September 1998

Instrumentalising Procurement – Congo in trouble

Instumentalising Procurement

Procurement in business life is an important part of running a successfull company. It will partly decide the profitability of the operation. The results of procurement will have a dominating effect on the balance sheet. Procurement is however more than just squeezing the best price out of every deal. It has also to do with expectations, conditions, timing, quality and reliability.

The procurement department has to meet the demands which are set by the production, management and controlling departments. This complicated task should be organised in such a manner that every procurement process can be handled with the greatest efficiency and efficacy as possible.

The procurement process should follow a step by step approach to fullfill all demands as much as possible. After that the actual decision can be made which product is to be bought. Procurement has to be instrumentalised to make the decision process an automatic process which should be run without to much human interference.

A decision tree model could be an example how to instrumentalise procurement.

The decision tree model

The decision tree model is an approach to simplify procurement. Every procurement has a reason. The procurement has to fullfill a demand in a company. The object of procurement has to do a job. This can be a very basic job as paper to write on or a machine for the production of goods. The procurement of paper could be a straight forward process where to main decision factor is the price. The other factors like the quality, thickness, print on the stationary are more or less inflexible because they are standardized. The abundance of sources make the decision therefore relativily easy. The procurement of the machine is however more demanding because of its specific nature, e.g. the complicating and often ambigious influences which turn up in the procurement process.

On both mentioned examples the decision tree model is applicable. It will however show its usefullness on the more difficult procurement decisions in a company.

The decision tree model is a five tier model, A, B, C, D and E, and each tier lists a number of conditions and questions. The object in question must meet the conditions or must answer the questions listed as much as possible. Each of those tiers have a value, for example 1 to 5, and the product which receives the most points in the first four tiers should be evaluated in the fifth tier. The results of the first, A, and the second, B, tier should thereby have an equal or higher value than the third, C, and fourth, D, tier. This to support their importance in the equation. The mathematical model, in a simplified manner will look like this (A+B+C+D)*2 + E*5 = X.

X is the value of the most promising product.

The general decision tree model that could support you in buying a object could look like as described here after. Remember that some conditions and answers could be listed by other tiers as well but this will increase the usefullness of the model. All conditions have more or less effect on the use of the object and the financial implications of acquiring and operating the object.

Tier A is about the Capability, the conditions which are to be met:

A1 Performance of the object, with performance you should think about:

A1.1 The production capacity.

A1.2 The production efficiency.

A1.3 The product quality.

A1.4 The product diversity.

A1.5 The time needed to change from one product to another one.

A1.6 Simulation/recording application, e.g. to test the object and to check it if their is production malfunction.

A2 The life expectancy, economical and technological, of the object.

A3 Human engineering, the construction of the object, this can be divided into:

A3.1 The ergonomics.

A3.2 The display.

A3.3 The control.

Tier B is about the Availability, the conditions which are to be met:

B1 Reliability of the object, with reliability you should think about:

B1.1 The reliability specifications.

B1.2 The environmental suitability.

B1.3 The ability to meet the reliability specifications.

B2 Maintainability of the object:

B2.1 The maintainability specifications.

B2.2 The existence of BIT, Build In Test equipment.

B2.3 The ease of maintenance.

B3 Sustainability of the object:

B3.1 The commonality with other systems in use.

B3.2 The local maintenance possibilities.

B3.3 The number of sources to procure systems.

B3.4 The in house full support capability.

Tier C is about the Growth potential of the object, the conditions which are to be met:

C1 The ease of upgrade.

C2 The impact on the system if upgraded.

Tier D is about the Risk with the object, the conditions which are to be met:

D1 The capabilities of the company which delivers the object and the after service record of the company.

D2 The position of the company, e.g. the financial position of the company and the technological and market position of the company in the economy/market.

D3 The development status of the object, is it a new product, is it well placed in the market or is it a running out model.

D4 The question of system integration, as products get larger, more complicated and to minimise production costs a lot of products are developed by a company and the parts are from other companies. What is the position and experience of the company in that line of business.

And finally tier E, tier E is about the price of the object. This last tier will be very often the decisive factor if at least the minimum standards of the previous tiers are met. The conditions of tier E which are to be met:

E1 The price of the object.

E2 The methods of payment.

E3 The currency in which the object has to be paid.

E4 The warranty on the object.

This general description of the decision tree model will help to instrumentalise the procurement of products in a company or organisation. It will deliver a clear view of the competing products which might be offered to satisfy a need of the company. Additionally companies will be forced to offer the best they have at the best price, otherways they simply will be eliminated in the selection process.

The decision tree model will not eliminate the human factor in the decision process but it is meant to support the procurement manager in the decision process.

Congo in trouble

Congo, or former Zaïre, has fallen victim of another civil war. The victor, Laurent Desire Kabila, of the former civil war which ejected Mobuto out of power has fallen victim to the same problems faced by his predecessor. The ethnic diversity, the lack of economic progress, the nepotism and the threat of discrimination led the country in another civil war.

In an effort to regain more support in Congo, Kabila played the ethnic card and tried to eliminate the Tutsi influence in Congolese politics. The Banyamulenge, Congolese Tutsis of Rwandan descent, were afraid to be discriminated again and resisted the orders of Kabila and started an armed resistance against the regime of Kabila in Kinshasa.

The Banyamulenge received support from their brothers in Rwanda and from Uganda. Rwanda and Uganda supported the Banyamulenge not only because of their close relations but especially because of the existence of anti Rwanda and Uganda forces in East Congo. This collection of forces, the Rwandan Hutu Interhamwe movement and the anti Uganda movements of the Allied Democratic Forces, some men of the last year defeated West Bank Nile Front and a local moslem movement out of the Ruwenzori mountains. All those movements operate out of Congo to spread terror in respectivily Rwanda and Uganda. If the Tutsi influence in Congo would be destroyed those forces would get a free hand to operate against Rwanda and Uganda.

The military operations

The battle hardened Tutsi forces with the support of Rwandan and Ugandan forces could relativily easy expel the Congolese forces out of the East of Congo. They have taken over control of the provinces of Kivu, a part of Shaba and a part of upper Zaire province including the largest city Kisangani. The rebel forces even staged a operation in the west of Congo. In the west they could conquer all important places like the harbours, oilfields and the energy powerplant in Matadi. Kabila was because of this daring assault pushed into a corner and close to be check mate.

The Congolese forces of Kabila could not stop the rebel forces. The rebel forces were closing in on Kinshasa. Kabila moved to his home town in the province of Shaba. Congo was on the verge of breaking apart. If Kabila would fall, he would most probably declare Shaba independent. The Banyamelunge, their Rwandan and Ugandan Allies could live with a desintegrated Congo. The call for a cease fire was there fore an acceptable proposition for the rebel forces. They had nothing to loose only to win.

Kabila called for help from the neighbouring countries which are all members of the South African Development Community. The largest member South Africa called for a cease fire and a diplomatic solution. Angola and Zimbabwe on the other hand were willing to interfere and support Kabila. Especially Angola was willing to support Kabila. Angola needs a strong and unified Congo which can suppress the diamond trade of the Unita in Congo. This would cut of the Unita of its main source of income. The Angolan forces could than try to defeat the Unita which still controls about two-thirds of Angola. But this is another story.

Zimbabwe sended commando forces of around 500-600 men with some air support which pushed back the rebel forces from Kinshasa. At the same time Angolan forces moved into Congo out of the Angolan enclave of Cabinda. Angola is after South Africa the strongest military power in the sub Saharan region. The Angolan forces pushed back the rebel forces from the seaboard. The rebel forces are there after trapped between two powerfull forces. With the loss of the Kitona air base they even lost their logistic support out of the East, Rwanda. But because of the lack of a credible air force the possesion of Kitona was irrelevant because the Angolan air dominance would have wiped out the Rwandan transport aircraft.

The demise of the western front of the rebels is just a matter of time. They do not have a chance against the superior forces of Angola, Zimbabwe and the Congolese army. The integrity of Congo seems to be saved by the intervention of Angola and Zimbabwe.

The position of the rebel forces in the East, with the support of Rwanda and Uganda, looks a lot better. The Congolese forces do not have the power to eject them out of the occupied provinces. And Angola and Zimbabwe are probably not willing to get to deep involved in the conflict. Some air support and logistic support will be possible but probably not use of the ground forces. The rebel forces do have the additional advantage that they can simply pull back in the dense jungle and wait for the Congolese to come. This battle in the jungle and far away form their logistic bases could prove to be to much for the still young and relativily inexperienced Congolese forces

The future

A diplomatic solution will be most likely in the future if the threat in the west of Congo is eliminated. The problems in the east would seem to be insoluble by military force. The Congolese and Banyamulenge rebels are both not strong enough to force one side into an understanding. The outside support both groups are receiving is not enough to move the scale into one direction. The Rwandan and Ugandan support is to little as is the Zimbabwan support. The Angolan forces are on the other hand most likely not willing to move that deep into Congo. They have enough problems of their own in Angola. The operations in Congo were largely out of self interest.

The dissolution of Congo has been prevented but the rebel force has become a power factor to be reckoned with. Everything what has to happen within the territory they hold has to be arranged to get their consent. If a solution is to be reached they will play a major role. Congo will probably move slowly to a more decentralised state as more regions with a large ethnic group will claim the same rights as the Banyamulenge have been given or better have fought for.

It is time that the many peoples of Congo start building their own nation. Not the old Congo were the people in power divide the profits among themselves but use the wealth of the country for all Congolese.