Email Jim at jim.thompson@ipulpmedia.com

Procurement is an area often talked about with a "wink-wink" and a "nod-nod." Early in my career, my little team was charged with certifying new valves and other components going into piping systems. We worked at a very large company which bought millions of dollars a year of these items. We were not in the purchasing or procurement department; we were in engineering. But we were the gate keepers in getting such appurtenances on the approved bidder list.

Sometime later, after we had all moved on to other assignments, I found that one of my direct reports had accepted tickets (from a vendor trying to get in) to Cincinnati Reds ball games. This was in the era of the "Big Red Machine" in the 1970's, when such tickets were not available at any price. This was an absolute no-no. Had I known about it when it happened, my job would have been to terminate him.

Other places I have worked looked the other way. Engineering departments are always the target of suppliers wishing to stay in good graces at the mill. I have seen (I wasn't overall in charge) engineering managers hauling out a year's worth of hard liquor, compliments of suppliers, at Christmas time.

In one case, coming from overseas, we had a delivery of dryer cans in our total order. My boss was told which dryer can was full of cases of wine. He got a couple of skinny guys to go in that dryer, while it was sitting in the yard, and unload it.

Now you may say, "Such incidents would not change the buying decision." And you would likely be correct.

But where did the money come from to buy such favors? It came from your employer. Yes, perhaps indirectly, but these suppliers have no other source of funds other than your employer or your employer's competitors. So, accepting such gifts is violating your fiduciary duty.

You laugh, you say everybody's doing this.

In my neighborhood, there was a Sonic Drive In Restaurant. Busy street, nationally recognized brand, good food for its genre. It went out of business. Why? Rumor has it the franchisee was hiring teenagers, and they were giving away the food to their friends. Why he or she did not have cameras covering the facility, I have no idea. And perhaps the rumor is false, but I talked to some teenagers in our neighborhood, so that was my source.

If true, the employees were not being held to high standards for their fiduciary responsibility. For not only did they cause their employer financial hardship, but they also destroyed a source of teenager jobs.

And that really wasn't a procurement case--it was on the sales end of the business. But it was a complete lack of fiduciary responsibility.

You will find the words "procurement" and "fiduciary" are hand in glove.

Be safe and we will talk next week.

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