Software offers end-to-end Supply Management solution.

Press Release Summary:

Supply Management v5.0 enables large corporations to plan, manage, and optimize total cost of ownership for purchased materials/services. It supports supply management processes such as refining supply strategies, managing supplier performance, re-aligning supply portfolio, selecting new suppliers, managing and activating contracts, and executing ongoing material and MRO procurement. Modules are organized by Supply Strategy, Selection, Execution, and Performance management strategies.

Original Press Release:

Verticalnet Announces Release of Supply Management 5.0 Software Suite

Customers Cite Rapid ROI, Flexibility and Power of Eleven Modules, and Ability to Optimize Total Cost of Ownership for Purchased Materials and Services

Malvern, PA, September 2, 2003 - Verticalnet, Inc. (Nasdaq: VERT), a leading provider of Strategic Sourcing and Supply Management solutions today announced the release of Verticalnet® Supply Management 5.0, the latest version of its award-winning software suite. Supply Management 5.0 provides a complete suite of applications to enable large corporations to plan, manage and optimize the total cost of ownership for purchased materials across the organization. Verticalnet's new release offers solutions that allow customers to gain an unprecedented level of insight and efficiency when managing the total cost of their supply base. By supporting a comprehensive set of supply management processes including refining supply strategies, managing supplier performance, re-aligning the supply portfolio, selecting new suppliers, managing and activating contracts, and executing ongoing material and MRO procurement, Supply Management 5.0 provides customers with the tools to execute a total supply management vision.

"Supply management objectives are rapidly shifting towards a focus on 'total cost of ownership' and away from the 'price-only' requirements which characterized the first wave of reverse-auction led sourcing initiatives," stated Nathanael V. Lentz, President and CEO of Verticalnet. "A Supply Management solution focused on total cost of ownership optimizes price, risk, and performance to enable the best supply management decisions. Achieving improved pricing, product quality, and reliable performance while establishing strong and sustainable supplier relationships is no longer simply an aspiration, but is now a reality for our customers with Supply Management 5.0."

Highlights of the Verticalnet Supply Management 5.0 release include:

· Flexibility to deliver Supply Management hosted or behind the firewall on the customers' servers. By offering options for full enterprise implementations or hosted delivery for each solution, Verticalnet Supply Management 5.0 is adaptable to the diverse IT requirements and support needs of customers.
· Eleven distinct modules organized by four key Supply Management processes - Supply Strategy, Supply Selection, Supply Execution, and Supply Performance. Each of the solution modules can be fully implemented, on a customer site or in a hosted environment, within 45 days for under $100,000 using the Verticalnet Express implementation methodology.
· Each of the solution modules is sold separately, by enterprise license, or under Verticalnet's monthly subscription model, which enables Supply Management projects to be immediately self-funding, maximizing the ROI of the project.
· Significant upgrades to Verticalnet's Spend Analysis application, providing web-based analytics and enhanced data cleansing and auto-classification capabilities. In addition, users of Spend Analysis are now able to seamlessly initiate a reverse auction or negotiation directly from the point of identifying savings in the analytical tool.
· Functionality enhancements to Verticalnet® Supply Selection, which incorporates Reverse Auction, RFx, and Structured Negotiation modules, including improved supplier discovery, improved ability to select suppliers based on total landed cost, support for diversity procurement, the ability to include supplier performance metrics as decision criteria, and improved auctioning capabilities.
· The release of a new module, Verticalnet® Contract Activation, which enables centralized sourcing organizations to efficiently and effectively distribute contract features to separate autonomous divisions, allowing divisional procurement organizations real-time visibility into available contracts, leading to increased contract compliance and lower total costs.

"Verticalnet's Supply Management 5.0 release offers customers significant enhancements to our market-leading Spend Analysis application and new functionality to our Supply Management suite including the most comprehensive Contract Activation application offered in the e-sourcing marketplace," said Jim Wetekamp, Verticalnet's Senior Director of Product Management. "In addition, our ability to offer customers flexibility in terms of multiple modules, multiple pricing options, and delivery flexibility is in direct response to customer feedback. Customers can now get our award winning technology how they want it, where they want it, when they want it."

Verticalnet Supply Management 5.0 is generally available today, and several Verticalnet customers have already gone live, or have elected to upgrade to Version 5.0, including Premier, IKEA, and MasterBrand Cabinets. "MasterBrand Cabinets considers both price and non-price factors in making supply decisions. Verticalnet's ability to help us achieve lower pricing while managing supplier performance was one of the key reasons we selected them initially," said Kathryn Farynowski, Vice President of Supply Chain for MasterBrand Cabinets, an operating unit of Fortune Brands. MasterBrand Cabinets has recently committed to upgrade to Verticalnet® Spend Analysis 5.0. "Improvements in functionality, performance, and ease of use were important factors in our decision to upgrade to Version 5.0. Our experience with Verticalnet has exceeded our expectations, and we have seen significant ROI. Additionally, we have seen increases in quality and supplier performance due to the use of Verticalnet's software," Farynowski commented.

Premier, Inc., the largest group purchasing organization in the healthcare industry was the first company to go live on Verticalnet's newest module, Contract Activation 5.0. Premier Quote Pending Approval

Companies interested in learning more about Version 5.0 can visit the Verticalnet website at, contact the company via email at, or via phone at 610-240-0600.

Release Details
Verticalnet Supply Management 5.0 consists of eleven modules organized by four key Supply Management Processes - Supply Strategy, Supply Selection, Supply Execution, and Supply Performance. Together, the integrated modules form an end-to-end Supply Management solution leading to lower total cost of ownership, decreased supply risk, and improved supplier performance. Individually, each module can be implemented separately with a company's existing systems to solve point problems and deliver immediate value.

Verticalnet® Supply Strategy
Verticalnet Supply Strategy modules include Spend Analysis and Source Planning. The first step in implementing world-class supply management processes involves gaining enterprise-wide visibility into spending to drive an effective supply strategy. An effective supply strategy enables you to maximize the value from your Supply Management initiatives. Supply Strategy modules help users answer the questions: "What are we spending our money on? Where are the best opportunities to achieve savings? What should our sourcing organization focus on?" Additionally, Source Planning helps organizations manage and prioritize sourcing projects to maximize the value of supply management.

Supply Management 5.0 Improvements:
· Web-based Analytics - Verticalnet Spend Analysis 5.0 includes the introduction of web-based analytics. Software installations are no longer required on the user's desktop, easing implementation and reducing the requirements on our clients' IT organization. Spend Analysis will also be available to users away from their desktops, through a standard web browser.
· Closed loop integration between Spend Analysis and Supply Selection - Verticalnet is the only vendor on the market that enables companies to launch Reverse Auctions or RFX events directly from the Spend Analysis module. Spend Analysis 5.0 contains tools to help procurement professionals identify savings opportunities and launch a reverse auction or negotiation event directly from the application.
· Automatic spend data classification - Spend Analysis 5.0 contains improved automatic data cleansing and classification features reducing the time and effort required to create a single, actionable view of corporate spending. Our automatic cleansing and classification features eliminate at least 80% of the manual effort required to prepare data for analysis.
· Spend data enrichment - Verticalnet Spend Analysis 5.0 contains data enrichment capabilities that enable users to gain more insight from their spending data. Procurement professionals using Version 5.0 have a better ability to reconcile parent-child supplier relationships and identify diversity suppliers, resulting in better identification of savings opportunities and increased compliance with corporate diversity procurement initiatives.

Verticalnet® Supply Selection
Verticalnet Supply Selection modules include Supplier Qualification, Negotiation, and Reverse Auction. Supply Selection modules enable companies to quickly execute iterations of sourcing negotiations to select the best mix of suppliers - balancing price, performance, and risk and selecting a portfolio of suppliers that deliver the lowest cost of ownership.

Supply Management 5.0 Improvements:
· Greater focus on total cost of ownership - Verticalnet Supply Selection 5.0 includes the ability to analyze bids based on landed costs, which enables companies to include shipping, rebates, terms, performance, as well as company-specific criteria in their decision-making process. These new features ensure the selection of suppliers that will deliver the optimal total cost of ownership, rather than focusing only on the lowest price per unit.
· Improved supplier content information - ability to tap into industry knowledgebases to identify new sources of supply, maximize competition, and ensure compliance with company diversity procurement initiatives.
· Supplier performance metrics as sourcing criteria - Version 5.0 enables companies to integrate supplier performance metrics into the sourcing process, to use past performance as a factor in awarding future business.
· Improved administration and auction monitoring capabilities that give Supply Managers better control over e-sourcing events as well as better visibility into the results of the events.

Verticalnet® Supply Execution
Verticalnet Supply Execution modules include Supply Planning, Contract Management, Contract Activation, and eProcurement. Verticalnet Supply Execution modules streamline purchasing processes, improve supplier collaboration, and ensure compliance with negotiated contracts.

Supply Management 5.0 Improvements:
· Introduction of Contract Activation - Verticalnet Supply Management 5.0 includes the introduction of Verticalnet® Contract Activation. For many companies, there is a significant time delay between the time a contract is negotiated and the time different business units execute on the new contract, terms, and related pricing. Often, different divisions will continue to buy from different suppliers, buying the wrong products or services, and/or paying higher prices than they should - despite the existence of a contract that would save money for the company. The process of accessing shared contracts and loading them into disparate division ERP or Contract Management applications results in re-keying of redundant information, processing errors and lost savings opportunities. Verticalnet Contract Activation enables centralized sourcing groups to quickly and efficiently communicate contract terms to disparate purchasing organizations. Contract Activation also makes it easy for purchasing organization to import contracts into their ERP or contract management systems - while choosing proper pricing tiers and other variables such as shipping locations, pricing tiers, service preferences, etc. that may change based on their locations or purchasing volumes.

Verticalnet® Supply Performance
Verticalnet Supply Performance Modules include Supplier Scorecards and Supplier Corrective Action Request. Without monitoring and corrective action, the value of Supply Management can erode over time. Suppliers revert to their old ways; contracts get lost and spot purchases increase. Verticalnet Supply Performance modules enable companies to measure enterprise-wide supplier performance and take corrective action measures for under performing suppliers. The results of Supply Performance feed the strategy process, delivering many of the non-price factors used in Supply Strategy and Supply Selection.

Supply Management 5.0 Improvements:
· Verticalnet® Supplier Scorecards is introduced as a separate module in version 5.0. Supplier Scorecards enable companies to extract performance data from disparate systems to provide holistic views of supplier performance that include metrics that include: pricing, quality, service, and timing. Supplier scorecards are accessible to suppliers over the Internet, so that suppliers may proactively manage their own performance, resulting in improved overall supply base performance.

About Verticalnet

Verticalnet (Nasdaq: VERT) is a leading provider of Strategic Sourcing and Supply Management solutions that enable companies to identify, negotiate, realize, and maintain supply chain savings. Supply Management encompasses more than mere price reduction- requiring companies to balance price, performance, and risk resulting in a lower total cost of ownership. Led by the Spend Analysis solution that quickly provides companies with insight into enterprise-wide spending, Verticalnet's full suite of Supply Management solutions enables companies to achieve lower prices, improved contract compliance, better supplier service, and shorter sourcing cycles. As a result, our customers recognize significant and sustainable savings in materials costs, inventory levels, and administrative costs - resulting in improved profitability. Verticalnet Supply Management is used by industry-leading organizations including IKEA, Lowe's, MasterBrand, Premier and Valvoline. For more information about Verticalnet, please visit

Verticalnet is a registered trademark or a trademark in the United States and other countries of Vert Tech LLC.

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