Procurement Training By Camel

 

I spent the last 10 days in Egypt on a purchasing training and consulting assignment with one of the biggest companies in the country. I spent most of my time in Alexandria, a beautiful Mediterranean-like city on the water. After my work was done, I found time to sight-see a bit in Cairo, prior to flying back.

No trip to Cairo is complete without a visit to the pyramids, and of course I did just that. I had a few options in visiting them. One was to walk, the other was to drive, the third was to go by horse, and the final option was to go by camel (I know, I know, you were dying for me to get to the camel topic…. keep reading and I’ll eventually make this topic relevant to purchasing).

Since I already get enough exercise walking back and forth to the refrigerator at my home, walking was out of the question. Many triathlon competitors will tell you that exercising too much (over-training) is a big problem, and I refuse to fall victim to it. Going by car seemed too mundane and also too quick. Going by horse felt so, well, un-Egyptian. As they say, when in Rome, do what the Romans do. Therefore, I went by camel.

I learned a lot about camels from my guide. One thing is that they go the entire Fall and Winter seasons without drinking a single drop of water – not one drop! The water is there, they just choose not to drink it, for a full six months. I was awestruck by this fact. During the Spring and Summer seasons, they drink infrequently, but when they do, they drink 40 liters. I was like that in college, only with Diet Coke. Of course, camels also have humps as a source of energy for their long treks. I have my belly, but it is of no such use.

One other thing I learned was through my own observations. My guide was on a horse. His horse did what all horses did when walking: it would look at the ground. Curiously however, my camel never once looked at the ground. He kept his head high and straight. He would look far into the distance the whole time. This piqued my interest.

I asked my guide why this was the case. His answer was fascinating (to me, anyways). He said that camels have to cover incredible distances, and they know it. What’s happening a few feet in front of them isn’t important to them. They have to focus on where they need to get to in a few months, not where they will get to in a few feet. As a consequence, they hold their heads high and focus on their destination.

This got me thinking. There is a lot to learn from camels. Camels are strategic thinkers. They plan everything ahead. They don’t let themselves get bogged down by the short term. They look far ahead and focus on their goals and objectives – getting from where they are to someplace very, very far away. They are unencumbered by the present. It is vital to their very existence.

Of course, I saw a purchasing corollary in all of this. Here I am in front of the one of the Seven Wonders of the World, and I’m busy philosophizing about purchasing. I really need to get a life.

Anyways, the best purchasing and supply managers that I have seen are the ones that don’t get bogged down in daily fires. And it is my experience that most purchasing professionals are spending up to 75% of their time in “fire fighting” activities. What I mean by that is not that they lack purchasing skills, but rather that they’ve allowed themselves to get sucked into unplanned short term activities – mails, IMs, customer issues, supplier issues, phone calls, etc.

How often has it happened that you started a day with a list of things you wanted to accomplish, and only got to one or two items at best because of unplanned activities? How many of those unplanned activities made it to your monthly status report? To your annual performance review? Chances are, they made it to neither. That’s the nature of fire fighting in our profession. Nobody got on the fast track to being the next director of corporate purchasing because they were so adept at putting out fires.

The answer of course is not to ignore these daily issues. The camel doesn’t do that either. The camel finds solutions that result in the ability to focus on the long term. We all need to do that. I teach many such principles in my seminars. It’s not enough to have great purchasing skills. We need to structure our workload and manage our customers and suppliers such that we can spend our time on strategic activities that do end up in status reports and annual reviews… and ultimately, in promotions and career growth.

To be honest, I never thought I would write a blog extolling the virtues of camels. Here we are though. Incidentally, in case you are curious, here’s a picture of me and my camel. Who knew I’d learn so much from him?

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How interested are you in the starter in your car? How about in the motor in your hair dryer or the hinges to your front door? Not very much interest there either, that’s what I thought.

How about if any of those don’t work? Then do you have interest in them? Suddenly you do! These are things that are supposed to “just work”, and you should be spending zero calories thinking about them in any capacity.

Why am I talking about this? Well, I attended a presentation from a purchasing trainer the other day where he said purchasing’s #1 objective was to exceed customer expectations and delight the customer. It was a packed house, and nobody blinked or questioned him. I like the guy, and he’s actually really smart and good at what he does, but I couldn’t disagree more.

We call the person inside our company that generates the demand and has the budget to fulfill it the “customer”. That’s really a misplaced term however. Think for a second who the real customer is, who you are really supposed to serve. Purchasing does not have a fiduciary responsibility to the person who generates the demand and has the budget (the internal customer). However, purchasing does have a fiduciary responsibility to the board of directors, internal audit, the shareholders, the owners, the taxpayers…. whoever it is that ultimately runs or owns the company or agency that you work for. THEY are the real customer.

Now, back to the starter, hair dryer, and hinges topic (I know you were dying to know how I was going to close the loop on those; let me tell you, it wasn’t easy!). Isn’t there a problem if you are either delighted or disgusted with how these items work? Even if you are delighted with their functionality, that still means you are spending too much valuable brain-time on something that is supposed to “just work”, right? Your real goal is to be disinterested, and to be able to carry on with more meaningful and value-added activities in life than extolling the virtues of that marvelous hinge in your front door. I’m sure it really is a marvelous hinge though. Just don’t tell me about it. I’m serious.

Purchasing is not much different. If we are trying to delight the internal customer, or if the internal customer is delighted, it is likely we are rolling over on key decisions where we are instead supposed to be taking a hard stand where needed on behalf of the REAL customers of the company.

If all internal customers had their way on every purchasing related need or issue, they would indeed be delighted. Your customer satisfaction scores would be through the roof. What would purchasing look like in that model though? It’s likely that most every order would be placed at the last minute with express shipping, their preferred suppliers would always be the selected suppliers, corporate commodity strategies would cease to exist and there would instead be customer driven purchasing strategies, and so on.

I don’t mean to paint a black picture. There are many customers out there who are well aligned with purchasing on doing the right thing for the company. It didn’t happen overnight or by accident though. It took blood, sweat, and tears on the part of purchasing before this end state was achieved.

How much do you think about the HR department in your company? Accounting? Finance? Legal? How much should you be thinking about them? These are all service providers for which you are the customer. Isn’t disinterest really the best state? They should “just work”, like the starter in your car, right?

Are you mixing your allegiance to the internal customer with your greater allegiance to the people who ultimately run or own the company or agency you work in? Are you being graded on your ability to delight the internal customer? How much time do your internal customers spend having to think about purchasing? You need to challenge yourself in all of these areas. None of this precludes you from having a great relationship with your internal customer by the way.

I know this is a difficult topic. It flies in the face of most everything we’ve ever learned. Customer service is supposed to be off the charts in every business. Dig deeper however, and you will see that it doesn’t or shouldn’t work that way for business units that have a fiduciary obligation to the company and owners. All the rules we learned about customer service were made for sales department personnel, and that’s not us.

It’s a good thing too. We have dream jobs. It’s much more fun shopping all day long with somebody else’s money!

While in the beautiful country of Bali, Indonesia, I went to a coffee plantation and tried a rare type of coffee called Kopi Luwak.

It’s rare because it first passes through the intestines of a civet, which is a member of the mongoose family, before being roasted.

Hopefully they wash it first, but I don’t know that for sure and I didn’t ask.

It’s supposed to be the smoothest coffee on earth, and it’s also the most expensive – up to $600/lb.

As I understand it, the term “Java” comes from Java, Indonesia. I figured these guys must know something about coffee.

Before drinking this mystical coffee, I got to watch a civet in a cage “produce” the beans for roasting.

To this day, I still don’t know who was more disenchanted with the Kopi Luwak production process, me or the civet.

The moral of the story however is that in order for me to experience this coffee, I had to embrace change, and this was no small change.

In the right circumstances, usually not involving wild animal droppings, people can embrace change. People are motivated when listening to compelling speeches about change.

In fact, in one way or another, almost every president in history has probably used the idea of “change” to get themselves into office.

For some reason however, when change hits the workplace, or when it becomes personal, the reaction can be much different. It’s too close to home maybe.

While doing a guest speakership at a purchasing conference last week, there were about 4 students (out of roughly 70 attendees) who were really resistant to my concepts, and vocally so.

After all, I was teaching them that the way they were doing purchasing was in fact what was causing the problems.

Nobody likes to hear that. Of course, I don’t get paid to tell people what they want to hear.

I dug deeper to find out why they felt the way they did.

We are talking about an organization that has 4 scattered implementations of ePurchasing, and not all with the same vendor.

Independent agencies of this organization were also looking at procuring their own ERP systems.

I asked why there couldn’t be ONE ERP system for the greater organization, and they emphatically explained to me that it wouldn’t meet their unique local needs.

I just listened. It wasn’t the right time or place to debate, although I’m sure they had some great reasons for their perspective.

My take away from this discussion was that some people don’t like change when it comes from the outside.

If there is change, they want it to come from within their immediate scope of control. More specifically, they want it to come from them.

Even if they negotiate independent ERP solutions for each agency, they might individually get great deals – maybe even world class deals – and they may do a great job solving problems that have been haunting them for years at the local level.

Their customers and local management may love them as a result. It still doesn’t make it the right thing to do.

The challenge in purchasing is to shift away from doing the right thing for a *part* of the organization and instead do the right thing for the whole company or organization.

That means not everyone involved will be happy. It also means that the solution may not be perfect for all parties involved.

However, it does mean that TCO will be optimized for the entire organization – and that’s what we’re getting paid to do as purchasing professionals.

Are you making purchasing decisions that are the right thing to do for your customer, but are the wrong thing to do for your company?

Are you ensuring an organization wide unified approach in your commodity purchasing strategies wherever possible?

You really have to challenge your customers and management – and even yourself – to make sure you are.

Remember, the ultimate customers you are trying to please are the board of directors and the shareholders, or the taxpayers in the case of government agencies.

The worst possible case of course is doing the wrong thing for all parties involved, like when I bought that dreaded wild animal intestine processed coffee.

In case you are wondering, it tasted awful.

…I guess not all change is good.