Procurement-Lessons-from-World-War-I

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This whitepaper/article from Zycus is intended only as an example of historical procurement lessons from World War I.

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Procurement Lesson from World War 1 T he f i r s t in a special 2 014 s eri e s f r om Z y c us: “P r o c u r eme n t L ess ons f r om Hi s t ory”

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INT R ODU C TION: 2 014 will mark the p a s s age o f a c e n t ury sin c e the Fi r s t W orld W ar b r o k e ou t . It w as p os sibly the f i r s t s t r a t egic w ar ev er f oug h t , with multiple p r oduct inn o v ation s , u s e o f modern arms and ammunition and with p a r tne r shi p s f o r ged. L e t' s look at one o f the bigg es t ope r ational e x e r ci se s in the hi s t ory o f human e xi s t en c e and s eek t o gain p r o c u r eme n t l ess ons f r om i t . It w as June 2 8, 1 9 14 when A r chdu k e F r anz F e r dinand, heir t o the th r one o f the A u s t r o- Hungarian Empi r e , and his wi f e S ophi e , Duch es s o f Hohenbe r g, w e r e a s s a s sina t ed in S a r aj ev o , Bo snia. S erbia w a n t ed t o gain c o n t r ol and o wne r ship ov er land f r om Bo snia t o e x p and i t s p r o vin c e . S erbia ' s i n t e n tions c ame f r om a simple f act - the criti c al impo r t an c e o f land as a s t r a t egic r es ou r c e f or i t s nation. And this laid the g r ound f or W orld W ar I. O v er the n e xt f our y e a r s and el ev en mo n th s , the p a r tici p ating nations w r o t e a n e w cha p t er in w orld hi s t or y , and this cha p t er w as r epl e t e with ma n y mil es t on e s and ev e n t s , big and small. L e t us h a v e a look at what modern p r o c u r eme n t p r o f es sionals c an t a k e f r om i t . Di s claime r T his whi t e p ape r / a r ticle f r om Z y c us is i n t ended only as an e x ample o f hi s t ori c al p r o c u r eme n t l ess ons f r om W orld W ar I. Z y c us do e s n o t endo r s e a n y inn o v ation s / s t r a t egi e s that a r e un e thi c al or immo r al. Neither do e s Z y c us suppo r t the id e a o f w a r , nor a n y nations engaged in w a r . P r ocu r ement L ess ons f r om W orld W ar I ww w .z y cu s .c om

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It all st a r t s with a m o ti v a t ed t e am T he UK s ec r e t ary o f s t a t e w a r , d ev eloped and publici z ed the slogan “ Y our King and C ou n try Need Y ou” f or the f i r s t 10 0 , 000 men t o enli s t in Ki t chener ' s N e w Ar m y . T he c all, launched on A ugu s t 11, 1 9 1 4 , w as an s w e r ed within tw o w ee ks . If the CPO do e s n ' t h a v e the rig h t people with the rig h t mind set , it w ould be di f f i c ult f or p r o c u r eme n t t o win b a t tl e s f or i t s busin es s . A t t r acting and inspiring the rig h t t ale n t in p r o c u r eme n t is as impo r t a n t as it is f or w arring nations t o inspi r e and r e t ain l o y al s oldie r s . P r ocu r ement L ess ons f r om W orld W ar I ww w .z y cu s .c om `

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G e t the h e a vi es t and the l ow es t hanging fruit f i r s t In the B a t tle o f the S omm e , on July 1, 1 9 16, about 7 5 0 , 000 Allied s oldie r s a r e unl e ashed along a 2 5-mile f r o n t; but b y the end o f the d a y n e arly 6 0 , 000 a r e d e ad, w ounded or mi s sing f or v ery li t tle gain. It is the w o r s t single d a y ' s f ig h ting in British mili t ary hi s t or y . Mismanageme n t o f r es ou r c e s r e sul t s in h e a vy l osse s t o the o r gani z ation. P r o c u r eme n t t e am l e ade r s al s o need t o unde r s t and the criti c al needs o f a p r oject and allo c a t e r es ou r c e s a cc o r dingl y . A huge budg e t and ma n y man-hou r s allo c a t ed t o a p r oject o f small s a vings oppo r t uni t y r e sul t s in w a s t e . App r opria t e t echnology and visibili t y o f e n t erpri s e - wide action c an help y ou ide n ti f y the fruit that is the juici es t and the m os t e asily r e ached. P r ocu r ement L ess ons f r om W orld W ar I ww w .z y cu s .c om

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G r ab y our oppo r t uni t y W hen the British e n t e r ed B as r a on N ov ember 2 3 , 1 9 1 4 , th e y wi s ely se t about s e c uring oil suppli e s in the Middle E a s t needed t o supply m os t o f the Ro y al N a v y . T he British s t r engthened their f o o thold in the w a r , thus s ta ying ah e ad o f their enemi e s . C a p t uring criti c al r es ou r c e s e arly in the game is ne c es s ar y , if the p r o c u r eme n t o r gani z ation w a n t s t o s t r engthen i t s supply chain and be at a g r e a t er ad v a n t ag e . E v en the B a t tle o f L ens (Hill 7 0) highlig h t s the ben ef i t s o f s e c uring s c a r c e r es ou r c e s . Hill 7 0 , being 15 f e e t higher than the sur r ounding land s c ap e , domina t ed the b a t tl ef ield. On A ugu s t 1 5 , 1 9 1 7 , the C anadian t r oo p s t ook the hill and held it again s t f i v e German c ou n t er a tt ac ks . Alli e s l os t 9 , 2 00 men; and the C anadians w e r e su cc ess ful in p r ev e n ting German f ormations f r om t r an s f erring lo c al men and equipme n t t o aid in d e f ensi v e ope r ation s . F or a c om p a n y , Hill 7 0 c ould be h a ving the s a f es t supplier mix that di s tribu t e s y our ris k s b y cov ering y ou again s t deli v ery f ailu r e s , c omp e titi v e supplier p o aching, or supplier b a r gaining p ow e r . It c ould al s o be the m os t c o n v enie n t di s t an c e f or y our c om p a n y b e tw een the f ac t ory and the mar k et , a pla c e whe r e the r a w ma t erial is abunda n t or a c ou n try with l o w labor c ost s . P r o c u r eme n t needs t o highlig h t i t s Hill 7 0 . P r ocu r ement L ess ons f r om W orld W ar I ww w .z y cu s .c om

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Mark y our time o f action T he British launched a nig h t a tt ack with all th r ee o f their armi e s on Oc t ober 2 3 , 1 9 18. T his time the British ad v an c ed six mil e s in tw o d a y s . T he British w e r e n o w ju s t 2 0 mil e s behind the r e ar o f the Hindenbu r g Lin e . If the British had launched the s ame a tt ack during d a ylig h t hou r s , with ju s t one ar m y , th e y p r o b ably w ould n ' t h a v e achi ev ed much su cc es s . Ju s t li k e the British a tt ac k ed when the sun w e n t d o wn, p r o c u r eme n t t e ams c an aim t o s ou r c e when pri c e s go d o wn. Kn o wing the b es t time t o s tri k e b y t r acking mar k e t indi c e s is impo r t a n t! P r ocu r ement L ess ons f r om W orld W ar I ww w .z y cu s .c om

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Ma k e y our suppl y -chain hole-p r o o f! In the thi r d and the f inal S omme O f f ensi v e on S e p t ember 1 5 , 1 9 16, the British ar m y f ailed t o b r e ak th r ough German lin e s and is unable t o achi ev e the objecti v e o f c u t ting a hole in the German line b y using ma ss ed a r tillery and i n f a n try a tt ac ks . P o sitioned at the h e ad o f a c om p a n y ' s supply chain, it is a huge r e sponsibili t y f or p r o c u r eme n t t e ams t o ma k e it f ormidable and immune t o demand f luc t uation s , supply sho r t ag e s or mar k e t t r an s f ormation s . A h e alt h y suppl y -chain w ould n o t only k eep the c om p a n y ah e ad in the r a c e but al s o c r e a t e a m o at that w ould p r o t ect the o r gani z ation again s t la r ger na t u r al di s a s t e rs / s ocio-e c onomic un c e r t ai n ti e s . In the thi r d pha s e o f the Y p r e s O f f ensi v e , on Oc t ober 9 , 1 9 1 7 , the British and F r ench t r oo p s t ook P oel c apelle with c onside r able bom b a r dme n t s . B ut in the n e xt 4 8 hou r s , 2 5mm o f r ain f ell on al r e ady s a t u r a t ed g r ound; the r emna n t s o f the e xpl o si v e s join the d o wnpour smashing the d r ainage s y s t ems and t urning the b a t tl ef ield i n t o a quagmi r e that is di f f i c ult t o survi v e in. Na t u r al di s a s t e r s c an c r e a t e h a v oc f or a n y o r gani z ation. T h e y c an ruin the suppli e s l e a ving p r o c u r eme n t highly vulne r abl e . P r o c u r eme n t t e am s , b y na t u re , a r e vulne r able t o e x t ernal f o r c e s and mu s t c arry out adequa t e risk anal y sis f r om time t o tim e . P r ocu r ement L ess ons f r om W orld W ar I ww w .z y cu s .c om

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Inn o v a t e t o st a y ah e ad In the B a t tle o f Ar r as on April 9 , 1 9 1 7 , the British su cc ess fully empl o y ed n e w t acti c s o f c r eeping b ar r ag e s , the ' g r a z e fu s e ' and c ou n t e r - b a t t ery f i re . P r o c u r eme n t al s o has t o ev ol v e with changing ci r c um s t an c e s . T he CPO needs t o d e vi s e inn o v ati v e s t r a t egi e s f or the c om p a n y t o s ta y ah e ad and s ta y p r o f i t abl e . P r o c u r eme n t is al s o impo r t a n t in the w a y it c o n tribu t e s t o p r oduct inn o v ation. W orld W ar I w as r epl e t e with e x ampl e s o f inn o v ation. n On April 2 2, 1 9 1 5 , the s e c ond b a t tle o f Y p r e s witn ess ed the f i r s t u s e o f the chemi c al w e apon 'poi s on ga s ' b y Germa n y n A t Hoog e , German t r oo p s u s ed f lame th r ow e r s f or the f i r s t time again s t the British lin e s ( June 3 0 , 1 9 15) n S t eel helm et s w e r e i n t r odu c ed on the British F r o n t on Oc t ober 3 1, 1 9 15 t o p r o t ect their t r oo p s f r om l e thal h e ad w ounds n On S e p t ember 2, 1 9 16, the f i r s t Z eppelin is sh o t d o wn ov er Bri t ain. T he Ro y al Flying C or p s u s ed a n e w c ombination o f e xpl o si v e and in c endiary bull et s t o g r e at e f f ec t . Ju s t li k e the w arring c ou n tri e s c on s t a n tly inn o v a t ed t o g e t an upper hand ov er their enemi e s , the modern busin es s land s c ape is no di f f e r e n t than a w a r . P r o c u r eme n t de p a r tme n t s need t o inn o v a t e t o s ta y ah e ad o f c omp e ti t o r s; be it in p r o c u r eme n t t echnolog y , supplier s t r a t eg y , s ou r cing plan s , or the ov e r all p r o c u r eme n t game plan. P r ocu r ement L ess ons f r om W orld W ar I ww w .z y cu s .c om

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N e v er c omp r omi s e on quali t y On Ma r ch 1 0 , 1 9 1 5 , the British O f f ensi v e at Neu v e Chapelle began; Allied l osse s amou n t ed t o 12,800 in ju s t 2 d a y s . S ome o f the blame f ell on the sho r t age and poor quali t y o f British shells that t ended t o e xplode b e f o r e pen e t r ating. T he phenomenon initia t ed the i n f amous 'Shell Crisi s ' which s oon c r e a t ed politi c al f allou t . P r o c u r eme n t t e ams a r e undou b t edly under h e a vy p r es su r e t o s ou r c e good quali t y di r ect and indi r ect ma t erial s . No w onder that sho r t age o f suppli e s and quali t y i s su e s c an l e ad t o major l osse s as c onsume r s , b o th i n t ernal and e x t ernal, w ould l os e tru s t in the c om p a n y . A good e x ample that c om e s t o mind is the r e c e n t ho r s e m e at s c andal that a f f ec t ed the E u r op e an r egion s . T he per f orman c e o f y our c om p a n y is depende n t on the per f orman c e o f y our supplie r s , and quali t y is an ess e n tial f ac t or linking the tw o , which t od a y ' s supply chain manage r s c ann o t igno r e . P r ocu r ement L ess ons f r om W orld W ar I ww w .z y cu s .c om

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U s e t echnology f or speed and e c onomi e s o f s c ale German a s s aul t s r e ached the S omme Line on Ma r ch 2 3 , 1 9 18, initiating the g r e a t es t air b a t tle o f the w a r , with 7 0 ai r c r aft i n v ol v ed in a single b a t tl e . W h e ther it is anal y zing y our e n t erpri s e - wide spend, or k eeping t a b s on the per f orman c e o f hund r eds o f supplie r s , or holding a huge s ou r cing ev e n t , when done pie c e b y pie c e and manuall y , it c an p r ov e t o be time- c onsuming and ev en c ou n t erp r oducti v e! W ith ad v an c ed t echnolog y , p r o c u r eme n t is in a l o t b e t t er p o sition t o d e vi s e s t r a t egi e s and g e t higher r et urn s . P erha p s this is what Germa n y tried t o achi ev e b y using 7 0 ai r c r aft in a single b a t tl e . Indeed, within a f e w d a y s in Ma r ch o f 1 9 18, the g r ound w as on c e mo r e in German hands P r ocu r ement L ess ons f r om W orld W ar I ww w .z y cu s .c om

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B e cl os e t o suppli e s and ensu r e a c ontinuous f l o w On N ov ember 2 2, 1 9 15 in the B a t tle o f C t e siphon, 2 5 mil e s s outh o f B aghdad, alli e s i n f lic t ed h e a vy c asualti e s on the T ur ks , but w e r e f o r c ed t o r e ti r e t o K ut due t o lack o f suppli e s . T he T urkish s oldie r s g a v e cha s e and b e sieged the to wn. T he b a t tle o f C t e siphon highlig h t s the im p act o f h a ving l o w s t ock o f r equi r ed i t em s . B uilding a good r elationship with supplie r s will ensu r e supply o f ess e n tial s , ev en during tim e s o f eme r gen c y . Y e t an o ther e x ample o f poor planning w as s een in the r ev e r s al o f German su cc es s ov er Allied t erri t ory in Ma r ch 1 9 18, as g r adually i t s t r oo p s began t o ti re , h a ving been on the m ov e without r eli e f f or f our d a y s . A dded t o t r oop f atigue w as the f act that the supply o f f ood, equipme n t , ammunition and ho r s e f odder be c ame p r oblemati c , the f a r ther the i n f a n try ad v an c ed ah e ad o f their supply c olumn s . P r ocu r ement L ess ons f r om W orld W ar I ww w .z y cu s .c om

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Spend and s ou r c e r e sponsibly One es tima t e put W orld W ar I ' s t o t al c os t at $400 billion. T hat is s aid t o be f i v e tim e s the v alue o f ev erything in F r an c e and B elgium at that tim e . T he r e has been a l o t o f criticism o f the e c onomic l os s r e sulting f r om W orld W ar I. E v en when a c om p a n y spend s , it is acting on the mon e y e n tru s t ed t o it b y i t s sha r eholde r s . And s ooner or la t er it has t o ju s ti f y the spending t o them. A r e sponsible p r o c u r eme n t de p a r tme n t c an help the c om p a n y build a p o siti v e and tru s tw o r t h y public imag e , l e ading t o i n v es t or c o n f iden c e . W orld W ar I al s o c o n tribu t ed t o the 1 9 18 i n f luen z a epidemic that killed millions o f peopl e . It is al s o claimed that mili t ary f o r c e s in E a s t A fri c a m a y h a v e s p ar k ed the outb r e ak o f what be c ame a glo b al AI D S epidemic. A n y busin es s ope r ation in t od a y ' s glo b al e c ono m y has t o t a k e i n t o a cc ou n t human rig h t s , e n vi r onme n t al impli c ations and h e alth ha z a r d s . W hile s ou r cing p r oduc t s and s ervi c e s , it be c om e s impo r t a n t t o ensu r e that the r e a r e no blood-diamonds on y our shining b o t t om-lin e . P r ocu r ement L ess ons f r om W orld W ar I ww w .z y cu s .c om

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Final r emar k s B usin esse s t od a y a r e v ery similar t o b a t tl ef ield s , s ans the blood. W e hope w e h a v e been su cc ess ful in our a t t em p t at p r o viding y ou glim pse s o f one o f the f i r s t bigg es t s t r a t egic b a t tl e s s p anning the glob e . M a y y ou gain v aluable l ess ons that help y ou and y our t e am in the daily c om b a t . I t' s i n t e r es ting h o w hi s t ory has such v aluable l ess ons t o t e ach u s , pe r s onally and p r o f es sionall y . Geo r ge S a n ta y ana on c e r emar k ed - “ T h os e who c ann o t r emember the p a s t a r e c ondemned t o r ep e at i t . ” S o , w e will be b ack s oon with a di f f e r e n t cha p t er f r om w orld hi s t ory and i t s p r o c u r eme n t l ess on s . Does your company have its own interesting procurement stories from history? will share it on our procurement blog . Write to us about them on roshnee.mistry@zycus.com and we P r ocu r ement L ess ons f r om W orld W ar I ww w .z y cu s .c om

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Abou t Z y c u s Z y c u s i s dedi c a t e d t o p o sitionin g p r o c u r eme n t a t th e h e a r t o f busin es s per f orman c e . W it h ou r spiri t o f inn o v atio n an d a passion to help procurement create even greater business advantages, we have evolved our portfolio to a complete Source-to-Pay suite of procurement performance solutions which includes - Spend Analysis, eSourcing, Contract Management, Supplier Management, Financial Savings Management, and Procure-to-Pay . FINANCIAL S A VIN G S MAN A GEMENT PRO C UR E - T O- P A Y SPEND ANA L Y SIS B ehin d ev er y Z y c u s s olutio n s t and s a n o r gani z atio n tha t p ossesse s dee p , d e t aile d p r o c u r eme n t e xpe r ti s e an d a shar p f o c u s o n bein g r e sponsi v e t o c u s t ome r s . W e a r e a la r g e — 600 + an d g r o win g — c om p a n y wit h a p h y si c a l p r es en c e i n vi r t uall y ev er y majo r r egio n o f th e glob e . W e s e e e ac h c u s t ome r a s a p a r tne r i n inn o v atio n an d n o clie n t i s t o o smal l t o d es er v e ou r a t t e n tion . Z Y C US SOU R C E - T O- P A Y SUITE SUPPLIER MAN A GEMENT E - SOURCING W it h mo r e tha n 2 0 0 s olutio n depl o yme n t s amon g Glo b a l 100 0 clie n t s , w e se a r c h th e w orl d c o n tinuall y f o r p r o c u r eme n t p r acti c e s p r ov e n t o dri v e c omp e titi v e busin es s per f orman c e . W e in c orpo r a t e th es e p r acti c e s i n t o e a s y - t o-u s e s olution s tha t gi v e p r o c u r eme n t t e am s th e p ow e r t o g e t m o vin g quickl y — f r o m a n y poi n t o f de p a r t u r e — an d t o c o n tinu e inn o v atin g an d pushin g busin es s an d p r o c u r eme n t per f orman c e t o n e w heig h t s . C ONT R A C T MAN A GEMENT Chi c ago: 5600 N Ri v er R oad, S ui t e 800 R os emon t , IL 60018 Ph: 8 4 7 -9 9 3 - 3 180 A tlan t a: 55 5 No r th P oint C en t er E a s t; 4th Floo r , Alpha r e tt a, G A 3 0 02 2 Ph: 6 7 8 - 3 66-5000 EUROPE L ondon: O f fi c e No 3 3 5 , 400 T ham e s V all e y P ark Dri v e , T ham e s V all e y P ark, R e ading, B er k shi re , R G6 1 P T Ph: +44 (0) 11 8 9 6 3 7 4 9 3 A SIA Mum b ai: Plot N o . GJ – 0 7 , S ee p z++, S ee p z SEZ, Andheri ( E a s t ), Mum b ai - 400 0 9 6 Ph: + 9 1 - 2 2 -664 0 7 6 7 6 NO R TH Prin c e t on: 1 0 3 C arnegie C en t e r , S ui t e 2 01 Prin c e t on, NJ 0 8 540 Ph: 609 - 7 99-5664 AMERI C A

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