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Procurement Perspectives: Procurement always needs a backup plan

Stephen Bauld
Procurement Perspectives: Procurement always needs a backup plan

No matter how carefully action is planned, it can never be assumed that everything will work out right.

Weather may be inclement. Necessary suppliers may not arrive on time. Opposition may be stronger or more tenacious than expected. Critical personnel may be ill or otherwise incapacitated.

It is possible to respond successfully to these setbacks on the fly, but it is unwise to take the risk.

Whenever a project is attempted, it should be planned as a series of critical steps. The time and resources required to accomplish each step need to be identified and a full understanding needs to be worked out concerning the integration of the various steps into the overall plan. The dependencies and the most efficient sequences need to be determined, as do the sensitivity and flexibility of each aspect of the plan.

For instance, it is necessary to know what is the effect of a delay in accomplishing one task on the start and completion dates of the other tasks. It is essential to identify those steps in a process that presents great risk or challenge.

It is also necessary to anticipate the type of problem that will inevitably arise in most organizations.

For everything that can go wrong, there is a need for a backup plan covering at least the immediate response to be taken and the logistical aspect of redeployment of resources should this occur. A system of contingency planning is sometimes described as having two steps in hand. The development of such a plan is costly, but in the long run it is nowhere near as costly as having no plan at all. Contingency planning mitigates the damage arising from any setback. If such plans are not in place, it may be impossible to implement a solution once the problem does arise.

While it is impossible to plan for every remote contingency, it is possible to identify those adverse events that are reasonably possible and that present the most serious risk and to put appropriate plans into place to deal with each of them should they arise.

A major deficiency related to the managements leadership approach in an organization is the all-too-common inability to understand when action is required. If the indecisive weaken an organization, the inactive can destroy it.

Inaction may result from different causes, but some are very common and therefore the most serious.

Chief among these is excessive focus on the process of decision-making rather than on the decision that needs to be made. Consultation, consensus building, due process, research and reflection all have their place in any organization, but their role is not to stymie the decision-making process of taking necessary action. When the need for action is urgent, the time for discussion has passed.

Disaster planning (also called contingency planning and pre-incident planning) entails the creation of an action plan dealing with catastrophic problems that may confront your company. Depending on the nature of the organization and the type of activities in which it is engaged, such events may include serious security breaches, a fire or industrial incident, the occurrence of an act of God (e.g. an earthquake, tornado or hurricane) or even a prolonged strike.

When these events occur, the better prepared your organization is, the faster the recovery will be.

Such preparation is an integral aspect of risk management. Study should be made of those who have encountered similar problems, to identify the responses that have the best chance of success.

All wise businesses examine the track record of their competitors and other organizations in similar types of business. My father used to say, anyone can learn from his (or her) own mistakes and misfortune. A wise person is able to learn from the mistakes and misfortune of others.

Stephen Bauld is a government procurement expert and can be reached at swbauld@purchasingci.com. Some of his columns may contain excerpts from The Municipal Procurement Handbook published by Butterworths.

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