Procurement Lessons World War 1

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Procurement Lesson from World War 1
The first in a special 2014 series from
Zycus Procurement Lessons from History
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INTRODUCTION 2014 will mark the passage of a
century since the First World War broke out.
It was possibly the first strategic war ever
fought, with multiple product innovations, use
of modern arms and ammunition and with
partnerships forged. Let's look at one of the
biggest operational exercises in the history of
human existence and seek to gain procurement
lessons from it. It was June 28, 1914 when
Archduke Franz Ferdinand, heir to the throne of
the Austro- Hungarian Empire, and his wife
Sophie, Duchess of Hohenberg, were assassinated
in Sarajevo, Bosnia. Serbia wanted to gain
control and ownership over land from Bosnia to
expand its province. Serbia's intentions came
from a simple fact - the critical importance
of land as a strategic resource for its nation.
And this laid the ground for World War I. Over
the next four years and eleven months, the
participating nations wrote a new chapter in
world history, and this chapter was replete with
many milestones and events, big and small. Let
us have a look at what modern procurement
professionals can take from it.
Disclaimer This whitepaper/article from Zycus is
intended only as an example of historical
procurement lessons from World War I. Zycus does
not endorse any innovations/strategies that are
unethical or immoral. Neither does Zycus
support the idea of war, nor any nations engaged
in war.
Procurement Lessons from World War I
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It all starts with a motivated team The UK
secretary of state war, developed and publicized
the slogan Your King and Country Need You for
the first 100,000 men to enlist in Kitchener's
New Army. The call, launched on August 11, 1914,
was answered within two weeks. If the CPO
doesn't have the right people with the right
mindset, it would be difficult for procurement to
win battles for its business. Attracting and
inspiring the right talent in procurement is as
important as it is for warring nations to inspire
and retain loyal soldiers. Procurement Lessons
from World War I www.zycus.com
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Get the heaviest and the lowest hanging fruit
first In the Battle of the Somme, on July 1,
1916, about 750,000 Allied soldiers are
unleashed along a 25-mile front but by the
end of the day nearly 60,000 are dead, wounded
or missing for very little gain. It is the
worst single day's fighting in British military
history. Mismanagement of resources results in
heavy losses to the organization. Procurement
team leaders also need to understand the
critical needs of a project and allocate
resources accordingly. A huge budget and many
man-hours allocated to a project of small savings
opportunity results in waste. Appropriate
technology and visibility of enterprise-wide
action can help you identify the fruit that is
the juiciest and the most easily
reached. Procurement Lessons from World War
I www.zycus.com
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Grab your opportunity When the British entered
Basra on November 23, 1914, they wisely set
about securing oil supplies in the Middle East
needed to supply most of the Royal Navy. The
British strengthened their foothold in the war,
thus staying ahead of their enemies. Capturing
critical resources early in the game is
necessary, if the procurement organization wants
to strengthen its supply chain and be at a
greater advantage. Even the Battle of Lens (Hill
70) highlights the benefits of securing scarce
resources. Hill 70, being 15 feet higher than
the surrounding landscape, dominated the
battlefield. On August 15, 1917, the Canadian
troops took the hill and held it against five
German counter attacks. Allies lost 9,200 men
and the Canadians were successful in preventing
German formations from transferring local men and
equipment to aid in defensive operations. For a
company, Hill 70 could be having the safest
supplier mix that distributes your risks by
covering you against delivery failures,
competitive supplier poaching, or supplier
bargaining power. It could also be the most
convenient distance for your company between the
factory and the market, a place where the raw
material is abundant or a country with low labor
costs. Procurement needs to highlight its Hill
70. Procurement Lessons from World War
I www.zycus.com
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Mark your time of action The British launched a
night attack with all three of their armies on
October 23, 1918. This time the British advanced
six miles in two days. The British were now
just 20 miles behind the rear of the
Hindenburg Line. If the British had launched the
same attack during daylight hours, with just
one army, they probably wouldn't have
achieved much success. Just like the British
attacked when the sun went down, procurement
teams can aim to source when prices go down.
Knowing the best time to strike by tracking
market indices is important! Procurement Lessons
from World War I www.zycus.com
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Make your supply-chain hole-proof! In the third
and the final Somme Offensive on September 15,
1916, the British army failed to break through
German lines and is unable to achieve the
objective of cutting a hole in the German line
by using massed artillery and infantry attacks.
Positioned at the head of a company's supply
chain, it is a huge responsibility for
procurement teams to make it formidable and
immune to demand fluctuations, supply shortages
or market transformations. A healthy
supply-chain would not only keep the company
ahead in the race but also create a moat that
would protect the organization against larger
natural disasters/socio-economic
uncertainties. In the third phase of the Ypres
Offensive, on October 9, 1917, the British and
French troops took Poelcapelle with considerable
bombardments. But in the next 48 hours, 25mm
of rain fell on already saturated ground the
remnants of the explosives join the downpour
smashing the drainage systems and turning the
battlefield into a quagmire that is difficult to
survive in. Natural disasters can create havoc
for any organization. They can ruin the
supplies leaving procurement highly vulnerable.
Procurement teams, by nature, are vulnerable to
external forces and must carry out adequate risk
analysis from time to time. Procurement Lessons
from World War I www.zycus.com
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Innovate to stay ahead In the Battle of Arras
on April 9, 1917, the British successfully
employed new tactics of creeping barrages, the
'graze fuse' and counter-battery fire.
Procurement also has to evolve with changing
circumstances. The CPO needs to devise innovative
strategies for the company to stay ahead and
stay profitable. Procurement is also important
in the way it contributes to product innovation.
World War I was replete with examples of
innovation. n On April 22, 1915, the second
battle of Ypres witnessed the first use of the
chemical weapon 'poison gas' by Germany n At
Hooge, German troops used flame throwers for
the first time against the British lines (June
30, 1915) n Steel helmets were introduced on
the British Front on October 31, 1915 to protect
their troops from lethal head wounds n On
September 2, 1916, the first Zeppelin is shot
down over Britain. The Royal Flying Corps used
a new combination of explosive and incendiary
bullets to great effect. Just like the warring
countries constantly innovated to get an upper
hand over their enemies, the modern business
landscape is no different than a war.
Procurement departments need to innovate to stay
ahead of competitors be it in procurement
technology, supplier strategy, sourcing plans, or
the overall procurement game plan. Procurement
Lessons from World War I www.zycus.com
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Never compromise on quality On March 10, 1915,
the British Offensive at Neuve Chapelle began
Allied losses amounted to 12,800 in just 2 days.
Some of the blame fell on the shortage and
poor quality of British shells that tended to
explode before penetrating. The phenomenon
initiated the infamous 'Shell Crisis' which
soon created political fallout. Procurement
teams are undoubtedly under heavy pressure to
source good quality direct and indirect
materials. No wonder that shortage of supplies
and quality issues can lead to major losses as
consumers, both internal and external, would
lose trust in the company. A good example that
comes to mind is the recent horse meat scandal
that affected the European regions. The
performance of your company is dependent on the
performance of your suppliers, and quality is
an essential factor linking the two, which
today's supply chain managers cannot
ignore. Procurement Lessons from World War I




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Use technology for speed and economies of
scale German assaults reached the Somme Line on
March 23, 1918, initiating the greatest air
battle of the war, with 70 aircraft involved in
a single battle. Whether it is analyzing your
enterprise-wide spend, or keeping tabs on the
performance of hundreds of suppliers, or holding
a huge sourcing event, when done piece by
piece and manually, it can prove to be
time-consuming and even counterproductive! With
advanced technology, procurement is in a lot
better position to devise strategies and get
higher returns. Perhaps this is what Germany
tried to achieve by using 70 aircraft in a
single battle. Indeed, within a few days in
March of 1918, the ground was once more in
German hands Procurement Lessons from World War I




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Be close to supplies and ensure a continuous
flow On November 22, 1915 in the Battle of
Ctesiphon, 25 miles south of Baghdad, allies
inflicted heavy casualties on the Turks, but
were forced to retire to Kut due to lack of
supplies. The Turkish soldiers gave chase and
besieged the town. The battle of Ctesiphon
highlights the impact of having low stock of
required items. Building a good relationship
with suppliers will ensure supply of essentials,
even during times of emergency. Yet another
example of poor planning was seen in the
reversal of German success over Allied territory
in March 1918, as gradually its troops began to
tire, having been on the move without relief
for four days. Added to troop fatigue was the
fact that the supply of food, equipment,
ammunition and horse fodder became problematic,
the farther the infantry advanced ahead of
their supply columns. Procurement Lessons from
World War I




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Spend and source responsibly One estimate put
World War I's total cost at 400 billion. That is
said to be five times the value of everything
in France and Belgium at that time. There has
been a lot of criticism of the economic loss
resulting from World War I. Even when a company
spends, it is acting on the money entrusted to
it by its shareholders. And sooner or later it
has to justify the spending to them. A
responsible procurement department can help the
company build a positive and trustworthy public
image, leading to investor confidence. World War
I also contributed to the 1918 influenza
epidemic that killed millions of people. It is
also claimed that military forces in East Africa
may have sparked the outbreak of what became a
global AIDS epidemic. Any business operation in
today's global economy has to take into account
human rights, environmental implications and
health hazards. While sourcing products and
services, it becomes important to ensure that
there are no blood-diamonds on your shining
bottom-line. Procurement Lessons from World War I




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Final remarks Businesses today are very similar
to battlefields, sans the blood. We hope we
have been successful in our attempt at providing
you glimpses of one of the first biggest
strategic battles spanning the globe. May you
gain valuable lessons that help you and your team
in the daily combat. It's interesting how
history has such valuable lessons to teach us,
personally and professionally. George Santayana
once remarked - Those who cannot remember the
past are condemned to repeat it. So, we will be
back soon with a different chapter from world
history and its procurement lessons.
Does your company have its own interesting
procurement stories from history? will share it
on our procurement blog.
Write to us about them on roshnee.mistry_at_zycus.com
and we
Procurement Lessons from World War I
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About Zycus
Zycus is dedicated to positioning procurement at
the heart of business performance. With our
spirit of innovation and a passion to help
procurement create even greater business
advantages, we have evolved our portfolio to a
complete Source-to-Pay suite of procurement
performance solutions which includes - Spend
Analysis, eSourcing, Contract Management,
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Behind every Zycus solution stands an
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and growing company with a physical presence
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see each customer as a partner in innovation
and no client is too small to deserve our
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incorporate these practices into easy- to-use
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