91 st Annual Meeting & Exposition April 1 – 4, 2012 Anaheim, California 91 st Annual Meeting &...

91st Annual Meeting & ExpositionApril 1 – 4, 2012

Anaheim, California


Anaheim, California

When Opportunity Knocks Open the Door

WHEN OPPORTUNITY KNOCKS:

OPEN THE DOOR!


Anaheim, California


Anaheim, California

1. What is “Opportunity” a Look at Definitions and Concepts2. Organizational Practices that May Inhibit Taking Advantage of

Opportunities3. Why Purchasing Departments are Well Suited to Take Advantage of

Opportunities4. Opportunities in Contracting5. Making the Best of a Bad Situation6. Do it Yourself and Save7. Build it and They Will Come8. Opportunities in Philanthropy9. “You can lead a horse to water but you can’t make it drink”10. Disclaimer

And of course there will be sagely advise from the ages liberally applied throughout the presentation.


The “Opportunity” Presentation Overview


Anaheim, California


Anaheim, California


A favorable or advantageous combination of circumstances

(American Heritage Dictionary)

A favorable juncture of circumstances (Merriam Webster Dictionary)

Quick witted; resourcefulness; occasion (From the Chinese Mandarin word for opportunity “jīhuì” )

What is “Opportunity”?


Anaheim, California


Anaheim, California


Luck is what happens when preparation meets opportunity.

Lucius Annaeus Seneca

Is it just a matter of luck?


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Anaheim, California


It is wise to turn circumstances togood account.

AesopFrom the Bat and the Weasel


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Anaheim, California


Who’s There!

Opportunity!

Can’t be!What??!!

Opportunity only knocks once!

Knock! Knock!


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Anaheim, California


Opportunity is missed by most people because it is dressed in overalls and looks like work.

Thomas Edison


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Anaheim, California


Specialization – Staff highly focused in one area

Insulation – Units physically or organizationally remote from business activity

Culture – Personal conduct shaped by corporate morals

Job Classifications – Limit what personnel can do

Organizational Practices That May Inhibit Taking Advantage of Opportunities


Anaheim, California


Anaheim, California


“The Gods cannot help those who do not seize opportunities”

Chinese proverb


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Anaheim, California


Why is Purchasing Well Suited to Take Advantage of Opportunity?

Interacts with almost all areas of business activity.The 10,000 ft. view

Has perceived or real authority to act.Ability to close the “deal”

Has the ability to perform objective analysis to assess the value proposition of the opportunity.Looks the gift horse in the mouth

Has specialized knowledge to complete a “deal”.Insures that taking advantage of the opportunity is appropriate and legal and can create the appropriate contract


Anaheim, California


Anaheim, California



Anaheim, California


Anaheim, California


Can We Create Opportunity?

“Why Coitenly! Nuk Nuk Nuk!” Curly Howard

If Opportunity is in deed related to circumstances, then it stands to reason that circumstances can be altered in such a manner as to precipitate favorable opportunities.

“If opportunity doesn't knock, build a door.” Milton Berle


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Anaheim, California


Always carry a flagon of whiskey in case of snake bite …also carry a small snake.

WC Fields


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Anaheim, California


So what do I do if I sense an opportunity?

Immediately identify a major stakeholder and enlist their support. This is the person(s) who will have the most to gain

Translate the opportunity into terms approvers can understand.Not everyone may understand or care about the issue(s)

Make sure the “value” of the proposition is clearly identified.“Value” may not always equate to dollars, but a “$” helps


Anaheim, California


Anaheim, California

A wise man will make more opportunities than he finds.

Francis Bacon



Anaheim, California


Anaheim, California


Stop, Look, Listen and Think

From The Royal Society for the Prevention of Accidents

The key to Creating Any Opportunity


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Anaheim, California


Opportunities in Contracting

The Supply Contract bid Dilemma

Lab Casework Change Order Fiasco

The Tired Sales Person


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Anaheim, California


Issues:Annual bids based on previous year’s buyAdministration time was excessiveProducts outside of bid offer’s range were not discounted

Results:Multiyear contractsPricing based on list less discount structureAll products discounted at some levelInvoiced monthly

Savings – Approximately $500, 000 Annually

The Supply Contract Bid dilemma


Anaheim, California


Anaheim, California


Issues:Change orders for casework in construction projects were taking months to process Approvals had to be obtained for the architect, project manger, general contractor, etc.The University Architect requested help in making the process simpler

Results:Multiyear contracts direct with the casework manufacturerPricing based on discount structure so all changes could be budgetedProject cost dropped dramatically, changes orders processed in weeks

Savings – Approached $1,000, 000 Annually

The Lab Casework Change Order Fiasco


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Anaheim, California


Slide image provided by Fisher-Hamilton


Anaheim, California


Anaheim, California


The Tired Sales PersonIssues:ISU requires demonstration of major research equipmentDemo inventories were tight required extra work for sales rep to bidEquipment hauled around in cars took time to set upEquipment did not always work correctly for demonstrations after being moved

Results:Multi year contracts required demonstration equipment remain on siteAll products offered on discount structuresISU Modified the lab space and now maintains the equipmentFree casework provided through another contractDemo equipment can be used for teaching as well as research

Savings – Approximately $700,000 lease cost, $100,000 Annually in product savings

Primary Contract Holder Lab - View 1

Primary Contract Holder Lab - View 2

Secondary Contract Holder Lab - View 1

Secondary Contract Holder Lab - View 2


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Anaheim, California


Make the Best of a Bad Situation


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Anaheim, California


The Reluctant Repairman

Issues:A half million dollar electron microscope is left open with circuit boards exposed

Repairman stated that the company no longer supports the unit (purchased only a year earlier) then left in frustration

Major research grant is depended on this instrument

Results:Dispute resolution negotiated over dinner with Japanese Vice President

Next day company offered a model upgrade as compensation

Warranty was also extended for a year

Happy research team recommended agent for professional service award

Savings – Approximately $150, 000 over original unit

Electron microscope provided to ISU as settlement offer


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Anaheim, California


Do it Yourself and Save

Nuclear Reactor Decommissioning


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Anaheim, California


Nuclear Reactor DecommissioningIssues:ISU was preparing to decommission its NRC teaching reactor in 1999.

Typical scenario would be to hire consultants to define project, prepare and evaluate RFP.

Consultants estimated $1 million in fees and $1 million in decommissioning cost.The University did not have $2 million on hand, the money would come from other programs.

Results:I convinced the University to utilize our Engineering staff in lieu of hiring consultants.

Awarded contractor stated it was one of the best RFPs they had seen, they bid $875,000.Project was finished on time and on budget, an industry first according to our contractor.

Savings – Approximately $1,125,000 over original estimates

This scenario was repeated successfully on two other nuclear clean up projects


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Anaheim, California

When Opportunity Knocks Open the DoorISU’s reactor casing was so well constructed that an automated jackhammer could not break it up. Hydraulic fracturing was utilized to break apart the casing. This technique was first documented by Roman historian Livy as being used by Hannibal’s engineers in 218 BC when crossing the Alps. Before with fracture holes drilled After fracturing technique was applied


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Anaheim, California


Build it and They Will Come

A Request for Assistance

A Better Way to Hatch Butterflies


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Anaheim, California


Issues:1995 - The Iowa Department of Economic Development and the Iowa Business Council created the Iowa Biotechnology Association. The problem then became how to fund it.Iowa State was asked to develop a sustainable funding model for the new association.

Results:Successful supply contracts were managed through the IBA as a consortia procurement effort.A one percent management fee was charged on the consortium contracts.Funding, primarily from three major contracts, has kept the association viable with approximately 60 organization participating.

Savings – ISU receives several hundred thousand dollars in incremental savings using IBA consortium contracts.

A Request for Assistance


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Anaheim, California


Issues:

ISU was building a new garden center which would incorporate a butterfly garden as its main attraction.

Typical installations used display cases to hatch butterfly pupae but hatching success is limited for tropical species, could be as low as 50%.

How to increase hatch rates and still allow the public to witness the hatching process.

Results:

After initial consultation the project architect, facilities manager and a local growth chamber company engineer were called by Purchasing to meet at the installation site.

Designs based on the purchasing agent’s experience with growth chambers were laid out an a legal pad and then tweaked by the team.

The growth chamber company offered to build three prototype units incorporating heating and cooling, humidity control and glass front door and rear panel. The cost would the same as for a standard growth chamber. Hatch rates increased to as high as 95%.

Savings – Thousands of pupae were saved annually at a cost of $2-$4 each. On the PR side - the growth chamber company, an Iowa firm, had developed a new product they could market.

A Better Way to Hatch Butterflies


Anaheim, California


Anaheim, California



Anaheim, California


Anaheim, California


Paraphrase from Matthew 7:7

Ask and You Shall Receive

Knock and it Shall be Opened Unto You


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Anaheim, California


Can Purchasing Play a Role in Philanthropy?

The most efficient purchasing agent will acquire goods at zero cost.

Some mission critical gifts may require a purchasing component.

Purchasing may be aware of users interested in potential donations others may not be aware of.

Fund raising efforts at times may conflict with procurement initiatives, so good communications with fund raising organizations is essential.

At ISU donations initiated through Purchasing allow credit to be taken by the fund raising entity as well, creating a win-win scenario.


Anaheim, California


Anaheim, California


Strike While the Iron is Hot!

English Proverb


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Anaheim, California

While we stop to think, we often miss our opportunity.

Publilius Syrus



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Anaheim, California


Opportunities in Philanthropy

The Rejected Accelerator

The Grant Equipment Conflict

New Aircraft Electronics


Anaheim, California


Anaheim, California


Issues:A university had rejected a new linear accelerator for failing to perform. The unit was identical to a unit owned by Iowa State. ISU had not rejected their accelerator and could use components from this unit.Purchasing was asked to acquire the rejected accelerator at minimum cost.The manufacturer knew ISU and was not willing to sell cheap.

Results:I negotiated the unit as a gift from the accelerator manufacturer’s parent company.The requirement was ISU had to remove the unit within two weeks.Removal and transportation cost around $20,000.The gifted unit provided ISU with spare parts for 5 years.

Savings – The donation was independently appraised at 1.4 million dollars

The Rejected Accelerator

ISU Research Accelerator

ISU Research Accelerator Power Supply and Control Room


Anaheim, California


Anaheim, California


The Grant Equipment Conflict Issues:The University received a grant in which the equipment must be used for both undergraduate teaching and advanced research. Our experience had shown students would not maintain the equipment to a level it could be used for the advanced research projects.Both purposes had to be served or the grant money returned.

Results:Our dilemma was stated in a proposal request for vendors to solve.The successful bidder offered two suites of equipment one discounted system purchased on grant funds the other donated to the university.The donated system would be used or a one day training course each year for clients of the donor if requested.

Savings – The donation and discounts amounted to over $250,000

Materials Testing Equipment Donated for Undergraduate Teaching


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Anaheim, California


New Aircraft Electronics Issues:The University was in the process of bidding equipment upgrades and paint for its executive aircraft.A local electronics manufacturer saw the RFP and asked if ISU would be willing to test a new product. The new electronics would provided safety equivalent to a commercial airliner.The University’s pilots were very interested in testing a new system.

Results:Because ISU was still going to purchase some items the bid was reissued based on the new electronics requirements.The electronics manufacture bid dealer cost and offered a new collision avoidance system and upgraded radar, winning the bid easily.ISU had successfully tested the first collision avoidance system designed for small aircraft.Savings – Discounts and donations approached $300,000


Anaheim, California


Anaheim, California

When Opportunity Knocks Open the DoorISU’s upgraded and newly painted executive aircraft


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Anaheim, California


How do I Integrate Philanthropy into the Purchasing Process

Take time to listen to the needs of vendors and staff even if the comments are not related to what you are working on.They will give you the circumstances you need

Promote your client by describing research activities in your bid documents. Vendors look for particular research to support

Never say no on the first pass. Think about it first, you may be the key ingredient to make something workout

Don’t be afraid to ask, nicely, all they can say is no. My success rate is about one in twenty five, but the one “hit” usually has real value

No donation is too small to be worth the effort. If the donor feels you appreciate the gift it may lead to bigger opportunities


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Anaheim, California


Without promotion something terrible happens...

Nothing!

P T Barnum


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Anaheim, California


You can Lead a horse to water but you can’t make it drink

Old English Saying


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Anaheim, California


Some Times things Just Don’t Work Out

The Unwanted Casework


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Anaheim, California


The Unwanted Casework Issues:The University spends significant money remodeling labs, often as soon as five years after a building is built.The designers would like way to reduce long term costs but prefer oak casework which is not easily removed. Modular casework was available but only in steel construction.

Results:On a bet, I challenged our casework contractor to make me a modular steel cabinet with wood doors and drawers.About six months later the salesman delivered the cabinet to my office.The new design would cost 25% more that traditional wood but would allow for easier remodeling.The cabinet design was rejected for cost and the fact it still has a steel structure.

Moral: Though not accepted by ISU the design became one of the company’s top selling products. Any positive effort helps someone.


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Anaheim, California

When Opportunity Knocks Open the DoorWood on Steel Casework Originally Designed at ISU’s Request


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Anaheim, California


Everything has beauty, but not everyone sees it.

Confucius


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Anaheim, California


When one door closes, another opens; but we often look so long and so regretfully upon the closed door that we do not see the one which has opened for us.

Alexander Graham Bell


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Anaheim, California


DisclaimerThis presentation is not intended to be a primer on how to seize opportunity but merely relays information about opportunity for your edification.

Attempting to create or seize opportunity under the wrong circumstances can be hazardous to your health or professional career. If you elect to try some of the tactics conveyed in this presentation your results may vary.

Failing to take advantage of known opportunities may result in the loss of protection described in slide 9.

The author does not condone the use of whiskey to create opportunity.

All images use in this presentation have been taken from sites like the Library of Congress or Wikipedia and are known to be in the public domain. Additional images have been taken by the author and are free to replicate. Gifs are from free use sites. If for any reason any image is not in the public domain the author declares fair use under U.S. Copyright law for illustrative purposes related to non-commercial use.


Anaheim, California


Anaheim, California


The pessimist sees difficulty in every opportunity.

The optimist sees the opportunity in every difficulty.

Winston Churchill


Anaheim, California


Anaheim, California


Thank you for allowing me the opportunity to share this presentation with you today!

91 st Annual Meeting & Exposition April 1 – 4, 2012 Anaheim, California 91 st Annual Meeting &...

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