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Procurement Lessons World War 1

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

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Procurement Lessons World War 1

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  1. Procurement Lesson from World War 1 Thefirstinaspecial2014 seriesfrom Zycus: “ProcurementLessonsfrom History”

  2. INTRODUCTION: 2014willmarkthe passageofacenturysince the FirstWorldWarbroke out.Itwas possibly the firststrategicwarever fought,withmultiple productinnovations,useof modernarmsandammunitionandwithpartnershipsforged.Let'slookatoneofthe biggestoperationalexercisesinthe historyofhumanexistenceandseek togain procurementlessonsfromit. ItwasJune28,1914whenArchdukeFranz Ferdinand,heirtothe throneofthe Austro- HungarianEmpire,andhiswifeSophie, DuchessofHohenberg,were assassinatedin Sarajevo,Bosnia.Serbiawantedtogaincontrolandownershipover landfromBosniato expanditsprovince.Serbia'sintentionscame fromasimplefact -the critical importance oflandasastrategicresourceforitsnation.Andthislaidthe groundforWorldWarI. Overthe next fouryearsandelevenmonths,the participatingnationswroteanewchapter inworldhistory,andthischapterwasrepletewithmany milestones andevents,bigand small. Letushave alookatwhat modernprocurementprofessionalscantakefromit. Disclaimer Thiswhitepaper/articlefrom Zycusisintendedonlyasanexampleofhistoricalprocurementlessonsfrom WorldWarI.Zycusdoes notendorseanyinnovations/strategiesthat areunethicalorimmoral. Neitherdoes Zycussupporttheideaofwar,noranynations engagedinwar. ProcurementLessonsfromWorldWarI www.zycus.com

  3. Itallstartswithamotivatedteam TheUKsecretaryofstatewar,developedandpublicizedthe slogan“YourKingandCountryNeedYou”forthe first100,000mentoenlistin Kitchener'sNewArmy.Thecall,launchedonAugust11,1914,wasansweredwithintwoweeks. Ifthe CPOdoesn'thave the rightpeoplewith therightmindset,itwouldbedifficultforprocurementtowinbattlesforitsbusiness.Attractingandinspiringthe righttalentinprocurement isasimportantasitisforwarringnationstoinspire andretainloyalsoldiers. ProcurementLessonsfromWorldWarIwww.zycus.com `

  4. Gettheheaviest andthelowesthangingfruitfirst Inthe Battleofthe Somme,onJuly 1,1916, about750,000Alliedsoldiersare unleashedalong a25-mile front; butbythe endofthe daynearly 60,000are dead, wounded ormissing forverylittlegain.Itisthe worstsingleday'sfighting inBritishmilitary history. Mismanagementofresourcesresultsinheavylossestothe organization.Procurementteamleadersalsoneedtounderstandthe critical needs ofaprojectandallocateresourcesaccordingly.Ahuge budgetandmany man-hoursallocatedtoaprojectofsmallsavingsopportunityresultsin waste.Appropriatetechnology andvisibilityofenterprise-wideaction canhelpyouidentifythe fruitthatisthe juiciestandthe mosteasily reached. ProcurementLessonsfromWorldWarIwww.zycus.com

  5. Grabyouropportunity Whenthe BritishenteredBasra onNovember23,1914,they wiselysetaboutsecuringoilsuppliesinthe MiddleEastneeded tosupply mostofthe RoyalNavy.TheBritishstrengthenedtheir footholdinthe war,thus stayingaheadoftheir enemies.Capturingcritical resourcesearly inthe game isnecessary,ifthe procurementorganizationwantstostrengthenitssupply chainandbeatagreateradvantage. Eventhe BattleofLens(Hill70)highlightsthe benefits ofsecuringscarceresources.Hill70,being 15feethigherthanthe surroundinglandscape, dominatedthe battlefield.OnAugust15,1917,the Canadiantroopstookthe hillandhelditagainstfiveGermancounterattacks.Allieslost9,200 men;andthe Canadianswere successfulinpreventingGermanformationsfromtransferringlocalmenandequipmenttoaidindefensive operations.Foracompany,Hill70couldbehaving the safestsuppliermixthatdistributesyourrisksbycoveringyouagainstdeliveryfailures, competitivesupplierpoaching,orsupplierbargainingpower. Itcouldalsobethe mostconvenientdistanceforyourcompanybetweenthe factory andthe market,aplace wherethe rawmaterialisabundantoracountrywithlowlabor costs. ProcurementneedstohighlightitsHill70. ProcurementLessonsfromWorldWarIwww.zycus.com

  6. Markyourtime ofaction TheBritishlaunchedanightattackwithallthreeoftheir armiesonOctober23,1918.Thistimethe Britishadvancedsixmilesintwodays. The Britishwere nowjust20milesbehind the rearofthe HindenburgLine.Ifthe Britishhadlaunchedthe sameattackduring daylighthours,withjust onearmy, they probablywouldn'thave achievedmuch success.Justlikethe Britishattackedwhenthe sunwentdown,procurementteamscanaim tosourcewhenpricesgodown.Knowingthe besttimetostrikebytrackingmarketindices isimportant! ProcurementLessonsfromWorldWarIwww.zycus.com

  7. Makeyoursupply-chainhole-proof! Inthe third andthe finalSommeOffensiveonSeptember15,1916,the Britisharmy failedtobreakthroughGermanlinesandisunabletoachieve the objectiveofcuttingaholeinthe Germanlinebyusingmassedartilleryandinfantryattacks.Positionedatthe headofacompany'ssupply chain, itisahuge responsibilityforprocurementteamstomake itformidableandimmunetodemandfluctuations,supply shortagesormarket transformations.Ahealthysupply-chainwouldnotonlykeep the companyaheadinthe racebutalsocreateamoatthatwouldprotectthe organizationagainst largernaturaldisasters/socio-economicuncertainties. Inthe third phaseofthe YpresOffensive,onOctober9,1917,the BritishandFrenchtroopstookPoelcapellewithconsiderablebombardments.But inthe next 48hours,25mmofrainfellonalreadysaturatedground;the remnantsofthe explosivesjointhe downpoursmashingthe drainage systemsandturningthe battlefieldintoaquagmirethatisdifficulttosurvivein.Naturaldisasterscancreatehavoc foranyorganization.Theycan ruinthe suppliesleaving procurementhighlyvulnerable.Procurementteams,bynature,are vulnerabletoexternalforcesandmustcarryout adequateriskanalysisfromtimetotime. ProcurementLessonsfromWorldWarIwww.zycus.com

  8. Innovatetostayahead Inthe BattleofArras onApril9,1917,the Britishsuccessfullyemployednewtacticsofcreepingbarrages,the 'grazefuse'andcounter-batteryfire. Procurementalsohastoevolve withchangingcircumstances.TheCPOneedstodeviseinnovativestrategiesforthe companytostayaheadand stayprofitable.Procurementisalsoimportantinthe wayitcontributestoproductinnovation.WorldWarIwasrepletewithexamplesofinnovation. n OnApril22,1915,the secondbattleofYpreswitnessedthe firstuseofthe chemicalweapon'poisongas'byGermany n AtHooge,Germantroopsused flame throwers forthe firsttimeagainstthe Britishlines(June30,1915) n Steelhelmetswere introducedonthe BritishFrontonOctober31,1915toprotecttheir troopsfromlethal headwounds n OnSeptember2,1916,the firstZeppelinisshotdownover Britain.TheRoyalFlyingCorpsused anewcombinationofexplosiveandincendiary bulletstogreateffect. Justlikethe warringcountriesconstantlyinnovatedtogetanupperhand over their enemies,the modernbusinesslandscapeisnodifferentthana war.Procurementdepartmentsneedtoinnovatetostayaheadofcompetitors;beitinprocurementtechnology,supplierstrategy,sourcingplans, orthe overall procurementgameplan. ProcurementLessonsfromWorldWarIwww.zycus.com

  9. Nevercompromiseonquality OnMarch10,1915,the BritishOffensiveatNeuve Chapellebegan;Alliedlossesamountedto12,800 injust2days. Some ofthe blame fellonthe shortageandpoor quality ofBritishshells thattendedtoexplodebeforepenetrating. Thephenomenoninitiatedthe infamous'ShellCrisis'which soon createdpolitical fallout. Procurementteamsare undoubtedlyunderheavypressuretosourcegoodquality directandindirectmaterials. Nowonderthatshortageof suppliesandquality issuescanleadtomajor lossesasconsumers,both internalandexternal,wouldlosetrustinthe company.Agoodexample thatcomestomindisthe recenthorsemeatscandalthataffectedthe Europeanregions.Theperformanceofyourcompanyisdependentonthe performanceofyoursuppliers,andquality isanessentialfactorlinkingthe two,whichtoday'ssupply chainmanagerscannotignore. ProcurementLessonsfromWorldWarI www.zycus.com

  10. Usetechnologyforspeedandeconomiesofscale Germanassaultsreachedthe SommeLineonMarch23,1918,initiatingthe greatestairbattleofthe war,with70aircraftinvolved inasinglebattle. Whetheritisanalyzingyourenterprise-widespend,orkeepingtabsonthe performanceofhundredsofsuppliers,orholding ahuge sourcingevent, whendone piece bypiece andmanually,itcanprovetobetime-consumingandeven counterproductive!Withadvancedtechnology,procurementis inalotbetterpositiontodevisestrategiesandgethigherreturns.Perhapsthisiswhat Germanytried toachievebyusing70aircraftinasingle battle.Indeed, withinafewdays inMarchof1918,the groundwasonce moreinGermanhands ProcurementLessonsfromWorldWarI www.zycus.com

  11. Beclosetosuppliesandensureacontinuousflow OnNovember22,1915inthe BattleofCtesiphon,25milessouthofBaghdad,alliesinflicted heavycasualtiesonthe Turks,butwere forcedtoretire toKutduetolackofsupplies.TheTurkishsoldiersgave chaseandbesiegedthe town.ThebattleofCtesiphonhighlightsthe impactofhaving low stockofrequireditems. Buildingagoodrelationshipwithsupplierswillensuresupply ofessentials, even during timesofemergency. Yetanotherexampleofpoor planningwasseeninthe reversalofGermansuccessover AlliedterritoryinMarch1918,asgraduallyitstroopsbegan totire,having beenonthe movewithoutreliefforfourdays. Addedtotroopfatiguewasthe fact thatthe supply offood,equipment,ammunition andhorsefodderbecameproblematic,the fartherthe infantryadvancedaheadoftheir supply columns. ProcurementLessonsfromWorldWarI www.zycus.com

  12. Spendandsourceresponsibly OneestimateputWorldWarI'stotalcostat$400billion.Thatissaidtobefivetimesthe value ofeverythinginFranceandBelgiumatthattime. There hasbeenalotofcriticism ofthe economiclossresultingfromWorldWarI.Evenwhenacompanyspends,itisactingonthe money entrustedtoitbyitsshareholders.Andsoonerorlaterithastojustifythe spendingtothem.Aresponsibleprocurementdepartmentcanhelpthe companybuildapositiveandtrustworthypublicimage, leadingtoinvestorconfidence. WorldWarIalsocontributedtothe 1918influenzaepidemicthatkilledmillionsofpeople. Itisalsoclaimedthatmilitary forcesinEastAfricamay havesparkedthe outbreakofwhat becameaglobalAIDSepidemic.Anybusinessoperationintoday'sglobaleconomyhastotakeintoaccount humanrights,environmentalimplicationsandhealthhazards.Whilesourcingproductsandservices,itbecomesimportanttoensurethatthereare noblood-diamondsonyourshining bottom-line. ProcurementLessonsfromWorldWarI www.zycus.com

  13. Finalremarks Businessestodayare verysimilartobattlefields,sansthe blood.Wehope wehave beensuccessfulinourattemptatprovidingyouglimpsesofone ofthe firstbiggeststrategicbattlesspanningthe globe. Mayyougainvaluablelessonsthathelpyouandyourteaminthe dailycombat. It'sinterestinghowhistoryhassuch valuablelessonstoteachus,personallyandprofessionally.GeorgeSantayanaonce remarked-“Thosewho cannotrememberthe pastare condemnedtorepeatit.” So,wewillbebacksoon withadifferentchapterfromworldhistoryanditsprocurementlessons. Doesyourcompanyhave itsowninterestingprocurementstoriesfromhistory? willshareitonourprocurementblog. Writetousaboutthemonroshnee.mistry@zycus.comandwe ProcurementLessonsfromWorldWarI www.zycus.com

  14. AboutZycus Zycusisdedicatedtopositioningprocurementattheheartofbusinessperformance.Withourspiritofinnovationanda passiontohelpprocurementcreateeven greaterbusinessadvantages,wehave evolvedourportfoliotoa completeSource-to-Paysuiteofprocurementperformancesolutionswhichincludes-Spend Analysis,eSourcing, ContractManagement,SupplierManagement,Financial SavingsManagement,andProcure-to-Pay. FINANCIAL SAVINGS MANAGEMENT PROCURE- TO-PAY SPEND ANALYSIS BehindeveryZycussolutionstandsanorganizationthatpossessesdeep, detailedprocurement expertiseanda sharpfocus onbeing responsivetocustomers.Weare alarge —600+andgrowing —companywithaphysical presenceinvirtuallyeverymajor regionoftheglobe.Wesee each customerasapartnerininnovationandno clientistoosmalltodeserveourattention. ZYCUS SOURCE-TO-PAY SUITE SUPPLIER MANAGEMENT E-SOURCING Withmorethan200solutiondeploymentsamongGlobal1000clients,wesearchtheworldcontinuallyfor procurement practicesproventodrivecompetitivebusinessperformance.Weincorporatethesepracticesintoeasy- to-usesolutionsthatgiveprocurementteamsthepower togetmoving quickly—fromanypointofdeparture—andto continueinnovatingandpushingbusinessandprocurementperformancetonewheights. CONTRACT MANAGEMENT NORTH Princeton:103CarnegieCenter,Suite 201Princeton,NJ08540Ph:609-799-5664 AMERICA Chicago:5600NRiverRoad,Suite 800Rosemont,IL60018Ph:847-993-3180 Atlanta:555North Point CenterEast;4th Floor,Alpharetta,GA30022Ph:678-366-5000 EUROPE London: OfficeNo335,400ThamesValleyParkDrive,ThamesValleyPark, Reading, Berkshire,RG61PTPh:+44 (0)1189637493 ASIA Mumbai:PlotNo.GJ–07,Seepz++,SeepzSEZ,Andheri (East),Mumbai-400096Ph:+91-22-66407676

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