The other finalists were Bombardier Flexjet, Hong Kong International Terminals Ltd., John Deere, Philips, Waste Management, Inc and the University of Texas on behalf of U.S. Department of Energy and MINATOM.
Motorola’s entry focused on the Company’s need to drastically reduce costs and increase productivity, with the priority to reduce the cost of direct and indirect materials purchased. Realizing that a radically different approach was needed, Motorola turned to operations research for guidance. Working with Emptoris, Inc., and combining OR-aided methods such as innovative bidding, online negotiations and scenario-based optimization analysis, Motorola launched a comprehensive system to support the company’s sourcing process.
As a result of the new system, Motorola’s savings have exceeded $600 million thus far, including nearly $200 million (an extra 4-7%) attributed to the advanced collaboration, online negotiation, optimization and analysis system capabilities. Using the system not only changed the way negotiations are conducted, but has also served as a catalyst for moving Motorola from loosely coordinated efforts by individual sectors of the company to conducting truly global negotiations jointly across business units.
According to Theresa Metty, Senior VP and CPO of Motorola, Inc., “Motorola’s Internet Negotiations Tool (MINT) leverages the strength of the internet and technology powered by Emptoris to re-invent our supplier negotiation process. The MINT solution assists us in obtaining the most competitive sourcing arrangements, enables our negotiation process to have a much broader and deeper reach, and improves our internal efficiencies through automation. Over the past three years, Motorola has saved over $600 million by way of MINT’s widespread adoption across Motorola’s ‘Category Management’ community. Winning the Edelman Award further confirms the success and effectiveness of the MINT negotiations platform and Motorola’s ability to apply sophisticated Internet Negotiation techniques to analyze, reduce and optimize the total cost of sourcing.”
Metty adds, “We appreciate the careful analysis undertaken by the INFORMS judges to analyze and evaluate all the finalists submissions. We are very proud of our accomplishments and we are committed to further exploiting and expanding MINT’s optimization capabilities into the earliest stages of our product development lifecycle, and to achieve our goal of managing 100% of our spend with MINT.”
The Franz Edelman Award winner was announced today at the INFORMS conference, “Applying Science to the Art of Business," which is taking place at the Hyatt Regency in Cambridge, Massachusetts. This year’s competition is being held in conjunction with the Massachusetts Institute of Technology and immediately follows a 50th anniversary celebration of the founding of the MIT Operations Research Center.
The Edelman competition recognizes outstanding examples of projects that change organizations and people’s lives. The top finalist receives a $10,000 first prize. This is the 33rd year of the prestigious competition.
Past winners of the INFORMS Edelman Award include Continental Airlines and CALEB Technology, for applying a disaster recovery system that showed exceptional resiliency on September 11th and the city of New Haven and Yale University, for preventing AIDS through an innovative needle exchange program. IBM, Sabre Technology and Merrill Lynch have also won the award which is presented by INFORMS and CPMS, the society’s practice section.
Information about the conference is available online at http://www2.informs.org/Conf/Practice04/
All the finalist papers will be published in the January 2005 issue of the INFORMS publication Interfaces.
The Institute for Operations Research and the Management Sciences (INFORMS®) is an international scientific society with 10,000 members, including Nobel Prize laureates, dedicated to applying scientific methods to help improve decision-making, management, and operations. Members of INFORMS work in business, government, and academia. They are represented in fields as diverse as airlines, health care, law enforcement, the military, the stock market, and telecommunications. The INFORMS website is at http://www.informs.org