FOR IMMEDIATE RELEASE
CombineNet Technology Enables Bayer Corporation To Achieve Maximum Savings In Global
eSourcing
Advanced Decision Guidance System Fuels "Expressive Competition" Among
Bayer Supply Base
PITTSBURGH, PA—April 7, 2003
Bayer Corporation, an early adopter of eSourcing technology, is utilizing CombineNet's
advanced decision guidance system to optimize its sourcing processes in highly complex
and strategic areas of its global spend. Bayer's decision to engage CombineNet is
a direct result of Bayer's pilot application success. In July 2002, Bayer used CombineNet's
technology to source ocean freight. It was a major initiative for Bayer. The results
significantly exceeded expectations across a variety of fronts including, reported
savingsthat Bayer could implementand speed-to-solution.
Bayer's traditional ocean freight sourcing methods allocated 4-6 weeks for the bid
analysis phase alone. Using CombineNet technology, Bayer reduced its bid analysis
(and award determination) time to just three days, limited transship use to 20 percent
of the total volume, and ensured that individual lane prices did not exceed targetsgenerating
final allocation savings in excess of 10 percent. Additionally, all of Bayer's carriers
participated and commented about how much they preferred the process compared to
traditional and reverse auction-centric approaches.
To strengthen our eSourcing process, we needed to expand our ability to explicitly
consider both price and non-price factors, such as numbers of carriers and individual
carrier capabilities," said Robert A. Rudzki, Chief Procurement Officer at
Bayer Corporation. "Our goal was to decrease the complexity of the overall
process so our procurement decisions more effectively reflected our global business
requirements."
To gain full value from an event of this nature, Bayer worked with CombineNet as
a strategic partner to develop the model in just two days' time, going from concept
to launch, and achieving significant results with a solution that utilized far richer,
expressive carrier offers.
CombineNet's combinatorial optimization technology enables our suppliers to submit
more creativeand conditionaloffers, such as bundled bids, volume discounts, or rebates
to give us greater insight for conducting follow-on negotiations during bid rounds,"
explained Tom O'Neill, Vice President of Professional Services and Logistics Procurement
at Bayer. "CombineNet provided us a decision guidance template that allowed
our ocean freight experts to build, optimize, and evaluate dozens of candidate award
scenariosin a couple of days. The technology provided a way for all of our process
stakeholders to understand the hard dollar trade-off costs we evaluated, thereby
accelerating our decision alignment and move to execute carrier contracts."
Our technology provides large companies like Bayer an uncompromising way to deal
with the real-world complexities that define their business," said Tony Bonidy,
president and CEO of CombineNet. "The work-around tactics that we replace leads
to eye-opening ROI that can be easily measured."
This performance boost and the success of the ocean freight project are the reasons
why Bayer is integrating CombineNet's technology into its global eSourcing program.
With the success we've achieved using CombineNet's combinatorial optimization technology,"
Rudzki said, "it's clear that we have an additional toolcustomized to the way
Bayer does businessto generate substantial impact across key segments of our business."
About Bayer Corporation:
Best known for its flagship product, Bayer Aspirin, Bayer Corporation produces a
broad range of healthcare, crop protection, polymer and chemical products that help
diagnose and treat diseases, purify water, preserve local landmarks, protect crops,
advance automobile safety and durability and improve people's lives. Bayer Pharmaceuticals
is a division of Bayer Health Care and a member of the worldwide Bayer Group, a
$27 billion international healthcare and chemicals group based in Leverkusen, Germany.
The Bayer Group stock is a component of the DAX and is listed on the New York Stock
Exchange (ticker symbol: BAY).
About CombineNet
CombineNet, the advanced sourcing technology company, helps companies achieve the absolute best value and lowest total cost of ownership for goods and services. CombineNet's Advanced Sourcing Application Platform enables companies to engage in Expressive Commerce™, the strategic sourcing initiative that allows buyers and sellers to communicate supply and demand more expressively, collaboratively and strategically. The result is a win-win for both buyer and supplier, where greater innovation and efficiency are driven into the supply chain. CombineNet's ASAP consistently produces 10, 15, even 20 percent greater actual cost savings than other e-sourcing solutions, and has delivered more than 45x ROI for the largest businesses in the world including General Mills, PepsiCo, Procter & Gamble, Siemens and others. For more information, visit www.combinenet.com.
Media Contacts:
Greg Holt
CombineNet Inc.
Director of Marketing
Phone: 412.471.8200
gholt@combinenet.com