BravoSolution Real World Procurement – Optimization Webinar Available Now

We have a confession to make. No, let’s be clear from the beginning, I have a confession to make. Not “we”. If I say “we”, you might just think that this is in some way the fault of my close colleague Nancy Clinton, or some other member of the wider Spend Matters team and that I am trying to get them to take some of the hit here. But no, this is all my fault.

Last week, I ran a webinar as part of the BravoSolution Real World Procurement series. The topic was Sourcing Optimisation, looking at the leading-edge technology that enables organisations to run very complex sourcing exercises, and analyse huge numbers of supplier responses, offering many different options – and come up with the “optimal” solution.

Anyway, to demonstrate how tricky this is, I presented a very simplified cut-down optimisation problem for the delegates to try and solve. Here it is.

We offered a small prize to the first successful answer. I gave that answer as contracts 1 and 6 to supplier B;  contracts 2, 3 and 4 to supplier C; and contract 5 to supplier D.

Well, after the second webinar (the evening event, aimed at the US market), I had an email. In it, the writer claimed that my solution I had given was incorrect. Rubbish I thought, he’s obviously mistaken. Let’s take a look … he says the answer is actually supplier B gets Contract 2 and 6, Supplier C gets Contract 3 and 4, and Supplier D gets Contract 1 and 5.

Oh b****r, he’s right! I had not looked closely enough at my own problem and had applied a 5% discount to supplier D which I should not have done as they only won one contract in my solution.

At least the person who spotted it was a BravoSolution employee, Jack Zinn, who does have a Masters in Statistics from Cornell, a fine university, and said that  “I coded up the Optimization problem and determined what the actual optimal solution is”. So at least he didn’t do it in his head. That was obviously my mistake. If nothing else, this demonstrates that this is tricky stuff, and also that my Maths brain may be getting out of condition.

But, this is a very exciting topic and area, and if you are in an organisation of any size, and you haven’t looked at sourcing optimisation, you really should. And you can start by listening to/ watching our webinar here.


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