Emptoris Optimization — Setting the Record Straight

Tonight, I'd like to welcome Olga Raskina, PhD., Optimization Engineer, and Ammiel Kamon, SVP Marketing, of Emptoris. They requested an opportunity to respond to Michael Lamoureux's post, "The Optimization Doc's Perspective on Emptoris" from Friday.

We agree with Jason, it is often wise to consult a doctor in an area where one is not an expert. However, if the 'Doc' renders an opinion without ever seeing the patient, one ought to question the prognosis, and a second opinion is likely required ...

Emptoris' overall offerings are second to none, and in this area we've received specific recognition from unbiased third parties (more on this below).

By Michael's own admission, he is not actually knowledgeable about Emptoris’ capabilities in optimization and advanced sourcing. And much of the post tries to ferret out information through cursory means. Failing to get substantive information, Michael concludes with an un-informed, doubt-inspiring negative opinion. Thus making his post nothing more than a long FUD piece.

The post includes some bold claims regarding the superiority of the Mindflow engine to Emptoris'. Since Mindflow had a very strong offering, and it was Michael's "baby", we can understand where he is coming from emotionally. But the reality is much different, particularly if one takes an informed view. Given that Emptoris acquired Mindflow and retained core engineers and product management talent, we are in a unique position to truly assess relative strengths of these two systems:

Here are just a few of the significant Emptoris advantages, in the area of optimization and event creation, over Mindflow:

- When there are conflicting constraints, the system will actually identify them (in MF the user had to manually look for them)
- Ability to identify secondary suppliers (MF only identified the primary suppliers)
- Handling of delivery constraints
- Ability for suppliers to create bundled bids and business volume discounts (in MF the buyer had to create these on behalf of the supplier)
- Step Volume Discounts (MF only supported basic volume discounts)
- Ability to run sensitivity analysis on supplier count (cost for 6 suppliers, 7 suppliers, 8 suppliers, etc. w/o running separate scenarios)
- The system will notify the user if a scenario has become outdated due to constraint changes
- MF Lacked Supplier-specified capacity constraints
- Ability to specify a count on something other than supplier and ship-from
- Ability to specify a limit on attributes other than price and quantity (e.g., lead time, total miles, etc.)
- Bid adjustments on ANY numeric value

Michael portrays our optimization capabilities as having a simpler model, relative to Mindflow. However, we support all of the elements he calls out as missing, and we go much further. Specifically relevant to the mis-statements are the following corrections:

- Ability to create an unlimited number of basic and advanced constraints (count, limit, allocations)
- Full ability to handle item substitutions and alternates
- Flexible supplier bundling, including ship-to considerations
- "Feedback information with alternative scenario suggestions" is not based on rounds; rather it is provided in close to real-time.
- A powerful optimization engine which goes far beyond simple usage of Cplex
- Tremendous in-house experience in developing large-scale optimization systems

Now if Michael mis-judged the Emptoris capabilities to this degree, could it not be that perhaps there is much more to our offerings then we’re being given credit?

Specific to the Advanced Sourcing Service, an element of the solution that was completely missed is the overall solution packaging, which goes way beyond a brilliant engine. We provide skill sets and infrastructure to help customers contend with mega-events; as well as readily available category specific expertise (transportation, packaging, etc.); and proven processes for handling this scale of event. At first blush a technologist may not value these at all, but the reality is that there is tremendous value here, particularly when we're making this entire package available to qualified consulting partners for their own delivery needs.

All of which, amount to an extremely powerful offering, and one that has been recognized as such. The premier academic optimization organization, INFORMS, has uniquely recognized Emptoris for our optimization achievements and real business impact for our customers. Every serious sourcing optimization player tried to win INFORMS' Edelman Award, and we were the only ones to receive the top honors.

In fact, public details about some of our foundational capabilities can be found in our Edelman paper - no need for guess-work.

In terms of the marketing of the Advanced Sourcing Service, it is our choice not to disclose the nitty-gritty of the specific engine enhancements that were made. In our judgment there is little benefit in detailing these on our website or press releases at this time. Our goal with the news was to highlight the complete solution package. But one shouldn't conclude from this marketing decision, that there were no optimization innovations -- or an even more outlandish suggestion, that our top notch optimization team, has been resting on their laurels for three years. That makes no business or competitive sense.

We like Michael, and several of our team members have worked with him in the past. The reason we stopped briefing Michael is because he was and is a technical and strategic consultant to at least one of our competitors. We perceived two down sides that we simply could not overcome 1) A direct transfer of key technical and business insights to competitors 2) The bias that inherently enters the coverage once someone is financially and emotionally committed to a competitor. This bias is not a good or a bad thing, it just 'is'. We are not angry or upset, but we recognize the situation for what it is, and therefore have decided not to do an in-depth briefing with Michael on the Advanced Sourcing Service.

Thank you,

Olga Raskina, PhD., Optimization Engineer
Ammiel Kamon, SVP Marketing Emptoris

Spend Matters would like to thank Dr. Olga Raskina and Ammiel Kamon for their post.

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