The Olympics are not only a global sports event but also a colossal logistical and procurement challenge. For the Paris 2024 Olympics, efficient procurement will be crucial to ensure that everything from construction to logistics is delivered on time and within budget.
In this blog, we’re delving into the importance of procurement for the Paris 2024 Games, highlighting key aspects of the procurement strategy necessary to achieve a successful event.
Why procurement is so important for the Paris 2024 Olympic Games
Procurement will play a pivotal role in the successful delivery of the Paris 2024 Olympics. The sheer scale and complexity of the event means that meticulous planning and execution is crucial. Effective procurement is required to ensure that all required goods and services are sourced efficiently, delivered on time, and within the allocated budget. Furthermore, procurement will play a part in contributing to the sustainability goals and ensuring compliance with local regulations.
With the eyes of the world on Paris, any delays or budget overruns could not only tarnish the reputation of the organisers, but also impact the overall success of the Games. Therefore, procurement strategies must be robust, flexible, and proactive in order to anticipate and mitigate potential risks.
Key Elements of the Procurement Strategy for Paris 2024
1. Sourcing items with fixed delivery dates
The Olympics operate on a non-negotiable timeline, making punctuality in deliveries absolutely critical. This means:
- Strict Supplier Contracts: Suppliers must adhere to stringent delivery schedules with penalties for delays.
- Reliable Partners: Working with suppliers who have a proven track record in delivering large-scale projects on time.
- Contingency Planning: Having backup suppliers and alternative plans in place to mitigate risks of delays.
2. Advanced planning to beat competition and hit deadlines
To meet the demanding schedule of the Olympics, procurement projects must be planned well in advance:
- Early Engagement: Engaging with suppliers and contractors early to secure the best terms and ensure availability.
- Competitive Bidding: Conducting thorough tender processes to select the most capable and cost-effective suppliers.
Timeline Management: Developing detailed project timelines that outline key milestones and deadlines.
Supply chain management
Of course, as ever in procurement, supply chain management is crucial to achieving success in points 1 and 2 above.
We can take away key learnings from the supply chain management strategy used by procurement teams to deliver the London 2012 Olympics:
“The London 2012 construction programme represented over 100 tier 1 construction and engineering contracts, each of which was contested at tender stage by similar supply chains. This introduced the risk of ODA engaging with the same supply chain on several contracts and exceeding its capacity.
Understanding where an appetite for multiple projects existed in the market and the impact of an award of more than one contract to any one supply chain was fundamental in controlling delivery and managing this risk. This was achieved by mapping the potential supply chains for each of the contracts on disparate projects, and assessing their delivery capacities in the event of multiple contract awards, to ensure that over-utilisation did not cause delivery inefficiencies.
Post-contract, all critical supply chains – where delay could affect any other aspect of the programme – were identified, along with individual contractors within those critical supply chains, and mapped. Key indicators of these critical suppliers’ financial stability, such as net worth, payment patterns and other appropriate financial indicators were monitored on a daily basis. Where concerns were raised, tier 1 contractors’ procurement teams were advised either to consider removing or replacing suppliers from a bid list if in the procurement stage and take suitable additional assurances to protect contract delivery, such as parent company guarantees or vesting certificates, and establish alternative supply arrangements.
During construction, the rate of insolvency for construction sector organisations in the UK peaked at more than 10 per day, yet in a supply chain of over 1000 critical supply organisations that were monitored; only a handful went into administration or defaulted on delivery with negligible impact to the programme. This was testament to the initial financial scrutiny undertaken in the procurement stage and subsequent information gathering and management.
The depth of information gathered on each tier of the supply chains also presented an opportunity to integrate the supply chains horizontally across projects and achieve efficiency via aggregated demand at a programme level. For example, common components, such as street lighting and balustrading, could be centrally sourced to maximise leverage.”
3. Logistics: Navigating Paris road systems, rules, and regulations
The logistics of delivering goods and services in a city as busy and complex as Paris require meticulous planning:
- Traffic Management: Understanding and planning around Paris’s traffic patterns to ensure timely deliveries.
- Regulatory Compliance: Ensuring all logistics operations comply with local laws and regulations.
- Environmental, Social, and Governance (ESG) Considerations: Prioritising sustainable logistics solutions that minimise environmental impact and align with the event’s sustainability goals.
4. Construction or refurbishment of facilities and Olympic Villages
Building and refurbishing the infrastructure necessary for the Games is a massive undertaking:
- Project Management: Employing robust project management practices to oversee the construction projects.
- Quality Control: Ensuring high standards of quality in all construction work to meet the requirements of the Games.
- Timely Execution: Synchronising construction schedules with procurement timelines to ensure all facilities are ready well before the event.
5. Coming in on time and in budget
Achieving cost and time efficiency is paramount for the success of the Paris 2024 Olympics. To achieve this, procurement teams must consider:
- Budget Control: Implementing strict budget controls and monitoring expenditures closely to avoid cost overruns.
- Efficient Resource Allocation: Optimising the use of resources to prevent wastage and ensure every penny is well spent.
- Regular Audits: Conducting regular audits and reviews to ensure that the procurement process remains on track and within budget.
A procurement consultancy perspective on the Paris 2024 Olympics
The Paris 2024 Olympics present a unique and formidable procurement challenge. Coming in on time and on budget is not just a goal but a necessity, but with the right strategies in place, it is achievable. Effective procurement will be the backbone of the Paris 2024 Olympics, ensuring that the event runs smoothly.