Wading In The Deep End Of The Procurement Cesspool

Spend Matters welcomes this guest article by Art van Bodegraven.

Maybe Robotics Will Save Us

Face it. People are what get us in trouble in the supply chain realm. People make decisions based on faulty data, or no data at all. People bend the rules to placate other people (who may be such exalted beings as customers).

FREE Research Report: How to Chose Procurement Technology That “Grows With You”

It's not the system's fault that it doesn't work right or can't handle a specific circumstance. People designed, coded, tested and refined the brand-spankin' new application, and people trained other people in its use. One shudders to contemplate how machines might some day make decisions "just like people."

Do We Need Smarter People?

We could debate all day the difference between, and value of, raw intelligence versus good sense, but my take is that there are a few categories of shortcoming that contribute to disappointment, failure, or catastrophe. They are: stupidity, ignorance, complacency and arrogance.

These core conditions afflict all elements of supply chain management. Sourcing and procurement are not immune; there is no vaccine that has yet made it through clinical trials. The problem is not necessarily more acute in logistics execution, nor does S&OP hold ultimate answers. Some anecdotal evidence suggests that outcomes are more pronounced when SCM functions act independently, but are mitigated in collaborative, high-communications environments.

Both strategic and tactical arenas have been infected, and all levels of corporate and supply chain management have been known to succumb.

The 4 Horsemen Of Deep Doo-Doo 

The specific affliction involved is not important; all those carrying the various viruses that contribute to finding one's organization in a bad place, ripe both summer and winter, wind up in the same wastewater. Backstroking like mad, they pray that freestyle is not the next event. Those core attributes, that can either maim or kill operationally, are revisited below.

  1. Stupidity: Sad to say, all aspects of our profession provide refuge for some who just don't, can't and won't get it. They are stuck in the last century, they cling to the one and only thing they know, they are legacies – scions of a prior generation who have inherited or been appointed to roles in which they need to stand on tiptoe to keep their heads above the polluted water line.
  2. Ignorance: Larger numbers, actually, would be more capable if they knew more about what they don't know. They might understand and apply the right stuff, if only someone had deemed them worthy of learning, training, exposure, updating, industry and/or functional networking. But, they don't know what they don't know, and yet they make decisions and lead functions anyway. Their path, by the way, is a well-worn shortcut to fighting the stupid for better lanes in which to swim.
  3. Complacency: The dread "if it ain't broke, don't fix it" school. They're happy with where they are, and where their enterprise is. That they might be better, that they might be more profitable, that they could do more volume (with more customers), or that their competitors could make a game-changing move at any second barely registers on the share-of-mind-ometer. Swim, boys. Swim for your lives!
  4. Arrogance: The aggressive varietal of complacency, this strain leads to delusional imagining that today's power and position are a divine right, never to be either challenged or taken away. This is the province of those who are committed to the notion that "We are the best. We always have been. We have no reason to change. Others change to become more like us, but they'll never catch up."
    These are the bullies who club their suppliers into submission, just because they can. These are the predators who make life difficult for their customers – pricing, availability, lead times - because they are the only game in town.
    These are the snobs at the other end of the cesspool, too good to swim with those lesser others who actually deserve to be there. Think of the insufferable sports franchise that only today realizes that it has not won a championship in 40 years. Consider the mega-retailer, reduced to a marriage of invalids with a competitor, that still kills acquisitions and can't seem to escape its sordid history of supplier abuse. Remember the electronics icon that collapsed with a weakened supply chain and the irony that its conqueror has fallen hard times a mere decade later. Think back to the ever-lengthening list of "whatever happened to?" brands.

The Miracle Drug

The foundation for a solution to these ailments is straightforward; it is wholesale and wholehearted adoption of a collaborative continuous improvement way of life within the enterprise. But, as in many other cases, if the patient goes off his or her meds, the future is not guaranteed.

Whatever version of the indicated family of medications is applied (e.g., Lean, Six Sigma, other), among the objectives are the eradication of arrogance, complacency and ignorance. Stupidity is admittedly a more challenging proposition, but can be combatted with selective (as opposed to desperation) hiring and longer-term programs throughout the educational system.

The role and criticality of investments, personally and corporately, should be apparent, and cannot be over-emphasized. This requirement will induce insomnia among CFOs, but it is a requirement if an organization is serious about not letting the cesspool leach into the groundwater.

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First Voice

  1. Barb Ardell:

    WOW! I feel W. Edwards Deming rolling over in his grave. Yes, people complicate life. Fortunately or unfortunately, we are a necessary component. Rather than name-calling and bashing, perhaps we could try to understand why people _behave_ the way they do and then strive to change behavior. For behavior change to take place there must be two components: 1. Motivation (Is it worth it?), and 2. Ability (Can I do it?). We often assume motivation is the issue when it is really ability. Pep talks will only add to frustration if ability is the issue. If we believe it is truly a motivation issue, we need to look at how we are attempting to motivate change. Do we just talk people to death, sharing more information if change doesn’t occur? This is notoriously ineffective. Instead, we need to connect to the values and beliefs people already hold. I encourage you to read the NY Times bestseller, _Influencer_ if you want to learn more about how to increase your success at driving change. Research proves that this approach increases results tenfold. Or feel free to contact me to learn how these skills and methodology can be brought to your supply chain organization.

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