Combinatorial Optimization for Sourcing

P&G applying CombineNet solution to direct, indirect materials and transportation

Pittsburgh  November 11, 2002  Procter & Gamble has signed up to use optimization software from CombineNet to improve the speed and quality of the company's sourcing decisions.

CombineNet, founded in 2000 and headquartered in Pittsburgh, offers several combinatorial optimization solutions for sourcing, supply chain, distribution services and strategic planning. The provider said the applications enable executives to identify and justify the most practical solutions to real-world business problems.

The provider will offer P&G access to its flagship solution, ClearBox, as well as consulting services for the company's global sourcing of direct and indirect materials and transportation, with possible applications across its supply chain on planning and sourcing problems.

Although the specific terms and conditions of the transaction have not been disclosed, both parties offered that the deal involves a number of sourcing events over an extended term.

"At P&G, a number of people have evaluated this technology and we believe it will be very effective when applied against solving complex problems," said Carol Rubeo, director of purchases innovation at P&G.

Tony Bonidy, CEO of CombineNet, said: "The problems large corporations encounter  such as determining the right allocation of business to suppliers in a reverse auction where bidders are allowed to bid expressively  make it impossible to obtain an optimal solution by sifting through all of the potential solutions. Our decision-making technology enables corporations like P&G to solve real-world problems in seconds."

Technology consultancy AMR Research reported recently that companies using the combinatorial optimization technology have been able to quickly resolve problems that had previously stumped supercomputers and are seeing savings by using the technology in their sourcing efforts.

CombineNet recently announced that it was partnering with e-sourcing specialist Procuri in a joint marketing and reselling agreement that will have the two companies offering decision-support solutions for e-sourcing.