Supply Excellence — In Defense of Defense Department Purchasing

In Defense of Defense Department Purchasing

October 23rd, 2007 · by Tim Minahan · No Comments · best practices, supply management

Please don’t misconstrue last week’s news of alleged corruption and graft in Defense Department purchasing in Iraq. A few bad apples should not spoil the years of red-tape cutting and purchasing efficiencies (and just downright effectiveness) that the DoD has achieved.

I was fortunate enough to witness the initial wave of governmental initiatives to streamline and improve federal and Defense purchasing policies and performance first hand while in Washington during the first Clinton Administration. (Trust me, reworking — and removing — thousands of pages of the FIRMR, FAR, and DFAR policies in favor of more commercial and automated purchasing techniques was no easy task.) I was also recently reminded of the daunting task DoD purchasers face everyday, and the darn good job they do overcoming these challenges.

The person doing the reminding was none other than Retired Lieutenant General Gus Pagonis — the man responsible for all buying and moving everything from tanks and troops to food and bandages during the first Gulf War. (Pagonis later went on to lead the re-engineering of Sears’ supply chain.) Speaking at the Procuri Empower 2007 conference earlier this month, the former General reminded attendees just how complex the global supply chain the U.S. Military runs — and in heated war zones nonetheless. For example, during the first Gulf War, Pagonis’ logistics team, “planned, moved and served 122 million meals.” Supplied 1.3 billion gallons of fuel. Handled over 31,800 tons of mail. And transported troops and equipment 52 million miles across the desert. And, unlike in the commercial world, any missed shipments or delays in the war theater have dire consequences.

Pagonis was a wealth of knowledge on purchasing and supply chain strategy, using many of the advanced planning and management techniques used by leading enterprises, including balance scorecards, risk-reward and performance-based contracting, and activity-based cost modeling. (He profiles his experience and supply chain lessons from the military in his must-read book, Moving Mountains: Lessons in Leadership and Logistics from the Gulf War.) Yet, his most compelling insights were how he applied military leadership techniques to the retail supply chain.

“There are big differences between managing and leadership,” said Pagonis. “Management is about maintaining and controlling. Leadership is about innovating, developing, and challenging.”

Pagonis boils down his leadership techniques the the following building blocks:

Know yourself: Understand what you’re good at and hire people that augment your weaknesses.
Present yourself: Know your audience, listen to them, and tailor your message to their sensibilities. Manage by walking around and meeting your team members and internal (and external) customers in their own locations. (And don’t forget to bring the pizza or some other gesture that can get people to open up and tell you the straight scoop.)
Know the mission: Whether you’re in the battlefield or on the shop floor, intimately understand the strategic vision (e.g., “Drive Profitable Revenue Growth”). Develop strategies that directly support this vision (e.g., “Achieve Supply Chain Integration and Visibility,” “Manage Service and Unbundle Cost”). And define quantifiable objectives and tasks to execute these strategies.
Develop your subordinates: Understand the strengths and weaknesses of each employee. Train employees on your strategic vision, strategies, and objectives. Provide regular performance evaluations and develop training and corrective actions to drive continuous improvements. Motivate employees through incentives and simple gestures, such as singling them out for a job well done.
Develop your tools: Pagonis used daily “stand-up” meetings (lasting less than 30 minutes) for team members to quickly raise issues. He augments this status meetings with weekly sit-down meetings to delve into operational status and issues in more detail, requiring department heads to share three “Ups” (positive progress on strategies and objectives) and three “Downs” (potential drawbacks and issues and suggested corrective action plans.) Pagonis also set aside 15-minute “Please See Me Time” (PSM for short) sessions on his calendar where staff could schedule a private meeting to discuss any topic.

These techniques helped Pagonis lead the now famous “left hook” maneuver that helped bring the first Gulf War to a rapid close. These leadership principles also enabled Pagonis to drive a supply chain turnaround at Sears. Best of all, while they take some practice, Pagonis’ approaches are transferable to any leadership role — whether heading purchasing for a mid-market company or leading a small team. There is indeed such a thing as military intelligence. And we can all benefit from borrowing from it.

Email Forward & Bookmarks