After extremely difficult negotiations, the company signed a contract with IBM in 1990 with the scope of designing and manufacturing a power supply unit for IBM's new personal computer (PC). This was my first mission and the main reason for my new career at the company Intracom.

The project was very important, the customer was very demanding, the price, which Intracom had quoted was extremely tight and the time schedule very ambitious. The plan was to design the unit and all manufacturing and testing infrastructure for 1.000 power sully units per day. Some critical components and the respective manufacturers had been pre-selected by IBM (eg the fan, connectors, fuses), but for most of the parts we would have to do all the sourcing, certification and purchasing agreements ourselves.

Back in 1990 all communication was done by fax, there was no email or internet available at that time. The procurement officer had no other option, he and two engineers of the power supply design team would have to visit Taiwan and qualify suitable suppliers. This country was a source for low-cost components. Workers were winding transformers by hand and electrolytic capacitors were being manufactured in plants, with acid baths as big and open as swimming pools, where the workers were stirring the dangerous liquids with some sort of paddles.

There were many opportunities for competitive sourcing of components, but at the same time a potential problem of any kind would put the project in jeopardy. It was a risky situation. The solution was found in working very close through a local engineering office, specialized in overseas sourcing, which would try to ensure that all tasks were properly performed.

This setup worked excellent and formed the basis of a very beneficial cooperation and the development of many good sources from Taiwan for a wide range of projects, for many years to come.
 

In 1998 the company was assigned a very special project. It would manufacture, as a local subcontractor of the company Raytheon the Patriot defense missile system for the Hellenic Armed Forces. Intracom was the only non-USA company that had received authorization from the Pentagon (DoD) to manufacture electronic subsystems outside the USA.

The single most demanding purchasing task for this huge project was the procurement of the "shelters". These are special containers, in which all other subsystems are built into and which then are mounted on special trucks for quick and flexible deployment of the complete defense system almost anywhere in the field.

The total cost of this single order was roughly 1 billion Greek Drachmae and any successful negotiation would yield a substantial cost reduction for the company. But how do you negotiate about items, which have been designed by another company, which also has all the personal contacts?

This was a very difficult problem, also providing for a strong motivation. Fortunately, the list of approved suppliers contained two companies. One company was clearly the proffered supplier, while the other one was undergoing a phase of reorganization and did not seem to be able to handle this order. Both potential suppliers visited the purchasing manager of Intracom to present their offers, but showed very little flexibility with regard to the pricing. With the dead lines approaching fast for this strategic assignment, the purchasing manager organized a 3-day trip to the USA to do the final evaluations and negotiations. The first day included a visit to the facilities of Raytheon, the designer of the Patriot system and then one day each was devoted for plant visits to the two shelter subcontracting candidates.

As a result of this tour, the "preferred" supplier started questioning his chances of winning this almost certain purchase order and resubmitted a significantly lower quotation. The tough trip and the hard negotiations had paid off...
 

The company owned a fleet of more than 200 cars for its management and selected personnel. A small group of people had the responsibility of maintaining it in a good condition and taking care of the various administrative matters, such as insurance, etc.

As the fleet grew, so did the problems with it and at some point the decision was taken that it would be more appropriate to stop buying cars and start leasing them. This would have other benefits as well.

Thus, a selection committee was put to work, which organized a tender. The interest was high; all the major car-leasing companies in Athens participated. The results of the tender were impressive, everybody was very eager to win this account; however all companies had very similar offers and the differences were so small, that it was almost impossible to select the winner. There had to be another criterion, which would provide a clear leader, justifying such a strategic decision beyond any doubt.

The solution was found, when the leasing companies were asked to bid for the existing fleet of company-owned and operated cars. An evaluation session was arranged, so that all leasing companies would be able to assess the condition of representative used cars.

When the bids came in everybody was surprised. One leasing company stood out of the pack; it obviously had a much better way of utilizing or reselling the used cars and was offering a significantly higher amount to buy back the fleet of used cars from the company. This tipped the balance clearly in favor of this contestant and a clear decision could be taken while a significant benefit was realized on behalf of the company.

The company is producing many different products using several thousand different components and raw materials from hundreds of suppliers coming from all over the world. Even one missing screw will bring the production process to a halt with very unpleasant consequences for the company and its relationship with its customers.

It is the task of more than 10 people in the purchasing department to follow-up on all purchase orders and to ensure their proper execution. And it is not only the suppliers, that can have problems, it is the freight forwarders as well, and ships, planes, trucks, customs offices and banks as well, which if they do not perform as planned will delay the delivery of ordered goods.

And sometimes it so happens that the goods arrive in time, but a quality problem may rise during incoming inspection. In this case, any margin for corrective actions becomes very slim...

It is practically impossible and also very costly to anticipate all and any potential problems in multiple supply chains and always be 100% sure of all deliveries. And then, there are always some unforeseen situations, illnesses, strikes, etc, which can ruin the most elaborate plan.

To cope with this huge challenge a special information management and decision support system was created, which helped to prioritize the production needs and identify possible bottlenecks up to 6 weeks in advance. This would give everybody involved enough time to follow-up and anticipate problems and react immediately, if anything goes wrong.

This critical items procedure (nicknamed internally "the criticals"), perfected over the years, was culminating in a weekly meeting every Wednesday afternoon, which was attended by every product manager, the production manager, the planning manager, the purchasing manager and every other person that might specifically be involved in the "critical path" of the supply chain.

And since people always dominate each chain it is interesting to highlight another important detail: Well kept inside the purchasing managers personal drawer was an old-fashioned red rubber stamp with the wording "URGENT - CRITICAL" inside a lined border. This stamp was applied to every critical order or related follow-up correspondence to highlight that this order is to be handled with very special care and that there are no margins for errors or delays. With time, all suppliers had learned their lesson and they knew that things were very serious when they saw this stamp. The relatively rare use of this ritual provided everybody a guarantee that there would be no misuse of the urgency over the complete supply chain.

This innovative procedure (and internal MRP software) proved especially valuable when the company had to fight for very competitive contracts with near-to-impossible delivery deadlines and stringent penalty clauses. Our competition was almost certain, that we would fail, but with the "criticals" Intracom and its suppliers in close collaboration always managed to deliver as promised.

Almost everything is possible, when you have a little time, a little extra warning. The only thing we cannot do (yet), is turn back the time and do the things we have forgotten to do or avoid problems, we have not anticipated.

In deep waters...

The phone rings, it is the "big boss", he very rarely calls himself...

"Hello Mr. Mittmann, I would like to sponsor some cardiology equipment for the emergency unit of a certain hospital. Please talk to the head doctor and my foundation, the amount seems to be a bit high, I would not like to spend more than 100 million (Drachmae)".

There are moments when you don't know where to start. I have absolutely no idea about cardiology issues or the respective medical equipment for an emergency care unit with 10 patients, whose life might be in great danger. What is important and what is not? The responsibility is enormous and so is the investment, which should be implemented in the best possible way.

The managing doctor had already decided on the equipment he wanted. This would be the first of its kind in Greece. A highly sophisticated computerized network of monitoring equipment for the emergency cardiology unit, which could even provide automated diagnoses. "Bedtime" in an emergency unit is extremely precious. Doctors must take accurate decisions about each patient fast. Assess the seriousness of each incident. Who stays? Who gets operated? Who is OK and allowed to go home?

So the market research begins. I talk with other doctors, specialists in other hospitals. I gather information and try to evaluate the proposals. Then it is necessary to talk to other suppliers, what do they have to offer? How do they argue? They deal with this many years now, know this stuff inside out. While I am facing such a question for the first and possibly last time.

A good purchasing officer must try to cope with a good salesman by combining valuable information and viewpoints from many other discussions with other salesmen and try to get the complete picture. The better the salesmen are, the more careful you have to be in order not to get fooled. We don't want to buy from the best salesman; we want to buy the most suitable equipment at the best possible price and at the best conditions. This is every procurement officer's nightmare.

Every salesman will tell you all real (and perhaps not so real) benefits of using the product he sells but he will not tell you its weak points. These you must find for yourself, or try to interpret what competing salesmen have to say. Because no honorable salesman will directly talk about his competitor's products in a negative way. This is not "politically correct".

After many discussions and visits we can draw up a matrix, which will answer two basic questions:

1. What should we buy from whom?
2. How much should we pay for it?

Be careful: we will not always buy the cheapest product, or always the best product.

We will always try to identify the best combination of product features and cost, which best suit the particular procurement requirements.

This also happened with the cardiology emergency unit equipment. In the end, we bought the equipment which the doctor had initially selected, but at a much lower cost and with some extra capabilities. And it was another successful procurement mission