Communication at YLES (case study)

INTRODUCTION

The Young Leaders’ Entrepreneurial Summit (Y’LES), the flagship event of the LUMS Entrepreneurial society was four days away.  The General Secretary of LES (LUMS Entrepreneurial Society), Ozair Haseeb sat in his dorm room at 4 am, consistently calling his core team to ensure everything was on track.

He called the Director of Operations, Ahsan, for an update on the delivery of supplies.  “Ozair, we went to the procurement office today to check, they said they’re handling it and will take an update from the vendor and let us know.” Ozair looked visibly anxious, “Let us know? How? We will have to go to their office again, please go tomorrow again and check.” 

Ozair had no way to check whether the required material was according to their specifications and if the order was to be delivered on time. After months of planning, sleepless nights and sacrifices, the events success lay on the procurement department’s capabilities. Ozair had placed the order well before time, he knew how things worked here but fearful doubt still nagged at him.

“You never know with these guys… better send Ahsan again”, he thought.

Ahsan went to the procurement office for the third time within 2 days. “You’re here again? The delivery date is after 2 days, on the 18^th right? Let me call the vendor and take an update from them.” said the procurement officer.  After twenty minutes of waiting in the office, he responded, “The vendor will deliver on the 18^th as decided, nothing to worry about. I called him.”  Ahsan sighed with relief.  “That should pacify Ozair for a while!”

On went the preparations, and soon the event was just round the corner. It was the evening of January 18^th, and the supplies had not arrived yet. Ozair, trying to remain calm, contacted the procurement department again and told them that the supplies had not been delivered, and reiterated the fact that the event was just 2 days away. The procurement manager called the vendors to inquire the reason for the delay and found out that there had been a shortage of one of the items they had ordered. However, he was certain that the order will be received the next day. Ozair was not so sure.

 It was 19^th January 2014 when the order was finally delivered. As Ozair opened the boxes, he realized the tent was not of the color they had ordered originally (which were based on the color theme of their award ceremony at the end of the event) coupled with the issue that the stationary and miscellaneous items ordered were not of the brand originally mentioned.

Ozair, through no fault of his own was left visibly disappointed. He visited the procurement officer to understand what went wrong. “The order isn’t according to your requirements? Here is the email we sent to the vendor, exactly the specifications you submitted.”  Ozair, even more surprised replied “Yes, sir. The email mentions the things ordered but not the exact color of the tent or the brand of stationary ordered. Our event is tomorrow and we don’t have any time to send it back.  We explained everything to you in person.” The procurement ended the conversation by saying “Yes, and I forwarded all the specific details to the vendor over the phone, either I can inform the vendors about this issue or you can proceed with this order. Your call.”

Ozair was left helpless. What disappointed him the most was the unfortunate turn out of the tent color. The society had decided that they would end the event with a bang and would go with a color themed closing ceremony. Everything was planned to be in accordance with the green and gold theme. The tables, the décor, the lighting, even the china. It would be next to impossible to incorporate the greenish tents they now had at their disposal. This was not what he had in mind at all.

 However, with the event happening the next day, Ozair realized there was not much he could do at this point in time. He decided to keep the unsatisfactory delivery and carry on with the event. The procurement officer went ahead with the payment process for the vendor, least bothered by the disappointed faces.

“Business as usual”, said Ozair.

BACKGROUND

The Young Leaders' and Entrepreneurs' Summit is a nation-wide event hosted by Lahore University of Management Sciences (LUMS), one of the most prestigious universities of Pakistan which prides itself on Business Studies being it’s unique selling proposition. YLES is an event where participants from all over Pakistan come to share their ideas for sustainable and innovative business start-ups. Its primary aim is to bring the idea of entrepreneurship to the youth of today, and encourage them to break out of their bubble, color outside the lines, and build something new from the ground up. Through this summit, ideas which have the potential flourish into successful business ventures are recognized and rewarded.

The process of procuring any item by the student run societies starts with the submission of indent forms to Mr. Ali Shah at the office of extracurricular activities (Refer to Exhibit C). The indent form consists of the items to be procured and their costs. He approves the indent and sends a purchase requisition to the procurement. A Purchase Requisition (PR) number is then issued to the societies. The society then contacts the Procurement department, regarding the requirements, a considerable time prior to the event itself, for large, flagship events this is usually 2 to three months. As soon as the procurement department receives the purchase requisition, they contact their external vendors (RFQ), who give the department various sales offers. The department chooses the vendors that provides the requirements at the lowest price in the lowest time without compromising on quality. Each member of the department deals with different audience. For the student-run societies, it is Mr. Waqar. After choosing the vendors, Mr. Ateeq-ur-Rehman at the office of extracurricular activities issues the societies a Service Inquisition Request (SIR) form. The department receives the products from the vendors and stores them in the a warehouse behind the School of Science and Engineering, where the inspection report is generated and forwarded to the user through SAP. All the transactions done are system generated via this software. The end user verifies the inspection report after inspecting the product. After the product is verified, the GRN (good receipt note) is generated. The vendor then sends the invoice which is sent to the finance department for the payment process. The payment is made through the finance department. Procurement department gets the intimation that check has been delivered to the vendor and the process gets completed from PR to GRN. This process is summarized in Exhibit A.

Ozair was not the only one dealing with the procurement department. The department plays an integral role in ensuring that supplies, equipment and services are available for all the departments and societies at LUMS.  The department has a list of approved vendors it is responsible for dealing with. However, like in the case of Y’LES, things rarely go as planned.

Y’LES was a three day event where participants from all over Pakistan participated. In order to execute such a large scale event, several supplies were required and a request was placed 2 months before the event was to occur. Despite the organizing team’s excessive work and diligence, there were apparent issues of miscommunication in placing the order.

THE CORE ISSUE

The extensive process and the long chain of command in communicating a decision is perhaps one of the primary reasons behind the problems Ozair and his team faced. When a purchase order is made, it is required to be first signed by the purchase officer, the deputy manager and then the Head of the procurement Department. With the various chains of command in place, the time needed for a request to be processed is extensively increased.  This results in unnecessary delays, as the team’s regular visits and frequent emails (Exhibit D) to the procurement department prove. Refer to Exhibit B for the communication hierarchy.

The issue of communicating with the extra-curricular activities department initially and waiting for them to forward their response to the procurement department is an immensely frustrating and unreliable process.  The LES team had to repeatedly visit the procurement office after they submitted a request, in order for the procurement officers to pay attention to them. The long chain of communication results in a process of “Chinese whispers” where messages may be subjected to distortions and delays. In a nutshell, this is a huge barrier to effective communication.

What concerned Ozair the most was how the sponsors would react to this. The main sponsor for the event was Mountain Dew, who had requested the green and gold theme. The red tents were horribly clashing with the rest of the décor, and Ozair knew they were not going to be happy about this. They had been extremely specific about the type of promotion they required YLES to do for them. He shuddered, thinking about the long term impact of this. Will other sponsors back out from our future events? Will our reputation be affected by this? To some, it was simply a difference of color or the shortage of a few miscellaneous items. But Ozair knew what it meant to the stakeholders involved in the event. This is not what they signed up for. Moreover, what about the participants, who were one of the primary stakeholders in this situation? Lastly, Ozair also wondered how the procurement department could implement a software without training their employees. Something wasn’t right.

PROCEDURES OVER COMMUNICATION

The deputy manager for the procurement department, Mr. Muhammad Iqbal, points out that the type of work they do is more “technical”. Technical mechanisms therefore play a much greater role than communication. The focus of their operations is mainly on policies and procedures for procurement of particular items rather than on communicating, be it internally or externally, to the vendors and the end users such as other departments or societies of LUMS.

The issue of the long chain of communication and the inertia it produces is sidelined.  Their deputy manager admits that the use of emails has been encouraged as a form of communication, despite the fact that vendors are sometimes unable to effectively decode instructions through emails, and thus require personal calls or in person meetings. But he believes that emails are important in retaining evidence of a conversation taking place, filing a record of instructions given and thus, it supersedes other forms of communication.

This tedious process thus reinforces red tape and procedural emphasis, and has hijacked personal relationship building, with a reduction in personal meetings and phone calls, occurring within the procurement department.

BROKEN TRIANGLE OF COMMUNICATION

Currently, with the dense structure of communication channels established by them, the procurement department believes it is equipped to deal with the vendors directly and the role of the end users in forming a triangle of communication with the vendor and the procurement department is undermined.

There was no mechanism in place for Ozair to directly communicate with the vendor and explain his requirements as the procurement department played the middle-man in communicating these specificities which did not end well for the society.

The focus on improvement as their deputy manager points out is based on, “…working on our weaknesses and trying to fill the gaps in communication between the vendors and the procurement department.” There is little emphasis on completing a network of communication between the three parties involved. This can be shown in Exhibit E.

PROCUREMENT AND THE ECA (Extra-Curricular Activities Department)

There are designated members of the procurement department for dealing with each department at LUMS. However, just like Ozair and his team, for student societies at LUMS to proceed with the procurement process, they must submit a request through the ECA department.

The ECA works under the Office of Student Affairs, and maintains a weak communication link with the procurement department. With a weak follow up mechanism in place, the procurement department struggles to deal with the inflow of individual requests coming in. Communication with these students is done on an individual basis, rather than through an official channel.  This leads to delays and miscommunication.

ERP SOFTWARE

The ERP software does not keep a record of quality of the product ordered as well as the time the vendor took to deliver it. As seen in Ozair’s case, the quality of the products ordered was not up to the mark mainly nor was the color of the tent equivalent to what was ordered. This lack of quality, accuracy and time delay is not specifically configured by this software, hence making it difficult for the management to assess and select new vendors accordingly.

More importantly, when the ERP software was installed last year, the employees were not given any training on how to operate it. Without sufficient training and knowledge on how to use the software, the employees had no option but to either avoid using it, or to learn themselves. Most of the work was hence still being done manually. This lead to inefficiency in running the software along with the increasing risks of mistakes while operating it. The software has the ability to combine all of the data of the order thus making it easier for the management to keep a record of the order placed and the processes done. But unfortunately, maximum benefit from this system could not be reaped.

When asked, Muhammad Iqbal stated on this issue “The ERP software is just an identification of the process that has been completed. The quality assurance of the order is made by the students themselves, who are placing and receiving the order, via the good receipt note”. However, due to the long process of communication and the extent of burden on the society’s president to plan, organize and run the event, the concept of good receipt note does not happen practically. Even if there is a gap in the product quality, the end user compromises with it because the product is usually delivered at the end date and they are unable to take the risk to send the products back and ask for a replacement as it would take time.

CONTINGENCY PLAN

The procurement department does not have a contingency plan in place in case there is an error made during the process of procurement. The long chain of command ensures that errors are made during communication, and products are not made according to exact specifications. However, the only route to make the correction is through returning the products, which is a time consuming process. 

CONCLUSION

A vicious cycle of stagnation resides, where the complex communication channels continually ensure that the process for change is ineffective within the department. Even simple changes in procedures or standard operations need to be approved through various channels as well, and the inertia continues to survive. Ozair had no choice but to try and put the disappointment behind him, and do his best to make sure nothing else goes wrong. The show must go on.