BOSTON,
MA, April 27, 2004 – Motorola’s innovative
approach to streamlining the supplier
negotiation process has won the 2004 Franz Edelman Award for achievement
in operations
research and the management sciences. The Edelman Award, the culmination
of a rigorous
competition recognized as the "Tech World Series," is
sought after by operations researchers and
planners around the world and is presented annually by the Institute
for Operations Research and
the Management Sciences (INFORMS ® ). Motorola won for its
entry "Reinventing the Supplier
Negotiation Process at Motorola.”
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 50 th 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 33 rd 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 11 th 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://www.informs.org/Conf/Practice04/ All
the finalist papers will be published in the January 2005 issue
of the INFORMS publication Interfaces.
About
INFORMS
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.
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