Procurement Lessons from the FIFA 2018 World Cup
The recently concluded FIFA World Cup 2018 – had France crowned as 2nd time victors, after defeating Croatia in the finals. While France was one of the pre-tournament favorites, Croatia’s run was an unexpected fairytale.
Here are some key takeaways for procurement & sourcing professionals from the soccer extravaganza:
- Don’t stick to your favorites
Your procurement strategy has to live up to the mark. As in soccer so in procurement & sourcing, performance has to justify being a “favorite,” else your procurement set-up will get knocked out, or your suppliers’ portfolio will be up for a toss.
Teams like Germany, Argentina and Brazil found this out the hard way and were knocked off at different stages of the tournament. Germany faltered because their coach was too rigid with tactics and did not adjust it despite results suggesting dire need of a different approach. Argentina and Brazil were unable to make a deep run because of the old adage coming true – a team is more than the sum of their individual parts. A collective team effort outshines individual brilliance. Once their superstars were stifled, the teams lost their way.
Thus, don’t blindly have your suppliers marked as favorites just because they offer you discounts. Rather, adopt good supplier performance management software and continuously monitor their performance across various KPIs and thus enhance your relationship with them by their performance.
- Source Strategically
One of Croatia’s star player hails from Switzerland whereas half of the French and Belgian players have African ancestry. It shows that teams that were willing to embrace players’ basis their caliber and performance have succeeded irrespective of the background of the players. It does show that it pays to have a diverse talent pool, thus, likewise in your procurement process; you must plan and source strategically to achieve your procurement goals. Shared below is a 7- step process that you can follow to source strategically and effectively:
- Categorize your spend data
- Analyze the supply market
- Develop the sourcing strategy
- Select the sourcing process
- Negotiate with the selected suppliers
- Implement the new supply structure
- Benchmark and track the results
- Pragmatism is the mantra
The age-old cliché: Strikes win you matches and Defense wins championships were proven right by France winning the 2018 World Cup final by adopting a pragmatic strategy throughout the tournament with defense taking precedence over beautiful soccer. One of the French strikers was a significant contributor to their defensive strategy. Similarly, procurement should pause for a while and rather than aggressively pursuing cost reduction opportunities; it should step back and defend the supplier risks with the aid of the supply chain visibility the procurement department has.
The above key learnings from the FIFA 2018 World Cup can be adopted by procurement professionals to meet their objectives and be a champion!