MrNepathy's Blog

I was doing a seven-million-dollar bid at work and while on a conference call that was mostly about biking strategies followed by thirty seconds of, “oh by the way, bid like this…” when I heard reference to a bid we had just won through Bacon World. Bacon World is a big third party that controls quite a lot of business. Another analyst had done a bid through Bacon World for Chuck’s Waffle Hut. Chuck’s Waffle Hut is some company you’ve probably never heard of, but you all probably have waffles in your house. Maybe they’re not Chuck brand, but by the size of the business it’s safe to say Chuck moves a lot of waffles.

The bid I was working on for Bacon World is for a company you’ve all heard of. It’s a gigantic company. As the bid was for a huge amount of business, it became my focus. It was a tedious monster and required all sorts of spreadsheet acrobatics. But I still knew I had a bid for Chuck’s Waffle Hut on the horizon so when I heard the name, I brought it up. I was told, “We already have that business for Bacon World and since we don’t want to irritate Bacon World, or bid against ourselves, just bid at ten percent worse. We’ll put in a bid just to submit something and open the door with Dengar’s Wicker Emporium.” Dengar’s Wicker Emporium is a new third party that no one at work had heard of.

Dengar’s Wicker Emporium is apparently run by that kid that had the days of the week written on his underpants because they are some very-seriously detail oriented people. They don’t just want, “Hey we’ll give you a 72% discount to Nebraska” they want, “We will charge you $215.17 on a 1234 pound shipment to Nebraska.” It was going to be a lot of work just to submit a token gesture. It would be like laying out the good cheese (the kind where it’s individually sliced, but not individually wrapped) to impress Micronesia when you’re thinking, “Wow, that’s a place? And Gargamel isn’t from there?” But whatever, I got time, I’m here 45 hours per week after all. So after wrapping up the seven-million-dollar bid, I’m prepared to work on Chuck’s Waffle Hut. That’s when I get a call that changes everything.

“Hey, we just spoke with Chuck’s Waffle Hut and Bacon World might be losing its agreement with Chuck’s Waffle Hut, which means we do have to bid on this seriously. Oh, since Chuck’s Waffle Hut is such huge business out of a place we don’t normally service, we hired two people and expect to hire one more to handle it all. If we lose this business, we’ll probably have to let those people go. One more thing, our first response is due tomorrow.” That entire paragraph is a précis of what happened. None of that is made up, it’s just in my own words. So we went from, “Just bid to be polite” to “bid to win and win to save jobs.” Great, no pressure.

I launched into a focused approach to this monster process which involved over 40,000 shipments. To add to the insanity, it would also be handled as an online auction. We had to enter a bid, under a certain number, in order to qualify. Without getting into the weird non-sensical aspects of trucking, I’ll explain what I had to do like this. Our current agreement is about kilograms on the Moon, and they wanted me to convert that to pounds on Jupiter 40,000 times. It’s actually more complicated than that because that would be a math formula applied 20,000 times, whereas this is a bit more complicated, but you get the idea. It’s a possible transition from one thing to another, but it’s still tricky. In my process I wipe out about 28,000 of the shipments because they were for places we don’t go, like Neverland to Narnia. It’s our standard practice. If we can’t handle it, we remove the data and focus on what we can handle.

Well we are told to bid on entire lots, which means every shipment. So the salespeople say, “Include Neverland to Narnia, even if we cannot do it.” Uh, what? We do have those rates, but we don’t have the ability to even apply a pretend cost to them, so now I have to put back in all of the old data, keep it identifiable from the data we can handle, and keep everything in perfect order so that when I put it into the bid spreadsheet, it synchs up properly. The “fun” part is that even sorting the spreadsheet takes time. It’s over 40,000 rows and goes from column A to column CP and I half of those are formulas that I cannot copy over with values because one number might change in column E and twenty columns do their calculations based on column E.

Still, I get an answer in by the deadline. The deadline was at 4 p.m. I did not get an answer from anyone that matters until 3:30 p.m. The only thing we had to answer was, “Yes we’re under the cap” and offer proof. It’s then that I’m told, “Oh by the way, we only want to handle one lot, so, just concentrate on these 6,000 shipments.” Grr. So my job got easier, but I wasted a lot of time, energy and hair worrying about keeping all my ducks in a row.

Now we have to prepare an actual bid plan. I took part in a practice auction with imaginary money. This is important later, so I’ll separate out the rules:

Winning amount is shown. No carrier information is provided alongside it. In fact carrier information is never divulged and even during the training web-conference carriers are identified only by number, such as “Carrier 4.”

You can decrease your total bid amount by .25% to 2%. If you want to lower it by more, you will have to make multiple changes.

Auction will last at least one hour. After that the auction ends when no bid has been placed for five minutes.

During the course of the “practice auction” I learned that if we cannot bid on Neverland to Narnia, we can be assigned an allowance to represent the lanes we cannot handle. This makes it so Chuck’s Waffle Hut can look at each bid and compare it apples to apples. Sounds fair. So I fix our bid information and get our Allowance figure.

At this point I get instructions from my mega-boss. In the case of very complicated bids, or ones with system-wide application, my mega-boss will decide our plan. He overrides every regional vice president. The theory is that on some bids, some terminals will have to take a hit so that the company can get the business. Terminals are concerned with their own revenue whereas the mega-boss is concerned with the company’s revenues. It would be like if the Wheats department of Crispy Wheats and Raisins was going to lose five cents per dollar but the Raisin division was going to make ten cents per dollar, you don’t let Wheats say no to the business. So mega-boss gave an answer and that means I don’t have to ask anyone jack. On I go about my business.

We come up with a plan and after a lot of mathematic and spreadsheet gymnastics we’re finally set to go. The day of the auction Dengar’s Wicker Emporium comes along and says, “Oh hey, we made an error on the one sheet, so the auction will be two days from now.” I wanted it over with, but whatever.

The first email I see when I arrive the day of the auction is from Dengar’s Wicker Emporium, and it says that due to carrier concerns about confidentiality, all of the rules are changing. Keep in mind, I have no idea which shippers are involved in the bid and not even “Carrier 5” is shown next to the winning bid.

The new rules are as follows:

Bid amount will drop 1% every four minutes.

The Allowance amount remains constant.

There is no indication of how many carriers remain.

Bid ends when no carriers remain. The last amount you accept will be the amount you bid.

Now there are numerous problems with this scheme. Let’s start with the first concerning the 1% drop. Instead of moving at dollar amounts we specify, so long as our moves are .25% to 2% in nature, we now drop at a fixed percentage which means we don’t control the final bid amount. This is important because when the dust clears I’ll have to find a way to get one math equation, repeated 5600 times with changing values for X, to all add up to a very specific number. So instead of adding up the answer for 5,600 equations, coming up with an answer and using that as our bid, we’ll end up with a number and then have to figure out how to force 5,6000 equations to arrive there. It would be like you’re given 5,600 Lego pieces and told, “Make whatever you want” and then someone destroys that and says, “Here’s a picture of a Lego version of Washington Crossing the Delaware, now make this exactly with these 5,600 pieces.”

Second problem is that the allowance does not change as our total goes down by 1%. If our initial bid is $4,500,000 which includes $4,000,000 for lanes we can handle and $500,000 in Allowance. After the amount drops by 1%, our bid total is $4,455,000 but as the allowance has stayed $500,000 for us, we’re actually bidding a revenue of $3,955,000. If the Allowance had changed by 1% (which would have made sense) our revenue would be $3,960,000. Only $5,000 difference at first, but after nine such drops, the difference is substantial. One equation is .99^N(X + C) whereas the other is .99^NX + C.

I point this out to everyone and so we decide to stop at drop nine instead of drop ten as we had originally planned. Basically the disparity between the equation that made sense and the equation they used is more than my yearly salary by step ten in the actual bid. In half an hour of work I pointed out something that if we won at step nine, will pay my salary. Of course, if we dropped out at step nine and would have won at step ten, I could have potentially cost us four million dollars in business. But, whatever. It’s my job to point out how things work, not to decide what to do with the information.

After waiting online for 45 minutes where my only function was to hit “Accept” nine times and “Withdraw” once, we were ready to figure out the giant problem of how to get 5,600 equations to come out to a number, let’s call it $4,117,587.00. Through the magic of spreadsheets and my various searches, lookups and such, after half an hour I get us to within $90, which we consider good enough. It creates a simple plan and we stay within all of the original guidelines mega-boss gave us. Everything is pre-approved, gift wrapped and ready to go. Right? If you think that, you clearly don’t understand all of the frustrations of my job.

Here we have to break down the numbers further. Without explaining operating ratios, we’ll say that for the entire piece of business, the O.R. was 106. Less than 100 is good, over 100 is bad. That means that no matter what we do with the 5,600 equations, our average will always be 106. One terminal, which had 4,700 of the shipments came along and said, “We know we were okay with 104 for us and all, but we’ve decided we want a 99.” Here’s the problem with that. If you have 4,700 shipments averaging out to a 99, but your average for 5,600 shipments will always be 106, you have 900 shipments that will average out to 142.6. A 106 O.R. is acceptable because it’s in that “plus or minus” zone where our costing might be off and it might operate at a profitable level, or even if it’s a slight loss, the profitable freight mixed in with these shipments should make it all come out ahead. Go us. But a 142 is more like, “We’re better off driving the truck into a lake and paying the customer the damages than we are actually hauling this.” This would be like, “Well, the 4,700 of us each want a Chicklet and we’re okay if the 900 of you have to be kicked in the genitals in order for us to get our Chicklets.” But, I went on with preparing a plan for that if someone approved it. Next day, the day this is all due, I come in and another terminal which had not been involved, but had 700 of the shipments, said, “Hey, we’d like a 96 O.R.” To keep with the previous analogy, this would be like someone saying, “The 700 of us want Gobstoppers, the 4,700 of them would like Chicklets, and I guess that means the 200 of you will get ‘Kaiser Soze-d.’ Your family and everyone that you ever loved will get machete. But, we’re down with that.”

Fortunately the Chicklet people said they’re willing to take bee stings, but the Gobstopper people still wanted Gobstoppers and were annoyed at not being told that they would get Purple Nurples. Keep in mind, I was operating at a deadline of four in the afternoon, it was currently eleven in the morning. The salesperson wanted to go with our original plan. But, I went through meticulously and found a way that the Purple Nurple was reduced to a rope burn and the bee sting was kicked up slightly to a wasp sting. Everyone still lost, but the one losing the most loss less now and the one losing the least would lose a tiny bit more. I also explained to the Nurples that I had an approval from Mega-Boss which is like a “Get out of jail free” card. Everyone was “happy” and I sent it out.

Oh, if we’re right about our estimates on commission, the salesperson could get over $20,000 when all is said and done if we get all of the business throughout the year. I, as you may have guessed by all of my hard work, will get an amount equal to what I paid you for reading this.

(That number would be zero, by the way)