BBA 4326 Unit I Scholarly Activity
Columbia Southern University
The goal of any company today is to succeed. But succeeding in business can mean many different things such as exceeding customer expectations, capturing a greater global market share, standing out amongst competitors in the market, reducing production costs, increasing revenue, reducing risks associated with doing business, and creating mutually profitable partnerships within business (Garrett, 2015). Partnerships offer numerous opportunities to participating companies by allowing for access to one another’s expertise, assets, logistical abilities, and by allowing for specific burdens to be taken on by outside entities. Partnerships require each party to effectively and responsibly handle their share of the agreement to ensure the partnership is a successful one. Todays society is a global one and “it is no longer effective for organizations to work alone. Within the public, private and voluntary sectors, the need for partnership working, often cross-sectorial working or working beyond the boundaries, is recognized as a vital component of success” (Wildridge, Childs, Cawthra & Madge, 2004, p. 3). In its simplest form, procurement is the process of obtaining goods and/or services for any and all aspects of business (“Procurement,” n.d.). The procurement process often requires organizations to work together as partners in order to achieve a high level of productivity and to ultimately succeed. However, many complications can arise throughout the procurement process ranging from human error, misrepresented information, increased regulation, lack of planning, and even simply lack of knowledge. Knowing and understand what makes a successful partnership is crucial in avoiding procurement failures in business.
Building a successful partnership in business relies on certain key components. To start, the needs and desires of customers are what fuel the necessity to form partnerships within business. When looking to build a successful partnership, businesses usually look for one or more of the key ingredients, which are: complementary strength, common customer base, and chemistry. Businesses often search for partners that are strong in areas that they themselves are weak, this is known as complimentary strength. The second ingredient in forming a successful partnership is searching for a partner with a common customer base where all parties are able to take advantage of the same customers without competing with each other. The final ingredient is chemistry. Organizations can achieve chemistry by searching for and selecting partners that have a good industry reputation, share a common vision, and have the financial strength to deliver on their commitments.
Building and maintaining trust can be one of the biggest challenges within a partnership. Trust is earned by doing what you say you are going to do, doing it well, and doing it consistently. Building trust within a partnership can sometimes take years to accomplish and can be lost very easily and very quickly should one party fail to deliver on their obligations (Garrett, 2015). According to Wildridge, Childs, Cawthra and Madge (2004, p. 4), important factors to remember in terms of partnerships is that “partnerships are not a soft option but hard work; partnerships take time to develop; partnerships must be realistic and aim for what can be achieved, not be set up to fail by being too ambitious; partnerships can, if successful, achieve more than individual agencies working alone.”
Failures within the procurement process can be very detrimental to organizations and to partnerships. However, mistakes and failures within procurement can also lead to lessons learned and new possibilities for growth and change in the future. Denver International Airport is the largest airport by land area in the United States and is the sixth busiest in terms of passenger traffic. In 1991, the airport attempted to cut aircraft turn around time significantly by remodeling and updating the highly time-consuming passenger luggage check in and transfer system. The airport would attempt to fully automate the luggage transfer system using a system of barcodes and destination-coded vehicles that would integrate all three of its terminals (“Three Disastrous Project Management Failures,” 2016). According to the article Three Disastrous Project Management Failures (2016), the five key variables that all project managers deal with are scope, time, cost, quality, and risk. In terms of this project, Denver International Airport failed at every single one of them. The airport contracted BAE systems to develop the complex automation system that would handle the luggage. The project was doomed from the start when DIA completely ignored BAE’s timeline for completion and insisted upon an unrealistic 2-year timeline. This severely under scoped the project and forced management to assume unnecessary risks. Furthermore, the airport decided not to include the airlines; perhaps the largest stakeholders in the project, in the planning discussions. This caused key details to be overlooked such as oversized luggage considerations, and equipment designed to handle special luggage such as skiing equipment. Ultimately the initial opening of the systems was delayed by 16 months with losses of over $2 billion being incurred and the entire project was eventually being scrapped in 2005 (“Three Disastrous Project Management Failures,” 2016). DIA severely under planned for the project and did not allow for the appropriate time to be taken in the planning and execution phases. The airport should have included the airlines as the largest stakeholders to ensure proper inputs were considered and that equipment would be designed to handle any possible luggage that may be encountered. Within the successful partnership pyramid, DIA did a poor job at managing their own expectations as far as the timeline was concerned and failed at building a solid foundation of trust with BAE systems, ultimately eliminating any chance at a successful long term partnership.
The United States government spends a tremendous amount of money in procuring supplies and equipment for its military and in providing aid to foreign militaries. In a June 2017 report published by the special inspector general for Afghanistan reconstruction, it was revealed that the U.S. Department of Defense may have spent up to $28 million more than required to procure new camouflage uniforms for the Afghan national army. The report reveals that the uniforms procured in 2007 were inappropriate and ineffective for the environment of Afghanistan. The report also revealed that the U.S. already had a wide range of useable camo patterns available at no costs, but the officials involved in the procurement process simply refused to use them and surfed the Internet looking for alternatives. Once officials were said to have ran across a forest pattern that they thought might work for the new uniforms, they showed the pattern to the Afghan defense minister who “liked what he saw.” No efforts were ever made to engage troops or commanders who would be actually wearing and using the uniforms. Additionally, no effort was made to test the forest camouflage pattern and determine is sustainability to the Afghan environment, which encompasses less than 2% of actual forest. The report ultimately revealed that the U.S. government wasted $28 million of taxpayers money in the name of fashion simply because the Afghan defense minister thought that the pattern was pretty. There were many contributing factors to this procurement failure including non-experts making unilateral decisions, lack of oversight by management, failure to engage appropriate stakeholders in decision making and planning, and lack of quality control in testing the sustainability of the pattern against the environment for which it was intended (“Pink Uniforms,” n.d.).
One of the largest and most notable procurement failures, that is ongoing today, is the procurement of the F-35 Joint Strike Fighter jet. The F-35, originally announced in 2001 as the fighter jet that could do almost everything that the U.S. and other militaries desired, is now in its 17th year of redesign despite an originally promised service entry date of 2008. Additionally as of 2018, there were still 263 high priority performance and safety deficiencies that remained unresolved and unaddressed (Grazier, 2018). According to the article by Hughes (2017), the program is a decade behind schedule and has failed to meet most of its original design requirements. On top of that, the program has become the most expansive and expensive defense program in this history of the world, coming in at over $1.5 trillion by the jets phase out date in 2070. The unit cost per aircraft it now at over $100 million, which is more than twice the originally promised figure. The debacle began with overzealous claims being made by Lockheed Martin stating that the F-35 would be far better than any current aircraft in air to air combat, air to ground capabilities, and suppressing enemy air defense systems. However, in a 2015 combat test, the F-35 was slated against a much older, much less expensive F-16 fighter to test its actual capability against the aircraft it is set to replace. The F-35 was flown with empty weapon bays and no externally mounted weapons or fuel tanks while the F-16 was flown with two externally mounted 370-gallon fuel tanks. Despite its significant aerodynamic and weight advantages, the F-35 test pilot noted that the F-35 was far less maneuverable and markedly inferior to the F-16 fighter in a dogfight (Hughes, 2017). The F-35 program is sadly a continuing example of a partnership that has failed to meet the needs and desires of customers. Agreements, specifications, budgets, and deadlines have all faltered and expectations have been very poorly managed. Lack of quality control and design deficiencies have proved detrimental to the program and are ongoing. Unfortunately, the only part of the successful partnership pyramid that has been satisfied is the creation of a long-term partnership. Only not out of desire, but purely out of the fact that at this point the U.S. and other governments have too much time and too much money invested to allow the program to fail.
For businesses to create and maintain successful partnerships, participating parties must develop and implement effective processes that are both realistic and attainable. Businesses should look for one or more of the three key ingredients to building a successful partnership and must be willing and able to honor their commitments and deliver on their promises time and time again in an effort to establish and sustain a trusting working relationship.
Grazier, D. (2018, March 19). F-35: Is America’s Most Expensive Weapon of War the Ultimate Failure? Retrieved from https://nationalinterest.org/blog/the-buzz/f-35-americas-most-expensive-weapon-war-the-ultimate-failure-24984
Hughes, M. (2017, June 13). What went wrong with the F-35, Lockheed Martin’s Joint Strike Fighter? Retrieved from http://theconversation.com/what-went-wrong-with-the-f-35-lockheed-martins-joint-strike-fighter-60905
Pink Uniforms. (n.d.). Retrieved from http://calleam.com/WTPF/?p=8517
Procurement. (n.d.). Retrieved from http://www.businessdictionary.com/definition/procurement.html
Three Disastrous Project Management Failures. (2018, October 22). Retrieved from http://www.itmplatform.com/en/blog/three-disastrous-project-management-failures/
Wildridge, V., Childs, S., Cawthra, L., & Madge, B. (2004). How to create successful partnerships–a review of the literature. Health Information & Libraries Journal, 21, 3–19. Retrieved from http://search.ebscohost.com.libraryresources.columbiasouthern.edu/login.aspx?direct=true&db=a9h&AN=14141093&site=eds-live&scope=site
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