Fit for Purpose: how to select a supplier

I’m a 2* NOB/CMAS diving instructor (the so called ‘ long way’) and my son is a PADI Open water and Advanced diver (‘the short way’). Diving is in the family and we planned to go on a two-week diving vacation to Zakynthos, which is known for its sea turtles that are hard to find in the rest of Europe. Also, the weather in Greece is nice and it has an excellent business case when it comes to cooking (mainly going to restaurants and near to none self-cooking). Anyway, that aside. The following question then came forth: which diving school will we go to in those two weeks. This is a typical Fit for Purpose question and the Anderson MacGyver selection approach for IT market services could also be applicable to select a supplier of scuba diving services. Let me tell you about our findings.

Working from the Anderson MacGyver approach, the first two questions are: (1) Are we dealing with a ‘Specific’ or a ‘Generic’ activity and (2) do we steer towards cost efficiency or value add. Concerning the first question (specific versus generic), that question is easy to answer: in our case this is typically generic, the standard offer in the market suffices: arrange the diving gear, organize transport to the diving location and ensure competent guidance.

The answer to the question ‘Does this add value to the customer or not’ is a bit more nuanced. Diving schools can be found all over the world, often ‘PADI-based’, with the same type of services. In the first instance, you would think of ‘commodity’. On the other hand, even though the ‘vendor’ is often the same organization (PADI), the manner in which a diving school (the implementation partner) incorporates this can make a rather large distinction. How well-educated is its personnel, how tight is it internally organized, how well-willing is it towards the demands of its customers? From that point of view and in the awareness that you as a customer are still seeking for added value, especially during a holiday, the qualification ‘Value Add’ is the most obvious qualification.

Phase 1: Scoping: Determine supplier criteria and service requirements

We established in advance the following demands in accordance to the MoSCoW principle:

• Must have: a double dive in the morning, so that there is time for other activities in the afternoon (exploring the island, hiring a boat, etc.)
• Should have: a sufficient number of dive sites, twelve days of diving and at least two dives a day would imply a minimum of 24 dives, so variation must be sufficient. In particular diving schools that offer wreck dives will score high
• Could have: Facilities, with the smaller diving schools it will be cramming to get on a zodiac or a small boat, while the larger – and normally better organized – diving schools often have bigger boats with more space and comfort.
• Could have: Material, bringing your own equipment is – in terms of extra payment for luggage with airline companies – often more expensive than hiring. The diving school must have good material, in any case from a safety perspective, but also from a diving comfort perspective.
• Would have: English, German or Dutch speaking supervisors, A briefing that is easy to follow contributes substantially to the pleasure of diving.

In addition, pricing is a factor. Considering that the various diving schools normally do not differ that much in terms of pricing, we will first make a selection based on quality. We will talk about pricing in a later stadium.

Phase 2 Vendor & Solution qualification: determine preferred supplier

Step 1: Qualify suppliers for the short list (market scan)

As said, a diving school on Zakynthos and more precisely: in or around Laganas (because we had an apartment near there and the Caretta turtles lay their eggs on the beaches around Laganas).

A first – Google Maps – search indicated that there were five diving schools in the proximity of our apartment, three in Laganas (five-minute drive) and two in Keri (fifteen-minute drive). There was a large difference in the extent of provided information on the websites. From extensive information about the various dive sites to a little brochure with little to none relevant information. Based on this information, we made a ranking for visiting the diving schools on our long list. Reading through all the acquired information about the diving schools we noticed that all diving schools dived on the Southern point of Zakynthos. The diving schools in Keri were situated closer to this location, which could reduce some of the sailing time.

Step 2: Down select suppliers (supplier qualification)

Overall, we decided to start in Laganas and then drive further to Keri for a suppliers visit on location. With our Request for Proposal – give us a keen price for 24 dives including diving equipment – ‘in the back pocket’. Diving school 1: left a decent impression, however, the receival was more focused on business and they had some problems with giving a price indication for 24 dives. Their big boat would probably be used in the upcoming days/week, while they were currently operating a small boat, and no double dives had been organized at that moment. They had only ten dive sites. Diving school 2: welcoming a young man that needed to contact his companion for every question and could not tell anything concrete himself, eight to ten dive sites, brand-new diving equipment for hire. We got a completely uninteresting offer in terms of pricing. Diving school 3: scored good, personal and nice  welcome, transparent prices with an obvious volume advantage. However, there was no guarantee for a double dive. In other words, with a dive in the morning and one in the afternoon your whole day is filled with driving back and forth to the diving school. We headed towards Keri for participants 4 and 5. Diving school 4: was run by a German family. Good and kind welcome, broad explanation, more than sixty dive sites including day trips to the far North, three boats, each day one or two double dives and – especially when compared to the diving schools in Laganas – interesting packages in terms of pricing. At last – always complete a selection process – we visited participant number 5: No one was present to provide us with information. We did see a pricing table, that showed us that the pricing could be keener (which is information that a purchaser loves), the – wat seemed to be- diving equipment for hire looked somewhat old and worn out.

Phase 3: Selection: Determine preferred supplier based on in-depth understanding

In this phase, extensive demonstrations of the three best solutions will be executed in accordance with the selection approach. We could have easily added this step in this specific selection process by joining the two or three best scoring diving schools for a day, and then making a definitive choice. However, there was no establishment of a long commitment nor a so-called vendor lock-in. In other words, it would be possible to swap from diving school at any moment. That is the reason why we drove back five hundred meters to participant number 4, after a thorough yet short and unanimous evaluation (see table 1). Time to negotiate!

Table 1: Scores of suppliers on selection criteria

Phase 4: Contracting: Reach agreement with the preferred supplier

The guiding principle was that the choice was made primarily on quality, so the choice for the preferred supplier was evident. However, seen that in our selection process we also used a benchmark on pricing, we knew that, even though participant 4 also scored high, a competing diving school had even keener prices. The approach of the negotiation became: the quality of diving school 4, Nero Sport Diving Center, against the prices of diving school 5. This second visit we were received by Dennis Mohr, who apparently was the owner of Nero Sport. Negotiating about a Best and Final offer with the decision-maker is always a good thing. However, as said, a German diving school. Dennis gave us a tour, showed us how everything was organized (personal equipment downstairs, hired material upstairs, sufficient rinsing tanks and new material, among other things, BCDs with integrated lead – a revelation in terms of comfort!). Everything looks fine, so ‘let’s talk about the price’, provided that we chose a package with a minimum of 24 dives. That what, on beforehand, seemed to be a reasonable plan, to reduce the price with around 10-15%, yielded a friendly though ‘nonnegotiable’ Nein.

Follow-up: Implementation

Overall, my son and I had twelve amazing diving days with Dennis and his team. They fulfilled all expectations in terms of organization and employees, and even superseded some. Partly due to their self-built Neraki, the ship that was used for the double dives. You could clearly tell that the design was made by people that know the demands that divers have for a boat that is used for diving trips.

Take-aways

Clearly, the selecting of a diving school is a process with far less risks than the selection of a complex IT solution. The costs are substantially lower, the vendor lock-in is in this case zero (it is practically possible to switch to another diving school every other day) and the greatest risk is a bad vacation day (unlike being unable to invoice for months or supplying problems by an incorrect storage administration). Having said that, this blog does give some ‘take-aways’ for the selection of solutions and implementation partners

• Determine beforehand what your demands are, including the importance, before you go on the market, so that you know what you are looking for
• Use the selection to get to know suppliers in terms of knowledge, quality of the solution and cultural fit
• Certainly, with these types of standard services, ask a broad group of suppliers, in an early stage, about price indication, so to get a more realistic image of the pricing of this type of service

Note that names of the other diving schools in the selection process have been omitted, due to the partly competition-sensitive (price)information. Whoever is interested in this information can contact me