Societal Damnation 46: Mass Hysteria

While mass hysteria is a term that typically refers to collective delusions of threats to society that spread rapidly through rumours and fears, it also means unmanageable emotional excesses on a large scale, and both can be damning to your supply chain. Each of the following situations can significantly impact your supply chain in a negative way.

Fear of Your Product

If a rumour gets out that your product is dangerous to use, it can lead to mass boycotts and an immediate drop in sales whether the rumour is true or not. For example, let’s say someone claims that your bottles are laced with BPA that leaches at room temperature, your cell phones are not properly shielded and increase a person’s risk of brain cancer by 20%, or your toddler toys regularly break into plastic pieces with sharp edges that can be swallowed and cut and choke the toddlers playing with them and the rumour spreads across the internet at today’s internet speed. True or not, that could be thousands of lost sales in minutes.

Fear of Your Processes

Just ask the oil industry how well their operations progress when they want to start drilling, or even worse, fracking. And while the former can be quite safe with today’s technology, and the latter reasonably safe with the right geological conditions (with no nearby ground water reservoirs for the chemicals used in fracking to leak into, no underground caves that can rupture and cause sinkholes, etc.), many people, understandably, don’t like these processes and many more are just outright fearful. And they don’t stop at boycotts of your product. They hold protests and do everything legally, and sometimes, illegally possible to stop your progress.

So, if they fear that you are using a process that creates an unsafe product, that puts people, or animals, at risk, or that is polluting any part of the environment (air, water, or ground), they will speak out. And they will verbally, and sometimes physically, attack your supply chain (and the people who run it).

Fear of Your Ethics

Sometimes people will think you’re just out to make a quick buck, no matter what the cost, and you don’t care who gets hurt, or, more precisely, used, abused, and financially bankrupted along the way. Now, this may be true of your psychopathic CEO (who is, statistically, the most likely person in your organization to be a psychopath, even more so than the corporate lawyer as per our post on societal damnation #48: worker’s rights), but this is likely not true of you.

This poses a real problem during a strike or walk-out, legal or not, when the instigators, who may be delusional (and see themselves as the re-incarnation of Cesar Chavez) or may not, believe that you are going to displace and dispel them at any cost, possibly with force, and believe that their only option is to counter with force. This, of course, not only puts your supply chain at risk but your workforce at risk as well.

Craze for Your New Product

Sometimes hysteria swings in the other direction and instead of fearing your ethics, processes, or products, for whatever reason, everyone has to have your product — now. And we get what is now typically known as Black Friday Madness where people literally trample each other to death trying to get one of your products before the local retail establishment sells out. Now, you’re probably saying, how does this affect Procurement? Isn’t it the job of the retail establishment or sales and marketing to properly forecast demand and make sure there is enough and the public relations personnel to insure the message gets out that there is enough units to satisfy demand and no on needs to panic? Well, yes, but if there are not enough units by the release date, that’s Procurement’s fault and Procurement should know that when it comes to demand planning, the models typically go over the heads of most people in the organization and only Procurement, with its advanced modelling skills (that it applies daily in its Sourcing projects), is fit to check the model and make sure everything is as accurate and reliable as it can be. Procurement’s fault or not, we have the ethical responsibility to do our best to make sure no one else screws up on behalf of the company in a manner that puts people’s lives at risk (or the company’s brand reputation at risk either — we depend on that too).

Hysteria is very real, and since people not only run our supply chains, but provide the reason(s) that they keep running, hysteria is a very real damnation that we have to be prepared for.

Environmental Damnation 20: Oil & Natural Gas

Closely related to Economic Damnation #9: Oil & Natural Gas Reserves and Oil Price Shocks, Oil & Natural Gas is also an environmental damnation that hits us hard on the front end and hard on the back end.

In our economic damnation post, we talked about how the almost randomly fluctuating prices that can often double or halve within a year is a damnation that can wreak havoc with your supply chain. When prices double, your costs are going up, way up, and there’s nothing you can do about it. When prices halve, if you’re in a contract, you’re losing money hand over fist, possibly both hands over both fists if there was a fuel surcharge and the supplier refuses to remove it, claiming they are still in a fuel contract with their supplier and won’t see the price drop for a year. (And that’s why you always have to tie surcharges to market rates and monitor closely.) But that’s just the beginning.

Dirty Power

Oil and Gas is dirty power. Burning oil releases dangerous pollutants into the air that pose a risk to our health, a risk to our environment, and even a risk to machinery that requires clean air to ventilate. As a result, these are pollutants that, in many countries, must be captured upon their creation during the burning process by law. This requires expensive machinery that adds to production costs, maintenance costs, and overhead costs.

Disaster Risk

Oil and gas is explosive. Very explosive. It only takes a single miscalculation and your fuel, your factory, and, possibly even your workforce goes up in a hot fiery ball of liquifying flame and all that is left at the end of the day is charred remains of melted metal and smoke.

Shortage Risk

Reserves are limited. And so is our ability to tap them. There are only so many pumping stations, so many pipelines, so many tankers, and so many people to operate them. A single delay in transportation. A single accident that shuts down a pipeline or a pumping station and your supply can be cut off for days or weeks and your production shut down for that length of time.

Oil and natural gas negatively impacts your balance sheet on acquisition, and, if something goes wrong, on transport and utilization. But, in many places, it’s sometimes the only viable energy source at the organization’s disposal. (And why an organization with the dollars should invest in its own sustainable energy production methodology, and, if located in an appropriate area, solar, wind or hydro power to minimize its dependence on oil.) So, unfortunately, for the time being, it’s a double damnation that Procurement needs to live with.

8 Reasons Best-in-Class Suppliers are Ignoring Your RFP


Today’s guest post is from Brian Seipel, a marking project expert at Source One focussed on helping corporations achieve both marketing and procurement objectives in their strategic sourcing projects.

Imagine you’ve spent hours crafting an RFP defining exactly what you need and finding the right mix of suppliers best able to provide a solution. Despite your efforts, top suppliers are either unresponsive out of the gate or go dark early in the initiative. Suddenly, your supplier pool is shrinking, and key players in the market have thrown in the towel before your RFP even got off the ground. Why is this, and what can we do to ensure sourcing events bring in the best possible candidates?

Failure to Launch

It’s easy to look at an RFP as a way for suppliers to “wow” you, but keep in mind that an RFP is a two way street — You need to “wow” them as well. Your RFP is your first shot at communicating your needs to potential suppliers. As such, the goal of your RFP should always be to attract the best possible suppliers and quickly establish why they should participate.

As soon as your RFP lands on their doorstep, you can bet suppliers are vetting you just as hard as you vetted them. They have a short list of red flags to determine whether they are a go or no-go — if your RFP trips too many, you can bet these suppliers will go dark, even if they are a perfect match. Knowing what these red flags are will help you craft an RFP that draws them in and ensures participation.

Before Distributing the RFP

Prior to reviewing the RFP itself, let’s discuss your potential supplier pool. Two red flags will ground your RFP immediately if not addressed before would-be participants see it.

  • Lack of proper fit.
    How sure are you that the suppliers receiving your RFP really are a good fit for all your requirements? Discovering supplier fit all but a few critical needs late in the game will be a huge time waster, so consider arranging a quick conference call with any suppliers you haven’t worked with before as a measure-twice-cut-once vetting process. Not only will you identify partial or all out bad fits, you’ll be able to establish a level of rapport early on.
  • Lack of a relationship.
    Speaking of rapport, participants know they are likely to run up against incumbent suppliers during the initiative. If you don’t begin building a relationship with them quickly, they may feel they are only being brought in to help you build a case to beat the incumbent down on price. A little glad-handing goes a long way: while you’re reaching out to participants to ensure they are truly a good fit, spend time describing why they were included in the RFP, and get them excited about the opportunity.

Hidden Landmines Within Your RFP

Now that suppliers are fully vetted and raring to go, take a step back and consider what red flags are sitting in your RFP documents.

  • Too much boilerplate language.
    Any supplier who has been in business for even a short time can spot boilerplate language — it isn’t hard to pick out. Boilerplate language creates the appearance of slapdash work, and suppliers won’t want to spend resources crating a thought out into a response when they don’t think as much thought went into developing it in the first place. Unless the boilerplate is needed to fulfill certain legal needs, strip it away.
  • Lack of clarity.
    New suppliers don’t know you, your needs, or what it will take to win your business — and they will bolt if they don’t get this information quickly. Your RFP should be clearly written and organized in such a way to fill in all three of these blanks in short order. At a minimum, include an elevator pitch about your organization, and follow with the reasons behind this RFP and what you hope to accomplish before leading into the scope of work. Lay out the initiative’s key milestone dates, and the deliverables required for each.
  • Poorly defined scope of work.
    It is all too easy to gloss over fine details when building out a scope of work. Stakeholders who are intimately familiar with the initiative from the inside may not consider an outsider’s (very limited) point of view when constructing this section. Nothing sends suppliers running faster than a weak scope, which gives the impression of a poorly defined project requiring too much of a time investment in gathering enough information to participate.
  • No opportunities for communication.
    Even the clearest RFP and most detailed scope of work only tells half the story. Open communication is needed to flesh out requirements and delve deep into the underpinnings of a winning proposal. Are you building time for Q&A sessions into your initiative, and clearly spelling out your availability to participants? If suppliers get the sense that they can’t engage you, they won’t risk spending time drafting a proposal only to learn later on that they missed the mark entirely.
  • Needlessly extensive questionnaire or requirements.
    The longer your questionnaire, the more time and resources suppliers will have to spend responding. Include too many, and you may make responding too difficult. Is each question strictly required to determine if a supplier can meet your needs? Cut out any superfluous questions with extreme prejudice.
  • Requests for financial information.
    The first requirement on the chopping block should be the need for one, two, or even three years of financial information if you don’t actually intend on examining them. Private companies often balk at this requirement, and RFP issuers often subsequently drop it after they decide they don’t truly need them. There are other ways to ensure financial stability, such as Dun & Bradstreet checks and reference checks. So ask yourself, do you need all those years of financial information? Now ask again, do you really need them?

Strategic Sourcing is a Two Way Street

Remember that an RFP is a two way street. Just as suppliers are trying to win your business, you need to ensure they see the value in doing so. Clearing away the red flags above is the first step in meeting that goal.

Thanks, Brian.

LOLCAT Says – Canada, Do NOT Vote Conservative!

LOLCat, the election is coming up on October 19 (2015) and Harperman, the same individual whose party is effectively holding cancer sufferers, survivors, and their affected kin hostage by not matching up to $35 Million of donations unless the party is re-elected (Source: CBC News), wants to be re-elected.

What do you think, LOLCat. Should Canadians vote Conservative and, by definition, put the Harperman back in office? (Remembering that politics in this country does not work like politics in the United States. Whomever leads the party that gets the most seats gets to be Prime Minister, even if he [or she] is not elected in her riding!)

Before you answer, let me remind you that the Harperman is the same individual who:

  • forced Canada into the TPP negotiations
  • withdrew us from the Kyoto Protocol (making us the first developed country in the world to withdraw from this planet saving protocol)
  • cut funding to Veterans Affairs to the point that a Veterans Group has launched an Anyone But Conservatives campaign, Green Party included! (Source: Huffington Post: “veterans launch anyone but conservatives campaign during harper stop”)
  • … and then spent over $700,000 fighting a class-action lawsuit fighting wounded Afghan veterans who just wanted the benefits and care they were promised (Source: Huffington Post: “veterans lawsuit canada harper government”)
  • runs Billion dollar deficits while cutting social programs (Source: They Tyee)
  • introduced controversial bill C-51, which, according to the OSCE, violates Universal Principles of Human Rights and gives CSIS unprecedented new powers to spy on individual Canadians and revoke terrorist propaganda (Source: National Post)
  • put our safety in jeopardy every time we leave the house by slashing funding across all safety programs at Transport Canada (Source: Global News)
  • pushed First Nations to give up the rights to their land for oil and gas, land that took them decades upon decades to reclaim (Source: The Guardian)
  • spent over 1.3 Million fighting sick moms’ EI disability benefits, wait, what?!? (Source: The Globe and Mail)
  • made a secret arms deal with Saudi Arabia (Source: The Globe and Mail)
  • and who is, in leading Canadian minds, gasp!, pro-war (Source: Globe and Mail)
    and who apparently loves the smell of napalm in the morning
    (how anti-Canadian can you get? There’s a reason we’ve went from being one of the best respected countries in the world to a country that is literally spit on!)

And who has committed more sins than we can document in a single post, but which have been chronicled and made freely available by CUSP (Citizens United for a Sustainable Planet) on The Harper Sin List* page.

What say you, LOLCat?

We agree, LOLCat, we agree. Harper has singlehandedly ignored Canadian ways while destroying our reputation and our cultural heritage.

In the words of Tony Turner:

Harperman, it’s time for you to go!

We’ve had enough of your not-so-benign dictatorship!

There’s a reason the Canadian Christians think “Harper’s clock is in Jesus’ office” (mwpr.ca).