Sports to Source: An analogy
Let us look at chess first. Many times in my sourcing experience, I have seen and come across situations that look like a "gridlock" - none of the stakeholders seem to budge from their expectations/stance. It is precisely under these circumstances that one person has to "make a move" - it can't be the most "optimized move" but a move can help resolve the situation and make a way forward. It is the same manner as in Chess - you can't sit, all at once and think about all the potential moves that can lead you to win. For instance, a few years back, I was faced with signing a GPA (General Purchase Agreement) for a few engineering component suppliers. One component was "our all sounding" vehicle horn that had to meet a 3 lakh km and 3 year warranty term at the same erstwhile OEM price, considering that electric horns on an average do not last for more than 6 months in Indian traffic !! Impossible situation!! How did we resolve it? Through a detailed data analysis of field failure of horns, customer preferences, driving patterns and horns usage, we were able to arrive at an alternative solution. The solution involved changing the frequency (Engineering design), making a small change in the user manual (marketing/service folks), a few changes in the GPA (legal team) and a small change in the price - all this was led by the sourcing team because somebody in the sourcing team thought there was a way to change everybody's stance and making adjustments on the expectations front. One move led to a series of difficult and time consuming moves. But a resolution was found successfully with a change from the original objective. One has to at least make a move - a 70% correct move is alright. There is no 100% information available to make a move - one has to only make it.
Next, let us look at simple cycling. You can glide only on a downward gradient. The other times you need to be pedaling, and it is pretty hard when on a upward slope. But most of the times it is the upward slope. The underlying aspect is that you need to keep pedaling. This is particularly the case when you are handling an outsourced piece of client procurement or sourcing. You need to demonstrate value and dollar benefits in good measure all through the engagement, day in and day out. You need to keep showing value by pedaling continuously - there is no respite here!
How about archery? Till the last decade, OEMs were unwilling to look at raw material prices going through the roof. The supplier was expected to supply radiators and wiring harnesses with a 3% Y-o-Y cost reduction even though aluminium and copper prices went up 200%!! Was it still possible to obtain a cost reduction - yes! Provided a cost increase was given. Eventually organizations started to refer to authentic raw material price standards such as the LME and linked their price points on a quarterly or half yearly basis so that whenever prices went up, they got the relevant increase from the OEMs and passed on reductions to OEMs, whenever material prices went down. However, the point is they were still able to give productivity and other improvement cost reductions by separating raw material costs from the other costs. Hence they derived a new way to capture a (net) 0.5% cost up : a 3% cost down and a 3.5% cost up. This is just like the wind correction an archer has to make to hit the target. He might hit the target but the wind may play the spoil sport.
Last but not least, how many times have we not heard that a hockey team has not played to a strategy to be able to pull off a win? All stakeholders have to be aligned to a common objective as far as execution is concerned to be able to achieve the desired outcome from a sourcing project. Alignment is key - that is what Toyota's Hoshin Kanri does to a sourcing organization. I like to speak exclusively on this in one of my upcoming blogs.
Please feel free to add in a few more analogies that come to your mind - waiting to hear your perspectives.