The (Sourcerer’s) Apprentice and the “procurement”(sort of) task

Apologies to our non UK readers to whom this may not resonate....!

The Apprentice is a competition where ambitious young 'business people' compete for a job with Lord Alan Sugar. Each week one is eliminated after the two teams carry out a business task. This week was a 'buying' task where the two teams (3 boys versus 4 girls) had to buy 10 products in a day at the best possible price. So a test of planning, some basic procurement skills and, probably most importantly, negotiating / bargaining skills.

Jamie, the boys captain, gave his team good advice; that you've got to give the supplier some reason for reducing the price even if it is only 'we don't have that sort of money'.  He suggested asking for 70% off list price, which seems a little optimistic!

The girls look good - they plan and work the phone. They order the kitchen worktop in advance as it is non-standard.  The boys try to buy it off the shelf and fail. The boys go straight off to the shops – asking for a plain gold Tikka in Hatton Garden, where they have no idea what it is.  The girls they get on the phone and find that Southall (centre for Asian products) is the place to go for a gold Tikka.

The girls get the list price of £190 down to £160. But how do they know £160 was the best price? No comparison with any other outlet as far as we can see.  And indeed that is demonstrated when the boys (having finally found a source), get it for £135 after some tough negotiation and persistence.

Chris takes Jamie's advice about having a 'story' to heart and makes up little tales about why he needs some tartan material, certain books etc.  Which works surprisingly well.  His combination of good looks and a somewhat 'nice but dim' verbal delivery style seems to go down well with female sales people!  And Jamie cleverly spots that he doesn't need the guarantee on one item and uses that in his negotiation.

Meanwhile the girls give way when faced with people saying “no”.  They don't really push and they don't have alternatives (their 'BATNA'). They appear to get ripped off by various traders – paying twice the wholesale price and twice what the boys paid for various items. They pay £69 for the tartan material against the boys' £23.

Amazingly, despite the boys failing to find three items, for which they are penalised, they win!  Which is a sign of the unreality of the programme – if you failed to provide 3 of the 10 items for your business, you wouldn't last long in the real world. But they did negotiate with a lot more desire and conviction than the girls.  And the girls did use the immortal worst question in negotiation;  "is that the best price you can do?"  To which there is only ever one answer...

It is hard to know how much is conditioned by the presence of a camera crew.  And elements of the programme might give the wrong impression of what procurement is about; but it highlighted key points that are applicable more widely.

  1. Planning is critical.  Don't just run around London - or your supply base - without working out what you're trying to do.
  2. But planning - and identifying sources -  is no substitute for understanding what you're buying and knowing what a 'good price' might look like - is it £23 or £69?
  3. And planning and benchmarking still need to be followed through with a commercial / negotiating sense, ability, and tenacity.
  4. Finally, you can't negotiate when you're in a rush.

Well done the boys!

First Voice

  1. Rob:

    Let’s see if all of the boys and girls can do better on this one…

    http://www.number10.gov.uk/problemwithprocurement

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