Edelman award-winning team joined by INFORMS President Mike Rothkopf (third from left) and committee chair Tom Spencer (far right).

Motorola's innovative approach to streamlining the supplier negotiation process 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 INFORMS. Motorola won for its entry "Reinventing the Supplier Negotiation Process at Motorola."

The other finalists included 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 O.R.-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 percent to 7 percent) attributed to the advanced collaboration, on-line 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 percent of our spending with MINT."

This year's competition was held in Cambridge, Mass., in conjunction with the INFORMS Spring Conference. The Edelman competition recognizes outstanding examples of implemented operations research/management science work.

Editor's note: More details on the 2004 Edelman Award and Motorola's prize-winning work will appear in the next issue of OR/MS Today. Papers from all of the 2004 Edelman finalists will appear in an upcoming issue of Interfaces.