Business Chief - May 2018 by Business Chief USA

Firing on all cylinders to remain ahead of the curve

May 2018 â&#x20AC;¢ USA EDITION

Centralising the supply chain to deliver global success

PROCUREMENT

PROFICIENCY SAP ARIBA continues to provide procurement proficiency amid a backdrop of transformation

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ATLANTA

Engaging with Generation Z

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FOREWORD WELCOME TO THE USA edition of Business Chief. This month, we start the conversation with Epicorâ&#x20AC;&#x2122;s Senior Vice President of Product Marketing, Scott Hays. As more and more businesses struggle to attract, and more importantly retain, the key talent and expertise they need, Hays tells us why itâ&#x20AC;&#x2122;s important for employers to encourage Generation Z in the workforce. On the subject of skills shortages, we also speak to Jack Coker, Principal at Ducatus Partners, to see how companies can address the lack of skilled workers and investment in both America and the world stage. Speaking to Business Chief, he discusses whether the current skills gap a global phenomenon and what businesses can do to fix it. Next, with an estimated 50mn electric vehicles to be in operation by 2025, we speak to Taavi Madiberk,

CEO and Co-founder of Skeleton Technologies, to see how businesses can make sure that the adoption of electric vehicles is sustainable. In a fast-changing marketplace, developing and maintaining a brand identity can be a mammoth challenge for any company. With this in mind, Business Chief spoke to marketing expert Allen Adamson. He tells us why business should be careful not to dilute their brand when introducing new products. Next, we turn the spotlight to the capital of Georgia, Atlanta, to see how this bustling economic powerhouse is emerging as a major player in both the US and global economy. Finally, Business Chief takes a look at the top 10 largest commercial businesses that the US has to offer.

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Engaging Generation Z

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Wider electric vehicle adoption requires global energy solutions

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IS THE US SKILLS SHORTAGE PART OF A GLOBAL EPIDEMIC?

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POWERING DATA-DRIVEN DIGITAL TRANSFORMATION IN MANUFACTURING Hewlett Packard Enterprise’s (HPE) Hybrid IT technology is enabling original equipment manufacturers (OEMs) such as GE Digital enter a world powered by Internet of Things (IoT) connectivity and data analytics – where nothing ever breaks. These benefits are being passed on to customers, allowing them to adopt new business models, streamline operational processes and create more innovative products and services. Hewlett Packard Enterprise’s (HPE) Hybrid IT technology is enabling original equipment manufacturers (OEMs) such as GE Digital enter a world powered by Internet of Things (IoT) connectivity and data analytics – where nothing ever breaks. These benefits are being passed on to customers, allowing them to adopt new business models, streamline operational processes and create more innovative products and services.

CHALLENGE For OEMs, the current idea economy is all about turning ideas into value faster than the competition. With the vast amounts of data gathered from a growing number of IoT endpoints, manufacturers can drive operational efficiencies, deliver better user experiences, and develop new capabilities. However, while leveraging technology to improve performance is critical to remaining successful, it’s not as easy as it sounds. This is due to a variety of factors, including: • Bespoke systems: Many existing industrial systems are purpose-built, with distinct protocols and limited capabilities. However, right now, what companies need are cross-platform visibility and insights. • Implementation difficulties: The lack of mature skills and resources for IoT implementation means that the integration of information technology (IT) and operational technology (OT) has become essential in driving productivity and business results. • Alignment between IT and operations: The financial risk and uncertainty resulting from IoT adoption has driven companies to use a mix of SaaS, Hybrid and Cloud-first strategies, which must now be connected to each other.

SOLUTION To combat these challenges, HPE OEM has built hybrid IT solutions that include pioneering edge computing and analytic data techniques, to help manufacturers turn vast quantities data into real-time, actionable insights. These solutions have been designed to adapt to a variety of business challenges. For example, GE Digital harnessed them to create Predix – the operating system for the Industrial Internet – to drive its own business transformation, as well as that of other manufacturers. As the world’s first and only industrial cloud platform, GE Predix is turning data into actionable insights from the edge to the cloud, and employing the latest innovations to optimize assets and operations – all supported by a robust ecosystem that accelerates app development. With the HPE-powered Predix, manufacturers can leverage big data and analytics in conjunction with industrial expertise to achieve real gains in productivity,

BENEFITS The partnership between HPE OEM and GE Digital is helping national electric utility company Saudi Electricity achieve an ambitious modernization of Saudi Arabia’s electricity infrastructure. Working with the HPE OEM and GE Digital Alliance, Saudi Electricity implemented an industry-leading Industrial IoT platform that supports machine learning and predictive maintenance technologies. This allows them to improve the company’s quality of service while minimizing energy costs. By 2020, Saudi Electricity expects to this continuing partnership to yield a $19B reduction in operational and capital costs, 3x increase in power generation capacity and improved reliability, and 100% control of critical electrical assets. Ultimately, companies seeking to thrive in the idea economy must implement data-driven digital transformation Ul practices. By identifying problems before they occur, manufacturers will derive improved quality, reduced production time and machine downtime, and lower production costs – and then pass these benefits on to the customer. The collaboration between HPE OEM and GE Digital is a powerful example of how hybrid IT platforms are giving manufacturers real-time visibility across heterogeneous systems, putting them in a safe and secure environment that enables decisions to be made quickly, accurately, and intelligently.

SAP Ariba and the transforming landscape of procurement As the supply chain industry continues to evolve, SAP Ariba plays a key role in defining the future of procurement Written by Dale Benton Produced by Glen White

SAP ARIBA

he very nature of procurement and the supply chain is changing. Advancements in technology and innovation have significantly shortened the lifecycle of products, forcing suppliers and procurement functions to transform their approaches. As procurement and supply chain has changed, so too has SAP Ariba. Speaking at SAP Ariba Live in Las Vegas earlier this year, Marcell Vollmer, the company’s Chief Digital Officer, looked to the future of procurement and more importantly, how it will continue to move beyond delivering cost savings and process efficiencies. “For the last two decades, procurement has been on a journey that has led to dramatic transformation. But the journey is just beginning,” Vollmer said. “Over the next 10 years, companies will face more opportunity and disruption than ever. And procurement will play a critical role in maximizing these opportunities to create business value. In embracing digital technologies and strategies, procurement can reimagine the function and beyond delivering cost savings and process efficiencies, fuel innovation and market advantage.” Mark Schenecker, VP Supply Chain, Procurement & Networks with SAP Ariba, has seen this transformation happen first hand in large scale organizations, both in culture and in practice.

May 2018

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SAP Ariba Business With Purpose

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The direct approach to procurement transformation As the pace of digital business accelerates and as customer expectations rise, supply chain transformation has become a priority for many organizations. Reimagining procurementâ&#x20AC;&#x201D;especially direct materials activitiesâ&#x20AC;&#x201D;offers an opportunity to help your organization gain efficiencies, mitigate risks, serve customers better, and identify new areas for growth.

Proactive value For any business, direct materials can represent a huge slice of the actual costs of doing business. But transforming direct materials in a holistic, strategic manner can prove challenging. Deloitte’s Direct Materials Value Transformation approach can help by supporting a more proactive, more strategic approach to procurement. By bringing together a host of capabilities in a unified portfolio, Direct Materials Value Transformation provides a single source of leading-edge solutions for addressing needs all along the source-to-pay continuum. The potential payoff? A tighter, more value-focused supply chain that can support greater supplier collaboration and help you maintain a competitive edge. Elements of Direct Materials Value Transformation

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Cognitive spend capabilities leveraging machine intelligence and advanced analytics to identify patterns and generate insights

Global Sourcing Insights to help companies analyze, visualize, and act on complex direct materials sourcing issues

Tax tools to help automate processes such as tax determination

Should-cost analysis and parametric cost modeling

Third-party risk management

Supplier enablement

Supply chain optimization

Reimagine procurement. Implementing for success In the ever-changing landscape of the supply chain and procurement space, as a partner to one of the world’s biggest procurement network providers, it has never been more important for Deloitte to go above and beyond what is expected from the relationship. Partner to SAP Ariba for close to 20 years, “Deloitte has well and truly earned the right to be called a “critical partner.”, says Hernan De la Torre, Senior Manager at Deloitte. “It is a very tight relationship. We are not only going to market together or serve the industry together. Our relationship is also about helping shape and redefine what is occurring in the industry. We work together to help our clients understand what the future of digital procurement will look like.” SAP Ariba continues to define the direct and indirect procurement space, working with companies and partners all over the world through a complex procurement network system. As it embraces the future of procurement, it calls upon critical partners that can not only navigate complex procurement functions and “implement for success.” “Our methodologies are well aligned, and I think that together we approach problems and opportunities in a very comprehensive way,” says De la Torre. For Deloitte, this isn’t just talking the talk. Earlier this year the company launched its Direct Materials Value Transformation offering, to “provide a wealth of existing

“ Ultimately, it is all about solving our client’s issues with the most affordable, costeffective and fastest to implement solution” Hernan De la Torre Senior Manager at Deloitte and new Deloitte and SAP Ariba capabilities to help companies reimagine their Direct spend.” Deloitte was officially recognized by SAP Ariba, receiving the 2018 SAP Pinnacle Award for SAP Ariba Partner of the Year – Large Enterprises. De la Torre believes the award is a true testament to the success in the way in which Deloitte has finely tuned its relationship with SAP Ariba that has allowed the company to truly exceed all expectations as to what a partner can and should be. “Ultimately, it is all about solving our client’s issues with the most affordable, cost-effective and fastest to implement solution. We have done this repeatedly, so many times, that we have fine-tuned it to extreme precision,” he says. “Obviously there are many things that go into these programs, there’s complexity, but we certainly have mastered program delivery at Deloitte with SAP Ariba and have new approaches and innovations that allow us to reimagine the world of Procurement.”

www.deloitte.com/SAPAriba @DeloitteSAP

S U P P LY C H A I N

“People are understanding this more and more. It’s about responding quicker, and more cost effectively and how we can create this near real-time instantaneous communication with our suppliers and treat them as an integral part of our supply chain and network” – Mark Schenecker, Vice President, Strategic Customers Business Networks, Supply Chain

With SAP, Schenecker plays a key role in working on the implementation of industry-leading cloud-based applications to some of the world’s largest companies in order to better collaborate with a global network of partners. Vollmer’s sentiment is echoed by Schenecker, who feels that as the procurement transformation journey will only continue to develop further, now more than ever companies must embrace a far more collaborative approach in order to keep up. “Typically, in the supply chain space, the conversation will start around demand planning,” says Schenecker. “From that, you make up a supply plan based on your customer requirements and then you

share that with the suppliers. This is often referred to as forecasting. “Forecasting, though, is very hard to get right because there’s some level of variability that you just can’t control.” Schenecker points to large companies that tackle this challenge of forecasting demand through collaboration. Rather than spending resources through inventory buffers to mitigate risk in supply, or create more precise forecasting, companies will work collaboratively with their suppliers in order to respond to a change in demand instantaneously. In the ever-changing pace of product cycles, this is crucial to being able to deliver true value to the supply chain. “It’s about making your supplier

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for their thought leadership, expertise and innovative mindset. Headquartered in the Silicon Valley, we constantly advocate leveraging packaged applications to meet the constantly changing demands of business world. We have registered ofﬁces in Houston, Dallas, Jersey City, Heidelberg, Bangalore, Hyderabad and Ba Chennai from where we support our clients across the globe. Our clients include internationally renowned brands such as Broadcom, Oclaro, Corning, NVIDIA, Dolby, TriQuint Semiconductors, Clorox, Aptina Imaging, Allergan, Vishay Intertechnology, and Albemarle.

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SAP ARIBA

network tick through collaboration,” Schenecker says. “People are understanding this more and more. It’s about responding quicker, and more cost effectively and how we can create this near real-time instantaneous communication with our suppliers and treat them as an integral part of our supply chain and network.” SAP Ariba works with companies in creating solutions in order to establish and build this “tight knit” collaborative network. Millions of companies all over the world use SAP’s cloudbased network to manage their business relationships and allow their customers to shop, share and save. This network is what enables that true collaborative approach. It allows buyers and suppliers to collaborate on transactions, manage their entire procurement process from source to settle, all the while controlling costs, finding new sources of savings and building an ethical supply chain. One of the key advantages in this collaboration is reducing lead times. A typical plant, when processing an order, could have a month of supply of parts. These parts are either

May 2018

stored by a supplier, sometimes via a 3PL, or stored on the factory floor or warehouse. This is often inconsistent and will vary from product to product, part to part. “If we run this through our tight knit collaboration you are looking at significantly reducing inventory,” says Schenecker. “Taking days or weeks of supply of inventory out of the supply chain will reduce costs. These inventory cost savings are critical to reducing the cost of the finished goods. It’s a real big move on the profit line.” Supply chain and procurement processes are often complex, taking into account direct spend (the materials that go into the makeup of a product), as well as indirect spend (services such as facilities management) which, when multiplied across numerous manufacturing lines, represents a significant investment. Schenecker points to the need for change management and how one of the biggest moves in product design is the intimate integration of procurement. Engineers or designers are sometimes in a position where they

S U P P LY C H A I N

SAP Ariba works with compnaies to establish and build collaborative networks

will purchase parts based primarily on their familiarity with the part or vendor rather than aggressively looking for the lowest cost at the highest quality. “We are witnessing a change in the integration of procurement with design,” he says. “Whereas before it would be a case of sourcing parts to an individual engineer’s familiarity, or just looking at supply chain optimization, the challenge was that

the supplier relationship was owned by the company or by the procurement team not necessarily engineering. “Now, it is much more individual and much more owned and dictated by the joint efforts of engineering and procurement. “The lifecycle of products is much shorter today and so change management revolves primarily

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SAP ARIBA

around speed, which is incredibly difficult to manage. It can be overwhelming, but it’s about training, coaching and understanding how to leverage the entire process in order to better understand the way that you will work with suppliers.” Through the cultural change and the way in which work is managed, Schenecker notes that the role of the designers, buyers, planners, suppliers, right through the entire supply chain is beginning to converge. Historically, the different suppliers throughout the supply chain process would operate as entirely separate entities. But in this time of shorter product lifecycles, which will only continue to get shorter in the near future, the whole supply network is moving from a serial to a parallel model. “What happens now is design, sourcing, ramp to production are all working simultaneously,” Schenecker says. “You, your network, your suppliers, and your buyers and planners are all working in parallel. “Teams don’t work in a serial fashion anymore, they work in parallel and it

May 2018

all overlaps, with each other area.” This echoes back to the importance that Schenecker places on the planning process, as companies are now looking to reuse parts and streamline the introduction of new parts much more than ever before. “Today, companies are constantly cannibalizing their products in order to continue to win in the marketplace,” he says. “With the speed at which the market is changing, you have to, otherwise someone else will.” In the procurement and supply chain space there is a firm understanding that you can only be as good as your supply chain. The SAP Ariba Network, which has millions of customers and suppliers from all over the world, sees beyond the realms of being just a supplier and what it means to really be a partner.

USA

Mark Schenecker Vice President, Strategic Customers Business Networks, Supply Chain

Mark Schenecker works in the Ariba Center of Excellence for strategic customers at SAP Ariba, drawing on over 20 years of experience in SAP Business Suite, supply chain management, business networks, the Internet of Things and SAP Ariba Cloud Solutions. Schenecker transitioned out of the SAP development organisation and now specialises in guiding customers on the Ariba Business Network and supply chain solutions to achieve incremental value with speed and simplicity. Schenecker is a frequent speaker on future technologies and is the author of numerous articles, one book and four patents.

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SAP ARIBA

“Sure, you look for a supplier and ensure that they make the right product, the right parts, to the right timescale and right cost,” he says. “But now you have to look at what it actually means in terms of the actual cost to do business with that supplier.” If a supplier has process inefficiencies or does not have the required integration capabilities in this ever-demanding environment of speed, then the buyer has to look at what effect that will have from a cost perspective.

May 2018

“Inefficiency for example, will bring inventory buffers into place to cover up a lack of proficiency in communications in the supply chain, which of course means added cost,” says Schenecker. This approach has changed the way in which buyers evaluate suppliers, with the quality and pricing of parts being equally as important as the ability to perform. Performance and performance measurement of suppliers has become as crucial than the supply itself.

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SAP Ariba has worked with supply chain integration specialists Deloitte and Intrigo

Working with suppliers has become centred much more around supplier management than ever before and through close collaboration, SAP Ariba helps buyers to navigate this changing landscape to truly implement new processes with little disruption. SAP Ariba has worked with Intrigo and Deloitte, integration specialists with deep supply chain expertise, as Schenecker describes. These two companies understand the SAP Ariba network, the procurement business processes, complex supply chains

and SAP Ariba solutions, and have successfully helped the integration of new process and new ways of working through close collaboration. Other key partners include Liason, an integration specialist for the buyers that donâ&#x20AC;&#x2122;t use SAP systems, but through the work of the company can seamlessly integrate to the SAP Ariba Network. SAP also calls upon the work of EY and Deloitte in order to look closely at integration from the change management level,

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SAP ARIBA

approaching the transformation of supply chain with the view of asking the question ‘how do you implement for success?’ “Our partners have been key to us,” says Schenecker. “And the best thing is, they don’t work on just the one area. Sure, you’ll see Intrigo working on integration of SAP Integrated Business Planning, ERP and Ariba with Deloitte running change management, but all of our partners operate under the wider scope of a larger transformational journey.” As SAP continues to redefine its supply chain network in order to continue to provide true value to its supply chain and procurement partners, the question then becomes one of how to keep up the pace with the rapidly changing procurement landscape. After all, today’s best practice will not always be tomorrow’s. “Customers, and not just ours but our competitors, drive us to higher levels of innovation,” says Schenecker. “But we intend to lead, not to follow. Sure, we look to broader market to see what’s happening, but in terms of procurement and supply chain, SAP Ariba is setting the tenor, the direction and the trend for the current market. And we will continue to do just that.”

May 2018

S U P P LY C H A I N

“We intend to lead, not to follow” – Mark Schenecker, Vice President, Strategic Customers Business Networks, Supply Chain

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L E A D E R S H I P & S T R AT E G Y

Engaging Generation Z

Business Chief speaks to Epicorâ&#x20AC;&#x2122;s SVP of Product Marketing Scott Hays about the importance of attracting and retaining the younger generation in the workforce Writ ten by MARK SPENCE

L E A D E R S H I P & S T R AT E G Y AS SOME BUSINESSES struggle to recruit the requisite volume of skilled workers, particularly in the US across industries like manufacturing and construction, the push towards Industry 4.0 is in acute danger of being derailed. However, a number of industry experts have recently pointed out that the vast swathes of millennials, and now members of Generation Z, that will soon make up the bulk of the workforce will also bring fresh ideas, skills and a desire to dedicate themselves to their chosen company’s mission statement – not to mention a willingness to exercise any opportunity to enhance their personal growth. But is it that straightforward? Are organizations equipped to deal with the expectations of this burgeoning workforce? What potential hurdles sit in front of businesses who want to recruit from this group? Are businesses technologically savvy enough to deliver a working environment that will appeal to these younger generations? Finding the right people Epicor is a business that prides itself on being able to determine target 30

May 2018

markets and buyers for its software solutions. As a business, its central mission is to build products designed to help its customers achieve their aims across manufacturing, retail, distribution and services. The company has been around since 1972 and now employs over 3,900 people. As a global business serving markets across 150 countries from its base in Austin, Texas, it’s essential to be on top of recruitment to ensure the company maintains a skillset that moves with the times and combats any gaps caused by technology transformation. As such, SVP of Product Marketing Scott Hays is well positioned to comment on the push to recruit younger generations into some of the aforementioned industries. So, why are we seeing such a drive towards recruiting these younger generations of workers? “Every business runs on people. As much automation as we are putting into certain industries, there is still a demand for people,” says Hays. “While some things are changing – population curves, attitudes on entering the workplace and length of time spent at university – the demand for people continues. That’s the same

â&#x20AC;&#x153;As much automation as we are putting into certain industries, there is still a demand for peopleâ&#x20AC;? SCOTT HAYS SVP of Product Marketing, Epicor

L E A D E R S H I P & S T R AT E G Y for old and new businesses alike.” Given Epicor’s rich heritage in the manufacturing industry, Hays uses this as a platform to demonstrate just why the demand for young skilled workers is so high. “This generation of young workers have grown up in a time where they were able to make things. Have you heard the term, ‘a maker’s approach’? Here in the US we are empowering our young people in school. Nowadays they are taught things like robotics and coding. They have a 3D printer or they’re using a CAD system. At a school level it’s relatively simple. There’s a real sense

“Here in the US we are empowering our young people in school. Nowadays they are taught things like robotics and coding” SCOTT HAYS SVP of Product Marketing, Epicor

May 2018

of ‘I can make stuff’ and this applies to the manufacturing world. There’s a strong affinity there between what these kids grow up with and the working world they’re entering.” It’s certainly true that a few years ago these young people wouldn’t be entering a world of work already equipped with an ingrained skill set. The expectation then would have been to honor an apprenticeship before serving a lifetime dedicated to a craft. However, technology has changed that landscape drastically and has given these young workers early access into the demands of their chosen industry.

Expectations and demands As these younger generations enter the global workforce there’ll be a tangible culture and time gap between current and older hires but the key, Hays feels, will be to create roles within an organization for recruits who are willing to engage with the business. The dialogue will be different too. “The word ‘engage’ is crucial. It’s no longer just a case of ‘apply and hire’ anymore. Millennials and younger generations want to be able to say, ‘I’m joining your purpose, I believe in you and I can contribute’, rather than just ‘what’s the job and what’s the

“I think I would summarize the expectations around technology as being centered on this idea of ‘ease of access’. If you think about the younger generation’s experience of engaging with other people, it’s much more asynchronous but it’s 24/7” SCOTT HAYS SVP of Product Marketing, Epicor

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L E A D E R S H I P & S T R AT E G Y salary?’”. As far as Hays is concerned, affinity and resonance will be primary drivers for recruitment going forward. Crucially, technology will also play its part: “I think I would summarize the expectations around technology as being centered on this idea of ‘ease of access’. If you think about the younger generation’s experience of engaging with other people, it’s much more asynchronous but it’s 24/7. Let’s use texting as an example. The nature of texting is such that it says ‘at this moment I have 30 seconds and I can move this conversation on by sending a text’, and that’s become an expectation for all their relationships now. It’s the same for their relationship with a company, its processes and its data,” he says. “Essentially they’re used to being more mobile. They can take one piece of important work and break it down into smaller elements. To them a piece of work can be moved forward without needing to be sat in front of a computer for hours. I think that will be an expectation going forward too. I also think it’s one driven by a culture of constantly dealing with smartphones and cloud technology. They’re always ‘on’,” he adds.

Looking ahead It’s accepted that this vibrant, younger workforce will be entering the job market as tech savvy individuals, but despite the huge advantages this brings are there any downsides? “There are two danger areas here,” says Hays. “Firstly, I think there’ll be an expectation of transparency and openness but that won’t always be the case in business. There are very valid reasons why some businesses protect certain areas of what they do,” he continues. “Secondly, there’s a real risk of overreaching and oversharing. There’s this idea they can make something and if it doesn’t work, they’ll delete it and start again. There’s a real willingness to take risks, but in business these risks aren’t always appropriate.” By way of caveating these concerns, however, Hays concludes that these ‘danger areas’ can certainly be overcome and, more to the point, he believes businesses should help rather than smother these aspects of younger workers. “We shouldn’t shut down these ideas but maybe we should put some guardrails on the approach. We really need to tap into ideas that are driven by fearlessness and innovation.” 35

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“ We recently worked with BizClik Media on an article which characterizes and explains the total value that Kudu Supply Chain has on company growth plans. From start to the finish, it was a pleasure working with the BizClik team. The feedback we have received from different audience groups on the article was phenomenal. It has attracted a lot of interest and attention to our company, our growth plans and has definitely created additional value to what we are trying to achieve.”

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TECHNOLOGY

Wider electric vehicle adoption requires global energy solutions WITH COUNTRIES THE WORLD OVER INCREASINGLY TURNING TO ELECTRIC VEHICLES, TAAVI MADIBERK, CEO AND CO-FOUNDER OF SKELETON TECHNOLOGIES, INVESTIGATES HOW WE CAN ENSURE THIS ADOPTION IS SUSTAINABLE Written by TAAVI MADIBERK

TECHNOLOGY

HE AUTOMOTIVE SECTOR is evolving at an unprecedented rate. According to the International Energy Agency (IEA), an estimated 50mn electric vehicles will be in operation by 2025, and 300mn by 2040. With BMW, Volvo, and Jaguar Land Rover promising electrified versions of their current models, most of the major car manufacturers have now announced significant investment, re-affirming this shift. Furthermore, with Dyson announcing that it is starting to manufacture electric cars and the European Commission forming a consortium that will drive the development of battery technology, there is no doubt that we are moving towards a world with electric vehicles at its center. While we are certainly on the road to wider adoption, there is still one main drawback that could thwart public interest: charging infrastructure. Fundamentally, in order to support the innovation and commercialization of electric

May 2018

vehicles, the right energy technology and infrastructure must be in place. This is critical to ensure the experience matches the hype.

THE RISE OF THE ELECTRIC HYPE Fueled by the rise in air pollution and political momentum to reduce global warming, electric vehicles have grown in popularity and the technology has improved at a record pace to become a benchmark for innovation in the automotive sector. Competition in the marketplace is also increasing. From the first Prius hybrid model launched by Toyota in 1997, to the more recent full electric

â&#x20AC;&#x2DC;THE CASE FOR MORE ENERGY EFFICIENT VEHICLES IS GAINING MOMENTUMâ&#x20AC;&#x2122;

The Range Rover Sport plug-in hybrid electric SUV signals an electified future

TECHNOLOGY vehicle launches of the Tesla Model S, BMW i3 and Nissan Leaf, car manufacturers are investing in hybrid and electric vehicles and demand from consumers is gradually growing. Couple this with increasing environmental and sustainability regulations and the case for more energy efficient vehicles is gaining momentum.Â The adoption of this technology, however, is hampered by a need to optimize infrastructure to ensure it can support the surge in charging capabilities. Crucially, if the infrastructure cannot cope with peak power points, the adoption of electrical vehicles will be reach a standstill.

GLOBAL ADOPTION REQUIRES A UNIVERSAL SOLUTION We already see Britain, France, Norway and China committing to ban diesel and petrol cars in favor of cleaner vehicles. This shift was most recently followed by one of the leaders in the automotive industry: Germany. At this point, it is becoming critical to adopt technology that allows us to smooth over the energy consumption needs that advanced countries are yet 42

May 2018

Click to watch Skeleton Technologies â&#x20AC;&#x201C; Global Tech Leader in Ultracapacitor Energy Storage

â&#x20AC;&#x2DC;IF THE INFRASTRUCTURE CANNOT COPE WITH PEAK POWER POINTS, THE ADOPTION OF ELECTRICAL VEHICLES WILL REACH A STANDSTILLâ&#x20AC;&#x2122;

to experience. We need to take a holistic view to managing energy provision, as we will not be able to rely on drivers of electric vehicles to scatter the time when they charge their vehicles to reduce peak demand. With implementation commitment growing at a rapid pace, there is a pressing need for collaboration that will support solutions for energy technology challenges globally. This can only be done if governments, industry bodies and innovators join forces to support energy storage technologies that complement future developments in the sector. There is a need for a serious discussion on how to implement a stable grid that will be capable of withstanding the increased energy consumption inevitable with electric vehicles. Critical to this will be coping with especially high demand peaks and proving that the grid has the resilience needed for electric vehicles to become a success.

REVOLUTIONIZING THE SECTOR It is possible to manage the growing demands on our energy infrastructure and ensure that there is a stable and reliable energy support that will drive 43

TECHNOLOGY the growth of electric vehicles, but it requires a fresh look at our energy storage mix. By investing in energy storage technologies that complement battery power, such as ultracapacitor technology, we can manage peak power needs. Ultracapacitors are one of the lowest cost solutions to helping with grid stability, and can play an integral role in supporting the national grid and managing power demands. Wide-scale electric vehicle charging creates serious issues with demand management, which can potentially cause power blackouts. These

May 2018

blackouts are caused mostly by short demand peaks, which usually last under a minute. This is precisely where ultracapacitors excel. As part of the grid solution, ultracapacitors can provide a means to ensure there are no blackouts during sudden changes in demand. On board vehicles, the technology should be evaluated and used in tandem with lithium-ion batteries in order to downsize the pack and increase the battery lifetime. By introducing capacitive technology to the power unit, it is possible to reach longer lifetimes and support the peak power needs of electric vehicles.

However, in order to do so, we must secure a reliable infrastructure to support this trend going forward. By prioritizing investment in infrastructure and encouraging discussion and collaboration between governments, car manufacturers and technology companies, we will be able to create an environment where infrastructure, technology and the consumer act as one. Only then will be able to embrace electric vehicle revolution globally and support a future that is dominated by electrification.

â&#x20AC;&#x2DC;WE NEED TO TAKE A HOLISTIC VIEW TO MANAGING ENERGY PROVISIONâ&#x20AC;&#x2122;

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Business process outsourcing and the digital revolution

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IS THE US SKILLS SHORTAGE PART OF A GLOBAL EPIDEMIC?

Jack Coker, Principal, Ducatus Partners, discusses how America can make its infrastructure “great again” as Business Chief finds out whether the current skills gap is a global phenomenon Written by JACK COKER Edited by OLIVIA MINNOCK

PEOPLE

“ Although it will take several generations to rebuild the infrastructure workforce to full capacity, companies can kickstart the process” – Jack Coker, Principal Consultant, Ducatus Partners

THE PEOPLE PROBLEM Modern infrastructure in the US was born from President Franklin D Roosevelt’s New Deal for the American people. Between 1935 and 1943, the Works Progress Administration (WPA) built over 500,000 miles of rural roads, 100,000 bridges and 1000 airfields. The WPA built sewers, tunnels and power lines. Hospitals, schools and fire stations sprang up across the nation. 50

May 2018

However, in recent years this spirit of investment has waned. In every report card since 1998, the American Society of Civil Engineers has awarded a ‘D’ to America’s infrastructure, reflecting chronic underinvestment in the sector. The society also estimates that, unaddressed, this could damage the economy to the tune of almost $4trn lost in GDP by 2025, slashing the disposable income of each household

across the United States by $3,400 each year. Fortunately, change is in the air and major infrastructure investment is back on the political agenda. The problem? There are not enough skilled people to meet demand. Whilst the WPA was created in part to soak up excess labor in the workforce, modern programs are hampered by the lack of it. All over the world, the skillsets

required in the labor market are having to adapt to technology transformation. As the US struggles to keep up with this demand, developments are more positive around the world with governments and educational organizations focusing on better preparing the workforce. Across the Middle East, Europe, Asia Pacific and parts of the Americas, employers are beginning to find it easier to find the right talent, but additionally it has been shown that particularly in Europe, contract, freelance and temporary work are all on the rise. This could point to a workforce adapting to fit their existing skillsets around changing demand. Globally, economic migration is on the up, with migrant workers increasingly of a more educated caliber. While migration can help to plug skills gaps across the world, as there is a bigger pool of talent to choose from for a countryâ&#x20AC;&#x2122;s particularly profitable industries, in many cases restrictions on migration are set to increase, particularly in the UK and US. In addition, wage growth across the EME market has been slow and as such it can be easier to hire new employees than in other regions, like Asia and the US. 51

PEOPLE A VICIOUS CYCLE Coming back to the US, underinvestment in infrastructure has been a topic of discussion for decades. However, the paucity of large infrastructure projects has led civil engineers and specialist managers to depart from the industry. This is compounded by fewer people seeking a career in the space, and fewer students enrolling in courses. A vicious cycle. Several states have recognized the need for infrastructure investments. For example, Connecticut and Washington are in the early stages of multi-year transportation improvement initiatives. What’s more, some states have resorted to raising extra funds to try and deal with the situation, including raising gas taxes, a key source of funding for road construction. In California, 20 of the state’s 58 counties already have transportation sales taxes in place which has led to an exponential increase in infrastructure projects. Unfortunately, even as the money is starting to flow, the workforce has atrophied. In short, there are essential individuals who make the difference between on-time, on-budget projects and multimillion-dollar overruns; and 52

May 2018

“ There are essential individuals who make the difference between on-time, on-budget projects and multimilliondollar overruns; and there aren’t enough of the” – Jack Coker, Principal Consultant, Ducatus Partners there aren’t enough of them. A number of issues stem from the workforce shortage. Lack of experienced workers means companies must relocate employees across the country on a project-byproject basis. Relocation can be expensive, especially in states like California. Another issue is that human resource and leadership teams focus almost exclusively on project start-up to the detriment of ongoing roles throughout the project lifecycle, resulting in a backlog of hires which has a direct

impact on the bottom line. Project and construction managers with five to 15 years of experience are in particular demand, and positions can remain open for months at a time; especially in the aviation, rail, transit and water sectors. This stretches workloads which in turn increases staff attrition. Another vicious cycle, further compounding the talent crisis. This is a particular problem for US infrastructure, but that’s not to say that other regions aren’t struggling to find staff with the specific skills needed as their economies shift and change.

TAKING ACTION Running into this problem with varying degrees, countries are taking different steps to upgrade the skillsets of their workforce in line with new requirements – but exactly where this responsibility lies is a contentious issue. Udemy recently commissioned a ‘skills gap’ report pertaining to the global work environment. This showed that the majority of workers around the world agree there is a growing skills gap, but largely feel “optimistic about their own skills and the competitiveness of their respective countries”. 53

PEOPLE On a worldwide scale, Udemy CEO Kevin Johnson stated: “the nature of jobs is quickly changing with automation, globalization, government policies and other factors, making it impossible for anyone to predict which skills a job will require in the future. This only serves to widen the perceived skills gap.” In the US, 79% of full-time employees according to Udemy believe there is a skills shortage and 35% “feel personally affected by it”, but 80% of these believe that workforce reskilling will be successful. In terms of reskilling efforts, 41% think the government, through tax benefits or otherwise, should contribute. Udemy’s report analyzed five global markets and found that in France, staff largely don’t feel the need to upskill, with 75% stating that they were confident with their current skill set – however in Brazil, 98% of those surveyed acknowledged the existence of a skills gap in their country. In terms of responsibility, 50% of Mexicans felt that it was up to the individual to upskill, with 17% placing responsibility on the government and 13% on employers. It was also found that some people have taken on a second job in order to utilize 54

May 2018

their skills in a more appropriate way, with 39% of Americans describing themselves as having a “side hustle” in comparison with just 18% in both Spain and Germany. In the US, there are doubtless deepseated issues that will not be solved overnight. However, with megaprojects in construction and infrastructure in the offing such as those tied to the 2028 Olympics, California’s high-speed rail and LAX’s $5mn upgrade program, there is no time to wait. With that in mind, the

“ Human resource and leadership teams focus almost exclusively on project start-up to the detriment of ongoing roles throughout the project lifecycle, resulting in a backlog of hires which has a direct impact on the bottom line” – Jack Coker, Principal Consultant, Ducatus Partners question is: how can companies best manage and mitigate workforce issues to ensure projects are on schedule and on budget?

PROACTIVE TALENT MAPPING AND EDUCATION By partnering with a specialist executive search provider, companies can build a map of where talent is and where it needs to be. Talent mapping is about proactively building a virtual ‘bench’ of talent, anticipating need, and successfully mitigating unnecessary

cost. Mapping allows companies to proactively engage candidates which significantly reduces time to hire. Upon the award of a large infrastructure project, a high-potential candidate pool is identified, engaged, and ready to be mobilized. In locations that are difficult to recruit to, either due to high costs or low desirability, talent mapping is especially useful. Although it will take several generations to rebuild the infrastructure workforce to full capacity, companies can kickstart the process. By working in partnership with colleges, companies can start to mold the next generation by putting the right skills in place, imparting knowledge, and developing talent pipelines through internships. When the time comes for graduates to seek full-time positions, companies may benefit from having built respect and loyalty with interns. According to World Atlas, one of the countries suffering an even greater skill shortage than the US – indeed the ‘worst’ in the world – is Japan, and education is a leading cause. “Japanese companies are faced with potential employees lacking knowledge of the global markets,” the report 55

PEOPLE argues, putting this down to a “rigid” educational system which does not equip Japanese students for the modern world. In China, as it strives to overtake the US as an AI superpower, finding the correctly skilled individuals is paramount and has become a common issue for companies according to the Global Skills Index. Therefore, issues in transforming the economy aren’t isolated to the US alone, but in China

they are increasingly in the form of new technology skills and the ability to manage a tech-based enterprise, which often has to come from employees educated in the US or Europe. High costs of hiring mid-tohigh management have resulted in MNCs being reluctant to set up core research centers in China, according to China Daily, which adds that China is making more efforts to work with universities, “especially top

“ In locations that are difficult to recruit to, either due to high costs or low desirability, talent mapping is especially useful” – Jack Coker, Principal Consultant, Ducatus Partners

May 2018

engineering institutions”. It is widely agreed in China that the likes of AI and Big Data should be exploited, but employers are now forced to look at the skills and talent pool on a global scale. The government has launched guidelines on focusing talent development in manufacturing, including integrating industry and education, promoting key adaptable abilities and qualities, and “establishing a high-level management skills pool”. While China leans more toward a planned economy than most, government involvement may be a direction for other economies to consider when dealing with the global skills gap. Although young talent is slowly entering the industry in the US, experienced talent is quickly flowing out. Senior talent is retiring and leaving an institutional knowledge gap. Companies have a responsibility to eliminate this from happening. Developing concrete succession plans to transfer knowledge and skills to the next generation minimizes the risks to the retirement process. This applies across the organization, from the C-Suite, project leadership to the

Jack Coker is a principal consultant at Ducatus Partners, an executive search and leadership consultancy focused in the global energy, infrastructure and process industries. He has significant search experience in both Europe and the Americas, serving a broad range of clients spanning architecture, engineering and construction across the energy, power and civil infrastructure sectors. Jack holds a Master of Science degree in Environmental and Earth Resources Management from Kingston University, London and a Bachelor’s degree, with honours, in Geography from the University of Portsmouth.

experienced niche engineers. Will the rediscovered appetite for infrastructure investment be enough for the US? Or is it a case of a day late and a dollar short? Only time will tell, but companies the world over can be sure of one thing: smart workforce planning and talent management is essential to successful project delivery. 57

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S U S TA I N A B I L I T Y

tay true to what you are

Marketing expert Allen Adamson tells us why businesses must be careful not to dilute their brand when introducing new products Written by STUART HODGE

S U S TA I N A B I L I T Y

E LIVE IN a changing marketplace. Although all of the traditional staples of customer service are still welcome, they are becoming less important to a new generation that had grown up with the ubiquity of online shopping platforms and a plethora of choices like never before. More and more highstreet retailers are suffering at the hands of the growth of at-home pointand-click shopping, and it seems that the power of a strong brand identity is greater than ever before. With this in mind, Business Chief spoke to branding expert Allen Adamson, author of various books esteemed at universities globally on the topic, including his latest title ‘Shift Ahead: The Best Companies Stay Relevant in a Fast Changing World’. He spoke to us about how the power of brands is changing in the modern world, and the challenges of diversifying in a changing landscape. “In my world a brand is what your story is,” he says. “One of the challenges that many marketers face is ‘what is their story? What do they stand for?’ Once you figure out your story, 62

May 2018

your brand, what has become increasingly difficult is ‘how do you get that story out there?’ Like many things, a theory in marketing and branding is pretty easy, but execution is really hard. What I mean by that is people only recommend extraordinarily good things or talk about extraordinarily bad things. They don’t recommend or talk about things that are just ‘okay’.” Consumer habits are no doubt changing too. In fact, a recent study by EFG Companies looking at digital

“ People only recommend extraordinarily good things or talk about extraordinarily bad things. They don’t recommend or talk about things that are just ‘okay’” – Allen Adamson, Co-Founder at Metaforce

purchasing in the car market revealed that half of customers will now check reviews online before even contacting a dealership. Not just that, but the study would also indicate that we are becoming more picky and impatient: 43% of the pool of almost 1,500 respondents said that they were more likely to visit a dealership if it had plenty of information on its website, and 83% expected a response from the dealership within 24 hours of sending an online vehicle inquiry, with 16% 63

“ If you don’t look good, most consumers are not going to read the product specs to find out what’s inside” – Allen Adamson, Co-Founder at Metaforce

May 2018

S U S TA I N A B I L I T Y wanting information immediately or within the hour. However, the nature of the response people are expecting has changed, with only 9% wanting a phone call from the dealership after they’ve submitted an online request. Not just that, but Adamson believes the way we are interpreting the world around us now is changing the way that consumers are recommending products. He says it’s now more often about how they appear visually than whether they’ve been recommended by one person to another. “Younger consumers are spending more and more of their time sharing stories, sharing ideas, sharing pictures,” says Adamson, who is also the founder of marketing and branding consultancy Metaforce. “With that in mind, I think ‘word of eye’ is becoming more important than word of mouth. I think the quality or the visual appeal of things is growing in importance because people are visual to begin with, and now that they can share pictures as fast as they can share words and ideas, you have to look good no matter what you’re doing. “A couple of years ago I went to the 65

S U S TA I N A B I L I T Y

Consumer Electronics Shows in Vegas and no matter which manufacturer I looked at, from 20 companies from China and from India that I’ve never heard of to Apple, Sony and Samsung, everyone’s products looked spectacular. All of a sudden, even the cheapest products looked incredibly stylish. Now, if you don’t look good, most consumers are not going to read the product specs to find out what’s inside. They’ll make a snap decision and if you don’t look good, you can’t fix it.” Another trap that manufacturers have to avoid falling into is having too myopic a viewpoint. If you are Coca-Cola, don’t just look at Pepsi as your major competitor or you could fall off the pace. With so much choice out there now, every soft drink manufacturer is a competitor. Blackberry is a prime example of a company which has suffered from being too tunnel-visioned in its approach. The Canadian smartphone provider did help to drive the boom in smartphone pervasion, but staunchly believed that consumers would never move away from using a keyboard. 66

May 2018

“ You have to make sure that whatever product you go into, the benefit of your brand still is delivered” – A llen Adamson, Co-Founder at Metaforce

The entire management team was convinced that the iPhone and touchscreens were a toy that kids would be playing with, but that any serious person typing out messages for business would never give up their keyboard. This undiversified view was why Apple and other competitors were able to steal a march and ratchet up their market share. It’s a danger for every company, but

do these changes in consumer behavior and the requirement for increased brand awareness mean it’s now harder to diversify your line of products within an overarching brand identity? Adamson doesn’t believe so, but he does feel companies need to be a little cleverer about how they do it, ensuring that the integrity of what their company stands for is not compromised. “You

have to make sure that whatever product you go into, the benefit of your brand is still delivered in that new category or that new segment and it reinforces what the core idea is,” he asserts. “I think BMW has been pretty successful switching from sports sedans to SUVs. Yes, their SUVs perform differently than their other models but when they talk about why their SUV is better than other SUVs, it’s still tied to that core idea of ‘the ultimate driving machine’. If you’re in an SUV, ‘the ultimate driving machine’ lets you go through a riverbed and up an incline without tipping the car over, and through mud and muck. If you’re driving a sports sedan, that means you can go around the corner on the highway at 60mph and not feel that you’re going 60mph around the corner. They have a clear definition of what BMW-ness is. “Now they’re experimenting with electric cars, the definition of what ultimate driving means has some latitude but no matter what it is, the worst thing you can do to a brand is to line-extend it or diversify into a product that’s unsuccessful and is rejected by 67

S U S TA I N A B I L I T Y the market. Because not only will you miss the opportunity to sell SUVs if you’re BMW, but you’ll do more damage to your core product line.” An example of a company losing vision of what made its brand truly special, as Adamson illustrates in his latest work, is Sony. “Sony used to stand for magical things when they first were around,” he says. “Their television sets, their screens had matchably better color than anyone else’s. When you put on their Walkman 20 years ago,

the sound was phenomenal. Then they started to stick the Sony name on products that didn’t give you goosebumps like clock radios, shower radios… not quite toasters, but they put their name on everything and all of a sudden on phones that were not that good. “I think the key part of success today is being able to deliver your brand benefit in whatever form your customer wants it. The trick is not to go so far where you’re just extending and, like

“ If you can’t deliver a great experience at these new diversification points then you’re basically diluting your brand, you’re stretching it too thin” – Allen Adamson, Co-Founder at Metaforce

May 2018

the Sony story, you have nothing special. When we look at brand extension we look at both fits. Yes, the Sony brand can fit in shower radios but does this have any leverage? “If you can’t deliver a great experience at these new diversification points then you’re basically diluting your brand, you’re stretching it too thin. You are looking at short-term sales versus longterm success. More and more brands have stretched so far that they don’t stand for anything because they

become diluted. Famous theory is ‘the stronger the focus, the stronger the brand’. If a brand stands for everything and is in every category it’s going to lose its success. “All of sudden people looked at Sony and said ‘oh, it’s not that special. Their phones aren’t that good. The shower radio is not that great’. They lost their sizzle because they diversified well beyond their ability to deliver a core Sony experience.”

ATLA CITY FOCUS

ATLANTA IS A MAJOR PLAYER IN THE US ECONOMY AND IS EMERGING AS A FORCE ON THE WORLD STAGE TOO. BUSINESS CHIEF TAKES A CLOSER LOOK AT THIS BUSTLING ECONOMIC POWERHOUSEâ&#x20AC;¦

ANTA Writ ten by SHANNON LEWIS 71

ATLANTA, CAPITAL OF GEORGIA, America’s ‘Peach State’, has ranked highly in the country with regards to Gross Domestic Product (GDP), even when taking into consideration the recession of 2008. In 2014, metro Atlanta, Atlanta’s metropolitan area, had a GDP of $324.9bn, ranking it 10th in the United States, according to Biz Journals, and demonstrating a 5.1% increase from the previous year. In 2016, metro Atlanta had a GDP of $363.8bn, according to Statista. Named the Atlanta-Sandy Springs-Marietta Metropolitan Statistical Area by the US Census Bureau, it is the most heavily populated metropolitan area in Georgia and the ninth most populated in the country. The GDP per capita of metro Atlanta was $55,300 in 2016 according to the Open Data Network. The Open Data Network predicts that if trends continue, by 2021 the GDP per capita will decrease to $54,615. In the city of Atlanta, the approximate GDP per capita is $40,882, according to City Data, a rise from the GDP per capita in 2000 which stood at $25,772. In 2016, Atlanta demonstrated the second-fastest economic growth in the top 10 metro areas of the United States, according to the Bureau of Economic Analysis. Georgia as a state has a GDP of $14.32bn, making it the second largest contributor to the United States’ GDP, contributing 2.2% to the total, coming second to Florida at 5.5%, according to Biz Journals. Georgia’s GDP in 2016 was approximately double what it was averaging between 1990 and 2015, $7.64bn, according to Trading Economics. It hit a record high in 2014, at $16.51bn, and a record low in 1994 of $2.51bn, 72

May 2018

ECONOMIC GROWTH

CITY FOCUS

CITY FOCUS but it currently makes up 0.02% of the world’s economy, according to Trading Economics. The AtlantaSandy Springs-Roswell metropolitan area places tenth in terms of GDP contribution, according to Spare Foot. Atlanta is also the largest city and most populated city in Georgia, with a metropolitan area populated with approximately 5.7mn citizens, according to Statista. As of 2016, the city of Atlanta is home to approximately 463,878 people, an increase from the previous year’s 456,002 residents, according to World Population. World Population confirms Atlanta’s population density as that of 630 people per square mile, or 243 people per sq km. Metro Atlanta is steadily becoming a popular region for immigration from other states in the country. In 2016 it gained 90,650 residents, ranking it fourth in the nation for increase in residency that year, according to AJC. One of the pulls is the new availability of jobs in the metro Atlanta area; 2016 saw the region add 77,000 jobs, the third highest amount among metro areas in the United States, according to the US Bureau of Labor Statistics and the Atlanta Regional Commission. 74

May 2018

â&#x20AC;&#x2DC;Atlanta is the largest city and most populated city in Georgia, with a metropolitan area populated with approximately 5.7 million citizensâ&#x20AC;&#x2122;

JANET S RANKIN remarked that Atlanta placed second among the 12 metropolitan areas of the United States with regards to job growth, and third with regards to the quantity of jobs added. The largest contributor to Georgiaâ&#x20AC;&#x2122;s economy is real estate, which, according to Biz Journals, contributes 12.1% of Georgiaâ&#x20AC;&#x2122;s GDP. Other sectors which contribute heavily are manufacturing and public administration. Information technology has been steadily increasing in relevance in Atlanta specifically. Atlanta also sees heavy contribution from real estate, finance, insurance, transportation and utilities, and the professional and business sectors. The professional and business services sector saw the largest increase in employment in the metro Atlanta area; between 2016 and 2017, it increased by 30,500, 6.2%, according to Bureau of Labor Statistics. Education and health saw the second-largest increase of 8,900, followed by leisure and hospitality at 7,600. According to the Bureau of Labor Statistics, the average job growth of 68,300 or 2.6% in the area was over double the national average of 1.2%. With regards to specific industries, City Data reports that though the Coca-Cola Company is a relatively influential figure in Atlanta, no individual 76

May 2018

EMPLOYABILITY

CITY FOCUS

business dominates the local economy. However, it is the service industry that hires the largest quantity of workers. In 2000, the metro Atlanta area was home to 24 Fortune 1000 companiesâ&#x20AC;&#x2122; headquarters and other large concerns including Delta Airlines, UPS, and Home Depot. In 2002, Atlanta was named a â&#x20AC;&#x153;Renewal Community,â&#x20AC;? which gave it access to a pool of $17bn worth of tax incentives for its businesses. According to City Data, the nonagricultural labour force in metro Atlanta consists of 2,158,600 workers, with 1,800 in the natural resources and mining sector, 97,500 in information, 115,600 in construction, 148,000 in finances, 170,300 in manufacturing, 200,700 in leisure and hospitality, 213,100 in education and health, 287,800 in government, 337,900 in business services, and 492,000 in trade, transportation, and utilities. It is also a hub for travel connections through the air, rail, and trucks, with the HartsfieldJackson Atlanta International Airport consistently being named the busiest US airport since 1998, according to WSBTV. Its terminal is approximately the size of 45 American football fields, according to Mental Floss. According to Forbes, the cost of living in Atlanta is 2% above the national average. 77

CITY FOCUS

TOP BUSINESSE ATLANTA IS HOME to many successful businesses with constantly growing employment opportunities. In terms of quantity of Atlantean employees, the third largest business in Atlanta is Gwinnett County Public Schools. The school system oversees 20,770 employees in Atlanta as of 78

May 2018

the beginning of 2016, according to Biz Journals. Established in 1871, it is the largest school system in Georgia, serving around 180,000 students according to the schoolâ&#x20AC;&#x2122;s website. Above that, in second place, comes internationally recognised university, Emory University. Emory, established

‘The largest company in Atlanta with regards to number of employees is Delta Airlines. Established in 1941, it employs 30,813 Atlantean workers, 31,028 Georgian workers, ultimately 78,763 workers overall’’

ES in 1915, employs 25,349 people; the majority are Atlanta based with 24,535 of those employees from the city, and 25,036 from the rest of Georgia, according to Biz Journals. Finally, the largest company in Atlanta with regards to number of employees is Delta Airlines. Established in 1941, it

employs 30,813 Atlantean workers, 31,028 Georgian workers, ultimately 78,763 workers overall, according to Biz Journal. With its hub in HartsfieldJackson Atlanta International Airport, it ranks 86th on Forbes’ America’s Best Employers for Diversity.

Writ ten by SHAUN BOWIE

TOP 10 LARGEST COMMERCIAL BUILDINGS IN THE US

BUSINESS CHIEF TAKES A LOOK AT THE LARGEST COMMERCIAL BUILDINGS THE US HAS TO OFFER, BASED ON THEIR SQUARE FOOTAGE, AND WHAT FUNCTION THESE GIANT CONSTRUCTIONS SERVE

T O P 10

USAA Headquarters: McDermott Building www.usaa.com

The McDermott Building is located in San Antonio, Texas, and is owned by Fortune 500 company United States Automobile Association (USAA), which offers financial services to military members, veterans and their families. The four-story building was constructed in 1976 and has undergone further construction work four times to reach its current size.

Boeing Everett Factory www.boeing.com/company/about-bca/everett-production-facility.page

Located in Everett, Washington, and opened in 1967, the Boeing Everett Factory is the largest building in the world by volume. The very first 747 jumbo jets were produced here and it continues to be involved in the production of state-of-theart aircraft. The facility is open for public tours every day of the week and houses six coffee stands, a bank, several cafes, its own fire department, a security team and a fitness center. The factory employs 30,000 people and the site hosts over 150,000 visitors every year.

May 2018

Willis Tower www.willistower.com

Previously known as the Sears Tower, the Willis Tower was the tallest building in the world for 25 years after its construction in 1973 with a total height of 1,729 ft including its roof towers. It is now the 26th tallest building in the world and the second tallest in the United States, beaten only by the One World Trade Center. It has 4.5mn sq ft of floor space and the largest tenant is United Airlines which occupies around 20 floors including its headquarters and operations center.

07 Embarcadero Center www.embarcaderocenter.com

Found in San Franciscoâ&#x20AC;&#x2122;s financial district, the Embarcadero Center is a complex that contains two hotels and five connected office towers. Constructed between 1971 and 1989, the center contains more than 125 retail stores, a wide variety of restaurants and two cinemas. During the winter, there is also an outdoor skating rink located on the site. Over 14,000 people work within the building which boasts 4.8mn sq ft of floor space.

T O P 10 Chrysler Headquarters and Technical Center

http://media.fcanorthamerica.com/ newsrelease.do?id=7054&mid

Spanning 5.3mn sq ft, the Chrysler Headquarters and Technical Center is found in Auburn Hills, Michigan. It took five years to construct between 1986 and 1991 and was opened five years after completion. The complex is spread over 507 acres and acts as the main research and development facility for Fiat Chrysler Automobiles US LCC. The building has 15 floors and boasts underground hallways large enough for two cars to pass each other, so vehicle testing can be completed within the building. These test cells have their own separate foundations to avoid shaking the entire complex.

Renaissance Center gmrencen.com

Made up of seven connected skyscrapers and located in Detroit, the Renaissance Center is the world headquarters of General Motors. It is the tallest building in the state of Michigan and also contains the largest Marriott Hotel with 1,298 rooms. Construction began in 1973 with the main tower being finished in 1977. The complex was further renovated in 2004. The building was financed almost entirely by the Ford Motor Company and was the worldâ&#x20AC;&#x2122;s largest private development, costing $500mn in 1971.

May 2018

Warren G Magnuson Health Sciences Building www.washington.edu

The Warren G Magnuson Health Sciences Building is the largest university building in the world and can be found on the University of Washington campus in Seattle. Originally constructed in 1947, it has had 20 interconnected wings added to the main building since, bringing its overall size to 5.7mn sq ft. The complex has wet laboratories, lecture halls and administration offices.

Air Force Plant #4 at Carswell Air Force Base www.lockheedmartin.com

Located five miles north of Fort Worth, Texas, Air Force Plant #4 is found at Carswell Air Force base. The facility is government owned but is operated by contractor Lockheed Martin Aeronautics which employs 17,000 people, making it one of the biggest employers in the area. Military aircraft have been manufactured here since 1942 and the F-35 Lightning II Joint Strike Fighter is currently produced on the plant assembly line. The factory also produces radar units, missile components and spare aircraft parts.

T O P 10 The Pentagon www.defense.gov

The Pentagon is one of the most famous buildings in the world, as well as being the second largest commercial building in the US at 6.7mn sq ft. Located in Arlington County, Virginia, the site was designed by architect George Bergstrom and construction began on September 11, 1941, opening January 15, 1943. The facility employs 30,000 military and civilian personnel and acts as the headquarters of the United States Department of Defense.

May 2018

The Palazzo www.palazzo.com

One of the most famous casinos in the world, The Palazzo is a luxury all-suite casino hotel found in Las Vegas Boulevard on the strip. It is the largest building in the United States with 6.9mn sq ft of space, having opened for business on 30 December 2007. The hotel has 3,068 rooms with a standard size of 720 sq ft. The hotel and casino are part of a larger complex with also includes the adjoining Venetian Resort and Casino and the Sands Convention Center. The entire complex is owned by the Las Vegas Sands Corporation.

QMAX & TO A

THE JOURNEY

CENTRALISED, OPTIMISED

SUPPLY CHAIN

Through the advent of a centralised supply chain strategy, QMax continues to deliver success for drilling fluids customers in the global oil and gas industry Written by Dale Benton Produced by Denitra Price

QMAX

s a company that promises to deliver with no excuses, the role of supply chain is crucial for QMax in staying true to its word. But that is what it proudly promises, and in 2015 the company brought in the talented Veronica Brown to oversee the development and continued growth of a market leading supply chain function. With over two decades of global supply chain experience in the oil and gas industry in roles with both Halliburton and BP, Brown brings significant experience of working with international customers in her current role as Vice President of Supply Chain at QMax. “I have been on both sides of the table when it comes to oil and gas,” says Brown. “I have worked as the operator and as the buyer. So, I understand how things work with regards to buying the products. We need to provide the services, but also how these services are then used by the operator, understanding their pain points, and what they are truly looking for in their product.” The supply chain function

May 2018

is undergoing a significant transformation in industries all over the world. No longer seen as a separate business function, supply chain is now recognised as a key driver of growth and, in some cases, guiding the strategic direction of a company. This is no different for QMax. Throughout her career, Brown has seen this evolution happen first hand. “This is something where I think QMax is a perfect example. I sit in planning meetings surrounding the future of the company, where we want it to go, what we want it to be, and supply chain is right there in those discussions,” she says. “It is very clear from the CEO to the VPs of Operations and Technology that they need to work closely with supply chain. It has been refreshing, to say the least. Supply chain is part of the discussion from the beginning, and it really enables true collaboration which, in turn, drives the company forward.” As a global supplier of solutions for

S U P P LY C H A I N

Veronica Brown Vice President, Supply Chain

Veronica Brown holds a BS in Business and a MBA from Bellevue University. She began her oil and gas career in 1994 with Halliburton in Mexico City. Following a twoyear stint in Finance, she moved to a Supply Chain role, and then she was offered a position in the Latin America Region ERP implementation team based in Houston. She then progressed to several management Supply Chain roles within Halliburton before accepting job with BP in 2008. Within BP, she led teams in the Gulf of Mexico Region and as the Global Fluids Category Manager. Early in 2015, Brown joined QMax as Head of Function for Supply Chain.

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QMAX

“I HAVE WORKED AS THE OPERATOR AND AS THE BUYER. SO, I UNDERSTAND HOW THINGS WORK WITH REGARDS TO BUYING THE PRODUCTS” – Veronica Brown, Vice President, Supply Chain

May 2018

Mud plant midland

S U P P LY C H A I N

drilling needs, waste management, the Middle East, etc. need to order transportation, technical testing products from the US, they contact and analysis services, QMax has our central supply chain team and we always had a logistics arm, but buy the product and ship it to them.” through Brown it has its very first QMax has also implemented a Vice President of Supply Chain. Supply Chain Manager role within Following the acquisition of QMax each country it operates. These by Palladium Equity Partners, LLC managers communicate their local in 2014, the new CEO recognised an needs directly with Brown who, issue across the company, one working with the global team, that saw a siloed way of leverage their global working between supply volumes across the chain and logistics. organisation. This is where Brown One example is a came into play. discount that was Year founded “There was a negotiated with a US logistics department, supplier. Now that a very siloed one, QMax buys directly and there was a with this supplier in representative in every one the US and ships to other of our locations. The problem countries, the whole organization was they never communicated reaps the benefits of the discount. with one another,” says Brown. This is an example of how “So, the decision was made Brown, through her role, has to create a global supply chain an almost real-time view and organisation and this is when my role understanding and of what is was created. One of the changes we happening across the organisation, implemented was to centralise our working with the CEO, operations, supply chain operation. So, when and technology to leverage cost our operations in Mexico, Colombia, savings and enable efficiencies.

1993

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QMAX

Barite silos midland

In three short years QMax and Brown have come a long way, but no supply chain journey ever truly ends. As noted above, supply chain is a continuously evolving space and so Brown understands that the company must not rest on its laurels and continue adapt to this changing landscape. “Right now, as an organisation we are implementing an ERP system that will provide us with greater visibility not only of what we are buying, but also the contract negotiations surrounding that purchase,”

May 2018

she says. “We are negotiating a number of different agreements in different countries, and currently there is no visibility to see what exactly these countries are buying, unless I ask for that information. “Having an ERP system in place will provide us with that visibility, but it will also enable us to have a better understanding of our performance and generate better, more valuable KPIs as an organisation.” An ERP system is but one of the many ways that technology is redefining the supply chain

S U P P LY C H A I N

QMax - Our Solutions

process, and while QMax currently runs most of this data capture through manual processes, technology will open the door to a more efficient and agile function. “Technology, starting with the ERP system, will enable us to improve our planning and demand planning for a product,” says Brown. “Once that is in place, we can add to that, such as transportation management systems. It will make the supply chain work better. I can have less inventory and be more efficient with planning and giving

forecasts to my suppliers.” With any transformation, particularly one that has been, and will continue to be, defined by technology and changing of process, challenge is inescapable. Brown recognises as much. In building the very foundations of a supply chain network to be more efficient and centralised, Brown knew that the first component required to enable change was the people. “Changing the mindset of people, be it operations or sales, and making them understand that supply chain

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QMAX

“CHANGING THE MINDSET OF PEOPLE, BE IT OPERATIONS OR SALES, AND MAKING THEM UNDERSTAND THAT SUPPLY CHAIN IS NOT A ROADBLOCK, BUT RATHER ENABLERS FOR THEIR JOBS. THAT WAS A CHALLENGE AT FIRST” – Veronica Brown, Vice President, Supply Chain

May 2018

S U P P LY C H A I N

is not a roadblock, but rather enablers for their jobs. That was a challenge at first,” says Brown. “As we work closer together, they can see the benefit much better than before. They understand that just because we are not out in the field with the technologies or products in action, it does not mean we cannot come up with innovative ideas and solutions to help them address their pain points.” As a means of reinforcing this message, Brown promotes a culture of collaboration. She insists that everyone on her team meet regularly with their internal customers in operations across the different regions to understand their needs and listen to them. In creating an open dialogue across the entire organisation, Brown and her team are better prepared to help those who need it. This open dialogue extends further, as Brown has redefined the negotiations process through the creation of mixed negotiation teams. “It is not just supply chain going to

Anchor USA a QMax Company negotiate with the supplier. We engage technology, operations, sales, and finance,” she says. “Together we developed a negotiation strategy centred around how we can go out and work with the suppliers, understand exactly what is required, and how we can tailor and shape our negotiations to generate the best possible deal for both parties. For me, that has been a huge milestone for the company.” As QMax continues to grow and expand its supply chain network, Brown points to the implementation of the ERP system as the next big doorway to opportunity, as it will pull together the various elements of the

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S U P P LY C H A I N

UAE - ADIPEC Trade Show

supply chain into one centralised system, enabling visibility that will prove key in achieving future success. “My goal for QMax is to grow the organisation in a way that we can manage all the categories of spend, including the indirect spend categories such as IT,

and manage our total spend much better,” she says. “Because they are important. Of course, we want to continue to ensure that we are getting the best product or the best service, but for me it is the centralisation that will drive us into the future.”

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BEHIND THE SCENES AT THE NEW POMONA COLLEGE MUSEUM OF ART Project Manager Brian Faber discusses the challenges of constructing this iconic facility

Written by John Oâ&#x20AC;&#x2122;Hanlon Produced by Tom Venturo

POMONA COLLEGE

omona College is a private liberal arts college in Claremont, CA, and the founding member of The Claremont Colleges. Though small, Pomona has offered its students first-class academics since 1887: there are 48 majors to choose from, not to mention 59 overseas study programs in 34 countries. In 2015 it was number one in Forbes’s annual rankings of top American colleges. That also was the year Pomona decided to build a new museum and gallery space. The new Pomona College Museum of Art (PCMA) is at the core of Pomona College’s liberal arts education, making the visual arts an essential part of the experience of all students. It achieves this by integrating the visual arts into the broader intellectual and disciplinary context of the college.

Pomona College 360° Virtual Reality Campus Tour

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By presenting contemporary and historic works of art for exhibition and study, and placing those works in context, the museum attracts visitors from a range of audiences. Its collections are a teaching resource, emphasizing first-hand conversation with art objects as a tool for increasing visual literacy and investigating the diversity of human experience. The museum encourages active learning and creative explorations across disciplines. Included are galleries, which allow students and classes to work as curators on exhibitions connected to the curriculum. The students see not only the collections but what it takes to direct and curate in a world-class institution. An element of the museum’s connection to the community is the outreach program to Claremont Unified School District (CUSD) based in the College’s Native American Study Center Collection. This program invites every third-grade classroom

CONSTRUCTION

“CONCRETE, IN MY OPINION, IS A MATERIAL THAT IS LESS CONTROLLABLE” – Brian Faber, Project Manager

in CUSD to campus to study Pomona College’s collection up close. Since 2013, the museum has offered classroom lessons, directed activities during collection visits, and postvisit classroom lessons to more than 1,200 third-graders. The new facility is specifically designed to host these programs and will allow the museum to expand its outreach to other grade levels and school districts, with a special focus on Title 1 schools. The construction project started with the appointment of two worldclass architectural firms, Machado & Silvetti and Gensler, their brief to align the art of architecture with the functional and programmatic requirements of a 21st-century

accredited academic museum. The general contractor, working under a gross material price (GMP) contract, is Hathaway Dinwiddie. The museum began to take shape in February 2018, when the first two concrete walls – about 70% of the main gallery – were poured, and two gang forms set up for the third and fourth walls. The basement walls also were fortified and waterproofed. The mass excavation and on-site work on utilities, sewer and electricity were completed, and water and fire services for the museum installed by the Golden State Water Company. Most of the building, around 80%, is cast-in place concrete walls, a linear board-formed concrete with

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POMONA COLLEGE

tapering windows and corners set below a sloping roof line, says Brian Faber. “Our campus has been here since 1887 and it has a good number of buildings that are constructed that way so that fits in conceptually with the campus design.” The other 20% is mainly glass and wood. Concrete has different challenges when formed on site than factory made panels. “Concrete, in my opinion, is a material that is less controllable,” Faber points out. “When you are

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pouring concrete into a wall cavity there are variables depending on how you vibrate the concrete, the temperature and humidity that day, the consistency of the concrete formula, and so on.” This means on-site inspection and monitoring and inspection must be meticulous, though he hastens to say he’s had no problems with the concrete supplied. The concrete is prepared less than 20 miles from the site. It’s a requirement of LEED certification

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that materials should be sourced as closely as possible to the point of use, however when going for LEED Gold (and Pomona won’t accept anything less) there are a lot of other considerations. So, very efficient mechanical systems, water efficient fixtures, on-site water conservation and eco-landscaping features have been specified. Smardt chillers for climate control are a case in point: “They are not the cheapest, but they are the best for our purposes,

and in every case that has been our criterion.” Trash and surplus materials are recycled and nothing goes to landfill: perhaps the longest supply chain route is the FSC-certified timber, which comes all the way from Canada, but that’s because you need the hard northern winters to grow lumber dense enough for construction. LEED Gold being a general construction standard in the USA, there are further stringent standards to meet when designing

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POMONA COLLEGE

THE NEW PCMA: KEY FACTS • 33,331 SQ FT BUILDING • DESIGNED BY MACHADO SILVETTI ASSOCIATES AND GENSLER • DESIGNED TO A LEED GOLD STANDARD • FOUR ART GALLERIES • TWO CURRICULAR GALLERIES • EVENTS SPACE DESIGNED FOR INDOOR/OUTDOOR EVENTS • THREE COLLECTION VAULTS • TWO ART COLLECTION STUDY ROOMS • EIGHT OFFICE SPACES • LOADING DOCK AND WORK ROOMS TO RECEIVE AND PREPARE ART FOR EXHIBITION • ADDED STORAGE SPACES • EXTERIOR COURTYARD

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CONSTRUCTION

“SMART CHILLERS ARE NOT THE CHEAPEST, BUT THEY ARE THE BEST FOR OUR PURPOSES” – Brian Faber, Project Manager

and constructing an art gallery, Faber emphasizes. Works of art are vulnerable. Wood, canvas and paper are very hygroscopic: they need an environment in which air temperature and humidity remain stable over time, within clearly defined limits. PCMA is an AA category facility, the highest international standard, with requirements such as providing security. This also means it has to guarantee that temperature remains within a two-degree temperature range at all times, with tight controls on relative humidity as well. In the

hot southern California climate that’s a challenge, hence the Smardt equipment. “Honestly, the most critical part about building this project is climate control,” says Faber, “because if it doesn’t meet the requirements of a double A-rated space, when the museum staff wants to borrow a Rembrandt that’s the first thing they will ask about.” Not that there are any firm plans to borrow that particular work, but we get the point. Construction is set for substantial completion in June 2019, with an expected museum opening in 2020.

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POMONA COLLEGE

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CONSTRUCTION

Here the Californian climate has been a help – apart from a two-day freak rainstorm the weather hasn’t disrupted work on site. By November 2018 the building should be closed in and weathertight, and work can continue on fitting out the interior. Some of Faber’s time until then will be taken up by monitoring the remaining concrete pours – about 10 of them – and seeing the roof goes on. However, more of his time will go into the constant process of interaction with all the stakeholders in this building. “Ultimately the users of this museum are staff or faculty members: five years from now nobody is going to be talking about the construction, but they will be living with and in this building. We have frequent meetings with staff, and with the Director of the PCMA, Professor Kathleen Howe. The nice thing about working on an art museum is that the end users are typically artists or artistically-minded people and so I have found that things are more easily conveyed to them.” They can visualize

spatially, and because of the process of meetings and explanation, Faber believes that these end users will be handed a workplace, teaching space, and public gallery that is already familiar and which they know will work. Faber sees the communication loop, with everyone who might be touching the project, as central to his work. “We try to be very proactive in letting them know the things that are going to happen and keeping all the parties, including the people who are going to maintain it five years from now, on board feeling they’re part of the project. I think we do a really good job of that at Pomona College.” The other thing he is happy about is the positive vibe among contractors, subcontractors, the design teams and end users. There have been barbecues where all of these stakeholders have fun, and end up with the feeling they are all contributing to a project that will entrench the college’s position on the cultural map.

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CONTRACTINGâ&#x20AC;&#x2122;S

BRIGHT Hypower has remained a leader within the construction sector thanks to its open-minded and bold approach to technology adoption Written by Catherine Sturman Produced by Tom Venturo

HYPOWER INC

ne of southeast USA’s largest specialty contractors, Hypower has completed over a thousand projects valued at over $1bn. The family business’s humble origins and passion to provide quality services has seen it amass a diverse portfolio, grow to over 600 employees and overcome a number of challenges which many others have failed. Hypower houses several divisions, ranging from commercial electrical, new construction, renovation, and service and repair; to outside plant power and communications, telecom engineering, airfield lighting, ground mount solar and prime electrical infrastructure projects nationwide. Established primarily to undertake infrastructure projects in the early 1990s, the company’s specialty niche in runway lighting and airfield lighting systems, and work at the new Denver International Airport Runways put it firmly on the map. Its subsequent growth enabled the company to not only spread out geographically but add a significant number of strings to its bow. “We added traffic signals, high

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mast lighting, street lighting. We got into the traffic signal business, which filtered into the intelligent transportation system business. This taught us about fiber optic cables and telecommunications,” explains President and CEO of Hypower Inc, Bernard Paul-Hus. “In 1996, Congress deregulated the telecommunication industry to open up markets to competition by removing regulatory barriers to entry into the telecommunication marketplace, which led to a tremendous amount of investment from the private sector. This created a huge boom in the installation of fiber, which we jumped into. We moved more into telecom, but never got away from our roots in airports.” Despite the burst of the dot.com bubble, Hypower’s niche markets enabled it to remain afloat without concern, until 9/11. “9/11 was our first real big challenge because nobody saw

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Bernard Paul-Hus President & CEO

Bernard Paul-Hus, a 45-year resident of Broward County, began his career in 1986 as an electrical estimator. Bernard Paul-Hus directs the entire Hypower operation including corporate management and administration. He is committed to achieving excellence in every Hypower project through employee training, utilizing cutting-edge industry technology and his unwavering dedication to quality. He ensures that every project team is unique and individually selected based on the qualifications and abilities of each team member to enhance the project delivery. His mentorship and guidance define Hypowerâ&#x20AC;&#x2122;s core values. Paul-Hus is actively involved in various committees and industry associations including TEC/VISTAGE Member since 1997; ABC (Associated Builders and Contractors) Board of Directors, a member of CASF (Construction Association of South Florida). Bernard is personally involved as a leader and a mentor with quite a few local charities â&#x20AC;&#x201C; HANDY (Helping Abused Neglected Disadvantaged Youth), Boys and Girls Clubs of Broward County, 4Kids of South Florida and Cystic Fibrosis Foundation. Hypower donates over $100,000 to local charities every year.

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CONSTRUCTION

that coming,” Paul-Hus explains “We’ve always been very reactive solemnly. “It wasn’t predictable in to the market, trying to stay ahead any kind of economic model, and all of what the market’s going to do. of our airfield lighting projects shut Right now, all of our divisions are down. However, we were fortunate firing on all cylinders, but sooner or to survive it, and within a year we later things will slow down. We now were back up and running normally. have enough foresight, vision and “The lesson we learned from data to anticipate these challenges, that, was that diversity was going and to weave our way through what to be our path going forward, the world throws at us.” so we needed to really diversify ourselves Forward planning into these counterBy paying significant cyclical niches,” he attention to its continues. “The tumultuous Hypower Inc most common history, Hypower was established in thing that gets has applied these done by companies lessons towards its like ours is buildings. future goals. Utilizing But even buildings, as predictive analytics, we saw in 2008-2012 can a business intelligence pretty much evaporate. When this platform, and delivering ongoing happens, government-funded and training, employees are now able subsidized work stays relatively to elevate their abilities within steady, and if you’re good, you’re their own specialty niches. going to continue to win it. “Our focus needed to be on “We ended up with seven divisions, achieving the highest level of financial but when the recession hit, we acumen at a project management decided to narrow these down into level, and we’ve been working on the five groups that we have today. that since 2009,” adds Paul-Hus.

1991

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HYPOWER INC “Having project managers that are effectively as good as any accountant at not only the historical, but the predictive part of a project, the forecasting side, has proven to be a huge home run for us. It’s also created the ability to go from micromanaging everybody’s decisions, to putting them in this world of ‘If-Then decision making thinking’. “We believe in autonomous management making decisions. We’ve created systems and processes that allow staff to make their own decisions based on the data they’re being presented with and with the options that are open to them.” Creating a system where employees are therefore encouraged to look at data on a regular basis and look at their own performance, as well as their team performance, has taken the company to new heights. “There’s a couple of different softwares which we’ve customized. We’ve now started integrating all those platforms into our proprietary platform, called HYPE,” explains Jeff Emerson, Vice President of Electrical Construction. “This pulls in real-time data, giving

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project managers and people in the field the systems and information needed to make decisions. It pulls in how much are we spending on material, or how many hours we have spent. What is our production goal? Are we installing as much every day as we need to? What are the open RFIs? It takes all these different systems and integrates them into one. “We’re in the middle of more app development now, that’s going to give every single person in the field, no matter what level they are, a daily goal on exactly what they’re supposed to achieve,” continues Emerson. “Up until recently, we did this verbally and with spreadsheets. Now, it is automated on an iPad or Smartphone that everybody will be able to see first thing in the morning and report on throughout the day.” Digital disruption The use of data within construction and design is continuing to reshape traditional

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Jeff Emerson Vice President of Electrical Construction

Jeff is a talented and seasoned executive with over 20 years of experience in electrical contracting management and operations. He brings a wealth of expertise with strengths in areas such as financial and project execution, profit and loss analysis, workforce talent investments and long-term corporate strategy oversight. In his 8 years with the Hypower family, Jeff has shown a strong understanding of how to obtain measurable gains, identify key performance improvements and provide tangible evidence of success throughout his leadership roles. With a reputation for judicious use of resources and resulting cost containment, Jeffâ&#x20AC;&#x2122;s work has been instrumental in providing Hypower with leading edge best practices and management reporting capabilities critical to the success of production systems and company performance. In addition, Jeff has effectively raised transparency and visibility within the organization by bringing technology decisions and issues to the forefront of crucial Executive Committee discussions. His commitment to excellence lead the company to become one of the local pioneers to implement and utilize the use of Virtual Design and Construction (VDC) and its newly designed studio houses over 20 VDC specialists.

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practices which have remained relatively unchanged – until recently. For Hypower, it is clear that the company remains keen to take full advantage of embedding new technologies across its operations. By strengthening its virtual design and construction capabilities (VDC), as well as harnessing building information modelling (BIM) technologies, the company has optimized its processes, reduced the number of mistakes and delivered higher quality projects at competitive prices, leading the business to remain ahead of the curve. “A lot of technology that’s used in modelling software, such as Revit, Navisworks, and AutoCAD are all pretty much industry standard. It’s the level of detail that sets us apart. We look for jobs where our customers or clients are going to appreciate the value that this brings,” explains Emerson. “When we’re 3D modelling and working with the rest of the team, you can view areas of concern, such as whether a conduit clashes with a HVAC duct, for example. We fix all these things before the material

‘Hypower harnesses Virtual Design and Construction and Building Information Modelling (BIM) technology to deliver higher quality projects at competitive prices’

HYPOWER INC

is ordered, or a stick of conduit is installed. This provides a lot of predictability, allows the schedule to be maintained, and the owner can look at the model and see what his building is going to look like inside and outside before we even start. Paul-Hus adds: “It’s the ability to virtualize a project by building it in three dimensions, while working with our fellow specialty trade contractors. We can all see the problems we’re going to have ahead of time, so we can fix it in this virtual world, so that when we get out there in the job site, it goes much better.” With up to 20 dedicated VDC/ BIM specialists, all large projects at Hypower utilize these essential processes. Coordinating with various trades is therefore encouraged across all avenues and moves the company towards the purchasing and prefabrication process. “Instead of ordering what might be typically six parts and have them come out in six boxes in the field, we’ll assemble all six of those pieces off-site and ship it out with a clear label that matches our VDC

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design, where the parts are then to be put it in place. We also use the Trimble Total station, which is our layout equipment,” adds Emerson. The use of new, digital tools has also overhauled traditional layout processes. “The team used to get in the field and use a tape measure, a chalk line, flags and drawings to figure out where everything’s supposed to go based on information provided from the contractor,” explains Emerson. “Now, when we receive information, all our points are laid out in a tablet. One team member can go out with Trimble Total Station, set out the laser, and mark where it all goes. Through this, we’ve reduced layout time by 70%. “We’re now also at near zero mistakes,” he continues. “In the last seven jobs, we have never missed a layout point, to the point that we’re actually helping others who are doing it the old school way. It’s therefore

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Barry Olson Vice President of Purchasing

Barry Olson started his career in the electrical industry in 1989, working for an electrical distributor and then transitioning into the contracting side of the business. Over the years, Mr. Olson has led the purchasing efforts of several large electrical contractors across the nation before settling in with the Hypower team in 2015. Devoted to the development of a procurement system based on partnerships with vendors, Mr. Olson has made significant changes to Hypower’s basic buying philosophy that has supported both Hypower’s long term growth strategy and contributed to bottom line profitability. Olson is also actively involved in the development of Hypower’s company culture; believing that the right working environment is conducive to maximum employee contribution leading to the company’s overall success. Mr. Olson holds baccalaureate and master’s degrees in organizational leadership as well as a master’s degree in management. Olson is also planning to start work on a PhD. in the fall of 2018 that he believes will equip him to further refine and develop Hypower’s workforce for continued growth and long term organizational stability.

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bringing value not just to us, but to them as well,” observes Emerson. “This will become the new norm in how buildings are constructed,” observes Vice President of Purchasing, Barry Olson. “People in their 20s and 30s are coming into the industry with their own ideas and paradigms of how much easier computer modelling makes things, for example. “We’re in a time where we’ve got a lot of senior managers that are also saying, ‘we’ve never done it this

way, we’ve always done it the other way’, and you now have enough new information and people in the industry asking the question, ‘well why can’t we do it this way?’ “Whilst there’s a blending of the two, at some point this whole platform of how buildings are put together is going to be the generally accepted practice,” he adds pensively. “I think we’re ahead of the curve in what we’re planning, because we are looking down the road as to where this will lead.” Nonetheless, Paul-Hus explains that the technology has presented a number of new challenges, particularly within Hypower’s

“Sooner or later things will slow down, but we now have enough foresight, vision and data to anticipate these challenges, and to weave our way through what the world throws at us” – President and CEO of Hypower Inc, Bernard Paul-Hus 122

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relationships with clients. “We can become extraordinarily frustrated at how difficult it is to sell the value of this technology to the end user, which is the owner or the general contractor,” he says. “If they are not experienced with the technology, we have not developed a good way to explain all of the things that would have gone wrong had we not gone through our processes. We have not been able to quantify in any meaningful way, all of the mistakes that we fixed before we got onto the site. “Us and the other trade contractors, through the virtue of our coordination, which is generally driven by the specialty trade contractors, have fixed so many problems, that when we go out to build the job, these problems will never happen, so the end user can never appreciate the fact that they didn’t happen. “We can measure year over year improvement, but if I tell a client that we’ve been able to drive 24% of our labor cost out of our jobs year on year on the same number of manhours, their first question is, ‘why isn’t your price lower?’” The cost

HYPOWER HAS COMPLETED OVER A THOUSAND PROJECTS VALUED AT OVER

$1BN

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trade off of planning for the labor gains yields predictability when done properly which ultimately saves time and the cost savings flow throughout the entire project. Increased agility Despite this, Hypower’s embrace of new digital tools continues to influence its positive culture of adaptability and change. “Five years from now, we expect that the hard hat that workers wear will have a chip in it with a visor that projects on the wall. I will walk into a room, flip down my visor and see all the work that I’m supposed to install that day,” explains Paul-Hus. “Rather than measure anything or do any layout work, it’ll actually be on the visor screen. I will simply need to walk up to where the device that I

After

need to install is, match it up with the shadow box that’s on my visor, and screw it to the wall, and I’m done.” “If you don’t have a culture that accepts the use of technology, you are going to be a company that struggles,” he adds. “The only way you do that is by implementing change, measuring performance improvement, rewarding people for following processes, and making sure that they understand this.” By placing significant emphasis on continuous improvement, Hypower is a strong believer in training and developing its workers, improving ways of working through the use of data, giving context to such data and then proactively reacting to the data received. “We don’t get focused on individual results, we get focused on

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Hypower-Employee Appreciation Night

the overall result,” says Paul-Hus. “We don’t want to put too much emphasis on profitability as the rest of our core values could get ignored; people might make decisions to boost profitability that hurts our professionalism, which then prevents us from continuously improving and ends up hurting our relationships.” Inspiring others Not one to rest on its laurels, Hypower expects the best of its staff, and makes a significant effort to give back, not just to its employees but to the local community. Its efforts to drive positive engagement and quality results have seen the company become recognized as

Business of the Year by the South Florida Business Journal in 2017. To reward employees, Hypower seeks to gather all required data and runs a number of events, inviting employees to attend. Presentations are undertaken and the company aims to recognize all staff which are leading the it to success. Additionally, Hypower’s growth has seen it give back to local communities, both through its charity events, raising over $1mn thus far, as well as recruitment of locals. Paul-Hus explains: “A young manager we recently recruited was through a charitable organization, Helping Abused Neglected Disadvantaged Youth (HANDY).

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“If you don’t have a culture that accepts the use of technology, you are going to be a company that struggles” – President and CEO of Hypower Inc, Bernard Paul-Hus

NBC Telemundo Headquarters

This individual was displaced from Haiti because of the earthquake in 2010. He was brought to the United States, where he finished high school, went to Florida Atlantic University and gained a degree in accounting. We brought him in as an intern and now he’s a full-fledged employee.” “Peter Stoykov, our Marketing Director, and I recently gave a presentation to kids on a career path

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in the construction industry. We go into the community and we say, ‘look, we understand that everybody wants to go to college, but we also understand that not everybody gets to go to college. It could be because you don’t have the grades, it could be because you don’t have the financial means, it could be for a variety of reasons. It could be because you have a child too young and you just don’t have the time to have a job, but none of that means that there aren’t career paths to success.’ “We use our company as an

Margaritaville Hollywood Beach Resort

example that you can start off in the field as an apprentice electrician and apply into our program or go to school while you’re receiving training. After four years in a certified program and a Journeyman prep course, as part of our Workforce Development Plan, you will receive a professional electrician’s license.

“At the end of four years, you’re making $50,000 per year. Your career path can follow suit. You continue to take our training, supervisory training, go to seminars, whatever it takes to continue your education. Keep climbing the career path to an executive level,” continues Paul-Hus. “I’m the President and CEO and I don’t have a college degree. I’m a really good example to stand and say, having a child at 19 years old, like I did, and not having a college degree doesn’t limit your ability to think big, chase your dreams, build

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VDC IN ACTION

“We’re in a time where we’ve got a lot of senior managers that are saying,

‘We’ve never done it this way, we’ve always done it the other way,’ but you now have enough new information and people in the industry asking the question, “Well why can’t we do it this way?” – Barry Olson, Vice President of Purchasing

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a business and be a leader. Do all those things that some people might have you believe you can’t do. Don’t listen to them and don’t get discouraged. There are multiple paths to achieving your goals.” The path to success Hypower’s long-term vision to ensure its vendors, customers, employees and shareholders remain happy will see the company continue to grow and deliver exceptional value and quality services, where digital tools will continue to support decision making and guarantee exceptional results. “Growth is the cornerstone of our success,” reflects Paul-Hus.

CONSTRUCTION

“Growth means that we can continue to invest in these processes. It means that we can continue to show folks that are just coming into this industry to come to work for us, that there will be an opportunity. “There is a career path that will not be stymied by running into someone who you can’t pass due to attrition. We’re growing, we expect workers to learn. The more you learn, the more likely we are to be able to offer you that opportunity that’s been generated by our growth. So, growth is super important. “If, through the use of all of our processes, we continue to drive down what it costs us to do the work versus the market value of doing that work, even when times get tough and we lower our prices, our costs will already be in line with those lower prices,” he adds. “For now, we’re benefiting with higher margins, because we continue to pursue work at a market rate, not

at a cost-plus rate. However, when we get into that really tough world of the overall market shrinking, we should be able to maintain or even continue to grow our revenue in that tough economy, simply because we, during the good times, didn’t get complacent with our success. We continued to take the products of our success and invested in continuous improvement. When times get tough, we can perform at a lower cost basis than our competitors.” Paul-Hus concludes: “That’s really our goal, to continue to take what the market gives us. Right now, there are more opportunities than we could ever react to. “But when those opportunities become limited, we will be in an excellent position, with a very well skilled workforce, and with processes that have driven down our cost so that we can remain competitive without losing money even through those tough times.”

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FILTRATION POWERED BY DATA HOW MANN+HUMMEL IS HELPING COMPANIES SAVE ON MAINTENANCE AND DOWNTIME Written by John Oâ&#x20AC;&#x2122;Hanlon Produced by Andy Turner

Intelligent filters, smart systems and rapid product development are features of todayâ&#x20AC;&#x2122;s MANN+HUMMEL, a traditional German company that is reinventing itself through the use of data and IoT Charles Vaillant, Chief Technical Officer

MANN+HUMMEL

filter is a workhorse. It’s hard to think of a mechanical system that does not have filters. They protect the moving parts from damaging particles, and in HVAC systems they protect people’s lungs in the same way. As MANN+HUMMEL puts it, they are there to ‘separate the useful from the harmful’: it may not be the most exciting component in any system, but it is entirely essential because without filters the machine, whether it is part of an automobile, a train or an air conditioning plant, couldn’t do its job – and it certainly wouldn’t have a long life. Mann+Hummel, a German manufacturer with a global footprint, is the largest filtration company in the world, with 80 locations, more than 20,000 employees, and annual sales in the region of $3.9bn. An impressive statistic is that it sells 24 filters every second. The company was founded in 1941 and is still owned by the families of its founders, Adolf Mann and Erich Hummel. Its success can be attributed largely to its domination of the automotive and transportation

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sector. It’s a position gained and held in large part because of the trust it has gained with MANN+HUMMEL brands such as Wix Filter, Mann-Filter, Filtron and Purolator. A wonderful history, however, as Chief Technical Officer Charles Vaillant is there to point out at every opportunity, good is never good enough, and the businesses of the future will not be able to grow with the practices of the past. As CTO Vaillant has a very exciting job – no less than to drive the growth of a traditional manufacturer into a digital-age manufacturer, finding previously unconceived value in products that used to be considered dull. For a start, he says, there are large filtration markets that Mann+Hummel has hardly touched. Filtration is a market worth some $60bn a year, and automotive accounts for only 40% of that, despite the fact that automotive and transportation markets give MANN+HUMMEL 90% of its turnover. “We see a great opportunity for us to take our competence and our capability and apply them in new fields such as life sciences, oil and gas (O&G) and a host of other industries.

M A N U FA C T U R I N G

â&#x20AC;&#x153;We see a great opportunity for us to take our competence and our capability and apply them in new fieldsâ&#x20AC;? Charles Vaillant, Chief Technical Officer

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M A N U FA C T U R I N G

We can take the competencies that have made us the world’s largest filtration manufacturer and apply them in new fields.” Currently, he says, the company is investing strategically in ‘intelligent air solutions’ for buildings like shopping malls, hotels and offices as well as premises where super clean air is required such as clean rooms, data centers and operating theaters.

If filters are changed too early just because they are done to a schedule, that incurs unnecessary cost. If they are changed too late, damage may result. A smart solution would trigger the change at the right time and you could really optimize your operating expenditure and maintenance cost.” The bottom line is that the filter may be a low-cost item, but by protecting an expensive The filter asset, its value is Looked at one way, intrinsically high. a filter is passive It’s easy to Number of and something underestimate employees at not considered the waste caused MANN+HUMMEL smart, however, by sloppy tools are now maintenance, available catalyze including ‘cleaning’ that transformation. “Combining the filters by reverse-blowing compressed latest smart technology, such as air through them and then refitting sensors, gateways, data acquisition them. Engine damage and warranty and data mining we can build smart problems caused by dust ingestion in filtration solutions. Even at a basic mining trucks or agricultural machinery level example, they can speak to are to be avoided when a replacement us and tell us what is going through engine can cost up to $50,000, not to them, when they need changing, and mention the cost of downtime. A smart what their operating conditions are. filter can save the operator disasters

20,000

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Charles Vaillant | CTO Charles Vaillant is the CTO for the MANN+HUMMEL group. He joined MANN+HUMMEL in 1997 and is currently responsible for innovation, new technology research, corporate strategy and corporate ventures. Charles has held a variety of positions in the areas of program management, design and development, product engineering and corporate development. He is based Raleigh, North Carolina. In 2015 Vaillant established i-2-m LLC, a startup company to accelerate commercialization of new MANN+HUMMEL technologies in the fields of clean air, clean water, energy and life science. During 2016 he created an IoT Lab in Singapore, at the Heart of Singaporeâ&#x20AC;&#x2122;s start-up ecosystem, to accelerate the digitalization of company products. Later in the year he launched MANN+HUMMEL Corporate Ventures, an initiative to make strategic investments in Technology Startups with a focus on Silicon Valley. Vaillant earned an Automotive engineering degree from LTR Eiffel (France), a Masters in Industrial Marketing from ESIDEC (France) and an M.B.A from the University of Michigan Ross Business School (USA). He lives with his wife and two daughters in Raleigh, NC USA.

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“Once fitted Senzit will connect directly to the network wherever

you are in the world” Charles Vaillant, Chief Technical Officer

like this, Vaillant says. “In construction, mining and agriculture, three of our key markets, they are working in the dustiest conditions imaginable. They get through a lot of filters and they really don’t have a good way to know when to change them.” Smart filters are no longer pie in the sky. In November 2017 at CES in Las Vegas MANN+HUMMEL launched its new digital product Senzit. It measures data such as the status of the air filters of agricultural and construction machines in real time and transmits the results to the user’s mobile device. The smart device creates added value for users by displaying the load status of the air filter as well as its remaining service life and machine hours completed.

It is convenient, saves time, reduces maintenance costs, protects the engine and makes it possible to utilize the full capacity of the air filter. “There are 10 sensors within Senzit,” enthuses Vaillant. “It measures pressure, humidity, temperature, and it has GPS and 2G/3G connection. Senzit is installed directly at the service port of the air filter housing and is suitable for almost all vehicles and all air filter brands, even older ones. Once fitted it will connect directly to the network wherever you are in the world and stream the data to the cloud. From the cloud we push the data back, after we have run some machine learning algorithms, either direct to the customer or to a web portal – it’s their choice.”

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M A N U FA C T U R I N G

Thanks to Senzit, it is no longer necessary to manually inspect the air filter to determine the degree of contamination. It makes it possible to plan maintenance in advance, reduces machine downtime, protects the engine and prevents unnecessary filter changes. Originally conceived as a smart filter, Senzit’s horizons started expanding as soon as it was launched. “Because I know the pressure in the filter I know when the engine is on and when it is off, and because I also have a GPS chip on it I can now provide the users with valuable information. I can provide them with a list of all the trips that the vehicle has done, when they started, when they stopped and where they went. So you have a fleet management component as well. That makes this digitization very interesting for us. By talking to the customers and engaging them we understand their needs and challenges and we are able to provide them additional services in order for them to run a better business. For example, some of the people that we talked to are using very big pickup trucks that they don’t move much. They use auxiliary power to work lifts,

drills and the like. Now they can go on the Senzit app to input an alert that will tell them when the truck has run for more than 50 hours and remind them to change the oil or the belt for example. Many customers are running old machinery that has none of the latest technology built in. Senzit turns these into connected vehicles, and we are adding an anti-theft component so they can see when a machine is moving when it isn’t supposed to.” It’s a revolution, no less. “IoT is really changing the nature of our company,” Vaillant continues. “It’s analogous with the digital service that you get from Amazon or Netflix or connected cars. These are things that are making our lives easier and more convenient. What we are trying to do here is provide the same level of customer satisfaction and convenience to our customers that operate in the harsh environments.” By leveraging data from climate and allergists, MANN+HUMMEL is currently developing smart filters that will make life easier for asthma and hay fever sufferers, for example. “FreciousSmart is analogous to

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the way the company works with agriculture,” he explains. “We are pushing out individual algorithms for every machine, taking into account the different type of dust and the different weather conditions. A great benefit of digitization is that we can customize products without having the cost of developing separate products. It’s about using big data and machine learning and converting the raw data into useful information like how many hours of safe operation they have left.” The internet of things in action Developing smart filters may have been Vaillant’s original objective, but digitization goes much further. “The other piece is the data that we have at our disposal now. On the one side we can have our engineers design better products now that I am collecting data from equipment all over the world. I can see how my product is performing in a real-world environment. In the past we were working with very small samples – today, every single filter can be part of my test fleet. Over the past 75 years MANN+HUMMEL was using mainly lab data to confirm a product performance. Today,

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analytics and data science are a major part of our work and a new skill set for a company like us.” As global CTO, Vaillant is responsible for a team of developers working on a comprehensive range of digital solutions, from sensors and interfaces to cloud programs. At the hub of this effort is MANN+HUMMEL’s IoT lab in Singapore. At this facility, system, hardware, firmware and software engineers and data specialists are working on the development of intelligent technology for filtration. The focus is on intensive cooperation with established technology groups and startup companies. “We have between 15 and 20 people at Singapore, and we are running out of space because we’re growing so fast. The world is our sandbox. We decided we want to be close to our customers, to research centers and universities. By doing this you run a very decentralized organization. Most of our people in Singapore speak Chinese fluently; they are in the same time zone as China and there’s now an extension of our IoT lab in Shenzhen, China.”

M A N U FA C T U R I N G

â&#x20AC;&#x153;IoT is really changing the nature of our companyâ&#x20AC;? Charles Vaillant, Chief Technical Officer

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Within a couple of months Vaillant will find himself in Silicon Valley, Shenzhen, Singapore and Germany, with brief stops at his North Carolina base catching up with reports from his team around the world. He is in Silicon Valley a lot as leader of startups and the venture arm of the company. â&#x20AC;&#x153;We are a traditional manufacturer and you could think that Silicon Valley is only about Tesla and Apple, but we need new materials and smart sensors and you find this in Silicon Valley as well. The world is changing

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at a very rapid pace. Large marketleading corporations like us have been doing the same thing for a very long time and really need to reinvent themselves. We need the courage to experiment with a completely different way of working, and I think IoT is a really great vehicle to show what can be done. Digital companies are able to bring out new products in a very short time compared to, say, automobile manufacturers. Cellphone companies show that itâ&#x20AC;&#x2122;s possible to roll out a new product every six or 12 months, not

M A N U FA C T U R I N G

MANN + HUMMEL is building its new technology center in Ludwigsburg

every five years. That is a big challenge and I think a lot of corporates are struggling with it. At MANN+HUMMEL we have the luxury of a leadership and shareholders that are fully backing us to experiment with new things. They understand that speed is of the essence and time is now!” So how exactly does IoT speed up product development? It’s a matter of escaping from standard manufacturing development processes that are very successive in style and adopting an agile way of working. “I know a lot of people

are using the word agile as a tagline, but what I am talking about is sprint methodology,” Vaillant says. “When we develop IoT products we launch new features in a two-week sprint, check and validate over another two weeks, then start again – so every four weeks we are able to bring new features into our products.” It’s a departure from traditional German product development principles. Minimum viable product (MVP) rather than perfection is the principle. From the start of the Senzit project to commercialization took just 12

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“When we develop IoT products we launch new features in a two-week sprint” Charles Vaillant, Chief Technical Officer

months, including pilot testing, prototyping, ramp up, manufacturing and the launch of the product. “Now we are launching lots of new features. The hardware stays the same but we build on added value in sprints to optimize and enhance the offering to our customers.” That methodology delivered a sensational new anti-pollution technology platform, “the Fine Dust Eater”, is now being trialed in Stuttgart and soon to be seen on the streets of Bangalore and Shanghai. The World Health Organization estimates that 7mn premature deaths a year can be put down to air pollution. In Germany, it’s 47,000. The company has developed applications which are designed

to reduce the pollution caused by particulates. A filter installed on the roof or on the underbody of a vehicle retains particulates from the ambient air. A brake dust particle filter minimizes the release of brake dust to the environment. The vehicle occupants are protected by an NO2 fine dust combi filter. The idea is to improve the air quality in cities by sucking up the ambient dust – if enough mobile and static units can be deployed. We do not know yet the impact these technologies will have, but as Vaillant says “if you try nothing you will not get anything. If your company core competence is to remove the useful from the armful, then it is your duty to come up with answers, isn’t it?”

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YAMANAGOLD

and the

DIGITISATION of ETHICAL

GOLD SOURCING

Through the advent of the G-Coin, backed by a blockchain supported Responsible Gold solution, Yamana Gold is transforming the sourcing of gold Written by Dale Benton Produced by Glen White

YA M A N A G O L D

he world of mining is changing. Historically known as an industry lagging behind when it comes to the implementation and deployment of technology, over the course of the last five years the mining conversation has turned towards innovation. One of the biggest conversations in mining, throughout history, surrounds the sourcing and supply of raw material, and now a number of companies are investing into technology solutions in order to track, trace and ethically manage its mineral supply chain. One such company that looks for innovative solutions to mining challenges is Canadian gold producer Yamana Gold. The company’s vision states its intentions clearly – to mine precious metals profitably and responsibly. It is this focus on responsible mining that has driven the company to partner with Emergent Technology Holdings to implement an innovative blockchain solution for the responsible sourcing of gold, making it the first in the industry to

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partner with the American firm. “We are not the only ones working on supply chain solutions in the gold sector, but in our view, this solution, in particular, is unique; it adds significant value to both us, as industry participants, and more so to people in communities where we mine and buyers, consumers and investors of precious metals. On the one hand, it leverages blockchain technology to execute supply chain contracts between miners, refiners, logistics providers and buyers in what has historically been a very manual and inefficient process with data recorded across disparate systems and several industry participants. This solution is certainly an improvement. And, perhaps more importantly, it leverages this technology to track and trace the provenance of gold from mine to vault, providing virtually absolute assurance that the gold produced through this supply chain solution is responsible gold, complying with the strictest due diligence standards including the World Gold Counsel’s Conflict-Free Gold Standard. There’s a market for that. We are starting to see pent

MINING

up demand for responsibly-sourced gold from jewellers, electronics manufacturers and even fund managers who have long been driving and promoting socially conscious and responsible agendas. With Emergent, and other supply-chain participants, we have developed an ecosystem to essentially guarantee that production flowing through it is 100% responsible

gold. Now, we and Emergent, hope to populate this ecosystem with as many supply chain participants as possible” says Tony Cina, Senior Vice President, Business Administration, Yamana Gold. “This is an industrywide solution. It is not exclusive to Yamana. If a participant contributes to responsibly-produced gold, then we encourage their participation.”

“Through this ecosystem, we will continue to

mine gold ethically and responsibly with the benefit of more efficiently ensuring that all of our gold is conflict-free” – Tony Cina, Senior Vice President, Business Administration, CPA, CA, ICD.D

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“Tracing gold from the mine site right into a vault, and then ultimately to a currency that you can spend across the world or to transfer money. That, for me, solves a real problem” – Tony Cina, Senior Vice President, Business Administration

“So ideally that means every miner, every refiner, every logistics partner and everyone in the entire precious metals supply chain joins the ecosystem; and Emergent is talking to all the major market players aiming to secure their participation. It is in everyone’s best interest to have one ecosystem that buyers, consumers and investors can depend and rely on. This is a unique opportunity for the gold sector to band together to further contribute to the improvement of social and humanitarian conditions in remote areas” Yamana Gold will utilise Emergent’s Responsible Gold Platform, the

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only permissioned blockchain that tracks responsibly sourced gold from its origin through to the end buyer. Along with supply chain partners, Yamana Gold will use a secure mobile network that scans smart chips in tamper-proof seals to record transfers of custody and other data on the Responsible Gold blockchain. “We had a unique interest in the supply chain element of gold production,” Cina says. “We saw the potential to employ an innovative solution to an industry challenge and we recognized the benefit in developing that solution through collaboration.”

MINING

Yamana Gold first worked with Emergent Technology back in 2016, and this partnership is part of a larger strategy whereby the company has sought out new ways of implementing technology and innovation to refine its operations. As technology continues to shape the world of tomorrow, Joe AbiDaoud, Vice President, IT at Yamana Gold, understands that the very nature in which a mining company must operate is changing. “It’s no secret that every company in the world is becoming a technology company,” he says. “We work in a very cyclical industry that will forever

go through ups and downs, and what we’ve begun to see in recent years is companies understanding that in order to stay competitive, they need to start doing things differently.” And doing things differently is exactly what Yamana Gold has been doing as it undergoes a significant technology transformation. But, as AbiDaoud notes, innovation and technology not only change the practical, physical element of mining, such as the automation of equipment, but innovation is almost driving the strategic thinking and direction of organisations. “The industry as a whole has

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SPROTT MINING INC

YA M A N A G O L D

been undergoing a significant transformation for quite some time,” says AbiDaoud, “albeit at its own pace and perhaps a little slower than others. This comes down to the cyclical nature. Gold prices plummeted in 2013, and it forced everyone to rethink our operating model. “Technology is one component of that, it’s not the only component but over time it has become more and more integral to the way in which Yamana Gold achieves success and will continue to deliver value.” AbiDaoud entered Yamana Gold in 2017 with a core mission to drive innovation and seek out opportunities to leverage technologies to provide value and to support the overall vision of the company, which is to mine precious metals profitably and responsibly. For AbiDaoud, three core pillars define innovation: people, process, and technology. When organisations think of innovation, they often focus largely on the technology aspect, while AbiDaoud believes the people and the processes are more important. “For some they seem to fail to

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recognise the important impact and role that people and process have to play in helping your organisation innovate,” he says. “Technology can’t move forward if the people and processes don’t move forward with it, so it becomes fundamentally about changing the way we work and the way we operate. Technology in the end is just a tool to do that.” The people element to innovation should not be understated, especially in an industry that has largely operated in the same manner for decades. Technological innovation breeds a cultural change, but as any transformation has shown, cultural change is no walk in the park. Part of that challenge is communication. Yamana Gold approaches this a little differently. “We actually don’t have a technology conversation,” says AbiDaoud. “When you’re speaking about innovation, or doing things differently, we don’t even talk about technology. It’s about talking about business outcomes in a language that’s understandable and relevant

MINING

to the end user’s business. That’s how you get a much more engaged partner at the end of the day.” As VP of IT, AbiDaoud has lived and breathed technology throughout his entire career and so it may be easier for him to say that due to his extensive experience. But it is a feeling shared by Cina, as he sees Yamana Gold’s approach to technology centred much

more around efficiency and effectivity, rather than seeking out problems. “We work with our operations and exploration teams to better understand what challenges they face and together consider whether there are operational or other technologies that could be deployed to resolve those challenges. Our approach is targeted. We do not introduce

“The industry as a whole has been undergoing a significant transformation for quite some time, albeit at its own pace and perhaps a little slower than others” – Joe AbiDaoud, Vice President, IT

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RESPONSIBLE GOLD BLOCKCHAIN SUPPLY CHAIN TECHNOLOGY BY EMERGENT TECHNOLOGY

solutions and then look for problems for which to solve. The solutions are very specific. They either solve a problem or create an opportunity” says Cina. “That’s why we try not to have discussions focused entirely on technology. It’s about how we can become more efficient; how can we produce more ounces both profitably and ethically. It’s about working with our strategic partners and seeking out areas of opportunity, to which we then work collaboratively to find a solution.” The partnership with Emergent Technology and the implementation

of the company’s Responsible Gold blockchain platform is but one shining example of Yamana Gold’s approach to technology, but it is not the only one. Yamana Gold has invested in Emergent’s “G-Coin”, a digital token backed by physical gold sourced from the Responsible Gold supply chain platform. “The conversation started a few years ago from a group consisting of technology experts, fintechs legal experts and gold market participants to look at the possibility of digitising gold,” says Cina.

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“We were invited as the only gold supply-chain representative.” “While initially we were not clear on where the discussion would lead, we quickly caught on to the concept of a digital gold currency that was backed, and had its value supported by, conflict-free gold.” This was a novel concept a couple of years ago. Today it’s a lot more real. And tomorrow even more so. G-Coin, first and foremost, is not a cryptocurrency, it is digital gold. It provides a digital certificate of ownership to physical gold stored in a secure vault, opening access to responsible gold as an investment, wealth transfer vehicle and payment mechanism.

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As AbiDaoud admits, it’s not an answer to a business problem, it’s an opportunity to open up efficiency and profitability, all the while remaining committed to responsible, ethical gold sourcing. Cina adds: “It is not the only digital token of gold in the world, but what makes it different is that it is more than just a digital store of value. It

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can actually be used as a medium of exchange to settle transactions or transfer value. That’s where it’s unique. I don’t know of anyone else that’s using responsible gold to back a viable digital currency. “Tracing gold from the mine site right into a vault, and then ultimately to a currency that you can spend or transfer to individuals and businesses

across global markets - that, for us is innovative.” Cina went on to say that “since the beginning of time, gold has been a store of value. With blockchain technology, gold can now be digitized; you can own it in your digital wallet and no longer have to hold physical gold. But what does the digitization of gold really solve if all you have done is alter the form in which wealth is stored?” Cina argues, “not much. But when you introduce the ability to spend and transfer gold as if it were cash, instantly,

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with zero transaction fees and in the smallest of denominations - that is a real solution. That’s innovative” Cina believes that the case for G-Coin is especially feasible in emerging markets, where currencies are more sensitive to inflation and currency devaluation and in some cases subject to currency controls. “The introduction of a gold-backed digital currency becomes extremely appealing to individuals and businesses in those markets”. Users will now have the ability to convert their local currency into the G-coin and protect their wealth and purchasing power. Through the Responsible Gold platform, and the advent of G-Coin, the mining landscape is well and truly on the cusp of great change. The demand for conflictfree gold has already begun to surge over recent years, with more and more participants looking to change the way in which they purchase and acquire gold. But what does the future truly hold for the ethical sourcing of gold? Cina feels that, in actual

fact, we could see a whole new gold asset class. “In 5-10 years, or perhaps less, as demand for responsible gold continues to increase, responsiblegold emanating from this ecosystem may become a new and distinct asset class, demanding a premium to gold otherwise produced. This bodes well for the sector, its participants and for the people in areas where we mine precious metals.” This is why we got involved: good for gold and good for society – profitably and responsibly.” Yamana Gold started this journey of digital transformation in 2016, but with technological innovation there is never truly an end to that journey. The official launch of G-coin is targeted for the third quarter of 2018, with the back-end technology already in place, but where does Yamana Gold go from here? “With everything in place with regards to that launch date, the goal for Emergent is to introduce and integrate G-Coin into payment walls and wallets in those emerging markets,” says Cina. “Emergent expects to process approximately $2

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“There is great opportunity for us as an industry to become much more collaborative and unified in our approach to innovation” – Joe AbiDaoud, Vice President, IT

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billion in transactions and payments in these markets over the next year and are looking to have G-Coin become a widespread alternative to traditional payment methods, ultimately pushing gold to become the most liquid asset in the world.” For AbiDaoud, the future is one of possibility and collaboration. “There is great opportunity for us as an industry to become much more collaborative and unified in our approach to innovation,” says AbiDaoud. “What I’d like to see is an ecosystem that all industry participants are a part of, with real benefits to everyone. That would be a tremendous accomplishment for the mining industry.”

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POWERING PEMEX INTO PROFITABILITY Written by Tom Wadlow Produced by James Pepper

RODRIGO BECERRA MIZUNO, CORPORATE DIRECTOR AND CIO AT MEXICO’S LARGEST ECONOMIC CONTRIBUTOR, REVEALS HOW TECHNOLOGY IS PLAYING A CENTRAL ROLE IN THE IMPLEMENTATION OF THE OIL AND GAS COMPANY’S 2017-2021 BUSINESS PLAN

n 20 December 2013, Mexico’s oil and gas industry entered a new age. Having operated under a monopolised umbrella for 75 years, President Enrique Peña Nieto signed a momentous energy reform bill which opened up the country’s largest revenue-generating Technology to private competition. For national oil and gas giant Petróleos Mexicanos (Pemex), this signalled a huge about-turn, an overnight change of course not witnessed since its formation in 1938. A massive transformation was required, from a company operating as a monopoly to one that can stand up to competitors. Once charged with delivering hydrocarbon energy across the whole of Mexico at whatever the cost, Pemex is now focused on efficiency, profitability

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and long-term survival. It was the enormity of this challenge which lured Corporate Director and CIO Rodrigo Becerra Mizuno away from a decade of servitude at Microsoft. “I thought this would be the biggest professional challenge of my career,” he recalls, “so when CEO at the time Jose Antonio González Anaya invited me, I was extremely excited. I knew technology would be at the forefront of this transformation. “On top of this, Pemex is the largest company in Mexico and one of the largest in the world.” The numbers back this up. As the eighth largest oil producer and drilling company in the world, Pemex’s $52bn revenue is equivalent to the entire GDP of Uruguay. It generates 2.5mn barrels of oil and 6mn cubic feet of natural gas a day,

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PEMEX IS THE LARGEST COMPANY IN MEXICO AND IN THE TOP 100 LARGEST COMPANIES IN THE WORLD. HERE ARE SOME OF THE NUMBERS THAT MATTER

>$52BN

ANNUAL REVENUE

70+

NUMBER OF DIFFERENT PRODUCTS SOLD

delivering this to over 11,000 service stations in Mexico and abroad via 83 land and sea terminals. From exploration, production and refining to logistics and marketing, Pemex covers the entire value chain. Technology and the road to profit While the enormity and scope of operations no doubt presents a competitive advantage over new entrants to the market, it exemplifies

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2.5MN

NUMBER OF BARRELS OF OIL PRODUCED A DAY

NUMBER OF PEMEX REFINERIES

the challenge Becerra Mizuno and the Pemex leadership are facing. The 56-page 2017-2021 Business Plan signposts Pemex’s road to profitability, and notably sets a target to achieve financial balance in 2019/2020. Technology will be crucial to realising this ambition. “If certain markets we are serving are not profitable, we don’t have to operate in them anymore,” Becerra

TECHNOLOGY

NUMBER OF PEMEX GAS PROCESSING PLANTS

NUMBER OF PEMEX PETROCHEMICAL FACILITIES

Mizuno says. “In that case, we have to make better decisions with the information or the data that we have. That’s where technology plays a major role, because it can streamline our operations and create a better more profitable and safer environment.” Brief set, what did the technology landscape look like when Becerra Mizuno arrived in September 2016?

“I found that Pemex had a large amount of technology infrastructure. They own it, they develop it, they construct it, they deploy it. Everything was done in-house. I said to myself, we need to change.” Much of this sprawling infrastructure owes its existence to a self-built telco network, the second private largest in the whole country, which includes 130,000 phone lines and 10 data centres. Pemex was founded nine years before Mexico’s national telecoms company Telmex, and hence had to build its own communications capability from scratch. There was a time when people who worked for Pemex had two telephones at home: one from Pemex and the other one from Telmex. “They got used to building their own technology infrastructure from the bottom up,” Becerra Mizuno says, “and they used to do it extremely well. But the world changed, and there are people that can do it better, because they specialise on that.” Privatisation of these telco assets has proven vital in simplifying

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PEMEX’S PARTNER IN DIGITAL TRANSFORMATION Huawei is a leading global Information and Communications Technology solutions provider. Our industry-leading products and solutions have been deployed in more than 170 countries. In the 2017 Global Fortune 500 list, we ranked 83rd, thanks to our customer-centric vision and yearly investment in R&D (at least 10 percent of revenue). Huawei has delivered services to 70 percent of the world’s top 20 oil and gas companies. Mexico and Spain are prime examples. Mexico — Pemex, the largest company in Mexico, dedicated to petroleum and petrochemicals, is undergoing a major Digital Transformation project, expected to be the largest of its kind in the Latin America O&G Industry. Huawei helps Pemex ICT transformation by successfully deploying Agile Campus and IMS(IP Multimedia System) solution. Based on integrated networking and collaboration solution, more than 60,000 employees distributed in 13 branches enjoy ultimate experience. Huawei 8-inch HD video phone provides easy and secure collaboration, Agile campus switch makes network intelligent and smoothly evolution for future. At the same time, Huawei unified solution accelerates and simplifies Pemex network operations, improve O&M efficiency by 50 percent. Spain — CEPSA, one of the leading energy companies in Spain, has to process massive amounts of data during crude oil exploration and production, therefore, there is a need for an effective data analysis solution in order to improve exploration and production efficiency. As CEPSA’s business grew rapidly, traditional databases failed to meet ERP system requirements and were holding back business development. Additionally, traditional servers and storage require high maintenance skills. CEPSA was looking for a cost-effective solution that could be flexibly expanded. Huawei provided solutions for CEPSA, including mission-critical servers, storage, switches to build a reliable and stable new-generation database system. Huawei servers greatly enhance CEPSA’s ERP system performance, which has led to an improvement in production efficiency. CEPSA’s financial analysis system has doubled the number of transactions it can process, meeting strict service requirements.

Huawei servers achieve a failure rate 15% lower than industry average, guaranteeing that the system runs reliably. Huawei uses industry standard components, greatly reducing costs for procurement and future capacity expansion.

Huawei cooperates closely with top global partners in the oil and gas industry. In oil and gas industry, we focus on digital pipeline, oil and gas IoT, High-Performance Computing (HPC), and operations management application platforms. Huawei is committed to providing one-stop ICT infrastructure solutions. Meanwhile, we have established an open, diversified, and win-win ecosystem. These include underlying automation enterprises, upper-layer application providers, and oil and gas engineering design enterprises worldwide. • Huawei’s server and Schlumberger’s reservoir analysis software have completed integration and admission testing • Huawei and Honeywell have jointly developed and officially released a wireless gas detection solution based on Huawei eLTE • Huawei and PCICT, a branch of Sinopec, together have developed a smart engineering solution for oil refining

Huawei is commited to being Pemex’s best partner in its digital transformation. Huawei is dedicated to building innovative infrastructure platforms for enterprise digital transformation by making optimal use of emerging technologies, such as cloud computing, SDN, Big Data, and the IoT. Also, by working closely with skilled partners, Huawei helps enterprises attain their goals of agile, intelligent digital upgrades. To date, 197 companies in Fortune’s Global 500, 45 of which are in the top 100, have selected Huawei as their partner for digital transformation. Huawei looks forward to implementing digital transformation with you and creating a fully connected and intelligent world.

PEMEX

“I FOUND THAT PEMEX HAD A LARGE AMOUNT OF TECHNOLOGY INFRASTRUCTURE. THEY OWN IT, THEY DEVELOP IT, THEY CONSTRUCT IT, THEY DEPLOY IT. EVERYTHING WAS DONE IN-HOUSE. I SAID TO MYSELF, WE NEED TO CHANGE” - Rodrigo Becerra Mizuno, Corporate Director and CIO

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Pemex’s technological landscape, which Becerra Mizuno stresses needed streamlining with a degree of urgency. “We needed to kickstart this immediately because we are working on the political clock, so we had to hit the ground running.” Becerra Mizuno is referring to upcoming presidential elections which, depending on the result, could signal further reform at Pemex. The need to demonstrate the viability of the 2017-2021 Business Plan to any incumbent administration, and indeed the Mexican public, is therefore paramount.

THE GREAT ENABLER Tangible progress has already been made. According to Becerra Mizuno, $50mn of savings have already been realised through strategic moves such as telco asset stripping, and by the end of the year Pemex will be relieved of its data centre management burden, instead operating on a hybrid cloud model and paying on demand for what it uses. Becerra Mizuno also points to a shift in spending priorities. “When

I arrived, our budget was 90% focused on investment, 10% on operational excellence. That means that 90% of things we did here with our budget was purchasing, which is how we arrived at this point where we have amassed a large amount of infrastructure.” “This year, we’re shifting that mix to 70% opex, 30% capex. We’re still not done, but we have changed the way we’re doing business now. We’re hiring service, not buying it.” The CIO points to the influence of both CEOs he has worked under – Jose Antonio González Anaya and now Carlos Treviño Medina. Without their leadership, much of this change would not have materialised. This shift in priorities is better demonstrated by the recent Pemex Drive event, which invited key industry stakeholders to learn about the company’s new technologydriven strategy. “We also wanted to create excitement around the company, which had been lost. It’s only now been revived by this and many other factors as well, including the efforts of the CEO.”

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Automation and the Industrial Internet of Things

Why is is everyone everyone talking talking about about it? it? Why Improved sensing technologies Cost-effective, secure connectivity Advanced computing and analytical methods

Leveraging decades of digital automation expertise, Emerson introduces the expanded Plantweb digital ecosystem, a scalable portfolio of standards-based hardware, software, intelligent devices and services for securely implementing the Industrial Internet of Things (IoT) with measurable business performance improvement. Plantweb becomes the most comprehensive and integrated Industrial IoT portfolio in the industry.

@EMR_Auto_Latam @EmersonAutomationLatam

IIoT, the key to achieve a Top Quartile Performance in the oil and gas industry Oil and gas companies strive to meet business and performance goals. Constantly changing market dynamics and operational challenges can make it difficult. Whether you are producing from a conventional or unconventional field, key challenges like reducing operating costs, minimizing HSE risks, and maximizing production are paramount. For decades, the industry has primarily used closed, private networks to control critical plant functions, or Operational Technology (OT). But in recent years, oil and gas companies have been among the first to explore Internet of Things (IoT) applications that enable more widespread and cost-effective monitoring and control of facilities, along with reduced costs and increased flexibility. Companies are dramatically improving the speed and accuracy of decision-making based on having the right information in the hands of the right expert, no matter where they sit. The Industrial Internet of Things (IIoT) is ushering in a digital transformation that enables companies to exploit technology and expertise better than ever before, but only if the right scalable technology strategy is matched to your business goals. The digital era is a reality for oil and gas leaders like Pemex, where state-of-the-art technology will bring about important operating improvements and increase productivity throughout the company’s value chain. Digital transformation has become a fundamental tool to bring about a change that will lead the company towards modernity and that will help Pemex face the challenges of the new Mexican energy model. This digital transformation will add value to production, reduce the overall costs of production processes, and optimize and streamline logistics, in addition to increasing the operating security of the company. This is why Emerson introduces the extended the extended Plantweb Digital Ecosystem, a scalable portfolio of standardsbased hardware, software, intelligent devices and services for securely implementing the Industrial Internet of Things (IIoT) with measurable business performance improvement. Plantweb Digital Ecosystem harnesses the power of Industrial IoT to expand digital intelligence to the entire manufacturing enterprise, while also providing an architecture for on-premise applications. Plantweb provides a comprehensive framework to help manufacturers achieve Top Quartile performance in the areas of safety, reliability, production and energy. Top Quartile is defined as achieving operations and capital performance in the top 25 percent of peer companies. In addition to highly secure process control, safety and asset management systems, Plantweb supports enterprise-wide operations with an expanded portfolio of Pervasive Sensing field instruments, the Secure First Mile family of software, gateways, security devices and services, the Plantweb Insight™ and Plantweb Advisor™ scalable suite of software applications, the Plantweb Optics™ Platform, and Microsoftenabled, cloud-based remote expert Connected Services.

Pervasive Sensing expands the industry’s largest portfolio of measurement and analytical technologies. Secure First Mile is a security architecture that allows customers to selectively connect highly secure data from protected control and operation systems (OT) to operational performance applications in the cloud environment (IT). Plantweb Insight Software provides a comprehensive, lightweight portfolio of IT-friendly applications with analytics for monitoring asset health which can run independently of existing business systems and distributed control systems (DCS) and provide a simple and powerful entry point to Industrial IoT. Plantweb Advisor Software is a robust suite of integrated analytical expert applications for asset health, performance modeling and facility-wide energy optimization. The widely adopted OSIsoft PI System’s highly scalable open data infrastructure is used as a platform for these applications. Plantweb Optics is a mobile-ready collaboration software platform that provides cross-functional collaboration and decisionmaking to help plants operate safely and profitably. Lastly, Connected Services is an Industrial IoT-enabled cloud services offering for real-time monitoring of important assets’ health, energy consumption and other operational applications. But the Industrial IoT is not only transforming the way information is conducted across the company to improve decision making. Industry is at a critical inflection point where efficiency-focused operational improvement programs have reached a point of diminishing returns, and personnel are being strained to achieve more with less than ever before. In the next era of manufacturing, Top Quartile performers will embrace digital transformation through the Industrial Internet of Things (IIoT) to accelerate, institutionalize, and sustain best-in-class behaviors across their workforces. The Emerson Digital Workforce Experience, is an immersive experiential environment that transforms, via Industrial IoT, the nature of work and improves workers’ lives through real-life work scenarios in five key industrial areas: project engineering, commissioning, control and simulation, maintenance, and reliability. The Digital Workforce Experience empowers workers to transform traditional behaviors and deliver value in fundamentally new ways by adopting innovative approaches enabled by Emerson’s Plantweb digital ecosystem. In summary, the potential of the Industrial Internet of Things (IIoT) is bound only by the limits of our creativity. But its realization will forever be tied to security. This trend is already playing out among early Industrial IoT adopters in the oil and gas industry, where there is tremendous motivation to adopt networked technologies and smart sensors. Many oil and gas facilities, especially offshore platforms, are located in dirty, distant, dull and dangerous environments. In these harsh areas, automation and remote management can increase efficiency, improve performance, and enhance profitability. But most importantly, they keep people out of harm’s way. TO LEARN MORE ABOUT EMERSON’S PLANTWEB DIGITAL ECOSYSTEM GO TO EMERSON.COM

POWERED BY PARTNERS Touting potential partners was also a key objective at Pemex Drive. Indeed, a major facet of the 2017-2021 Business Plan involves the creation of joint ventures along the companyâ&#x20AC;&#x2122;s entire value chain as a mechanism to increase investment and efficiency. One example of this in action is a software factory developed with French consulting giant Capgemini. Based on mutual incentives such as delivering cost savings for one another, this initiative has already helped Pemex to begin cutting the sprawling number of costly applications embedded throughout

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its operations. By carefully identifying which processes could either be outsourced, merged or removed entirely, Becerra Mizuno hopes to cut 800 line of business applications down to 200-250, which even by his admission is still high. Accenture is another company helping Pemex to develop a digital ecosystem based on mutual benefit, while Microsoft and Emerson Work Services are helping deliver important work regarding migration of applications and processes to the cloud. Longstanding partnerships have also been redefined, such as the

“WE’RE OPEN, WE’RE LOOKING FOR TALENT, WE’RE LOOKING FOR YOUNG PEOPLE, AND WE’RE GOING TO GIVE THEM THE OPPORTUNITY TO DEVELOP THEIR SKILLS”

one with SAP. Having utilised SAP’s oil and gas expertise for more than 50 years, Becerra Mizuno explains how this venture has evolved to provide all important flexibility to Pemex. “We have established a new partnership with them, where it’s not only them charging for their licenses or their service, but it’s also on a payas-you-use scheme on some of their modules, especially the oil and gas modules. Before, we had to pay for these no matter what, but we can now take into account peaks and troughs.” Becerra Mizuno further highlights an increasing number of pilot projects

- Rodrigo Becerra Mizuno, Corporate Director and CIO

being initiated with suppliers in a bid to uncover the next game-changing solution. Typically lasting eight to 12 weeks across all business units, these programmes are helping convert vendors and suppliers into true partners which build solutions tailored to Pemex’s priorities. “I’ll give you a small example,” Becerra Mizuno says. “In the refining process, one of the things that affects us the most is unprogrammed outages, because of the resultant

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maintenance. So, we’re working with Baker Hughes, part of GE, to create a pilot around these. The idea is that we can create savings, which will increase the value of the partnership to both parties. We’re not just buying sensors from them or their software, we’re doing things in a mutually beneficial way.”

CULTURE CATCHES UP Pemex is not just embracing innovation with its partners. Internally, something of a cultural revolution is underway. This is no minor undertaking for Becerra Mizuno, who is responsible for around 3,000 employees spanning engineers, consultants and decision makers, many of whom are from an older generation and more cautious about new technologies. “How do I get an aging work force to adopt new things?” he asks. “That’s usually very difficult. We have to see that becoming digital was largely about a new mindset. It’s a radical change in the way we do things – we’ve run a tonne of programmes to get people who have

not used technology to embrace it.” An initiative which has fostered innovation internally is Idea Lab, which allows employees at all levels to submit pitches in a venture capital style, progressing through various rounds until a winner is chosen and their idea funded. Harnessing innovation by attracting new talent is altogether a different challenge, especially when it comes to luring younger, techsavvy recruits into oil and gas. Partnerships with educational institutions like Mexico City’s Tec de Monterrey will help to bridge this gap. Pemex Drive was hosted on one of its campuses, and Becerra Mizuno says Pemex is working closely with the university to develop interest in oil and gas IT careers. He cites his own example of leaving a private technology giant for a public-Technology oil and gas firm. “When I was at Microsoft, it was an extremely optimised company, so the things that I was able to do were very narrow. They were perfect, but they were narrow. “At Pemex, there’s so much to do,

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“HOW DO I GET AN AGING WORK FORCE TO ADOPT NEW THINGS? THAT’S USUALLY VERY DIFFICULT. WE HAVE TO SEE THAT BECOMING DIGITAL WAS LARGELY ABOUT A NEW MINDSET. IT’S A RADICAL CHANGE IN THE WAY WE DO THINGS – WE’VE RUN A TONNE OF PROGRAMMES TO GET PEOPLE WHO HAVE NOT USED TECHNOLOGY TO EMBRACE IT” - Rodrigo Becerra Mizuno, Corporate Director and CIO

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and we need so much help. If you’re someone that is ambitious, that is young and can see the silver lining coming to work for us, it’s the perfect place. That story has not been told or communicated yet – we’re seen as a monolithic company and what we’re trying to show is a different kind of Pemex. We’re open, we’re looking for talent, we’re looking for young people, and we’re going to give them the opportunity to develop their skills.”

THE ROAD AHEAD Both from a cultural and implementation point of view, Pemex is beginning to make strides, evidenced by the fact that Becerra Mizuno has been recognised as a top 100 CIO in Mexico and a HITEC-50 2018 Award winner. “I think success is something that you share,” he says. “It’s something that you can’t do alone. I’m very fortunate to have the people that I have around me. The most important thing for me has been the support of the two CEOs that I’ve had the pleasure to work with. The current CEO Carlos Trevino is so open, so dynamic and

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so supportive of what we do. He is really the transformation CEO for us.” But what about the path in front of Pemex and Becerra Mizuno? For the CIO, three important targets and ambitions remain. “The first thing is to deliver the things that we said we would deliver. To make sure that we overdeliver what we have promised and that we meet the expectations that we have set for the team and for the technology department of Pemex. “The second thing for us is, as you know, we have a big transition coming with a new administration coming in December. I would love to see a lot of the building blocks and the strategies that we have implemented become lasting. Pemex is going in the right direction, which has been validated by many experts. “The third big piece is to make sure the people in the team continue to believe that there are good things coming ahead, that they continue to be motivated, so the momentum continues whether I’m here or not. That’s the most important thing for me.”

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early 80% of new homes in the US today are built by National Association of Home Builders (NAHB) members, which include single-family and multifamily homes. The NAHB has over 700 state and local associations, and 140,000 members. Roughly a third of members are homebuilders and remodelers. The NAHB provides educational opportunities, and hosts a student competition every year at the International Buildersâ&#x20AC;&#x2122; Show (IBS), which is the worldâ&#x20AC;&#x2122;s largest residential and light commercial construction trade show that brings 60,000 visitors from 100 countries to see the newest and best products in the industry. The NAHB offers many opportunities to get people involved in the industry and make connections with industry leaders early on. Becoming an NAHB member has many benefits including discounts online, in stores, at car dealerships, credit card companies, hotels, and car rentals. Member benefits also include access to student scholarships, classes, and trainings in different

areas such as design-build, building safety, project management, risk management, green building, and The Builder Assessment Review (BAR). Building safety has always been a primary concern in the construction industry. In order to raise public awareness on this issue, the NAHB has started a campaign called Safety 365 to provide information and resources to the public to keep construction workers safe, and eliminate preventable accidents, injuries, and deaths. The Safety 365 campaign highlights different aspects of construction safety each month, and also promotes safety outside of the job. The NAHB offers classes, safety training materials, and news updates to educate employers and workers on safety and health hazards in the industry and on the jobsite to comply with Occupational Safety and Health Administration (OSHA) requirements. The NAHB also supports the increase in sustainable or green building in response to rising energy costs, the need to improve air quality,

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Chantal Contreras, NAHB President at CSULB

ensuring clean water, and conserving water usage. The goal of sustainable buildings is high performance through construction and development techniques, materials, and designs that minimize the homeâ&#x20AC;&#x2122;s impact on the environment and conservation natural resources. Sustainable buildings are moving towards using more efficient systems; some of the energy conservation systems include

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high-performance windows, energyefficient appliances, lighting, better insulation, and HVAC systems. Another important factor that contributes to green building is water conserving systems such as waterefficient appliances, fixtures, filtration systems, and low-maintenance landscaping and irrigation systems. Using better resources like high performance engineered wood, wood

alternatives, allergen-free materials, and recycled building materials also aid in sustainable building. Lastly, using effective HVAC equipment, formaldehyde-free finishes, and products with minimum off-gassing or low-VOCs will ultimately better the homeâ&#x20AC;&#x2122;s indoor air quality. Sustainable buildings not only encourage environmental awareness and more efficient uses of scarce resources, but also result in an improved living environment and lower utility bills. The NAHB continues to follow current issues that arise in the industry. Some of the hottest topics in the industry right now are that design build is on the rise, as

design-bid-build seems to be winding down, collaborative approaches are becoming more and more common for projects. Cyber risks are an enormous issue nowadays, as the rise of technology becomes more advanced, the exposure to information is put at risk for many companies and digitally collaborative programs including building information modeling (BIM). The rise of robotics in the construction industry in projected to make construction sites virtually human-free by 2050 by using drones to monitor site status, smart sensors to track people on-site, and radiofrequency identification to track site equipment and materials.

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Residential construction is governed by building codes and standards set by local and state laws. These codes often reflect local construction practices, climate, and geography. Most US communities have adopted the International Code Councilâ&#x20AC;&#x2122;s I-Codes. The I-Codes address all aspects of single-family

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and multifamily construction, including structural and MEP, and energy conservation requirements. The codes protect public health and safety, and have now turned to energy efficiency, sustainability, and property protection. But some of these energy code changes are benefiting specific product manufacturers and

take away consumer flexibility. The ICC codes are updated every three years, and the NAHB analyzes their impact on new and existing buildings. Their role is to ensure that the ICC evaluates all proposals objectively and that any changes or additional code requirements that are adopted are necessary and cost-effective. Through

NAHB efforts, the International Code Councilâ&#x20AC;&#x2122;s Board of Directors now requires cost impact information. If that information is not included, the proposed change will be rejected. If you are interested in learning more about the NAHB or becoming a member, please visit our website at www.NAHB.org.

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The source of value

Procurement executives across the globe continue to see the potential they can unlock throughout the supply chain. They understand that business today is about engaging, collaborating, adapting instantly to evolving needs, and finding new sources of value. Getting that value, however, can prove a challenge.