Business Review Asia - December 2016

How does

D e c e mb e r 2016

technology

drive Maynilad Water

www.businessreviewasia.com

How shoes built an innovative supply chain

Services?

Rise of the drones

CapitaLand:

MAKING A megastructure

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EDITOR’S COMMENT

WELCOME TO THE December issue of Business

Review Asia. Our lead feature this month is a profile of CapitaLand’s exciting Chongqing megastructure – a development representing over two decades of Sino-Singaporean collaboration.

We also explore the growing prevalence of drones and what regulatory bodies need to do in order to ensure that tomorrow’s technology is used safely and efficiently. Last but not least, in recognition of the fact that drones and unique buildings are born in the minds of exceptional thinkers, we chart the top ten most innovative universities in Asia.

We also profile successful companies in the region, including ECCO Shoes and Maynilad Water Services, whose CIO Francisco Castillo was named ASEAN CIO of the Year for 2016.

From all the staff at Business Review Asia, we wish you a happy and successful 2017.

Don’t forget to join the conversation on Twitter - @BizRevAsia and @MrNLon

Enjoy the issue, Nye Longman Editor Nye.Longman@bizclikmedia.com

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CONTENTS

06

PROFILE

Making a megastructure

14 TECHNOLOGY

Rise of the drones 4

F E AT U R E S

December 2016

LIST

22

Most innovative universities in Asia

C O M PA N Y P R O F I L ES

32

ECCO Shoes Supply Chain

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70

Home Centre

Maynilad Water Services, Inc Technology

Supply Chain

5

Making a

MEGASTRUCTURE CapitaLand’s Raffles City megastructure in Chongqing, China, will stand as an endearing symbol of Sino-Singaporean collaboration and sustainable construction. Business Review Asia takes a closer look Writ ten by: NYE LONGMAN

PROFILE

PROFILE

WITH A TRACK record of delivering major commercial and residential projects across the region, it comes as no surprise that CapitaLand is building China’s latest megastructure.

Completed in stages from 2018 onwards, Raffles City Chongqing will look out across the junction of the mighty Yangtze and the Jialin Rivers. Combining residential, Prime Minister Lee Hsien Loong visits Raffles City Chongqing show suite

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December 2016

shopping, office, hotel, and serviced residences, the complex represents CapitaLand’s largest single investment in China and will stand as a long term reminder of the company’s growing commitment following 22 years of operations in the country.

Building a megastructure Once Raffles City Chongqing

MAKING A MEGASTRUCTURE

is completed, the S$4.9 billion megastructure will cover an area of 1.12-million-square-metres, sporting the very latest in construction innovations. From district cooling systems and its composite outrigger design, to structural seismic design and Building Information Modelling (BIM) – this will truly be the megastructure of tomorrow.

“As the biggest and most complex Raffles City development that CapitaLand has undertaken, Raffles City Chongqing is set to be one of the most ingenious and awe-inspiring modern structures of all time” – Lim Ming Yan, President and Group CEO of CapitaLand

9

PROFILE

The technology and expertise deployed on the project has been incorporated in order to increase efficiency throughout the planning, design and construction process.

Sustainability is not typically the first thing that comes to mind when people think of megastructures around the world, but CapitaLand has 10

December 2016

ensured that Raffles City Chongqing will set the record straight. The company has worked hard to achieve a Gold LEED-CS pre-certification from the United States Green Building Council and therefore has a number of high-profile sustainability features built-in as standard.

Alongside shades designed to

MAKING A MEGASTRUCTURE

“Raffles City Chongqing occupies a strategic location on the Chao Tian Men site in Yuzhong District, at the confluence of the Yangtze and Jialing rivers, highly regarded as the crown jewel of Chongqing” – Lucas Loh, CEO of CapitaLand China

reduce heat and an initiative to recycle building materials, the structure also sports an efficient irrigation system to conserve water, as well as reduced energy consumption from its district cooling system. Office air quality will also be maintained to the strictest standards using a combination of cool air filters and carbon sensors.

Raffles City Chongqing is based on the imaginative work of Moshe Safdie – a talent whose handiwork can be seen in a number of worldfamous designs. The award-winning architect has been behind such iconic structures as Singapore’s distinctive Marina Bay Sands integrated resort and Israel’s Yad Vashem Holocaust History Museum, as well as numerous public buildings in the US, Canada and beyond.

Confident in China Lim Ming Yan, President and Group CEO of CapitaLand, says: “Raffles City Chongqing is an iconic landmark at the gateway to China’s western region. The project has taken on added significance with the establishment of the Chongqing Connectivity Initiative (CCI) and the development of One Belt One Road 11

PROFILE (OBOR), which have further enhanced Chongqing’s strategic position.

“When completed, Raffles City Chongqing will complement the CCI and OBOR as a hub for international and domestic companies to partake in the growth story of Chongqing.

We will also be setting up the SinoSingapore Collaboration Centre with the Yuzhong District government at Raffles City Chongqing to facilitate the provision of leading-edge modern services to the city.”

“As the biggest and most complex Raffles City development that CapitaLand has undertaken, Raffles City Chongqing is set to be one of the most ingenious and awe-inspiring modern structures of all time. We

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December 2016

“The demand for elitelevel, multipurpose developments will only increase […] and, with the right combination of foresight and capex, CapitaLand is poised to seize the manifold opportunities this offers”

MAKING A MEGASTRUCTURE

are drawing on CapitaLand’s 30 years of experience in integrated developments and 22 years of local knowledge in China, to tackle the project’s immense scale, complex design and unique site conditions.”

Lucas Loh, CEO of CapitaLand China, adds: “Raffles City Chongqing occupies a strategic location on the Chao Tian Men site in Yuzhong District, at the confluence of the Yangtze and Jialing rivers, highly regarded as the crown jewel of Chongqing. Located next to the traditional Jie Fang Bei CBD, it boasts excellent connectivity as it is fully integrated with a transport hub that comprises a metro station, bus interchange, ferry

terminal and cruise centre.”

Out of CapitaLand’s nine iconic Raffles City developments, eight are located in China; an investment that not only takes stock of how big the Chinese economy is, but more what it can become in the future.

While the slowdown from China is certainly not to be taken lightly, the stellar growth of its upper and middle classes is often overlooked when pondering this fact. The demand for elite-level, multipurpose developments will only increase in the face of this and, with the right combination of foresight and capex, CapitaLand is poised to seize the manifold opportunities this offers.

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TECHNOLOGY

RISE OF the drones How do you solve a problem like a drone flightpath? With increasing numbers of drones in the air, the hunt is on to integrate them into society Writ te n by: TO M WA D LOW AND NYE LONGMAN

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TECHNOLOGY A WAYWARD PIZZA delivery may not be an obvious cause of airport delays. Nor is a nosey photographer or lost box set of Game of Thrones.

They do all have one thing in common, however. They can (and are) being served by drones; drones which are increasingly creating hassle for air traffic authorities.

What was once perceived as a novelty is now fast becoming a serious consideration for many senior supply chain and technology personnel, with the likes of Amazon leading the way. Hobbyists are also taking to drones in their droves.

According to The Consumer Technology Association, 700,000 drones were shipped in 2015, an increase of 63 percent on 2014. In the space of 10 years from 2015 to 2025 the industry is expected to grow from a value of $3.3 billion to $90 billion.

The advantages are obvious: super-fast deliveries, convenience, fuel efficiency and cost among those which will be felt by businesses and their consumers. But, much like their driverless counterparts and human-operated vehicles on the roads, integration with air traffic is cause for a few headaches.

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December 2016

Dealing with turbulence and changing airflows in urban spaces is another head scratcher.

Grounded Recent months have seen both Dubai International and Warsaw Chopin airports suspend flights because of problematic drone activity.

In Los Angeles a drone came to within 200 feet of an airliner, while hundreds of other incidents of pilots and air traffic control staff sighting drones have been recorded.

It is a problem, and one which has seen numerous (and some novel) devices pop up in a bid to stave off unwanted flying robots entering personal and commercial airspace.

Among them is ApolloShield, what looks like an internet router which sends radio signals to prevent small non-military drones from flying overhead. A tidy $30,000 a year per unit to manage, it is hardly a cheap solution, especially for larger use cases such as prisons, sports stadiums and power stations.

Jamming devices are commonly used in military circles as an alternative to blowing up drones, while other start-ups have developed rocket

FOR MOBILE SOLAR, THE SKY IS THE LIMIT

“What was once perceived as a novelty is now fast becoming a serious consideration for many senior supply chain and technology personnel, with the likes of Amazon leading the way�

launcher-style cargo net guns to parachute them to the floor. The Dutch police has adopted a rather more old school technique. It is using specially-trained birds of prey, primarily eagles, to attack drones.

From one pest to another Could learning from another pest improve the flightpath situation or simply make it worse? Several studies have recently been carried out into how birds alter their routes depending 17

TECHNOLOGY on urban airflows, which can change from one building to another.

Small drones are much more susceptible to gusts and turbulence than larger aircraft, as the wind speed is comparable to their airspeed.

Flying at low altitudes in the highly complex flow of urban environments, and in close proximity to terrain and buildings, is a significant challenge that most autonomous flight control (UAV) systems have not been developed to cope with.

Looking at how similar sized birds overcome these conditions could hold the key to making drone transportation more efficient, especially in built up areas. However, in becoming more efficient drones could become even more of a

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December 2016

nuisance, and using the same airflows as gulls and pigeons could add an unwanted degree of messiness to deliveries.

Drones over Asia Considering that significant numbers of Asians still live in rural areas and, with access to finance among these communities increasing, the demand for delivery drones will only grow. Companies such as JD.com and Singapore Post have already started using drone deliveries and

FOR MOBILE SOLAR, THE SKY IS THE LIMIT

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TECHNOLOGY

“How can drones be designed to maximise flightpath efficiency without causing problems with air traffic and the public in built up areas? Whoever comes up with the answer could be about to make a serious dent in the future $90 billion industry”

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December 2016

All images © 2016 Alta Devices. All rights reserved.

RISE OF THE DRONES Image copyright Š 2004-2016 JD.com, Inc. All Rights Reserved

more routes are on the way.

Drone use is also growing in companies not involved in order fulfilment. SwarmX, a Singaporean drone startup, is using this technology to aid in the inspection of solar panels and other sustainable energy installations for the Norwegian giant DNV GL. Also hailing from the island nation, Garuda Robotics is using drones to collect agricultural data to improve crop planning.

Whatever their function, drones

need the appropriate regulation, and Asian countries like Singapore are leading the way by legislating as the technology emerges. Other countries in the region should take note or risk missing the bus – or the drone!

How can drones be designed to maximise flightpath efficiency without causing problems with air traffic and the public in built up areas? Whoever comes up with the answer could be about to make a serious dent in the future $90 billion industry.

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TOP 10

Most innovative universities in Asia Written by Nye Longman

TOP 10 Business Review Asia takes a look at the top innovation incubators in the region and explores how these have grown to be so successful at research and talent development

WHAT MAKES ASIA such a hotbed for innovation? The region has produced everything from paper currency to the modern cup of tea; recent years have been no different –innovations in medicine, gaming and business are churned out at a seemingly exponential rate. It is clear that a region that has produced such diverse creations as the PlayStation, carbon aerogel (the world’s lightest substance) and an AI-backed medical chatbot could not have done so without the support of its universities and learning institutions.

International news agency Reuters recently explored this phenomenon. Using a methodology that scores an institution’s research, patent filings and the ability and desire to monetise the discoveries, the publisher has arrived at some interesting conclusions. From the data, it is clear that East Asian universities dominate, with Southeast and Southern Asia coming in behind.

Taking a regional look, Business Review Asia’s explores the success of each institution.

>

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TOP 10

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KAIST SOUTH KOREA

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KAIST (formerly known as the Korea Advanced Institute of Science and Technology) was founded with the purpose to provide the country with fresh cohorts of elite-level scientists, well-schooled in both theoretical and practical applications. The Insititute offers a wide variety of courses in natural and life sciences, engineering, liberal arts, and bio engineering.

Founded in 1971 with the assistance of American academics, KAIST has built a global network with notable institutions including Carnegie Mellon University, the Georgia Institute of Technology, Technical University of Denmark, and the technical universities of Berlin and Munich.

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With a student body numbering 30,000, UTokyo is regarded as Japan’s premier education establishment. Spread across five campuses in one of the world’s busiest cities, the university offers a broad range of subject for undergraduate, postgraduate and research positions – everything from medicine to literature can be studied. Tokyo also boasts some of the most successful alumni in the world – it has ranked consistently highly for its graduates attaining CEO positions in Fortune 500 companies.

Alongside the 15 Japanese Prime Ministers that have completed studies there, the University of Tokyo has produced 12 scientists that have gone on to win either a Nobel Prize or the Fields Medal.

Seoul National University is generally regarded as South Korea’s most prestigious institution and for good reason. Alongside worldclass academic credentials (the University has ties with Yale, MIT, and the World Bank) Seoul also has arguably the highest student spend in the country. Alongside traditional undergraduate courses in engineering, medicine, and law, Seoul also offers specialities in mining, agriculture and a range of other industrial segments.

Notable alumni include Kwon Oh-hyun, CEO and chairman of Samsung Electronics and celebrated economist Ha-Joon Chang.

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Osaka, one of Japan’s National Seven Universities, is ranked fourth overall in the country amid very stiff competition; Reuters also ranked it the third best in Japan for research. But that’s not what makes Osaka University unique. Its longstanding culture of academic excellence goes all the way back to the eighteenth century. Since then, the university has seen many high calibre alumni walk through its doors, none more prestigious than Toru Kumon who went on to develop the world-famous private tutoring method that bears his namesake.

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SAKA O UNIVERSITY JAPAN

Pohang University has consistently been ranked first in the Times Higher Education ‘100 Under 50 Young Universities’ and there are so many reasons why this accolade was awarded correctly. In 2010, for example, the University became the first in South Korea to provide scientific data for students via mobile devices – that year also saw the university become the first bilingual campus in the country.

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POHANG UNIVERSITY OF SCIENCE & TECHNOLOGY (POSTECH) SOUTH KOREA

ASIAN UNIVERSITIES

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NATIONAL UNIVERSITY SINGAPORE SOUTH KOREA

Singapore’s largest and oldest University, NUS offers strong undergraduate and research opportunities to a student body well over 30,000-strong.

As well as consistently topping a number of regional lists, the University was also ranked 12th globally by QS World University Rankings. Similar to KAIST, NUS also has a strong partnership with Yale University embodied in the form of Yale NUS College – a liberal arts institution benefiting from local facilities as well as international knowledge transfer.

In addition to Presidents and Prime Ministers, the University can also boast a World Health Organisation Director-General and a former President of the United Nations Security Council among its notable alumni.

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NANYANG TECHNOLOGICAL UNIVERSITY SINGAPORE

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Originally founded with a broad engineering corpus, Nanyang has since broadened its fields of study to include such subjects as fine arts, medicine, and accountancy. Of particular interest to business leaders is the University’s MBA programme – which the FT ranked as the best in Singapore and second best in Asia.

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PUTRA UNIVERSITY MALAYSIA

Malaysia’s premier academic institution, Putra University Malaysia has a strong, globally-recognised reputation for delivering agricultural innovations. Alongside this focus, it offers courses in engineering, medicine, economics and more. It has links to institutions in the UK, Thailand, and South Korea.

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India’s Institutes of Technology dot across the whole country. Over 20 in number, they are responsible for ensuring that India’s workers of tomorrow are fully equipped to innovate. Prominent among its prestigious political and business alumni are the likes of Sundar Pichai (Google CEO), Padmasree Warrior (former CTO at Cisco Systems), and Rajat Gupta (former Managing Director at McKinsey).

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IISc leads the country’s science efforts in a number of ways and was the first Indian institute to be counted by the Times Higher Education World University Rankings for engineering and technology (2015-16). Its academic program covers broad courses in biological, mechanical, electrical, and chemical sciences, as well as physics, mathematics and interdisciplinary studies.

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HOW ECCO SHOES BUILT AN INNOVATIVE SUPPLY CHAIN Written by Nye Longman Produced by Charlotte Clarke

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WITH SINGAPORE AS ITS NERVE CENTRE OF SHOE PRODUCTION, ECCO SHOES IS REAPING THE BENEFITS OF BEING CLOSE TO THE POINT OF MANUFACTURE; A SUPPLY CHAIN TRANSFORMATION IS GATHERING SPEED

Q

uality Danish shoemaker ECCO Shoes has shifted its focus eastwards in recent years. By moving functionalities to Singapore, the company is now closer to its substantial Asian manufacturing base, and is driving innovation across its supply chain. Quickly becoming one of the regional industry leaders has just been one effect of the move, explains Supply Chain Director Scott Phillips. The citystate boasts fantastic infrastructure links and one of the most business-friendly environments in the world, both of which Phillips and his team have leveraged to build a fit for purpose operations hub. Business Review Asia speaks to him at length to learn how this was achieved, and what challenges have been overcome.

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December 2016

S U P P LY C H A I N

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SCOTT PHILLIPS ECCO GLOBAL SHOE PRODUCTION & SOURCING SUPPLY CHAIN DIRECTOR Scott Phillips is a Demand Driven Supply Chain Professional with 14 years’ experience across multiple industries. He started his career in the Sales & Marketing field in Adelaide, Australia for a national Steel Roofing company, Fielders Steel Roofing.

Interest in the concepts of balancing demand and supply led a natural path into the Supply Chain of Detmold Packaging (Detpak Packaging), primarily located in Singapore and Indonesia, and focused on manufacturing paper and board food packaging products to global B2B markets.

Leading an implementation and the operation of a Regional S&OP process (Indonesia, Malaysia, Thailand and Vietnam) for BlueScope Steel exposed techniques in end-to-end value chain concepts. After this Scott took up an assignment with General Cables to merge its Asia Pacific manufacturing acquisitions and build and align the operations supply chains. These included mature operations in Thailand, Philippines and New Zealand, a niche unit in China, and a greenfield plant in India.

Now with ECCO Global Shoe Production & Sourcing as the Supply Chain Director in Singapore, transitioning and building the global headquarters locally from Denmark, Scott is looking forward to taking all his experiences to build a vertically integrated world-class supply chain that drives profitability into its global retail customers.

Married with a young family and having successfully completed a Masters of Business Administration, Bachelor of Management (International Marketing) and a Bachelor of Business (Employment Relations) from the University of South Australia, including a Dean’s Merit List recognition, Scott is a young experienced professional riding the wave of contemporary supply chain practices.

S U P P LY C H A I N

Operations

owner operated footprint in both Founded by Birte and Karl Toosbuy retail and e-commerce.” in 1963, ECCO has always adhered For ECCO, moving operations to the Scandinavian philosophy of to Singapore was crucial. Phillips functionality and simplicity. Still a says: “The aim is be closer to family business five decades on, the our operations; 70 percent of company has swelled to produce our manufacturing is in Asia 20 million pairs of shoes per Indonesia, China and Thailand, year, going out to nearly 90 and the other 30 percent countries with a is in Europe.

19,500-strong “Having the “Singapore is workforce daily global a melting pot worldwide. operations in of cultures and ECCO, despite Denmark, which talent within its size, owns is a long way away the majority of its supply chain but from Asia, made assets. “We are not specifically in things a bit difficult. almost 100 percent Also the access shoemaking” owner operated to new talent throughout our pools in Asia production is seen as an operations,” opportunity for Phillips explains. running companies completely “We make the leather, we make based in Asia.” our shoes; we own a lot of our own warehouses. We also have Meeting the talent challenge owner operated retail space Singapore was initially somewhat and e-commerce platforms. of a double-edged sword when Our strategy is to to grow the it came to recruiting talent, but

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ECCO SHOES

Phillips and his team overcame this in their own unique way. He explains: “Singapore is an interesting place. Obviously there is not much labour intensive manufacturing here, so getting people experienced in shoemaking is near impossible unless you expatriate them. “Singapore is a melting pot of cultures and talent within supply chain but not specifically in shoemaking. So when bringing operations out to Singapore, the challenges were the opportunities and the opportunities were the challenges so to speak.�

With the majority of staff well-versed in supply chain operations, the task remained to ensure that

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December 2016

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S U P P LY C H A I N

they understood ECCO’s decades of country is a regional logistics shoemaking artistry. Phillips explains: hub, and demand for talent “When someone joins the company is high – but ECCO is able to we endeavor to send them to a successfully compete in this field factory to make a pair of shoes, so by ensuring that its positions are they literally come back wearing their both attractive and rewarding. own pair of shoes, which is pretty “When it comes to cool. We call it the ‘cow to shoe manufacturing and planning programme’ and this gives operations this is much our people a more difficult,” “When someone huge amount Phillips says. joins the company of insight.”

“So we have “That’s the had to really we endeavor to send industry part then leverage them to a factory to and then we have on different make a pair of shoes, ongoing personal industries, different so they literally come approaches, looking development. We back wearing their use performance outside the box and appraisals and finding people own pair of shoes” other employee from different engagement backgrounds. tools. We generally use They just the rule 70 percent hands on, 20 need the right persona. percent coaching and 10 percent “We spend a lot of time academic as a general rule to keep developing and educating them, developing people going forward.” getting them into the industry, Recruiting for roles such as order understanding how to make shoes, fulfillment and freight logistics the complexities of the industry professionals is challenging – the itself. That has been a challenge.

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ECCO SHOES

At the moment we have a stable team which we’re now working on strongly developing.”

Disrupting the supply chain ECCO bucks the trend when it comes to supply chain operations – it owns and operates almost 100 percent of its assets. A facet of the business, Phillips explains, which gives the company control of where and when its products will arrive in stores.

“We have an extremely complex network from end-to-end, probably made more complex by the fact that we control every step of the way,” Phillips says. He goes on to explain that ECCO has around 200 different supply chains for its materials coming into the factories. “We have five factories that are converting materials into shoes, and we have about 70 shipping lanes going into the first port market.

“At the end of the day, we are shoemakers.

That’s our core competency, but we believe that because we own the assets we can glue the supply chain together for a competitive advantage.”

ECCO’s external operations are being further in-sourced. Over the past year the company has leveraged significant investment in order to purchase new machinery in order to bring more manufacturing components inside its facilities.

“The company likes to control its value chain from end to end, which is quite amazing. It’s rare a company is going that direction these days,” Phillips adds. “We are bucking the trend and that

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December 2016

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S U P P LY C H A I N

makes this an exciting supply chain to work in because we have all the toys. So the challenge is: how we can make them all work together?”

Alongside bringing in the right talent, the timely implementation of innovative technology has played no small part in this growth journey.

“I lose the most sleep - other than trying to find talented people – over disruptive technologies and how we can utilise them all,” Phillips adds. “We run a centralised SAP program with an ERP backbone

throughout the company and this is a fantastic asset.

“We’re starting to use disruptive companies to run our models for us in parallel to our current program to manage Big Data. We are seeing if we can slowly transition into these new technologies to manage complex supply chains. So far we’re managing to do some cool projects.

“If we put data in the cloud, we can be much more flexible when we shift in the market or find a shift in how a customer wants a

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S U P P LY C H A I N

product delivered,” he explains. “We don’t have to restructure hundreds of people and thousands of man hours to restructure a module in our ERP. We can grab data from a cloud, bring it down, play with it, send it back up and continue the day to day running of the business.”

Even a matter of days in the supply chain can feel like a lifetime. Trying to pin down what ECCO will look like in five years will always be a cautious prediction; though due to the strength of the systems Phillips and his team have developed, the future certainly looks bright. Continuously improving its supply chain will be central to wherever the company’s next big growth drive occurs. Driving value while maintaining flexibility in the supply chain will be crucial to this growth, Phillips concludes.

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e n h o T itisati g i d aynilad M f o nlon a H ’ O John n Chavda y b n Writte ed by Kiro c Produ

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Maynilad Water Services, Inc. has helped a large population of Metro Manila reap huge dividends in health and lifestyle benefits, thanks to an IT transformation of its water service

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he Philippines is not a country that suffers from a lack of water. The capital Manila enjoys an average monthly rainfall of around eight inches, and its 22 million population does not generally go thirsty. However like every large city that has grown through rapid urbanisation, it has struggled to modernise its infrastructure at the pace required. Managing the supply of clean water and the downstream activities of runoff and sewerage management were inadequate prior to 1997 when the water service was privatised. The government-owned Metropolitan Waterworks and Sewerage System served the metropolitan area, however, a significant proportion of sewage ended up in storm drains or open canals. It was neither an efficient nor a healthy situation.

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In 1997, the government awarded contracts to two companies, splitting Metro Manila into west and east zones.

The West Zone went to Maynilad Water Services, Inc. (Maynilad), a consortium that subsequently ran into financial difficulties and returned the concession to the government.

In 2007, water services were again placed in private hands—under the DMCI-MPIC Water Consortium.

New management subsequently implemented the necessary intervention and poured the needed investments that made possible Maynilad’s dramatic turnaround from financially crippled utility to consumer-focused organisation.

Today, Maynilad is under the ownership of three principal shareholders: Metro Pacific Investments Corporation which holds majority shares at 53 percent; DMCI

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Holdings, Inc., a local infrastructure company, with 25 percent; and Marubeni of Japan with 20 percent. Maynilad is responsible for the water and wastewater services in the western part of the Greater Manila area, serving a population of more than nine million in 17 cities and municipalities. Maynilad’s concession contract has been extended to 2037.

Clearing the way for improvement The new management invested heavily, and it needed to. Leaking pipes were a big concern. In 2007, 67 percent of the water that left the treatment plants was classed as ‘non revenue’, in other words most of it was lost though leaks, though much was illegally diverted. Replacing the large pipes made a big difference in a reasonably short time, but detecting leaks and illegal extraction was just one aspect of running a complex and geographically extensive utility that cried out for the application of new technology.

In March 2011, Dr Francisco Castillo, who had been overseeing the IT system from his position as Managing Consultant at the Spanish IT consulting firm Indra Systems, was appointed as CIO and Senior VP of Maynilad, with a seat in the management committee to reflect the key role IT was to play in setting the strategy that would

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Francisco Castillo CIO and Senior VP

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1 In everything now in one place. #

Let the transformation begin.

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take the company right up to the cutting edge of global best practice. In-house IT was never going to be the answer – his strategy was to outsource all of the operational and maintenance systems.

“It meant redrawing the organisational map” he says. “I now have a very small and strategic IT team of nine, six of them as Project Managers engaged in managing contracted-out projects.”

His first priority was to fix the networks, servers and storage, so he set in motion a series of projects to create a robust infrastructure out of something that was, frankly, a mess. “It meant revamping our network in terms of cabling, putting in fibre connections to connect all of our remote offices and changing every one of our switches. Then we standardised and virtualised all our servers, becoming the first organisation in the Philippines to do so.”

At the same time it was necessary to re-engineer all the applications. SAP had been set up as a tool to automating manual processes rather than as an ERP platform that would support all the business critical systems. SAP was re-implemented with additional modules, and the customer relations platform revamped to the latest iteration of MS Dynamics software. “The CRM system used to reliably crash every four hours,” he observes wryly, “and the solution the former IT team had reached was to programme it to reboot every three hours.”

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The product itself was not at fault – it just hadn’t been implemented properly.

field of IT/OT convergence. Now he has another OT team of 15 people, larger because these functions have IT/OT convergence not been outsourced. “By uniting the Revamping the core IT was a major two, data can be taken straight from task, and it delivered great results in the plant into the IT system and you increased efficiency throughout the can see online how production is organisation. There was however doing, what issues you have with your another side to equipment, and how the coin. There is you need to schedule a huge amount maintenance.” of information To facilitate this, available from he has implemented the sensors, the FIELD MOUS equipment and (Field Monitoring User plants belonging to System). It’s a set of employees currently a sprawling water software modules at Maynilad Water utility, much of it designed for plantServices, Inc. ‘locked in’ and wide monitoring hard to access. and analysis. It also These monitor water flows, pressure, comprises a system data archive that chemicals, pollution, acidity and many handles the collection, storage, and other things besides. Most companies retrieval of data and also acts as a run their IT and OT (operational data repository for all applications. technology) functions as separate Ultimately it allows management to departments, so it was a radical step understand where the business stands in 2014 when OT was placed under operationally at any given moment Castillo. It established Maynilad as in time. FieldMOUS is Maynilad’s IoT a leader in the much talked about platform, enabling sensor data to be

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Part of daily monitoring tasks is to read the value displayed at the power meter

The FieldMOUS (Field Monitoring User System) program is the main technology for monitoring vital field data.

By uniting IT and OT, data can be taken straight from the plant into the IT system and you can see online how production is doing

M AY N I L A D WAT E R S E R V I C E S , I N C .

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viewed, virtually in real time, at the new central control room which was commissioned only in August this year.

The major manifestation of the IT/ OT landscape has seen the number of applications running within the business from 16 in 2011 to around 60 today, and from 35 physical servers to more than 350 virtual servers, says Castillo. Over the same period the number of reportable incidents has reduced dramatically, in fact by 70 percent within the first nine months. “It is hard to argue with myself if it is all under me. We are reaping the benefit because we can get the data straight from the sensors and feed it into our

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The Maynilad Central Control room, from where all water and wastewater facilities are monitored and controlled

different IT systems. There are many ongoing projects to maximise the benefits of that convergence. Over 50 facilities have been automated, with more than 900 instruments regularly calibrated and maintained,” he says.

Better for business, better for users At any point in time Maynilad has some 60 IT projects ongoing, and a similar number of OT projects. “Over the last five years we have moved fast. I could say we have improved from Jurassic to even beyond the state of the art in some areas.” Postconvergence (though that process is

still ongoing) among the priorities now being refined are IT/OT security and the physical security of the facilities and remote equipment. One important focus is the improvement of customer service and customer experience.

The key thing has been to provide a reliable water supply. Back in 2007 only 46 percent of customers were receiving a 24-hour water service, now it is close to 100 percent: then the number of connections was around 700,000, now it’s over 1.3 million. Nevertheless a lot more can be done. The first phase, now complete, was to make billing available online, via SMS or by e-mail, and the next

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target will be to have an automated advisory service that will give advance notice of interruptions in service, maintenance issues and the like.

The people in the West Zone concession don’t need a long memory to appreciate the difference, and now the management of Maynilad can make informed decisions knowing precisely the true state of the business thanks to the business information dashboards they can access. It’s important to remember, he says, that in a highly regulated industry, where water prices are set by the government, the only real business improvement deliverables are internal ones, mainly in operational efficiency.

Automation is an ongoing process says Francisco Castillo, but many plants have been fully automated and over the next two years all of them will be managed directly from the central control room. “We have dramatically improved on all of the key performance indicators that the regulator expects of us, and we are now on a par with any 21st century utility,” XXXXXhe concludes. “Non-revenue

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water is now down to 30 percent and that is improving monthly.” In September, Castillo was declared ASEAN CIO of the year, an annual recognition given to an individual who has displayed exceptional leadership and contributed significantly to his company’s growth and influence.

Under his leadership, Maynilad was able to obtain an ISO 20,000:1 certification for its information technology service management system, and also received the SAP Customer Centre of Expertise certification for its efficient business processes. Capturing all these lessons learned, this year he wrote a book entitled ‘Managing Information Technology’ (Springer, Germany) which in effect is a compendium of best practices in the industry and how to apply these.

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TRANSFORMING THE SUPPLY CHAIN

TO BECOME A MARKET LEADER Written by Catherine Rowell Produced by Dennis Morales

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With vast experience in the retail industry, working for brands such as Marks & Spencer PLC and Kingfisher PLC, Chief Executive Offer for Home Centre Médéric Payne is passionate about the home and discusses how he is leading the expansion, growth and development of Home Centre through a number of exciting new markets and technologies

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ince joining Home Centre in 2014, Chief Executive Officer Médéric Payne has injected passion, energy and vision into the retail market in the Middle East. He has done this by providing a clear strategy, incorporating areas from business development and the management of day to day operations, to encompassing full endto-end accountability of running and leading the business, ensuring that Home Centre’s continual expansion

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delivers consistent results.

Payne has worked for a number of large retailers which house a range of cultural environments. However, his international outlook has enabled him to work successfully with a number of key nationalities, with over 40 based within Home Centre alone. Operating under the Landmark Group umbrella, the company has come a long way, which Payne explains: “My job is more within the wider business to lead the expansion and the growth

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and development of the company in the markets we are in now and the new markets we are entering.”

By joining such a successful company, Payne has streamlined and refocused the values within Home Centre’s vision in order to drive the business forward. Passion has become a core value, where Home Centre is keen to recruit individuals who exhibit enthusiasm: “When we recruit, we are looking for people with passion, which comes across in interviews. The passion and attitude is important,” comments Payne. Individuals have to provide accountability and ownership, show entrepreneurial experience and continually strive to achieve key results. “It’s not just about the work: it’s about effective results, whether it’s in supply chain, finance or commercial areas,” explains Payne. “Are you effective at your job and can you deliver the results that you’re being asked at any level in the business?”

Although Payne acknowledges that “retail is like a journey - there is no end”, he is insistent that continuous improvement is vital for all teams and ways of working at Home Centre. The company aims to remain a market leader within the region, bringing new ideas and fresh thinking into the industry. An example of this would be the introduction of mobile POS into company stores, at which Home Centre has become the first market leading home retailer and company at Landmark to undertake the pilot scheme. This will enable the gradual phasing out of tills in stores and allow sales assistants to showcase products in

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store, but also have access to the full catalogue and increased knowledge of products in the warehouse.

This transformation will enable an improved service for customers, which Payne explains: “We can process the order for the individual right there in store, right by the product, rather than dragging the customer away to a till in the corner of the store and take payment. That’s quite a technological revolution in the home industry.” This new process also will enable the company to align its supply chain so the employee can ascertain the type of customer, reduce customer waiting time and ensure a positive outcome.

Employee morale is also heightened.

Following on from these technological investments, Home Centre is driving its online business and retail site, utilising Hybris and

Oracle to ensure it operates correctly and safely, with efficient reporting.

Data is vital to the company’s continual growth, which is supported through the use of the Shrukran Rewards Loyalty Programme, the largest loyalty programme in the region. With over 15 million members, the programme covers all of the GCC and delivers a number of key benefits to customers.

However, the loyalty programme also allows Home Centre to understand what customers are buying. Payne explains: “If they buy a bed, do they buy the bed linen with it? Do they buy pillows, or are they just buying the bed? We can do real data analytics. For me that is a goldmine, the real data that we have from the back-end of our programme.” This enables the company to understand its customer profiles and therefore

“If they buy a bed, do they buy the bed linen with it? Do they buy pillows, or are they just buying the bed? We can do real data analytics. For me, that is a goldmine”

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The number of match requirements living space. Payne Home Centre staff explains that such with what the company can source, whether investment has it is colours, styles, been increasingly or designs in order to valuable for both the cater to customers. “It’s customer and Home all about value in the industry.

Centre: “It solves a lot of We are a mass market retailer offering problems for people - they can buy very good value that is very focused on furniture that will fit their apartment. local taste and styles”, Payne adds.

Technology is helping us be more In gaining access to such valuable productive and providing better information, Home Centre is looking interactive services to the customer, to improve productivity, getting but data is the key to a lot of this.” products to market quicker, being However, with customers gaining an more accurate in terms of inventory increased awareness and access to management, understanding how to information on where to buy products get the right dosage of product in the which are priced more attractively, right place, and sourcing from a variety the market has become increasingly of countries and bringing products in competitive. Payne explains: “When on time and at the right cost. “Those customers shop online, they are also things are more important today, looking at other countries and how particularly as the customer has more much products might cost them. accurate information,” says Payne.

They are comparing prices for goods In order to support customers in other markets, so you have to be further, Home Centre is now utilising competitive in getting your pricing and 3D rendering technology. This provides costs aligned, which starts to affect visuals of customer apartments with where our sourcing decisions come products so they can see how buying from. How much more local sourcing particular products will impact their can we do to reduce transportation

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Home Centre costs, reduce lead item, and it saves time was founded in times - it’s amazing and money in the long what effect that’s having run,” explains Payne. on the thinking and Alongside strategic sourcing.” technological To improve inventory investment, the management, which would then company’s logistics have positively affect areas such as cash been overhauled as a result of flow and shrinkage, Payne believes a company growth. Home Centre is number of new technologies will be aiming to build more cost effective, adopted within the retail market, such safe and productive warehouses and as Radio Frequency Identification upgrade their logistics systems. “In (RFID), currently utilised by a number the UAE we have a couple of sites of clothing companies, such as Marks that we are constantly tweaking to and Spencer, Decathlon and Zara. improve our productivity,” comments Replacing current barcodes, Payne Payne. However, it is vital to ensure the explains: “This is the chip in every quality of Home Centre’s products, product that has a unique number, in addition to ensuring employee so the idea is rather than knowing safety due to regional temperatures. that I’ve got 10 of an existing product The company is unlike many major in stock, in future it will show exactly retail stores, where Payne explains: which 10 they are and where they are, “a product goes from the warehouse, so you start having more traceability.” into stores, then into the customer’s This technology will ensure home. At Home Centre, we often have stock figures are correct, but customers ordering in store, then more importantly, it will support receive their delivery straight from the manufacturing errors which can occur warehouse. So, we aim to constantly with suppliers. “You will be able to trace improve our warehousing capabilities.” exactly which customer has had which Home Centre manages a vast

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number of its services in house, such as a logistics team, as well as having a fleet of in house delivery trucks and ability to assemble furniture through its carpenters. Payne explains how the company is unique. “We are different to European markets where the deliveries you have to pay for.

Here, there is an expectation that if someone orders a bedroom suite, we will come deliver it and assemble it.”

Payne reflects: “The one thing that Home Centre and a lot of retailers have to get right today is their supply chain. If you can embrace technology

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in the supply chain in this new world that’s been changing in the last six years, then your future looks bright.”

Although based in a number of different countries, Home Centre continually works as one multicultural unit, which can incorporate some challenges in working towards the same values, operations and policies.

Through treating the GCC as one large network, rather than different countries, Home Centre has ensured consistent and successful communication through a mixture of channels such as email and tech video conferencing.

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Payne ensures he is close to all teams, flying to the Kingdom of Saudi Arabia (KSA), Qatar and Bahrain to spend time with store teams and personnel, before flying back to the head office in Dubai. To ensure he is regularly in touch with consumers, Payne admits he even visits customers’ homes every quarter to gain insightful feedback. “Communicating those types of things back into the business helps us to learn,” he adds.

Home Centre has undergone significant growth and expansion, with an increased number of stores built within existing markets, alongside the remodeling of current stores. The company is also looking at new markets and product categories. It has embarked on a transformational change, to deliver a new range of products and services, which has now come into fruition with the launch of their new concept flagship store, based at the Mall of the Emirates in Dubai. Payne comments: “If you ignore developments and the importance of managing stocks and inventories correctly, then it doesn’t matter how good you are, you will let your customers down and they will go and shop elsewhere. For me, supply chain is the key to unlocking the potential in the market.”

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