Baseball and Procurement: More in Common Than You Think
“Tis the season. Post-season play continues for Major League (MLB) baseball as the final two teams have advanced and begun play in the World Series, the annual championship round of games endearingly referred to as the Fall Classic.
While MLB doesn’t boast a lengthy history comparable to that of procurement process execution (1869 vs. almost forever) they nonetheless share several essential process components. Three that readily come to mind are sourcing, data analytics and risk management. In fact, last year’s MLB Diversity Business Summit – the premier sports employment conference and supplier diversity trade fair- provided a wide range of
procurement opportunities, not including the actual sourcing of their “core” commodity: the major league players themselves.
Procuring core commodities is critical to any business. High quality baseball players are absolutely essential for competitive advantage, especially during the Fall Classic.
Baseball’s sources of supply
According to a recent piece in The Wall Street Journal, “The overwhelming majority of major-league players come from one of two distinct pipelines. One is in Latin America, where an ingrained baseball culture coupled with rich signing bonuses serve as a magnet. The other is the American travel baseball circuit, in which parents pay thousands of dollars for children—nearly all of them white—to play year-round schedules in pursuit of a scholarship.”
Imagine the number of “procurement scouts” required to cover two continents.
Once the teams are staffed, with 25 to 40 men on the roster, it is time to play, and perform, well. As in procurement, data analytics enters into play. The greatest example of leveraging data, and addressed in one of our earlier blogs, was outlined in Michael Lewis’s 2003 business best seller, Moneyball: The Art of Winning an Unfair Game. He recounts how the manager of one of baseball’s infamous underdog teams, the Oakland Athletics, leveraged baseball statistics and data to determine player recruitment. By simply shifting reliance from a player’s hitting record to their on-base percentage, the game was transformed forever.
Increasingly, data analytics are crucial to every day play. According to a July copy of BizTech magazine, “Every major league team has developed an analytics department over the past several years, but some more than others are pushing the envelope in using the technology.
The accompanying graphic illustrates the escalating use of analytics in MLB over the last few years…and the premium teams are willing to pay for “statheads.”
Similarly, innovative analysis of sourcing, spending data and supplier info – when collected and analyzed – gives an organization a competitive edge.
Yet, risk remains.
There is a fine balance between taking too much or not enough risk. Insufficient willingness to take risk in prospects may leave a team in short supply of future star players. Conversely, taking excess risk may deliver an inflated team payroll yielding disappointing results. Data analytics have proven to mitigate this risk.
Likewise, in contractor services procurement. Tracking and measuring a contractor’s performance and skill set, coupled with an executable feedback loop, provides an organization with a decision-making process. Will the tardy contractor be hired for future engagements? Will the error prone fielder be signed to a new contract?
If cutting-edge technology and innovative business processes are not part of your procurement organization SDI can help. SDI is uniquely positioned to bring process improvements that will enable your business to go further than it has gone before.