Friday, November 05, 2010

Look Who Is At The Center Of The Latest Procurement Controversy: The Girl Scouts!

Last week, the Associated Press picked up on an interesting procurement story: the Girl Scouts of the USA were seeking bids for the uniforms they currently buy from an American supplier in New Jersey. Among the four bidders invited to participate, two were from outside the USA including one from China.

The fact that an organization is evaluating all of its global sourcing options isn't exactly what I consider controversial news - outsourcing to China has been going on for decades and became mainstream practice at least 10 years ago - it has certainly gotten some attention in the media and among political leaders. US Congressman Bill Pascrell (D-NJ) wrote a passionate plea to the President of the Girl Scouts, saying that he is dismayed that the Girl Scouts "would even think of moving their business from a family-run and veteran-owned small business in New Jersey to China." Should the work be offshored, Congressman Pascrell calims that it will cost the US some 90 jobs.

Though the media and political leaders are practically characterizing the Girl Scouts' sourcing initiative as villainous, the Girl Scouts are defending their actions as "good business practices." The Girl Scouts' Vice President and General Manager of Merchandise, Barry Horowitz, was quoted as saying, "Like any manufacturer who uses fabric, we have an obligation to deliver the best value to our members and their parents. We can't know if we're doing that unless we test the market."

It's really hard to argue with that logic. However, amidst his incredulous expressions of emotion in his letter, Congressman Pascrell does actually touch on a couple of important issues.

First, he notes that he was told by the incumbent supplier, Jackie Evans, Inc., "that they have never missed a delivery deadline." He goes on to stress that lower prices may come as a trade-off for lower quality and suspect social responsibility, writing that "our American Girl Scouts could soon be wearing uniforms made abroad in part by young girls who would be deemed not old enough to work in the United States." He advises the Girl Scouts to "consider factors other than just simply the bottom line cost of production."

All very valid points and surprising coming from a politician (sorry, I'm a little bit jaded when it comes to our elected leaders). But in the Congressman's words, you will find criteria that should be considered in every supplier selection: quality and delivery performance and social responsibility right alongside cost.

The Girl Scouts claim to recognize this with Horowitz saying "We have a strict arrangement with vendors that they need to ensure that all appropriate laws are adhered to...We're very rigid about who does our work." That, I'm not convinced of. Someone from Mattel probably said the same thing prior to that big lead-painted toys scandal of a few years ago.

If the Girl Scouts select a Chinese supplier, will they conduct periodic, surprise on-site audits to confirm compliance with their supplier code of conduct? Or will they just give the supplier the rules and trust that they will be complied with like so many other organizations ill-advisedly do?

It sounds like we'll find out soon as the Girl Scouts expect to complete this sourcing process by the end of the year.

To Your Career,
Charles Dominick, SPSM
President & Chief Procurement Officer
Next Level Purchasing, Inc.
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jeff said...


Good article. I went to the Girl Scouts of America website and did a quick "environmental" search. According to the site, "In tackling ecological concerns and problems, girls believe it is everyone's responsibility—children, youth, adults and corporations alike—and everyone has a part to play." I think it is interesting that the Girl Scouts themselves are concerned about the environment, but the company would be willing to source items from China (that would have a huge carbon footprint among other issues). Not saying they can't source from China, but shouldn't they be listening to the girls? I think if they polled the parents, the parents might be willing to pay the extra to keep the jobs in the United States.

Charles Dominick, SPSM said...

Ooh! Good points, Jeff!

We'll have to wait and see how this turns out. Part of me is thinking that this is the Girl Scouts' way of keeping price pressure on the incumbent and that, if they keep the incumbent, they will get all this good PR that they are "greener" and more pro-US.