I hope that you have enjoyed the article “The 25 New Rights of Purchasing, Part II.”

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I wanted to expand a little bit on Right #6 – Right Product or Service.

I wrote that “you are counted on to know the products and services you buy at least as well as your internal customers to verify that the ideal product or service is being specified.”  As procurement professionals, too often we assume that the “end user knows best.”

And that can be flawed thinking.

I always go back to a time early in my procurement career when I think of this topic.  Then, I was a young and relatively inexperienced buyer for US Airways, right after it announced that it was changing its name from USAir.

Changing the name of an $8 billion per year company is no small task.  Everything bearing the company name had to be replaced.  I was responsible for purchasing US Airways signage to replace USAir signage.

One of the signs that needed to be replaced was in the lobby of our corporate headquarters.  The lobby’s walls were constructed of this beautiful marble.  The headquarters building is where the chairman (Steven Wolfe, at the time), president, and other top executives worked and the classy architecture of the building reflected the elevated status of the people who occupied its highest floors.  By the way, the chairman was directly involved in evaluating and approving every design and use of the new company logo.  Employees involved in the rebranding feared getting anything logo-related wrong.

To complement the beauty of the marble walls, we needed classy-looking signage.  The person in charge of determining the signage requirements – the Director of Properties & Facilities – specified these individual letters.  I don’t remember it they were aluminum or stainless steel, but they were metal and they were heavy.  And the Director specified that they were to be mounted using mirror mounting tape – basically a foam material with adhesive on both sides.

All of our suppliers submitted their bids without any exceptions.  One supplier contacted us in advance and said that the weight of the letters, the fact that they were being installed in a lobby where outside air would mix with inside air and cause temperature fluctuations, and the fact that they were being installed on a marble surface would all conspire to result in a high probability of the letters falling off.  The supplier suggested drilling holes into the marble walls, having posts attached to the backs of each letter, and inserting those posts in the holes to secure the letters to the wall.

Not knowing much about such stuff at the time, I simply relayed the message to the Director with a question of whether we should reconsider our specification.

The Director – an epically cranky man – scoffed at the notion of changing the specification and essentially said “We’re not changing the spec!  I know what I’m doing!  The letters will not fall off of the wall!”

Being wet behind the ears and respecting the Director’s technical background, I simply relayed the message to the supplier that the spec would not change and to bid as the spec is written.  That supplier did.  That supplier was the lowest bidder, one we had a positive relationship in the past, and one that satisfied all of our selection criteria.

So, we awarded the business to that supplier.  A few weeks later, the supplier delivered and installed the signage per our spec.

Just a few days later, I get a call from the Director, who was in a panic.  He said “The letters are falling off the wall in the lobby!  If Mr. Wolfe sees this, I’ll be fired!  Get the vendor in here immediately to fix this mess!”  I got the sign vendor to go to our corporate headquarters to evaluate the problem and recommend and implement a permanent solution.

What was the solution that was implemented on an emergency basis?

Welding posts to the letters, drilling holes in the marble wall, and inserting the posts in the holes to secure the letters.  That emergency fix cost thousands of dollars on top of what we already paid for the signage and installation.

It would obviously have been cheaper to get it done the proper way up front.  But the big question is:  Had  we specified the posts and holes up front and given all suppliers the opportunity to compete on that specification, how much more money would we have saved?

We’ll never know.

But the moral of the story is that procurement professionals should know when they are buying a “time bomb” of a product or service and should never let an order destined for failure go through.

To Your Career Success,
Charles Dominick, SPSM, SPSM2, SPSM3
President & Chief Procurement Officer – Next Level Purchasing Association
Co-Author – The Procurement Game Plan
Struggling To Have A Rewarding Purchasing Career?
Earn Your SPSM® Certification Online At
www.NextLevelPurchasing.com

 

Charles Dominick, SPSM, SPSM2, SPSM3

Charles Dominick, SPSM, SPSM2, SPSM3 is an internationally-recognized business expert, legendary procurement thought leader, award-winning entrepreneur, and provocative blogger. Charles founded the Next Level Purchasing Association in 2000, oversaw its incredible growth, and successfully led the organization to its acquisition by the Certitrek Group in 2016. He continues to blog and provide advisory services for the NLPA on a part-time basis as he incubates his upcoming business innovations. Charles is also the co-author of the wildly popular, groundbreaking book, "The Procurement Game Plan: Winning Strategies & Techniques For Supply Management Professionals."

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