Achieving True Diversity in Contracting

Guest Post By Dr. Oliver Hedgepeth, Program Director, Government Contracts and Acquisition at American Public University

What should be the focus of diversity in government contracting?  It can be linked to different types of federal, state, or private contracting practices or to hiring minorities in awarding a contract.

Should diversity result from a set of procedures and rules to follow? Or, should it be a set of guiding principles, such as our code of conduct or the ongoing discussion of ethics and culture in government contracting?

Dr. Charles B. Daniels from Old Dominion University defines diversity in today’s contracting world and in general as, “not just being defined by color, age, gender, or culture. True diversity and the hardest to achieve, is diversity of thought and ideas. Today’s great enterprises not only tolerate intellectual diversity, they seek it out, celebrate it and reward it. This is a true definition of diversity."

Is diversity part of the discussion with the subcontracting process? Although many government agencies are committed to diversity and inclusion, they still face challenges in getting a diverse representation of firms. 

“One of the reasons may be that the smaller firms are still getting established and have not been successful in partnering with the larger firms, who tend to receive contract awards,” says American Public University (APU) Management Program Director Dr. Marie Gould Harper.

Jere Ferguson, an adjunct professor of Government Contracting and Acquisitions  at APU adds, “In today's workplace, diversity remains a key element of the human capital strategy. Organizations are learning the importance of embracing these issues by developing and implementing diversity plans. Through these plans, successful organizations are increasing the organization’s competitiveness. These plans help to address resistance to change, create an open culture, utilize human resources more effectively, and improve employee retention due higher employee satisfaction. A focus on diversity in the workplace makes sense as organizations focus on one of their most limited resources they have: effective leadership.”

Dr. Morgan Henrie, author of Cultural Influences in Engineering Projects, notes that it was not that many years ago that various literary sources identified the growing trend of the multinational workplace and cultural diversity. From his viewpoint, it is almost a cliché to say this.

The mixing of ethics and cultures and building relationships among members of diverse contracting teams brings with them both opportunities and challenges.

The opportunities come from the different views and ideas that the sub-contracting cultures bring to the prime contractor and the government or private contracting management organization. If allowed and encouraged, the ability to identify problems and issues from different perspectives allows the contracting and program managers to develop new approaches and methods.

Henrie adds, “Often overlooked is that different cultures present team challenges as well, such as how team members communicate.”

Today—and it seems especially since 9/11—multinational work environments are the norm. If all of us in this contracting business do not understand the blend of ethics and culture and how to build relationships, it can lead to front page news.

In particular, our armed forces seem to have an increased diversity among their ranks. Brian Thompson, an APU adjunct professor of Government Contracting and Acquisitions, notes that, “Companies and government agencies need to continue to seize the opportunity like the military to better recruit qualified candidates.”

Diversity is not listed in the terms and definitions section of the Contract Management Body of Knowledge (CMBOK). It seems we are long overdue to address this oversight, but in the meantime we need to move ahead with understanding and leveraging diversity in our contracting efforts.

About the Author: Dr. Oliver Hedgepeth is the program director for Government Contracts and Acquisition at American Public University (APU). He is the former program director of Reverse Logistics Management and Transportation and Logistics Management. Prior to joining APU, Dr. Hedgepeth was a tenured associate professor of Logistics and chair of the Logistics Department at the University of Alaska Anchorage. His book, RFID Metrics, was published in 2007 by CRC Press and is in revision.

The Wide-Ranging Impact of Just-in-Time Inventory Management

Guest Post by Dr. Keith A Wade, faculty member, Transportation and Logistics Management at American Public University

Just-in-time (JIT) is an inventory management process that ensures that materials, labor, and other resources are available when needed. JIT is typically used by manufacturing industries that carry out daily production, such as car assembly plants.

With JIT, resources required are made available with no shortage, thus there are decreased holding costs and purchases of defective products.

JIT was widely adopted in the 1990s to keep inventory and other resources at stores and reduce costs. The savings allowed companies to reduce prices, increasing consumer demand and leading to more production and industry growth (Helper & Sake, 2012).

Transporting for JIT

Companies that use JIT often use air transport as the quickest means to deliver goods from suppliers worldwide. This approach enables companies to more easily switch suppliers if resources needed to sustain the demand of production are not available domestically (Nemetz & Fry, 1998).

Firms that require more material at a cheaper cost often use ocean shipping for short distances. This method is slower, so orders are often larger to ensure constant production (Nemetz & Fry, 1998).

Impact Across Industries

The growth of JIT has triggered the development of effective communication systems to ensure that suppliers deliver goods in time. JIT has also led to government policies. The Interstate Commerce Commission has formulated policies for trucking goods that have supported the goal of getting goods to consumers at the right price as well as the goal of profitable companies (Helper & Sake 2012).

JIT growth has resulted in new transportation industries that have reduced expenses for many companies. More trucking industries offer JIT delivery, which has increased employment in the industry. As a result, JIT has raised the US GDP by a significant percentage (Helper & Sake, 2012).

Challenges Ahead

The challenges facing JIT growth include the potential for supplier production delays that can cause production delays downstream. Communication systems and quick transport methods can help mitigate this risk (Helper & Sake 2012).

There are instances where JIT is not applicable. For example, in the energy industry, the petroleum and gas required for daily operations must be made available in large quantities in order to ensure constant productivity (Helper & Sake, 2012). So, the industry must lay out a strategy to maximize energy resources despite increased holding costs. Thus, some industries that produce essential goods and resources and rely on oil and gas may stop using JIT if such commodities become scarce. (Helper & Sake 2012)

The growth of JIT has solved many problems by ensuring rapid response to increasing consumer demand. It has also resulted in technological advancements and created jobs both internationally and domestically. It is likely to continue to play a role in U.S. manufacturing for years to come.

References

Helper, S., & Sake, M. (2012). Supplier relations in Japan and the United States: are they converging? Sloan Management Review

Nemetz, P. L., & Fry, L. W. (1998). Flexible manufacturing organizations: implications for strategy formulation and organization design. Academy of Management Review, 13(4), 627-639.

About the Author: Dr. Keith A. Wade is an Associate Professor of Transportation & Logistics with American Public University.  He teaches courses in Supply Chain and Logistics Management.  Prior to working full time in teaching, Dr. Wade worked in the Logistics field for over 15 years. He was most recent a Director of Supply Chain & Logistics Management for Ford Motor Company in which he managed logistics responsibilities all over the world. Dr. Wade earned a PhD from Michigan State University in Supply Chain Management, an MBA from the University of Detroit, and a BSBA from Oakland University. Dr. Wade is a Six Sigma Black Belt.

 

Successful Companies Employ Reverse Logistics

Reverse logistics completes the business cycle in a manner that offers new value to any organization.  While current sales are important, true success comes from being able to harness sales that take place in the future. If customers buy today and are happy with their purchase, they will buy again in the future. 

Reverse logistics practices such as retrograde, refurbishment, repairs, remanufacturing and recycling all contribute to building a sustained customer relationship.

Tapping into the adage, “Sell a man a fish, and he eats for a day,” companies that sell a man on the merits and value of a specific fish market sell that man fish for the rest of his life. For that matter, companies that do this well will also be selling that man’s family fish for the rest of their lives.

An example of this is my relationship with Nike. As a runner, I have purchased a lot of Nike shoes. I might occasionally purchase another brand, but I prefer Nike.  This means that I also buy Nike shoes for my children because I know that they are reliable and last. 

Some might argue that I am just a product of clever marketing. While I cannot dispute that point fully, a brand must fulfill a need and be something with which consumers want to affiliate. Growing up, my family shopped at K-Mart a lot. When that brand faltered, we would shop elsewhere. 

Products and companies that are built to last are responsive to the customer long after a purchase. This is where reverse logistics comes into the equation.

Through the years, I have purchased Nike shoes though various retailers and they all replace defective items without question. Customers want an easy, “no questions asked” replacement when there is a problem. People expect the brand to stand behind their product.

People want a relationship, not a one-night brand. Customers expect the brand to extend that relationship to the environment, to fair labor practices, and to value that endures the test of time. Companies need to ask themselves if they seek to build a relationship or just make a sale. Building something that endures requires that reverse logistics be built into the operation.