To bid or not to bid

On October 18, 2017 PSF hosted an enormously successful IT Symposium. Over 500 participants from more than 140 different organizations (I think). Lots of great discussion. What I want to comment on is TENDERING. More specifically, do more bidding events with more bidders add value. The implicit and often explicit belief from my exposure to supply management professionals (especially in the public sector) is an unequivocal yes!

But are we confusing means and ends? 40 years of supply management experience in practice, consulting and academia have taught me that our job is to improve outcomes / add value by reducing total cost of ownership and / or increasing innovation. Biddings relationship to these outcomes varies from directly beneficial to murky to counter-productive. Serious / effective / efficient supply management goes WAY beyond massaging an approved vendor’s list. (BTW, let’s starting saying “supplier”?) Not withstanding the sanctity of tenders, the only correlation between greater competition over ever shorter time horizons with more and more suppliers and superior outcomes is likely inverse. So, why is this your goal?

I’m a big fan of Deming. Much of business practice and education is little more than a footnote to Deming. I’ve attached the short wiki Deming overview covering his famous 14 points and 7 deadly sins. Always a good read.

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Joseph Sandor
Professor
Michigan State University
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  1. Professor Sandor – I think you’re spot on.┬á But I will say that you must take into account considerations unique to the public environment where public dollars are spent.┬á Stakeholders including taxpayers, special interests and more demand competition.┬á First you must educate them on your talking points if we are going to change the emphasis on bidding.┬á Second, i would suggest to the government professionals that we not just measure quantity of competition….many times is useless.┬á Most competitions are rigged to start and they also don’t have the right players at the table that can give us what you demand, best total cost of ownership and innovations.┬á So we should measure “quality of competition” which is about getting the best suppliers to the table that will get us best TCO and innovations that we need.

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    Raj Sharma
    Public Spend Forum
    Washington DC
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    Original Message:
    Sent: 10-22-2017 17:02
    From: Joseph Sandor
    Subject: To bid or not to bid

    ​On October 18, 2017 PSF hosted an enormously successful IT Symposium.  Over 500 participants from more than 140 different organizations (I think).  Lots of great discussion.  What I want to comment on is TENDERING.  More specifically, do more bidding events with more bidders add value.  The implicit and often explicit belief from my exposure to supply management professionals (especially in the public sector) is an unequivocal yes!

    But are we confusing means and ends?┬á 40 years of supply managementΓÇïΓÇï experience in practice, consulting and academia have taught me that our job is to improve outcomes / add value by reducing total cost of ownership and / or increasing innovation.┬á Biddings relationship to these outcomes varies from directly beneficial┬áto murky to counter-productive.┬á Serious / effective / efficient supply management goes WAY beyond massaging an approved vendor’s list.┬á (BTW, let’s starting saying “supplier”?)┬á Not withstanding the sanctity of tenders,┬áthe only correlation┬ábetween greater competition over ever shorter time horizons with more and more suppliers and superior outcomes is likely┬áinverse.┬á So, why is this your goal?

    I’m a big fan of Deming.┬á Much of business practice and education is little more than┬áa┬áfootnote to Deming.┬á I’ve attached the short wiki Deming overview covering his famous 14 points and 7 deadly sins.┬á Always a good read.

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    Joseph Sandor
    Professor
    Michigan State University
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