Pareto Purchasing

As I sit here the day after Christmas, I have much to be thankful for.  Often this means going through all the stuff that has accumulated in my memory banks, databases, family archives and images.  When it comes to having a family business for over 20 years… you realize that you must take a stand on things, govern your borders and those that are responsible for enforcing peace within those borders, and always look for expansion… and the buck always stops with the king.  And unless the king understands what is happening outside of his “house”… he could be losing everything he had right under his nose. For many of us, this happens on a regular basis.  Wisdom in leading people is never easy, but in time, worth it’s weight in “gold”.

Fortunately, I had a few kicks and a couple of 2 x 4s to the head and I got wise.  And so when it came time for me to answer a few questions about what is important to not just about my business (but the general populace as well), I found that while people love service, only some are willing to pay for it.  This is just human nature.  And if was true, then there needs to be a priority standard set forth, otherwise things go south, and no one respects a business that isn’t profitable.  Besides… service is not what people actually want.  We say this, but it is not true.

Pareto efficiency is a minimal notion of efficiency and does not necessarily result in a socially desirable distribution of resources: it makes no statement about equality, or the overall well-being of a society.  Many understand this as the 80-20 rule. It is all about weaknesses and constraints; 80% of the effects come from 20% of the causes.  So for the purchasing kings of state…understanding Pareto Purchasing is important,  and means that optimizing 20% of the work, gear, knowledge, etc… will give you 80% of what you are needing to see as results.

So if you are using an MA system, will 20% of that system get you 80% of the effects you need?  It should.  If you are doing a gear cache list and you were to properly identify what your most important pieces of gear are… you are in for a huge awakening!  And friends, this will be good for all sorts of reasons.  Why?  Because you having been asking the wrong questions.  I will get into this in future posts, podcasts and video training modules. But for now, you should start from the basics.

I love the quote from Princess Bride “what I wouldn’t give for a holocaust cloak”…  (for those who have seen the movie), the other two are looking at obviously being outnumbered and about to be slaughtered.  However, one who understands what constraints are and how they are meant to “turn ashes to joy”… constraints remove barriers of growth by removing elements of needlessness and this would be 80% of what you likely are thinking are.. “musts”.  And I am here to say… “Dream On”.  Good things are about to happen.

skyhook-winch-7When we opened up our testing site for the “kiosk idea”… It was originally met with confusion and even frustration. Why?  Because we ourselves didn’t complete our own evaluation of what we knew was true but couldn’t prove at the time.  Thus, the results were inconclusive because we left out parts of the 20% out.  We are working at completing this and we are seeing great results.  A massive acceptance of a limited choice, favorable terms and service. And… saving a ton people a ton of time, which in turn, saves us a ton of time.  Are there holes… way to many at this point, but Rome wasn’t built in a day, but it was torn down quicker than it was built.  Huge shifts can build and destroy equally or worse.

So I want bring  a few things into mind for the purchasing gurus in the making…

  1. What is the goal of gear cache?
  2. Analyze the team’s training and effective knowledge base and determine assets.
  3. Once assets are understood, remove 80% of it.
  4. What you are left with will be what produces the “bull-work” of your team.
  5. Once the bull-work is understood and agreed upon, what remains are challenges to accomplish your goals…Why?
  6. Because your goals are likely not being accomplished in the manner that it should be and your goals probably aren’t really your goals.

I want to leave you with this information to chew on for a bit.  Jot some thoughts down and feel free to toss them to info@rescueresponse.com.  In the next few installments, I want to break some of this down for one main purpose… To increase the ROI of your team and your personal accountability to the group you work with and or for.

 

Peace

 

Lance

 

Lance Piatt is CEO of Rescue Response Gear Inc. His other ventures include Rigging Lab Academy Inc., Raven Collective Media and Trails 2 The Sea.

 

 

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