Creative Thinking by Mars

Other companies should take note of this move by Mars. They recently applied game theory to the shipping-bidding process and found a non-zero-sum solution to the problem. Everybody wins.

Here's how it works: Game theory helps Freight Traders decide when to end a tender or auction. Say you're bidding for a rare Eminem action doll on eBay. The deadline is midday Friday, but you're going to watch the action and wait until 11:55 before making your bid. It's no different with freight. A shipper might post a big tender on Freight Traders' Web site for seven days, but 95% of the bids from carriers will probably occur in the last two hours.

"Sniping" — withholding bids until the last moment — suppresses competition, says Gail Hohner, a game theorist from New Jersey and Freight Traders' research director. Freight Traders has found the way to fix that problem: By introducing a "soft ending" mechanism, the company changes the rules of the bidding process so that any offer made in the last hour automatically triggers an extension of the deadline, removing the incentive for sniping.

Complacency is one of the worst things that can happen to a company. You have to continually challenge assumptions, question rules, and re-think the way things are done. Hats off to Mars for setting a good example.