SOURCE: MINDFLOW

July 27, 2005 14:59 ET

Aberdeen Sourcing Best Practices Report Ranks Companies Using MINDFLOW as Best In Class

PLANO, TX -- (MARKET WIRE) -- July 27, 2005 -- MINDFLOW today announced that Aberdeen Group finds firms using MINDFLOW among best-in-class sourcing companies. The leading research firm's most recent study indicates that companies applying advanced sourcing strategies achieve, on average, 12% incremental savings or more. The benchmark report spotlights two of the MINDFLOW clients that demonstrate this success.

MINDFLOW, the leader in On-Demand Solutions for Inbound Supply Chain Planning & Sourcing Optimization, helps customers build sourcing decision models for direct and indirect spend categories, using bid information collected with MINDFLOW negotiation tools. Companies use these decision models to simulate sourcing scenarios and achieve the optimal balance of supplier allocation, item costs and qualitative criteria, resulting in quick and compounding savings. Aberdeen's report indicates that only one in five Fortune 1000 companies is exploring options for savings opportunities above those possible with simple online negotiation tools alone.

The Aberdeen research article, "Success Strategies in Advanced Sourcing and Negotiations," details sourcing and supply management strategies of nine global companies to examine best practices in optimizing total costs and total value beyond common e-sourcing activities. MINDFLOW offerings are particularly effective for analyzing total cost and total value because users find MINDFLOW effective for the widest range of categories.

"Companies practicing advanced sourcing understand their suppliers' economics," said Richard Waugh, a lead analyst in Aberdeen's Design-to-Procure Practice. "They factor item costs, such as processing, assembling, freight and volume discounts, with qualitative factors like on-time delivery, defect rates, service levels and capacity. Best-in-class sourcing companies use the cost components and qualitative factors to build category total cost models. These total cost models are the basis of sourcing decisions that offer compound savings and less risk."

Aberdeen highlighted MINDFLOW customer VWR International to emphasize the importance of building comprehensive sourcing models including both cost components and qualitative factors. VWR, a leading scientific equipment distributor, uses MINDFLOW as the foundation for inbound supply chain planning and has experienced numerous supply network improvements. VWR also reports significant savings from improved supply allocation and reduced cycle times.

The second MINDFLOW customer examined by Aberdeen "...declined to cite specific ROI metrics, but admits to a 'multi-million dollar return.'" The report quotes this same customer's insistence that, "One of the major fallacies about bid optimization is that it is only applicable to very complex spend categories." MINDFLOW remains under strict agreement with the customer not to disclose the name, because of the competitive advantage they derive with MINDFLOW.

According to Mark Grefer, Executive Vice President of MINDFLOW, "Customers encourage their sourcing teams to leverage MINDFLOW's constraint analysis, strategic lotting, flexible bidding and optimization for simulating scenarios on almost every category, not just those normally considered strategic. We help sourcing teams quickly generate savings and develop ongoing sourcing improvements."

MINDFLOW delivers the requisite content and specialized service elements prescribed by Aberdeen to analyze and optimize total costs and total value in order to expand the savings realized through e-sourcing initiatives. Those interested in learning more about opportunities for savings beyond online negotiations can view the executive summary and access the benchmark report at www.mindflow.com/_05_news/ABERDEEN_BEST_PRACTICES.pdf.

About Aberdeen Group

Founded in 1988, Aberdeen delivers unbiased, primary research that helps enterprises derive tangible business value from technology-enabled solutions. Through continuous benchmarking and analysis of value chain practices, Aberdeen offers a unique mix of research, tools, and services to help Global Business Executives IMPROVE the financial and competitive position of their business now, PRIORITIZE operational improvement areas to drive immediate, tangible value to their business, and LEVERAGE information technology for tangible business value. For more information about Aberdeen Group, visit www.aberdeen.com.

About MINDFLOW

MINDFLOW helps companies save time, save money and reduce risk with on-demand solutions for inbound supply chain planning and sourcing optimization. Using MINDFLOW, companies develop sourcing decision models that accelerate savings and increase margins. MINDFLOW offerings include Category-in-a-Box™, MINDFLOW® EZ, MINDFLOW® OnDemand and the MINDFLOW library of more than 200 best-in-class sourcing decision models. Together with marquee customers, we have sourced billions of dollars in direct and indirect goods and services and have enabled many millions of dollars in cost reductions. With offices in the Americas, Europe and Asia, MINDFLOW helps customers realize aggressive savings goals. For more information about MINDFLOW, visit www.mindflow.com. MINDFLOW® is a registered trademark of MINDFLOW Technologies, Inc.

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