Olympic Procurement: Past, Present and Future
For countries that host the Olympics, the procurement of goods and services has always been an important part of the planning and execution of the Games. Because the organization of the Olympics involves complex arrangements of different sports - all of which require specialized facilities - and the hosting of teams of athletes from around the world, there are many different areas of procurement that Olympic administrators must handle in the lead up to, during, and after the Games. These include the building and renovation of sporting facilities and the sourcing of maintenance and grounds keeping, sanitation, food service, transportation and construction equipment, recreation and residential facilities, healthcare services, legal and administrative support and much more.
In recent years, Olympic procurement strategy has incorporated a new emphasis on sustainability, ethical purchasing and local sourcing; these concepts are now considered by planners at the highest level and integrated with the overall procurement strategy from the very beginning, no matter which country is hosting the Olympics. In this report we will look at the procurement operations of Olympic host cities from more than fifty years ago up to the present day, to see how the procurement processes for such complex international events have changed -- and, in some cases, have stayed the same.
Looking Back: Tokyo 1964
In 1964, the City of Tokyo hosted the Olympics for the first time. The managers of Tokyo had never hosted a series of events at the scale of the Olympic Games before, so the procurement process was entirely new and had to be adapted to on-the-ground realities as needed.
One example of this flexible procurement and operations strategy was demonstrated in how food service and facilities requirements were handled. Once the Olympic committee realized that hiring a legion of independent contractors to handle everything from food preparation to construction of facilities would be too complex from a logistics perspective, they asked the Japan Hotel Association organization for their expert assistance to meet the dining needs of thousands of attendees, athletes and foreign dignitaries. The JHA agreed to the massive job and took on responsibility for preparing all food and beverages during the Games; procuring, transporting and safely storing all supplies related to food preparation; hiring, training, managing and paying all food-service employees; and procuring the hospitality items needed to provide a comfortable eating experience for thousands.
Published accounts from the time describe the work of the JHA during the Games as impeccable. In addition to the responsibilities described above, the JHA oversaw the construction of two massive dining halls, designed an efficient meal-coupon service to streamline the distribution process, and created an astonishingly accommodating international menu with traditional dishes from every country represented at the Games offered to visiting athletes, diplomats and guests.
Vancouver 2010: A New Model for Olympic Purchasing
Sandra Hamilton was business manager to John Furlong, CEO of the Vancouver 2010 Olympic and Paralympic Winter Games. She says that the Vancouver 2010 Olympics were "a catalyst for social procurement; the first Olympic Games to include social considerations in their sustainability strategy."
As an example, Hamilton describes how the contract to supply flowers for the Games required that the winning vendor include a specific benefit for the local community in their business plan. To meet this requirement, the winning vendor hired and trained marginalized women, including several who had been incarcerated, to help with the flower arrangement and distribution process. As well, young people who were considered to be at-risk were employed in entry-level positions to learn carpentry and help build the Olympic podiums; construction contractors also provided jobs for low-income persons living in some of Vancouver's most impoverished neighborhoods.
The inclusion of social objectives as part of procurement strategy in Vancouver was just the first step towards the development of a sustainable sourcing policy for all Olympic events. Two years later, London's Olympic Games also took pains to ensure that social and ethical objectives were included as part of their overall procurement plan.
Sochi 2014 and Sustainable Sourcing
For the 2014 Olympics held in Sochi, Russia, the Sochi Organizing Committee worked with Reeve Consulting, a consulting group based in Vancouver, Canada to design and implement sustainable purchasing initiatives for the Games. Together, the SOC and Reeve created the Environmental and Sustainable Procurement Program, a comprehensive sourcing policy and measurement program that was put in place for Sochi.
The ESPP included 3 major elements:
- The use of metrics, measurement tools and supplier scorecards to evaluate procurement initiatives;
- The use of local sourcing networks and regional suppliers;
- And the creation of a social compliance program for producers of licensed Sochi 2014 products and merchandise.
While holding the Olympics in an environment that demanded rigid security measures presented unique challenges, the Sochi Games were considered to be a major success.
Rio 2016 Procurement
The management team for the 2016 Rio Olympic Games has designed a robust Sustainable Supply Chain Guide and Sustainability Management Plan, which together will guide all purchasing and sourcing activities conducted before, during and after the Games. The industry certifications that contractors and suppliers must possess include ISO 14001, OHSAS 18001, ISO 20121, ABNT Green Labels and FLO; respondents to Rio 2016 Olympic tenders must also respond to RFIs, provide proof of certification and create a supplier master catalogue.
According to the official website for the Rio de Janeiro 2016 Olympic and Paralympic Games, more than 30 million products will be purchased by the Olympic planning committee before the Games can begin. The Rio 2016 Games will conduct all sourcing in accordance with the Sustainable Supply Chain plan developed specifically for the Olympics. The five elements of which are:
- Optimization of cost
- Risk management
- Operational excellence
With these procurement management measures in place, if everything goes according to plan, Rio 2016 could end up being the most sustainable Games from a purchasing perspective in history.
Looking Ahead: Tokyo 2020
Reviewing the infrastructure Action Program for the Tokyo 2020 Olympic Games, it's clear that implementing environmental, social and economic sustainability policies are among the top priorities of planners.
For example, the development of a "disaster resistant" Olympic city is listed as the top goal of the program. This includes designing safety measures against earthquakes as well as for floods, which the report notes could be caused by heavy rain brought about by climate change.
Next, the report outlines plans to create a "low carbon society" centered on a high-efficiency natural gas power plant with a 1-million kilowatt capacity and to promote solar power systems for buildings owned by the Tokyo Metro region and private homes. The report also details the procurement requirements that are associated with the creation of 1000 hectares of new green space; the planting 1 million trees along roads and highways; and the redevelopment of the Sumida River waterfront.
In terms of upgrading and rebuilding existing infrastructure in Tokyo, the original Olympic Stadium (built in 1964 for the first edition of the Tokyo Olympics) will be rebuilt as the centerpiece of what is referred to as the Heritage Zone, the grounds where the 1964 Olympics were held. Ten new buildings are planned for the Tokyo Bay Zone, including a new facility for swimming events. In addition to these major projects, nearly 30 kilometers of new roads will be built to support traffic flow to and from Olympic 2020 venues.
It has been reported that the Tokyo municipal government will launch a stand-alone website to promote contract opportunities with the Olympics to vendors, with a particular focus on offering contracts for small to medium-sized businesses.
Sustainable Olympic Procurement: The Way of the Future
The trend towards sustainable purchasing by Olympic planning committees is gaining ground, an encouraging development at a crucial time for environmental and social concerns, not to mention global economic growth.
The Olympic Games have always pushed the envelope of what is possible, both from an engineering perspective and a social one; the striving toward greater human achievement and collective success is what makes the Olympic spirit inclusive and inspiring. By pursuing sustainable and ethical business practices, modern Olympic planning committees are creating templates for other major procurement initiatives, ones that may impact and shape the trajectory of societies of the future.
Nathan Munn | SourceSuite.com