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Pawn Stars: Lessons for the Supply Chain

I find one reality TV show interesting because it actually represents reality. …At least, it's the reality that I see through the supply chain and procurement lens of Freebenchmarking.com and Component Cost Estimator as it mirrors typical purchasing negotiations.

The show is Pawn Stars , about a family-owned pawn shop in Las Vegas. In this show, there are buyers and sellers; the family buys. Where the show deviates from true reality is that this family is actually very well informed and, when they don't have the knowledge they need on an item, they seek out experts to provide them with the knowledge needed to determine a fair market price. They transact quickly, right on the spot.

If only corporate reality could be like reality TV!

I don't know where or when it was that I parted ways with many of my contemporaries on supply chain thinking. If we are aligned on philosophy, it certainly appears that we are not on urgency.

Smarter than they look: Procurement professionals could learn a thing or two  from shows like Pawn Stars, where they know how learn what they don't know.

Smarter than they look: Procurement professionals could learn a thing or two
from shows like Pawn Stars , where they know how learn what they don't know.

Here are some of my views:

Companies are in an increasingly competitive environment. Survival demands differentiation, customer appreciated value creation, and cost effectiveness. Too many Western companies are struggling.

Fast movers
Small companies act quickly because they have to. They must have an efficient cash-to-cash cycle and, with each cycle, they must learn and improve. Large companies have relatively huge cash reserves, which takes the urgency out of performance improvement. They can take years to do what small companies can accomplish in weeks.

Inaction is often justified by pseudo-intellectual arguments that just don't stand up under close scrutiny, using real data.

Some decision makers in large companies have lost sight of the value of a dollar; not when it comes to their personal money, but with the company's. I don't know how many times I have seen huge cost reductions delayed for no good reason. Saving $100,000 is equivalent to saving a job, maybe two. Even if $100,000 is within the rounding of a financial statement, it's still $100,000 — and many of these add up!

Compare what you see on Pawn Stars to what happens within your company. How does your company behave? How do you behave?

Oh yeah, one final point: The family members in Pawn Stars appear to be decent, friendly guys. No arrogance or supplier abuse. Pawn Stars is actually a pretty good role model for business.

2 comments on “Pawn Stars: Lessons for the Supply Chain

  1. FLYINGSCOT
    March 6, 2013

    The Pawn Star show sounds pretty cool but we don't get it in the UK.  Maybe that is why our industry has been decimated over the last 40 years.  I personally think one can learn all one needs to know from watching the Simsons.  It sure has put my kids in great stead to become stand up young citizens.

  2. Brian Fuller
    March 6, 2013

    Ken, great insights as always… Mark Helprin wrote his second-best (IMHO) novel, 'Memoirs From Antproof Case' about a gold thief. Early in his career, though, the thief was an economic analyst for a major investment banking firm. His job was to travel the world and spend a lot of time in key countries. There, he learned what was going on from the ground level and it made for excellent intelligence that informed his company's global investment decisions. 

    It's solid tools and F:F conversation that best inform rational decisions. 

     

     

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