dynamically update the total cost when a threshold is reached. (I have personally designed and implemented two solutions with this capability, one of which is still on the market.)

The one thing that should have been noted, but wasn’t, is that implementing these discounts usually requires a sophisticated set of binary equations. If discounts are required in bulk, the size and complexity of the model will increase significantly and this can negatively impact solve time in a big way.

In addition, not only are tiered and bundled bids the most common form of creative bidding supported by many optimization applications, but they are also the most powerful when combined with discounts and used appropriately.

Finally, there’s no reason that the optimization cannot be applied on-line, in real-time, during the auction. If you’re buying a commodity, or if you can completely specify your business rules and constraints up-front, you can run an optimization-enhanced auction and make (automated) contract offers immediately after the optimization completes. While most providers don’t yet have this capability, Trade Extensions, for example, does. Now, the model has to be of a size and complexity that can be solved in real-time during the auction, but thanks to the advances in processing power and solution algorithms that have materialized over the past five years, you’d be surprised just how big the model can get and still solve in the 15 to 30 minutes typically allocated for a mid-size real-time auction.

Next Part VIII: Challenges / Issues

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