Wednesday, May 12, 2010


Central Planning vs. Individual Liberty

Many of us go through life never really thinking about the above two subjects. However at the current rate that the United States government is closing ranks and centralizing one major activity after another, i.e. Healthcare, Finance, et al. We are going to experience the destructive forces of bureaucratic reprobates on a massive scale.

In my field of profession, which is procurement, I have been awash in the battle between central planning and individual liberty all my career. There are two ways that this comes into play. There is either sales (who represent individual liberty) versus procurement (who represents central planning) or local procurement (who represents individual liberty) versus central/corporate procurement (who represents central planning). In both cases each side has a case to be made for why the processes which they undertake in order to better the bottom line profit merit more consideration and should take precedence over the other.

Beginning with sales versus procurement lets examine the facts. First, it is the responsibility of sales to bring business to a company so that revenue comes in and profits can be made. If a company can minimize their expenditures in gaining the revenue, profits will increase. Here is where the stealthy central planning procurement professional can exploit a not so vigilant manager into believing that he can increase profits through "standardization", "risk management", and "bundling procurements". This latter term means taking multiple procurements that are similar in nature across an organization and putting them together to gain a cheaper price. These are all very noble goals and when properly applied indeed improve the bottom line. However, there is ALWAYS enmity between sales and procurement. This is primarily a personality issue. Most sales people are "drivers" they typically act on emotion and are not detail oriented. They can't afford to be, their job is to make a person "feel" confident about doing business with your company. This frustrates the beejeezus out of procurement who is typically an "analytical" personality. This guy gets a sales order from sales and can't figure out what was sold. Proper numbers aren't used, some things are promised that should not be, etc... All the procurement guy knows is now he has to make chicken salad out of chicken &%)*. So from this point procurement always thinks in terms that if they ever get the chance to run things they would put a stop to all this inattention to detail by controlling, who, what, when, where, and why goods are sold and purchased.

This is certainly not a good idea, sales needs the ability to be flexible to bring in revenue. Many times the difference between getting a sale and not getting one is being able to do something the other guys can't. If you have no sales, you can't very well "control" the procurement of nothing. It took me a very long time to come to grips with this fact as a professional. That sales guy gives me the butter and the bread I have to figure out how to spread it. That is a fact of business life. You just have to put up with some amount of inefficiency. Yes I said that all you Six Sigma Black Belts, to hell with you and your DMAIC!

Next lets examine in more detail the actual "standardization", "risk management", and "bundling" aspects of a central procurement planner. This is still one of my biggest pet peeves professionally. As the story goes, when you have decentralized procurement (procurement at every branch, departmental, organizational level, as the case may be, there are duplicated processes, or multiples of the same product being procured separately and from different suppliers, etc. The big push has been going on for 20 years now to centralize, standardize, and bundle as much procurement as possible in order to get costs lower. Sounds like a great idea doesn't it! I agree these are also noble goals but what happens if you let it carry away your organization? Well I will tell you, first if you are in manufacturing the first casualty is usually your product line. Soon when you used to make five different types of pressure washers, you now can only provide three. So all of the clients that sales guy had that needed the other two types are no longer served. In most cases if that client still wanted to do business with you he either bought a pressure washer that was a little too small for his needs or way too big for his needs. All because some pointy headed number cruncher decided that he could save some money by standardizing on three models only. This same practice can be applied to IT equipment that is internal to a company. "Thou Shalt Buy This Model Only" who cares what the need is, which can vary by the geographical market served or industry served etc. It becomes the equivalent of a Star Trek uniform. You only have a choice of red, gold, or blue of this ugly polyester jumpsuit. Again decentralized procurement has many inefficiencies but at the same time you can more easily adapt to changes and challenges in the marketplace.

"So SimplexVir, that was a lot of useless information that I would have preferred not to have read, why have you vexed me so?" GOOD QUESTION!

You see what is happening in America right now is you have a bunch of bureaucrats that are chomping at the bit to "finally" put into place all of these theories and centralization plans so that they can CONTROL what the population does. They have no tolerance for individual liberty, you just do not know what is best for you and you need to fit into the proper processes that they have designed. If you don't fit tough, they will make you fit. You must comply in order for their plans to work. They do not care about your inefficient, independent, individual liberty. This is a cancer on this country. Just like allowing a procurement professionals to take over a company would absolutely KILL the company, allowing a central planning style of government to become so large and have so much control will KILL this Nation. We already have one foot in the grave!

3 Comments:

Blogger CynicalSon said...

What, no mention of the impact of preferences for small and “disadvantaged” businesses? ;-)

I suspect that we shall all be learning the inside and out of FAR (Federal Acquisition Regulations) in the near future. I envision a giant bureaucratic slave-state that will make us envy the Soviet people who only had to wait in line 10 hours in hopes of acquiring toilet paper (once they implement the Sheryl Crow one-sheet rule: http://www.foxnews.com/story/0,2933,267783,00.html). We will have to submit, in triplicate, forms specifying how much of our allotted consumption budget is allocated to “disadvantaged” businesses and how we will take the appropriate measures to dispose of consumption packaging in an internationally environmentally conscious manner (there will be a special police unit created to investigate and make sure people don’t use these triplicate forms as toilet paper, due to its scarcity).

4:08 AM  
Blogger Stirling said...

Great post!

8:49 AM  
Blogger James said...

The real issue is that virtually no one and especially no one in the executive, legislative and judicial branches of the collective are familiar with the contents of the Constitution as written and as amended. Why would anyone expect the country to be run as a federal republic when no one has read the Constitution nor have they been taught about it in school. It also apparent they desire to remain blissfully ignorant of the aforementioned document.

The electorate, as a whole, is even worse as they have their head in the sand and just love their congressional representation.

I swear to uphold and defend the Constitution of the United States against all enemies foreign and domestic -- yeah right.

i am guilty of the violation of the oath. So I am no better than anyone else.

As a people we are unworthy of our founding generations.

12:07 PM  

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