Purchasing B2B October 2015 by Annex Business Media

OCTOBER 2015

2015

CANADA’S SUPPLY MANAGEMENT MAGAZINE

ANNUAL SURVEY OF THE CANADIAN SUPPLY CHAIN PROFESSIONAL

E: INSID

L A N O I NATUSTRY IND O 2015E EXHPOW GUID S

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Table of Contents

Vol. 57, No. 5 • OCTOBER 2015

Features 8 WHERE DO YOU STAND?

8 $150,000

Results from the 2015 Annual Survey of the Canadian Supply Chain Professional.

PurchasingB2B readers 2015

$120,000

19 TRICKY BUSINESS?

$90,000

Tips for managing MRO spend. $60,000

21 STATE OF FLUX

$30,000

Looming trends in managed business travel. Greater Toronto Montreal Vancouver Calgary Winnipeg Edmonton Halifax Saskatoon St. John's Thunder Bay Area/Brampton

Also inside 5 BUSINESS FRONT

15 PURCHASINGB2G

6 FINANCE CORNER

THE LAW

7 PROCUREMENT PROFILE

21 Supplements inside:

Connect With Us Online We encourage you to visit us online to stay in touch with what’s happening in your industry and to view enhanced articles.

Features CHANGE MANAGEMENT AND THE SUPPLY CHAIN Supply chain management needs to be dynamic. This article highlights how the profession benefits from change management skills.

.ca

PurchasingB2B.ca

@PurchasingB2B

Michael Power

CREATE THE JOB YOU REALLY WANT Debating whether to look for a new job or stay put in your current gig? This feature discusses how to forge your ideal job from the one you already have. www.PurchasingB2B.ca/features

NEXT LEVEL MEETINGS MANAGEMENT ©maxsattana/Getty Images/Thinkstock

Looking to take your meetings program to the next level? This exclusive online article offers tips to innovate both meetings process and technology in order to limit the workload on finance and procurement. www.PurchasingB2B.ca/features

PurchasingB2B Weekly eNewsletter Cover collage: ©Getty Images/Thinkstock

Sign up today for regular industry news and insights. www.PurchasingB2B.ca/e-newsletter-subscription PurchasingB2B.ca / October 2015 / 3

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Up Front 80 VALLEYBROOK DRIVE TORONTO, ONTARIO M3B 2S9

www.PurchasingB2B.ca

PUBLISHER

Dorothy Jakovina 416-510-6899, djakovina@PurchasingB2B.ca

To The Future

s in previous years, the big focus of the October issue of PurchasingB2B is survey results and salary. And for the overall supply chain field, the news is on the bright side. In this issue, we report on the results of our 2015 Annual Survey of the Canadian Supply Chain Professional, done each year jointly with the Supply Chain Management Association (SCMA), as well as with MM&D and Canadian Shipper magazines. I don’t want to give away too many details (see story on page 8), but the average salary that respondents are reporting this year represents a sizeable increase over last year. The results also show that supply chain professionals across each region of the country saw an increase. Even provinces such as Manitoba/Saskatchewan and British Columbia—which took a hit last year in terms of the average salary—got an increase this year. Also this year, most of our respondents (by a healthy margin) said that they were satisfied with their jobs overall. A total of 89 percent of you said that you were happy with your current employment situation, which is the highest in the past five years. Also on the good news front, 60 percent of you said that you had received a salary increase over last year, with almost three quarters getting a raise of 2.1 percent of more. The majority (62 percent) also anticipates a salary increase next year as well. Happily, it’s a far cry from the lost jobs and stagnant salaries that the field saw during the Great Recession. The survey results aren’t the only surprise in this issue. We also feature the show guide for the National Industry Expo, a daylong tabletop event that PurchasingB2B is holding November 10 with our partner FRASERS.com, Canada’s leading industrial search engine. The event is designed as a one-stop shop for suppliers and buyers from across all of Canada’s economic sectors to meet and network, as well as discover the latest innovations and technologies. We’ll also feature education sessions throughout the day, covering topics such as buyer/supplier relationships, streamlining crossborder shipments, challenges facing SMEs and tapping into financial resources available to help grow businesses. At PurchasingB2B, we consider it part of our role to build bridges between buyers and suppliers, and that’s exactly what we hope to do with this event. For more information on the event, check out the website at NationalIndustryExpo.ca. The next issue of PurchasingB2B, which comes out in December, is also the final edition for 2015. For that, we’ll bring you a special report on sustainability. We recommend that you pick up a copy, as there’s no better way to go into January than to start thinking green.

EDITOR

Michael Power 416-442-5600 ext 3259, mpower@PurchasingB2B.ca ART DIRECTOR

Andrea M. Smith 416-442-5600 ext 3582 ACCOUNT COORDINATOR

Tracey Hanson 416-510-6762, thanson@annexbizmedia.com CIRCULATION MANAGER

Barbara Adelt 416-442-5600 x 3546, badelt@PurchasingB2B.ca ANNEX PUBLISHING & PRINTING INC.

VICE-PRESIDENT: Tim Dimopoulos (416)510-5100, tdimopoulos@annexweb.com PRESIDENT & CEO: Mike Fredericks, mfredericks@annexweb.com For over 56 years, PurchasingB2B has been a trusted source of information for Canadian purchasing/supply chain management professionals in the private and public sectors. Special features and supplements include Fleet Management, Canadian Automotive Review (CAR), PurchasingB2G, and Travel Management Canada. PurchasingB2B is published six times a year, except for occasional combined, expanded or premium issues which count as two subscription issues, by Annex Publishing & Printing Inc. © Contents of this publication are protected and may not be reproduced, in whole or in part, without the written consent of the publisher or editor. NOTICE: PurchasingB2B accepts no responsibility or liability for claims made for any product or service reported or advertised in this issue. PurchasingB2B receives unsolicited materials including letters to the editor, press releases, promotional items and images from time to time. PurchasingB2B, its affiliates and assignees may use, reproduce, publish, re-publish, distribute, store and archive such unsolicited submissions in whole or in part in any form or medium whatsoever, without compensation of any sort. SUBSCRIPTION SERVICES: To subscribe, renew your subscription, or to change your address or information, contact us at 416-510-5713 or 1-866-543-7888, ext 3258, apotal@annexnewcom.ca, or visit us at www.PurchasingB2B.ca. Subscription price per year: $99.95 CDN; Outside Canada per year: $172.95 US; Single issue Canada: $18 CDN. Annual Supply Chain Survey issue, Canada: $45; Outside Canada: $70 US. Taxes extra. From time to time we make our subscription list available to select companies and organizations whose product or service may interest you. If you do not wish your contact information to be made available, please contact us via one of the following methods: Phone: 1-800-668-2374, Fax: 416-442-2200 Mail to: Privacy Officer, 80 Valleybrook Drive, Toronto, ON M3B 2S9 Printed in Canada. ISSN: 1497-1569 (print); 1929-6479 (digital) Publications Mail Agreement No. 40065710 We acknowledge the financial support of the Government of Canada through the Canada Periodical Fund of the Department of Canadian Heritage

4 / PurchasingB2B.ca / October 2015

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Business Front

How long is just right?

Toronto-based Michael Hlinka provides business commentary to CBC Radio One and a column syndicated across the CBC network.

by Michael Hlinka

ow long have you been working at your current job? For me, it’s 15 years. In September 2000, I was offered a tenure-track position in Ontario’s community college system, and I haven’t looked back. A professor’s fulltime workload is 12 hours in the classroom a week. The job security is second-to-none. And when I retire, there will be a generous defined benefit pension plan, fully indexed to inflation, waiting for me. I’ve frequently commented to friends that I couldn’t be removed, even with attack dogs and water cannons—and they have tried on at least a couple of occasions! The reason I bring this up is because of some very surprising data that I ran across recently. It talked about how long, on average, workers stay on the job and the correlation between average years spent working in the same position and the state of the overall economy. These are American statistics but they align closely with Canadian numbers. The information that I saw tracks the years from 2000 to 2015. If you recall, the early years of the 00s were somewhat weak (after the bursting of the tech bubble, followed by 9/11) before the mid-decade boom, and then the 2008-09 crash that we’re still recovering from. Over these 15 years, the amount of time that workers stayed with the same job ranged from 2.2 years to 3.3 years, with the average amount of time falling about exactly in the middle: let’s call it 2.7 years. Now, here’s where it gets very interesting, if somewhat counter-intuitive, at least at first glance. A small number of years in the same job is associated with good economic times, while long tenure indicates a weak labour market. In 2000, American workers were with the same job for just over two years. As the economy weakened, the years trended up to 2.7, then back down to 2.3 in the salad days of 2005 to 2007 with a huge spike up to 3.3 by the end of 2009. Since then, the trend has been downward. That is, workers are staying put a shorter length of time, an indicator of strength. This made no sense at first. Why does someone leave a job? Because they’re laid off? Yes, that’s one reason. But there are other explanations.

How about they don’t like where they’re currently working and are seeking greener pastures? And then the proverbial light bulb went on! When the economy is booming, there’s more opportunity. Before I started teaching full time, I worked in Toronto’s financial services industry. The stock market was booming then. Companies were raiding each other for qualified employees, leading to high turnover and short tenures. When I joined George Brown College, a former colleague who was in a supervisory capacity, desperate for accredited professionals, approached me and essentially offered any of my students the opportunity to work 30 hours a week at $17.50 per hour—with their work schedule created not to conflict with their classes! Let’s contrast that with the end of 2009. People are being laid off left, right and centre. You’re grateful if you’ve got a job and even if you’re given another offer, you hesitate. That’s because if you change employers you may sacrifice seniority. That’s not so important when the economy is expanding, but it’s critical when it’s contracting. So what’s the point of all this? Right now, average years on the job is about 2.7, which indicates a labour market that’s OK at best, perhaps below-average in strength. This contradicts several of the other labour market indicators that are far more positive, including the unemployment rate and vacancies. At the time of writing, the “official” unemployment rate in the US was 5.1 percent and 7 percent in Canada. And 5.1 percent is very close to what most economists consider “full employment,” and there’s al-

“When we aggregate across the entire economy, what we find is that longer tenure in one position does not equal better economic conditions.” ways some slack in the labour market. I’ve seen multiple reports that job vacancies are at all-time highs, something else that suggests a healthy situation for workers. On the other hand, the participation rate—measuring what percent of the working age population is either working or actively looking for work—is well below its historical average, indicating that things are not so great after all. As I said, I have it very good at George Brown College, which explains my 15 years and counting of continuous service. But when we aggregate across the entire economy, what we find is that longer tenure in one position does not equal better economic conditions. And perhaps this metric, which you may not have even heard of before, does a better job of telling us the true state of the labour market, then other, more traditional measures do. B2B PurchasingB2B.ca / October 2015 / 5

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Finance Corner

Unlocked potential Aligning your procurement team’s actions with the goals of finance

Mickey North Rizza is vice-president of strategic services at BravoSolution.

By Mickey North Rizza

or years, we’ve been talking about procurement’s need to transform, and it finally feels like we’ve begun to make progress. I’ve seen more companies unlock their procurement team’s potential by developing supplier-focused strategies and moving away from conventional procurement practices. The road to an organization’s transformation is never easy and there’s no single way to overcome the barriers that procurement faces because everyone’s challenges are different. The key is determining what’s holding your team back, how to overcome these unique obstacles and how to better align with larger business initiatives. If you feel like your procurement team is still struggling to unlock its full potential and prove its value, below are five steps that can help you get there. Align your priorities with finance Historically, procurement was considered a back-office function, while CFOs are often a CEO’s right-hand man. The truth is that procurement and finance have many overlapping goals, and ideally should be working together. For an organization to see procurement’s full value, the team can’t work in a vacuum. Procurement must understand finance’s priorities, language and how they contribute to overall business objectives. The key is seeing the financial concerns and tying these to procurement’s objectives. Keeping this in mind will help align every decision procurement makes with the goals of the executive team. Know what numbers matter It has been standard practice for procurement to measure success by traditional KPIs such as the number of categories sourced, spend under management and cost savings. While these are important metrics, to align with finance you need to think like finance. Refocus on the financial numbers that show the value procurement is bringing to the organization, such as earnings-per-share, operating margins and return on invested capital and valuation. These types of results are framed in a way that the CEO and CFO can quickly grasp and depict the value that the procurement team is bringing. Businesses are focused on monthly financial reporting so procurement’s value contribution will be front-and-centre each month. Uncover what’s holding you back It’s easy to understand the benefits of aligning with finance, but it can be hard to act on it. The challenge is that there is a litany of internal and external issues that hold procurement teams back, and very few take the time to step back and consider how to overcome those barriers. The most common hurdle that procurement faces is organizational misalignment. Often, employees and departments are working towards different goals and are misaligned in how they interpret business objectives and how they measure progress. Misalignment is typically due to different definitions, different data or different drivers.

Determine where the organization is misaligned and how it’s affecting procurement’s success, and then figure out how to make a change. Change the game plan Once what’s been holding an organization back from unlocking procurement’s full potential has been identified, it’s time to make a new game plan. To create new and different results, it means you have to do something differently. The best places to start are to look at people, processes and technology. For people, consider the skill set that procurement currently has, what skills the team needs to grow, and what type of new talent they should consider bringing on board. In terms of processes, look at the horizontal business processes and also the current adoption rates. Determine whether people find the processes helpful, confusing or too time intensive. Finally, consider the technology. If it’s not helping the team do their job more efficiently or provide additional insight into the supply chain, it’s probably time to reevaluate its value. Use your data Business is becoming increasingly data driven, and it’s time for procurement to get on board. When reviewing people, processes and technology, look at resources through this lens and consider the data that procurement is creating as well as who is able to understand it. For example, today’s advanced sourcing and optimization technologies enable procurement teams to weigh thousands of what-if scenarios. Having this information takes the subjectivity out of bid decisions, transforming it to a complete quantitative exercise. The key is to have the right data, but also to have the right capabilities to make the intelligence actionable and predictive. No procurement team’s transformation path is identical another’s. Some organizations may find some steps much easier to implement. The first step is to identify your team’s current strengths and weaknesses. The more self-aware and open to change you are, the better chance you have of becoming one of the most strategic and value contributing members to your organization. B2B

6 / October 2015 / PurchasingB2B.ca

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Procurement Profile

A strategic role How did you get involved in procurement and supply chain? I became involved in procurement back in 1978 with Parker Brothers, the manufacturers of Monopoly and other games, quite by accident. I interviewed for a position in inventory control, and after a short while I was promoted to buyer and have been in supply chain ever since. Its changed a lot in that time as we have gone beyond moving things around and controlling costs, to playing a more central role in an organization’s success. What’s the best thing that’s happened in supply chain since you began? The most exciting change has been that supply chain has grown into a much more strategic role. Our role was once all about cutting costs and making sure things ran smoothly. Now we’re a function that some of the world’s most successful organizations are building their entire business models around. There has been an impetus for change recently, and much of that change has come thanks to the leadership of SCMA. Skills and education are critical to taking us where we need to be. SCMA has been excellent in helping us to improve structure, create clear business processes, and incorporate the latest technology and innovations. What would you change about the field? Tough question. I would ask supply chain professionals to advocate for themselves more within their companies or organizations. We need to work harder to understand the broader business to better understand where we can add value. Collectively,

Glynn Hancott, manager, procurement and planning services, The Ministry of Health and Long-Term Care

we need to show the value of supply chain higher in our organizations. There is a huge amount of value that supply chain professionals can bring to the table, but we’re often the best kept secret within our workplaces. What are your future plans? I have a number of goals—I want to keep working with younger supply chain professionals to help them build their careers, including getting the right skills and a good education in supply chain. I want to challenge them, and they must challenge themselves, to improve the way the supply chain operates within their organizations. What might readers be surprised to learn about you? They won’t be surprised at how passionate I am about supply chain, but I’m equally zealous about sports. Football and hockey are my personal favourites. With elite athletes, it often comes down to a pure physical performance. When I watch these sports, it’s an opportunity to see an athlete do something that most people cannot do. I enjoy seeing coaches teach young players to excel in their sport, and to achieve things that they themselves did not think possible. I’m also deeply interested in the strategy side of sports, which has many parallels with the role of the supply chain. What advice would you give those new to the field? Get as much education and learn as much as possible, and work smartly towards your career goals. Many of us will be retiring over the next few years, and there will be lots of opportunities for those who planned their careers wisely to play major roles within organizations. Set your sights high as far as your career goes. You can bring a huge amount of value to an organization, you just need to build your skills and grow your understanding of the organization you are working for, build relationships with suppliers and internally, and make sure people know the value you can bring. On a day-to-day basis, set ambitious but achievable goals and work hard to meet them. B2B

PurchasingB2B.ca / October 2015 / 7

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Supply chain salaries get a boost from last year’s average 2015 ANNUAL SURVEY OF THE CANADIAN SUPPLY CHAIN PROFESSIONAL

association in Canada for professionals in supply chain management, the Supply Chain Management Association (SCMA) is the

By Michael Power

hile recent economic news both

PurchasingB2B readers the mean salary is

internationally and here in Canada

$78,637, or 14 percent lower than the sur-

has certainly been mixed, it ap-

vey’s overall average.

pears that overall supply chain salaries have bounced back from a dip last year.

Overall, a total of 60 percent reported that their salary had increased this year, while 34

national voice for advancing

But that overall rise hasn’t meant an in-

and promoting the

percent noted that it had stayed the same.

crease for PurchasingB2B readers, who in

profession. SCMA strives

Fortunately, only five percent said that they

fact saw a drop in how much they made over

had seen a decrease in their salary over the

2014. And while women took home more

past year. Among PurchasingB2B readers, a

this time around than last year, the increase

total of 55 percent saw an increase, while

was less than what men saw, resulting in an

only two percent saw their salaries drop.

even greater gap between the sexes.

Another 41 percent saw no change in their

to ensure that employers recognize the critical contribution that SCM professionals make to the success of their organizations. SCMA sets

That’s according to the results of the 2015

salary as compared to 2014.

Annual Survey of the Canadian Supply Chain

The majority of our readers (44 percent)

Professional. PurchasingB2B conducts the

also saw a salary increase in the “two per-

survey each year along with MM&D and

cent or less” range, which is more than the

With nearly 8000 members

Canadian Shipper magazines, as well as

survey’s overall average of 34 percent. An-

working across the private

the Supply Chain Management Association

other 40 percent of PurchasingB2B readers

(SCMA).

saw an increase of between 2.1 and four

the standard of excellence or professional skills, knowledge and integrity.

and public sectors, SCMA is the principal source

According to our 2015 survey, the mean

percent, while 10 percent of the magazine’s

of supply chain training,

salary for Canadian supply chain profession-

respondents got an increase of 10.1 percent

education and professional

als hit $92,182. That’s a sizeable jump from

or greater. Looking towards 2016, 44 percent

development in the country.

the 2014 average of $86,987 and represents

of readers anticipate an increase of between

www.scmanational.ca

a six-percent increase over last year. For

4.1 and six percent.

All images this article: ©Getty Images/Thinkstock

As the leading and largest

8 / October 2015 / PurchasingB2B.ca

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FACT

Gender In 2015, the average salary for women

Overall, 89 percent of survey

climbed to $83,381—up 5.7 percent from

respondents said that they

last year’s average of $78,819. By compari-

were satisfied with their jobs.

son, men pulled down $97,945 on average, which is up from $92,276 last year by six percent. As well, compared to the overall average, female readers of PurchasingB2B earned significantly less, at $65,334. Their male

Salary breakdown by region

counterparts did better at $86,425.

Across the board, each region of Canada received an

Not surprisingly, the length of time spent in the field boost-

increase in their mean salary. That differs from last year’s

ed salaries for both men and women. For example, women

results, which saw several regions experience either

with 31 or more years of experience earned $97,894 on av-

nominal increases or a decrease.

erage, an amount that drops to $94,533 for those with more

Once again, Albertans took home the largest salaries,

than 35 years’ experience. For men, the average salary hit

with the average at $104,392—an increase of 6.4 percent

$117,093 after 31 years of experience then drops to $114,074

over last year. In 2014, Alberta saw a 4.7-percent dip in

for those with 35 or more years of experience.

the average to 98,109—the first decrease for the province

Gender

since the survey began. Ontario and BC came in with the next highest averages, 2014

2015

PurchasingB2B readers

Male

$92,276

$97,945

$86,425

Female

$78,819

$83,381

$65,334

at $90,809 and $87,587 respectively. Up next was Quebec with $84,763 — up five percent from $80,580 in 2014 — and Manitoba/Saskatchewan with a five-percent increase as well, at $84,342. Interestingly, Atlantic Canada saw a sizeable jump from $72,279 in 2014 to $80,930. That’s an increase of 12-percent for a region that had seen its average salary drop each year since 2012.

FACT The total number of 2015 survey respondents who said they were satisfied with their job overall

$87, 587

Brit Colu ish mbia

$10 Alberta 4,3 92

All images this article: ©Getty Images/Thinkstock

89%

Manitoba/ Saskatchewan

$84,342

90%

Quebec

Ontario

$90,809

$84,763

The total number of 2015

30 ,9ntic 0 a a $8 AtCl anad

PurchasingB2B readers who said they were satisfied with their job overall

PurchasingB2B.ca / October 2015 / 9

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“

FACT

Salary by industry Not surprisingly, what kind of organization you work for—and how big that company is—affects how much you make. The highest average ($109,450) went to companies

$84,532

with annual revenues of over $1 billion. That’s followed by organizations with revenues

The average salary of survey

between $51 million and $1 billion.

respondents working a

Despite recent turmoil in the energy industry, the natural resources sector was the

40-hour week.

only one to weigh in above the overall average. Supply chain professionals in that secby healthcare at $90,996. Companies with the most employees also saw the highest

$76,772

salaries. Organizations with more than 500 employees saw an average of $98,916, fol-

What PurchasingB2B readers

lowed by those with between 100 and 499 workers ($86,511) and under 100 ($83,853).

make by working 40 hours.

tor took home $104,231. At $91,889, the service sector was second highest, followed

Type of organization 2011

2012

2013

2014

2015

PurchasingB2B readers

Natural Resources

$98,500

$101,967

$105,979

$101,023

$104,231

$98,500

Service

$86,900

$86,396

$84,777

$87,109

$91,889

$79,525

Manufacturing

$75,400

$77,750

$82,222

$80,810

$87,000

$79,997

Health Care

$80,200

$77,948

$83,404

$83,991

$90,996

$82,718

Education

$74,300

$74,597

$77,113

$80,493

$84,823

$102,750

Trade/Wholesale

$80,500

$78,478

$79,693

$81,209

$83,178

$65,253

Public Administration

$80,500

$77,968

$80,225

$82,341

$84,101

$92,238

YOU SAID “As procurement gains a larger roll in most corporations, they’re looking for the ability to not only save money on direct procurement but streamline process and procedures to further reduce the bottom line.”

Salary by city Not surprisingly, the city in which someone lives and works also makes a difference to their salary. For PurchasingB2B readers, by far, living in Edmonton means the highest pay. The average salary in that city for our readers is $144,200. The next highest-paying metropolitan region is Ottawa-Gatineau at $124,500, followed by Sudbury at $97,000. The next three highest paying cities are Quebec City ($96,000), Saska-

toon ($92,000) and Halifax ($87,500). The Greater Toronto Area/Brampton/ Oakville region came in at $80,968.

FACT $104,231 The average salary for natural resources,

$150,000

Th su B up

PurchasingB2B readers 2015

$120,000

$90,000

the survey’s highest paid industry.

$102,750

$60,000

The average salary among those working

$30,000

in education, the highest paid sector among PurchasingB2B readers. Greater Toronto Montreal Vancouver Calgary Winnipeg Edmonton Halifax Area/Brampton

Saskatoon St. John's Thunder Bay

10 / October 2015 / PurchasingB2B.ca

PBB05_08-13 Survey.indd 10

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“There’s always going to be risk. The issue is how to manage it.” People who know Distribution, know BDO.

The Consumer Business Practice at BDO The logistics business has never been simple. And with recent emphasis on supply chain sustainability, higher safety standards, and an evolving regulatory climate, it’s getting more complex. BDO’s dedicated professionals provide an exceptional array of partner-led services to help you keep up with key issues and maximize profitability, even in challenging times.

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PBB05_08-13 Survey.indd 11

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Age

Salary and education Overall, respondents with an MBA degree earned the most, with the mean salary for that group coming in at $109,994.

2014

2015

PurchasingB2B readers

Those with a master’s degree also did well, with an average

Under 25

$64,517

$57,062

$48,000

salary of $102,994. A university degree of any sort means an

26-35

$71,890

$76,818

$58,922

36-45

$86,547

$89,958

$83,421

46-55

$90,985

$98,632

$75,287

56-65

$97,591

$105,499

$87,685

average salary of $92,253, while even some university education gave respondents a salary of $94,253. The average salary for those with a trade or technical diploma is $91,614. In past surveys, those who have earned their SCMP designation tend to report salaries that are higher than the

Employee profile

average, and this year holds to that rule. Respondents with

The amount of money an employee makes tends to accumu-

the designation reported earning $100,714, while those

late along with experience, and supply chain is no exception.

without the designation took home $89,810. Interesting to

Overall, respondents with 30-35 years of experience earned

note: those who were in the process of obtaining their SCMP

the most, at $107,823. The picture was a bit different for

had the lowest average salary, at $76,249. PurchasingB2B

PurchasingB2B readers, among whom those with 15-20 years’

readers who have earned the designation reported a salary

experience earned the most, at $97,142. Hard work can pay off, and those who worked the most

of $103,238, which is higher than the overall average.

hours also got paid the highest. Those who worked more than 50 hours earned an average of $112,739 or, in the case

$200,000

of PurchasingB2B readers, $102,993. Those working a slightly

$150,000

PurchasingB2B readers

less busy week—from 46 to 50 hours—pulled in $108,938.

2015

On average, if you put in the typical 40-hour workweek you earned $84,532 ($76,772 for PurchasingB2B readers). Age is also a factor that can affect compensation. The

$100,000

56 to 65-year-old crowd was the highest paid, averaging $105,499 overall, an eight-percent jump from last year’s $97,591. PurchasingB2B readers in this age group averaged

$50,000

even higher, at $108,499. Notably, those 46 to 55 saw an 8.4-percent increase to $98,632, while the youngest cohort— High School or less

Trade/ Technical diploma

College diploma/ CEGEP

Some university

University degree

MBA

Other Masters

the under 25 group—got hit with a drop from $64,517 in 2014 to this year’s $57,062.

HOW DOES YOUR SALARY MEASURE UP? Visit the PurchasingB2B Online Salary Calculator! www.PurchasingB2B.ca Brought to you in partnership with

12 / October 2015 / PurchasingB2B.ca

PBB05_08-13 Survey.indd 12

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FACT The average PurchasingB2B reader who responded to the survey is 47.5 years old,

YOU SAID

has worked in supply chain for 17.6 years and has been in their current job for 8 years.

“More attention is being brought to supply chain. As more understanding of the position is gained,

Position type

more opportunities to focus on particular roles

How much people made in supply chain over the past year

within supply chain are becoming available.”

depended in large amount on what position they held. Not surprisingly, those at the executive level took home the most,

How happy are you?

with an average of $148,571 (among PurchasingB2B readers the number was $142,400). Managers and consultants also did well, with those positions earning an average of $105,122

Satisfaction with salary TOTAL SATISFIED

and $104,880 respectively.

2015 survey average

PurchasingB2B readers

74%

68%

Very satisfied

19%

supervisors coming the closest at $91,808. In fifth place was

Somewhat satisfied

55%

49%

the engineering/professional title, at $80,368.

Not very satisfied

20%

25%

Not at all satisfied

All other job titles fell below the national average, with

Type of position

Job satisfaction

2014

2015

PurchasingB2B readers

Executive

$141,813

$148,571

$142,400

that a competitive salary ranked high among respondents in

As the survey focuses largely on salary, and it’s no surprise

Supervisor

$85,690

$91,808

$81,000

terms of defining their job satisfaction. Almost all respon-

Managerial

$99,462

$105,122

$92,096

dents (99 percent) noted that a competitive salary was “very important” to their job satisfaction. Of those, 71 percent said

Consultant

$102,461

$104,880

$26,400

Engineering/ professional

$83,434

$80,368

$66,500

Operations/ Tactical

$70,261

$75,465

$56,500

Clerical/ administration

$56,479

$62,953

$86,304

Other

$82,322

$79,239

$56,267

it was “very important,” while 28 percent noted that it was “somewhat important.” Among PurchasingB2B readers, the results were similar, with 66 percent considering a competitive salary “very important” while 32 percent said that it was “somewhat important.” While almost all respondents said that a competitive salary was important, 74 percent said that they were satisfied with

FACT

what they made. Among those, 19 percent said they were “very satisfied,” while 55 percent answered that they were

The annual sourcing volume of PurchasingB2B

“somewhat satisfied.” A total of 20 percent said they were

readers who completed the survey is $18.3 million,

“not very satisfied” and a remaining six percent were “not at

as compared to the overall average of $31 million.

all satisfied.” At 75 percent, the majority of survey respondents also

METHODOLOGY

considered a healthy work/life balance to be “very import-

A total of 1,256 supply chain professionals completed the

ant” to overall job satisfaction. Another 23 percent consid-

2015 Annual Survey of the Canadian Supply Chain Professional.

ered that balance to be “somewhat important.” For Pur-

Readers of PurchasingB2B, members of the Supply Chain

chasingB2B readers, 65 considered that balance to be “very

Management Association (SCMA) as well as readers of MM&D and Canadian Shipper magazines were sent email invitations to respond to the survey in the early summer of 2015. With this response rate the margin of error was plus or minus 2.6

important” and 27 thought it was “somewhat important.” Another seven percent said that it was not “very important.” Forty eight percent noted they were “somewhat satisfied”

percentage points, 19 times out of 20. Once again, research

and another 11 percent were “not very satisfied” with that

firm G. Bramm Research Inc. handled the survey.

balance. Meanwhile, 86 percent said they were “satisfied,” and 38 percent noted they were “very satisfied.”

B2B

PurchasingB2B.ca / October 2015 / 13

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Professional Directory

CORPORATE ON-SITE TRAINING WHY CHOOSE ON-SITE TRAINING? On-site training offers a variety of benefits to both employers and staff. In addition to cost savings and convenience, on-site training can be customized to meet different business needs. On-site training ensures consistent learning across the board from a single team to an entire organization.

WHY CHOOSE SCMAO TO PROVIDE YOUR TRAINING? Expert Instructors – Our expert instructors are leading supply chain academics and experienced practitioners who have real-world SCM experience. Our Programs – Our programs are designed to enhance skills development, professional competence and strategic perspective of SCM professionals at all levels of career progression from entry, to mid, and executive levels of functional responsibility. Our Reputation – As the leading supply chain association in Ontario, SCMAO has established a reputation for excellence in education and professional training. Over 70% of our corporate training is provided to repeat clients.

For more information on corporate training with SCMAO, please contact Carol Ship Spencer, Director, Education and Professional Programs at 416-977-7566 x2146 or csspencer@scmao.ca.

Brought to you by

STATE OF THE SUPPLY CHAIN WEBINAR Wednesday, November 25, 2015 – 12:00pm-1:00pm ET

Looking for insight into whether you’re being paid fair market value? Want to hear about your future career prospects? Learn more about the results from the 2015 Annual Survey of the Canadian Supply Chain Professional. Then we invite you to join us on November 25th for a FREE one-hour webinar that will include presentations of the survey results by Michael Power, editor, PurchasingB2B, Julia Kuzeljevich, editor, Canadian Shipper, and Emily Atkins, publisher/editor-in-chief, MM&D, and SCMA president and CEO, Cheryl Paradowski, along with commentary from top Canadian HR professionals and recruiters.

2015

14 / October 2015 / PurchasingB2B.ca

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Five top tips from the negotiation trenches

W By Maureen Sullivan

e all negotiate every day. In purchasing and supply chain management, negotiation skills appear near the top of the “required” list and can make or break your next contract or procurement discussion. Whether negotiating change orders, addressing performance issues or discussing the terms of a global supply arrangement, these difficult conversations are at the core of effective relationship management and cost controls. There are countless books on effective negotiation strategies, courses you can take and blogs you can follow. How to distill the key features contributing to a successful negotiation? After 15 years as a litigator and mediator, as well as 20 years in the procurement and contract management education field, here are five tips that resonate for me. Do your homework The better prepared you are, the greater your chance of success. As a practicing lawyer I was often astonished at how little preparation was done for significant negotiations. It’s crucial at the very least to understand the legal and contractual issues, the personalities involved and the interests and BATNAs (best alternative to a negotiated agreement) of all parties. You may have to consult with your legal counsel or other subject matter expert. Think about the negotiation from your counterpart’s point of view so you’re prepared to explore options that can work for both sides. Use active listening There are two parts to verbal communication: speaking and listening. I would say that listening is by far the more important. Knowledge is power, but how do you gain knowledge of your counterpart’s concerns and underlying motives if you aren’t an effective listener? While passive listening generally allows clear factual information to be heard and understood, active listening involves demonstrating comprehension. Clarifying, acknowledging, restating and reframing are all communication skills that help ensure active listening. Be prepared to be persuaded Most people negotiate with their position in mind—how far they will go, what they will agree to and where they will take a stand. You may have limits on your authority and certainly you should spend time thinking about your desired outcome. But it’s important to approach negotiation as a fact-finding mission. What do they know or believe that makes them see things differently than I do? If you can ferret that out, you have a better chance of convincing them that they have misunderstood and should reconsider their position. On the other hand, perhaps that information will show that your own understanding of the situation is flawed or incomplete. Be prepared to be persuaded. Remain courteous When things go smoothly and agreement is reached, intense negotiations can be almost euphoric for the parties. In such cases, it’s easy to remain cordial and maintain or enhance the relationship while concluding the agreement. More likely, there will be hiccups in the dis-

PBB05_15 PB2G.indd 15

cussions, misunderstandings and perhaps bruised egos. Both sides don’t have identical interests or there would not be a negotiation in the first place, so there will be concessions and perhaps even a deadlock. When discussions break down and you cannot justify spending more time and resources on the negotiation, it can be challenging to stay courteous. You may feel they have wasted your time, failed to negotiate in good faith or simply are being unreasonable. Remember that you may have to deal with this party in the future and your corporate reputation is on the line. Do your best to separate the people from the problem so you can maintain a working business relationship. Take the time to explain the next steps and thank them.

PUBLIC PROCUREMENT

Talk it out

Leave an offer on the table If you must conclude the negotiation without an agreement, ensure you leave a final offer open for a finite period. It’s likely the other party has not considered their BATNA. Failing to consider what you’ll do if agreement isn’t reached puts even the most skilled negotiator at a disadvantage. How will you know a “good deal” when you see it, if you don’t know what you can accomplish without the other party’s agreement? When things break down, leaving your final offer open for 24 hours allows the other party to save face by accepting once they’ve had a chance to fully reflect on their alternatives. You may be surprised how quickly you hear from them.

Bonus tip When you reach agreement, document it on the spot. Even though you may have to prepare formal documentation for execution later, getting a signature on even the most rudimentary draft of the key points agreed to can prevent buyer’s remorse. Memories fade, motivations wane and if you don’t have something in writing you may find that your hard earned agreement crumbles before it’s formalized. B2B Maureen Sullivan, LLB, is president of NECI, an organization providing procurement and contract management training to the public and private sectors for nearly 30 years. Contact Maureen at 250370-0041 or maureen@neci-legaledge.com.

PurchasingB2B.ca / October 2015 / 15

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The Law

Risky Business Managing risk in professional services contracts

Doug Sanders is a partner in the Vancouver office of Borden Ladner Gervais LLP (BLG). Doug can be reached at dsanders@blg.com Bill Woodhead is an associate in the Calgary office of BLG. Bill can be reached at bwoodhead@blg.com.

By Doug Sanders and Bill Woodhead

rofessionals are responsible for performing their duties in accordance with their contractual agreements. However, certain professionals may also have a duty of care with regards to various third parties not under contract. When a breach of this duty of care leads to an injury or loss to one of those third parties, the party suffering the injury or loss may have a claim of negligence against the professional in question. While unable to completely eliminate the risks of negligence claims, professionals may be able to reduce their liability through limitation of liability clauses within their professional service contracts. Clients and professionals should ensure that they read through these clauses carefully. Certain professionals, like engineers, have been found to have a duty to warn of impending damage to persons and property to ensure that their designs do not create hazards to members of the public. In Surrey v Carroll-Hatch, an architect hired a structural engineer to

“It can be unclear exactly what the term ‘gross negligence’ means in a particular contract, how it will be applied to a given situation, and what may be required to establish gross negligence, unless a contractual definition of the term is provided.” review the soil structure of two test pits. Upon his review, the engineer notified the architect that further deep soils test were required. The architect rejected this recommendation and the completed building incurred damage from substantial and uneven settlement. The engineer in question was found to be negligent, due to the fact that he failed to notify the owner of the risk involved in proceeding without the deep soils test. The British Columbia Court of Appeal found that this duty was independent of the engineer’s contract with the architect. Professionals can be found to owe a duty of care to contractors where errors in design cause losses. In Edgeworth Construction v ND Lea, the Supreme Court of Canada explained this duty by stating that typical bidding periods are too short to expect the bidding contractors to conduct a thorough review of the specified design and duplication of such review work by each bidder would be cost-prohibitive. However, the court also stated that although not present in the case, the engineering firm could have limited its common law duty to the contractor (third party) by including an adequate disclaimer of responsibility in the contract.

Although professionals cannot completely eradicate the risk of every negligence claim, they often attempt to reduce their exposure within their contracts. Limitation of liability clauses are used to set a maximum liability for a professional to their client for any claim including breach of contract or negligence. Professionals may attempt to cap liability to the amount of professional insurance available. Professionals also often include in their contracts a clause that limits any damages suffered to direct damages and excludes consequential damages such as the loss of profit and loss of use. Clients hiring these professionals may wish to consider excluding the benefit of such monetary limitations in certain situations such as willful misconduct, fraud or where insurance is available. Clients and professionals should also be careful to review carefully those clauses that assign risk or limit risk when negligence occurs. Occasionally, these provisions use the term “gross negligence” instead of “negligence”. Parties to commercial agreements should be aware that such terms have different meanings. Use of the term “gross negligence” has been recognized and interpreted by Canadian courts as requiring more than mere negligence. It can be unclear exactly what the term “gross negligence” means in a particular contract, how it will be applied to a given situation, and what may be required to establish gross negligence, unless a contractual definition of the term is provided. These cases noted above show that professionals must take care in defining their services. When risks become apparent, professionals may have a duty to warn third parties. Professionals and clients may agree to assign or limit risk of liability to the extent possible within their contracts. Parties to commercial agreements should carefully review these provisions to ensure they are drafted appropriately and seek the assistance of counsel where necessary. B2B This article is provided for general information only and may not be relied upon as legal advice.

18 / October 2015 / PurchasingB2B.ca

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October 2015 Vol. 17, No. 2

Driving EXCELLENCE The Ontario Public Service Fleet Management Centre

WINS A FLEXY

4 6

1 0 12 14 18

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INSIDE: Cover Story 2016 Car Previews 2016 Truck Previews Nissan NV200 Tire Trends Roadtest: smart fortwo

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§ S-AWC standard on Outlander GT. ‡ Whichever comes first. Regular maintenance not included. New vehicle limited warranty covers most vehicle parts (excluding batteries, with entertainment systems and other items excluded under the warranty’s terms and conditions) under normal use and maintenance. ** Whichever comes first. Regular maintenance not included. See dealer or mitsubishi-motors.ca for warranty terms, restrictions and details. Not all customers will qualify. FOR FURTHER INFORMATION ON OUR FLEET LINEUP, PLEASE VISIT MITSUBISHIFLEET.CA AND/OR CONTACT OUR CANADIAN FLEET TEAM BY EMAIL AT FLEET@MMCAN.CA. YOU CAN ALSO CALL OUR FLEET REPRESENTATIVES LUC GRENIER AT 1-905-214-9068, SHAWN BRYAN AT 1-905-214-9010, DAVID MURPHY AT 1-905-214-9048 OR MANON PARÉ AT 1-905-214-9014.

15-10-07 1:22 PM

General Motors has been named to the Dow Jones Sustainability Index, a global benchmark for corporate sustainability. The company is the only automaker to make the list in North America. The Dow Jones Sustainability Indices annually assess companies for environmental, economic and social sustainability performance and disclosure. The sustainability investment firm RobecoSAM identifies companies best equipped for long-term success measured against sustainability risks and opportunities. Over 1,800 global companies were analyzed this year. GM received top scores in climate strategy and operational eco-efficiency, and a perfect score in environmental policy and management. GM said it generated $2.5 billion in revenue through various recycling activities from 2007 to 2010 and now counts about $1 billion in byproduct reuse and recycling revenue annually. The company has saved over $196 million in energy costs through the voluntary energy reduction challenge set by the US EPA and $70 million in renewable energy investments. Earlier this year, GM earned 2015 ENERGY STAR Partner of the Year award for Sustained Excellence, the highest recognition a corporation can receive from EPA for superior energy efficiency.

80 VALLEYBROOK DR, TORONTO, ONTARIO M3B 2S9 PHONE: 416-442-5600 FAX: 416-510-5140

www.PurchasingB2B.ca

Vol. 17, No. 02

October 2015

EDITOR: Michael Power (416) 442-5600, ext. 3259, mpower@purchasingb2b.ca ART DIRECTOR: Andrea M. Smith PUBLISHER: Dorothy Jakovina (416) 510-6899, djakovina@purchasingb2b.ca ACCOUNT COORDINATOR: Tracey Hanson (416) 510-6762, thanson@annexnewcom.ca CIRCULATION MANAGER: Barbara Adelt (416) 442-5600 x 3546, badelt@annexnewcom.ca

ANNEX PUBLISHING & PRINTING INC. VICE-PRESIDENT: Tim Dimopoulos (416) 510-5100, tdimopoulos@annexweb.com PRESIDENT & CEO: Mike Fredericks mfredericks@annexweb.com CAR, established 1991, is published twice annually (April and October), by Annex Publishing & Printing Inc.. © Contents of this publication are protected and may not be reproduced, in whole or in part, without the written consent of the publisher or editor. From time to time we make our subscription list available to select companies and organizations whose product or service may interest you. If you do not wish your contact information to be made available, please contact us via one of the following methods. Phone: 1-800-668-2374, Fax: 416-442-2200, Mail: Privacy Officer, 80 Valleybrook Drive, Toronto, ON M3B 2S9. NOTICE: CAR accepts no responsibility or liability for claims made for any product or service reported or advertised in this issue. CAR receives unsolicited materials including letters to the editor, press releases, promotional items and images from time to time. CAR, its affiliates and assignees may use, reproduce, publish, re-publish, distribute, store and archive such unsolicited submissions in whole or in part in any form or medium whatsoever, without compensation of any sort. Printed in Canada Publications Mail Agreement No. 40065710

Cover photo by Klari Kalkman, Divisional Marketing and Communications Lead, Ministry of Transportation

Buick to preview 2017 LaCrosse

GM named to Dow Jones Sustainability Index

Buick will preview the all-new 2017 LaCrosse at the Los Angeles Auto Show in November, which the company says will be a striking evolution from current Buick models. The LaCrosse features a grille design that puts a new face on the brand, including a new, three-color tri-shield insignia set on a wing-shaped element. Contrasting with darkened grille bars and spanning the width of the opening, it connects the grille and headlamps, and emphasizes LaCrosse’s new sculptural surfacing. The design was inspired by the 1954 Wildcat II concept. It’s a face all Buick models will adopt by 2018. “The Avenir concept shattered expectations of what a Buick could be and the 2017 LaCrosse promises to do the same,” said Duncan Aldred, Buick’s VP. “Its expressive design represents a break from convention and highlights the progressiveness in all new Buick models.” The next-generation LaCrosse’s design is framed on an all-new chassis that is stronger yet lighter than the current model, the company said. New technologies such as a five-link rear suspension contribute to a more responsive ride.

Hydrogen: The Canadian way? Hyundai Auto Canada Corp. (HACC) has uncovered an appetite among Canadians for hydrogen fuel cell electric and non-gasoline powered vehicles. According to a study in partnership with Ipsos Reid and Offsetters, a carbon management company, the majority of Canadians (75 percent) want to drive a vehicle not powered by gasoline—but aren’t keen to turn to traditional battery electric vehicles (BEVs), with 71 percent of those surveyed saying having to charge a BEV is a pain and 67 percent feeling they’re too much of a hassle. According to the study, 64 percent wanted to drive a vehicle powered by hydrogen and 77 percent believe hydrogen fuel cell powered vehicles are the way of the future. In January 2015, Hyundai became the first automotive company to offer hydrogen fuel cell electric vehicles in Canada. The Hyundai Tucson Fuel Cell Electric Vehicle (FCEV) is available on a three-year lease in the Vancouver area. The Tucson FCEV takes less than five minutes to refuel and has an estimated range of over 420 km, eliminating the range anxiety and long recharge time of BEVs. The survey also noted that 74 percent see a benefit in the fuel cell vehicles not relying on volatile fuel prices. A higher proportion (82 percent) thinks that producing no greenhouse gas emissions is a major benefit of fuel cell vehicles. OCTOBER 2015 CANADIAN AUTOMOTIVE REVIEW | 3

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By Michael Power

Committed to

CUSTOMER

SERVICE Ontario Public Service Fleet Management Centre has won a 2015 Flexy award for Excellence in Fleet Leadership

stablished just five years ago, the Ontario Public Service (OPS) Fleet Management Centre has made huge strides as the province’s common central service provider for fleet services. Now, the team manages roughly $150 million in fleet assets and has registered over 16,000 Ontario civil servants to use its motor pool fleet. The centre’s journey has been so successful that it was one of just two Canadian winners at the North American Fleet Association’s Fleet Excellence Awards, held at the association’s I&E (Institute and Expo) in Orlando, Florida last April. Michael Cole, team lead, strategic fleet services, and Sandy Hand, regional manager, fleet operations, at the centre accepted the Excellence in Fleet Leadership Award. A large part of that win was due to the centre’s efforts in the area of sustainability, said Brian Cowan, manager, OPS Fleet Management Centre, Ministry of Transportation. The centre, in collaboration with the OPS Green Office, routinely sets reduction targets for the fleet. Since 2009, over 8.9 million litres of fuel and more than 19,300 tonnes of greenhouse gas emissions have been avoided, says Cowan. This has resulted in savings of roughly $9.6 million. The centre has 41 motor pools across Ontario with almost 500 vehicles. It has developed a keyless entry access system and an online reservation system so that employees can easily book a vehicle, arrive at the lot and enter a code on the door, Cowan notes. “The keys are in it and off they go,” Cowan says. “They can bring the car back, lock it up, and they’re done. It’s our OPS motor pool strategy.” The centre also uses a total cost of ownership analysis model, he says. In doing so, the centre determined that hybrid vehicles, while more expensive to purchase upfront, can actually save money when reduced maintenance, resale value and other factors are taken into account. “We find that the hybrid vehicles are certainly no more expensive and in some cases less costly

From left: Brian Cowan, manager; Sandy Hand, regional manager, fleet operations; and Michael Cole, team lead, strategic fleet services at OPS Fleet Management Centre, Ministry of Transportation.

over that lifecycle than regular vehicles that are lower cost to purchase,” he says. Two-thirds of the centre’s passenger vehicle fleet is hybrid or plug-in hybrid, which represents a five-fold increase over five years ago. The centre has also installed over 60 charging stations at fleet locations around Ontario, reduced fuel consumption through fleet “right-sizing”—determining the correct size and number of vehicles assigned to client ministries, promoted anti-idling through campaigns and technology partnerships with the private sector and the GreenFIT program. Among other innovations that contributed to the centre’s Flexy win was its relationship with Automotive Resources International (ARI), its fleet management services vendor, Cowan noted. The partnership has yielded an online motor pool reservation portal, making it easy for drivers to book vehicles and fleet staff to manage rentals. Through the portal, which can be accessed at any time from any internet-enabled device, drivers can reserve vehicles from any motor pool in Ontario. The tool has allowed the centre to expand its motor pools from 100 vehicles in five pools to 450 vehicles in 40 pools. Another important factor contributing to the centre’s win was its approach to customer service, Cowan says. The centre has a team of professionals across Ontario, at five regional locations with four sub-offices. Those employees deal with day-to-day issues, he says, including specking out new vehicles, doing replacement planning, dealing with transactional issues and more. The centre’s motor pool received favourable feedback in a survey, Cowan notes, with users stating they found the service convenient. “Our clients like the fact that they have people where their own staff is, where their vehicles are, and where they may or may not be having issues,” he says. “There’s a significant difference between how a vehicle might be operated in Thunder Bay versus Toronto. We have people in those areas that are familiar with the territory and the climate, geography and all of the different factors that are relevant.” C.A.R.

4 | CANADIAN AUTOMOTIVE REVIEW OCTOBER 2015

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GREAT ON PAPER, BETTER ON ASPHALT.

MAXIMA

SENTRA

ALTIMA

The 2016 Nissan Maxima, one of the Kelley Blue Book best buy picks, is part of the award-winning lineup that’s fun, affordable and reliable. Proving that a fleet of Nissan vehicles can be fun and cost-effective.

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By Lesley Wimbush

THE ROAD

AHEAD A look at the 2016 car model year

Long due for an overhaul, Nissan’s flagship sedan hasn’t had a major refresh since 2008. Returning with a fresh, new look, the 2016 Nissan Maxima has been redesigned from the inside out. Aside from its edgy, polarizing looks, a new lighter, more rigid platform helps the Maxima back up its “4-door Sports Car” claims. The cabin’s heightened luxuriousness includes diamond-quilted leather, zero gravity seating and an impressive level of safety technology systems. The GLE is the latest step in MercedesBenz’s new naming strategy, which neatly aligns their sports utility lineup with its equivalent passenger car counterpart. Thus, the GLE has the same level of technology and interior features as the E-Class; the recently debuted GLC slots in beside the C-Class, and coming soon, a GLS sport utility with the luxury of an S-Class sedan.

Ford Mustang GT-350-14

Replacing the top-selling GLK, the compact GLC crossover maintains the same level of off-roading credibility yet adds all the technology found in the C-Class sedan. The boxy, military image has been replaced with sleek, clean lines that further emphasize its C-Class ties. The compact RAV4 Crossover returns with the long overdue addition of a hybrid model. Joining Toyota’s expansive lineup of hybrid vehicles, the AWD RAV4 Hybrid is outwardly no different than the conventional model, but shares the same hybrid powertrain technology as the Lexus NX300h crossover. The recently released 2016 Tacoma returns with a bolder, sharper design, significantly stiffer steel frame and a checklist of new technology. In addition to the previously available 4-cylinder engine, the Tacoma will now offer a new 3.5L V6, which Toyota claims will offer class leading fuel economy.

Canada’s top selling car for 17 years was recently unveiled with what Honda claims is the “most ambitious remake of the Civic we’ve ever done.” Traditionally competing in the same segment as the Toyota Corolla, Hyundai Elantra and Ford Focus, the Civic offers a more sophisticated design, and two new engine choices, including its first-ever turbocharged option, Honda is hoping the Civic will also appeal to buyers of premium models such as the Audi A3 or Lexus IS 250. Honda is joining the enormously popular, and growing, compact SUV segment with their all-new HR-V. Based on the Fit platform, the HR-V offers the same ingenious interior versatility, ample cargo space and the choice of all-wheel drive. Now in its third generation, the mid-size Pilot crossover receives a complete makeover, with sleeker styling and a more luxurious interior. Still offering

6 | CANADIAN AUTOMOTIVE REVIEW OCTOBER 2015

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©walencienne;SvetaVo/Getty Images/Thinkstock

Mitsubishi Outlander

Fall’s colourful palette may signify the coming of the year’s end, but it also heralds the beginning of a fresh, new one. For this is the season when many automakers start rolling out their brand new models in anticipation of the year to come. Here is a look at some of the highlights.

three-row seating with room for eight passengers, the Pilot features such safety technology as lane-keeping assist and crash mitigation. Ford’s most exciting surprise for 2016 was the reappearance of their Ferrarifighting GT, a genuine exotic supercar built here in North America. Beneath its chiselled, carbo-fibre surface is a +600hp twin-turbo V6. Purists, however, will surely lament the unavailability of a true manual gearbox. The rear-wheel drive sports car offers the sole choice of a 7-speed dual clutch automatic transmission. Unveiled this fall as a 2017 model, Ford’s brutish, offroad-going Raptor returns with a new lightweight but high-strength aluminum alloy body. The V8 engine gives way to a weight saving 3.5 litre, twin-turbo-charged V6 mated to a brand-new 10-speed automatic transmission. The hard-core off-road machine now boasts a revised Fox Racing shocks suspension, four-wheel drive transfer case

and a terrain-mode system that adapts to road and trail condition. The new Mustang Shelby GT350 is the latest high-performance offering of Ford’s venerable pony car. Aside from its redesigned suspension, the GT350 gets a 5.2 litre V8 engine producing 526 horsepower hooked up to a six-speed manual transmission. Enthusiasts take note: the GT500 is also returning to battle rival Dodge Challenger Hellcat with a rumoured +740hp output. General Motors is enjoying prodigious output for 2016, with many new model debuts. The top-selling Chevrolet Cruze returns with more sophisticated styling and a higher level of technology. Inside, the compact offers as much rear legroom as some full-size sedans—the perfect place to try out its new 4G LTE wi-fi hotspot connection. Hailed as a “4-door Corvette,” the all-new CTS-V returns with a stiffer body structure, improved responsiveness and

Honda HR-V

Toyota RAV4 Hybrid

Hyundai Sonata Hybrid

©walencienne;SvetaVo/Getty Images/Thinkstock

Mercedes-Benz GLE Coupe

a higher level of interior luxuriousness. Shaving off hundreds of pounds thanks to extensive use of lightweight aluminum, the CTS-V is a worthy challenger to German performance sedans costing thousands more. The diminutive Chevrolet Spark returns with a huge, 17 percent increase in power—which in this case brings it up to 98hp from a mere 84. Externally, it benefits from some stylish creasing, and a lower ride and roof height that give it a more substantial, planted appearance. There’s an impressive level of technology in this budget hatchback, which includes the 4G LTE data and wi-fi connection, backup camera and MyLink infotainment system. The Malibu has always flown under the radar thanks to its indifferent styling, but crisp new looks should place it among segment leaders Kia Optima, Ford Fusion, Mazda 6 and newly stylish Toyota Camry. Interior space increases, with a weight reduction to support its reportedly

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Subaru BRZ

Chevrolet Malibu

Fiat 500x

Cadillac CTS-V improved fuel economy. There are two engine choices, a 2.0L turbocharged four, with 250hp and a new 160hp turbo-charged 1.5L with auto start/stop. As before, the Malibu is also offered as a hybrid. The refreshed Camaro sports car returns with sharper styling, and three engine choices: a 275hp turbo-charged four cylinder, a 335 hp V6, or a 6.2L V8 putting out 455hp—all mated to either an 8-speed automatic or 6-speed However, a single platform to underpin its manual transmission. entire portfolio is reportedly under Subaru’s strategy for 2016 includes development. For 2016, the Outlander using a single platform for its entire offers bolder styling, more technology and portfolio of vehicles, to help pare down better sound insulation, but its most costs and increase efficiency. The engine attractive features are affordability, lineup will be updated with cylinder reliability and practicality. deactivation and the addition of fuel Many of the Fiat Chrysler group’s injection for better fuel consumption. products are on hold for 2016 as the The XV Crosstrek and Impreza have company goes through yet another both returned with numerous updates, restructuring, but it does plan to introduce while Forester, BRZ and Outback are an all-new version of the Town and expected to undergo extensive changes. Chrysler minivan next spring. So far, the Outlander has been the sole The recently introduced Fiat 500x is the offering of any significance from the first AWD Fiat available in North America, struggling Japanese manufacturer.

and its subcompact, utility vehicle platform (shared with the Jeep Renegade) help Fiat to expand its reach into a new demographic of customers. It features a single 2.4L 4-cylinder engine with 180hp, paired to a 9-speed automatic transmission and driver selectable AWD terrain mode. Just released, Hyundai’s revised compact SUV Tucson is a sportier, more stylish vehicle than the one it replaces, offering a higher level of luxury and content. Offering more interior and cargo space than its competitors, the Tucson features optional LED headlights, panoramic sunroof, two powertrains and a wealth of standard technology. Hyundai recently debuted its new Sonata Hybrid, and coming soon, a plug-in Hybrid version of its mid-size sedan for US California emissions-compliant states. Available now in Canada, the regular Hybrid features a segment-leading aerodynamic profile aimed at fuel reduction, improved interior luxury and space and a single powertrain with a combined output of 202hp. C.A.R.

©walencienne;SvetaVo/Getty Images/Thinkstock

Nissan Maxima

8 | CANADIAN AUTOMOTIVE REVIEW OCTOBER 2015

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CAR Entire issue.indd 011614-MBV Ad Resize9(Q4)-CAR_8.125x10.75.indd 1

15-10-07 12:16 1:22 PM PM 9/21/15

By Howard J. Elmer

GM Silverado

NOTABLE

TRUCKS for the 2016 model year Trucks earn the most profit per unit for their builders—and in Canada more than half of new vehicles sold are classed as trucks. Is it any wonder that for 2016 the truck sales supremacy wars continue? So, what’s coming? Well, we are getting hot new midsize entries from Toyota and GM while Ram and Ford battle for the heavyweight title in the realm of HD pickups. Ford also continues to push its family of EcoBoost engines with an all-new 2.7L motor offered now in the aluminum-body F-150. Other builders though are embracing diesel engines. No doubt wanting to tag on to Ram’s success with the 3L EcoDiesel in the 2014 Ram half-ton, GM is now offering a small diesel in its midsize 2016 Canyon/Colorado twins. In the meantime, Nissan will soon be pushing a large, all-new 5L Cummins diesel in its revamped 2016 Titan. Power and fuel economy together are the holy grail of the truck business and another sign of the times is multi-speed transmissions. The last of the five-speeds have been retired (remember when five gears was a big deal?) with the passing of the last Tacoma. It’s all six-speed and up now with GM leading the pack for 2016 with an eight-speed transmission they have added to the 5.3L and 6.2L V8s. In fact, transmissions continue to gain gears with an outlook of 10-speeds on the horizon.

GM Silverado and GMC Sierra Last year was the big generational change for Chevy and GMC and they have pushed through 2015 by adding a variety of cosmetic packages to the Silverado and Sierra to play off the “make my truck unique” market. So, while this is P&P (paint and plastic) many of the generational changes are working well, like two-stage rear leaf springs, revised steering, a quieter cab, new brakes and new interior. The box also received a new integrated bumper-step with a handhold, new tie downs, under-edge lighting and EZ down tailgate. Now moving into 2016, the General is adding capability with an eight-speed automatic transmission added to the 6.2L and the 5.3L V-8. This boosts max trailering to 12,000lbs. Chevy is now also offering MyLink with Text Messaging Alerts and Siri Eyes Free. Also available through OnStar is 4G LTE and built-in Wi-Fi hotspot. Also new, available up-level trailering mirrors with back-up lighting

2016 Ram 3500 All you need to know about the 2016 HD Ram (Cummins diesel powered) is that it’s pushed its top tow rating to 31,210 lb. Ten pounds more than Ford. Enough said about that.

2016 GM Canyon and Colorado

GM Colorado

New last year, the reintroduction of these midsize twins puts some life back into this truck segment. But adding some punch to that launch for 2016 models is an all-new small diesel. This 2.8L diesel is due late this fall and promises to not only push up torque and tow limits, but also bring down fuel consumption. Competitors are watching this experiment closely.

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2016 Ford F150 Ford is selling every all-aluminum body F-150 it can build. However, that has not stopped them from adding a 2.7L EcoBoost engine to the 2016 lineup. This move doesn’t stop the blue oval from also working on electronic offerings that will be rolled out in the next few model years. First is a new Nav/Entertainment and tech package that is coming from Ford’s partners in Silicon Valley. The next F-150 will also offer up to six cameras on its body, including ones that can see around corners. Mobile apps will talk to your truck and, if you have trouble backing up your trailer, Ford has also created a trailer back-up system that will do it for you.

Nissan Titan The Nissan Titan re-launch is bringing a new niche to the truck market, a larger than half-ton pickup with a new 5L Cummins diesel engine. This Titan, the first revamp in over a decade, is going to be nothing like the current truck. Shown in Detroit at the beginning of the year, the 2016 model was promised for late summer. Well, it appears to be late, likely not coming before Christmas. Little else is really known about the truck, but it does have the potential to cause a real sales upset in the market if it does more than half-tons but is not classed as HD. That’s interesting, but we’ll need to see all the numbers first.

2016 Toyota Tacoma The Toyota Tacoma recently re-launched itself for the first time in nine years, and has finally brought a new powertrain to market. Replacing the long-in-the-tooth 4L V6 is an all-new, 3.5L Atkinson cycle V6 equipped with Toyota’s D-4S technology, featuring both direct and port fuel injection. This motor develops a peak 278hp and up to 265lb-ft of torque; numbers that are not unlike what the old engine produced, but then power was not the problem. What

the Atkinson cycle delivers is increased fuel performance (despite this engine information at the introduction actual numbers are still not available) but its use does drop power. To combat this trait D-4S tech switches from port fuel injection (Atkinson) back to direct injection (conventional) when the driver calls for power. As well, transmissions are now all six speeds. The Tacoma features an all-new interior, and it’s nice. Toyota has taken heat for its grey plastic interiors, but these are now gone. Colours, materials and soft surfaces are now found throughout the Tacoma cab, which makes it much nicer than the old one. Tacoma’s excellent off-road reputation is about to take a leap with the introduction of “crawl control.” This is a hands-off system that can be set to drive the truck in low-range from one to five km/h without any gas or brake input from the driver. It’s kind of like ultra slow cruise control. Crawl control also controls power to each wheel independently using information from the ABS system to drive-and-brake individual wheels as needed to maintain traction and speed. The driver just needs to steer. Frankly, the system is remarkable. Since the computer runs each wheel separately, the driver can’t reproduce the results the truck can achieve. C.A.R. OCTOBER 2015 CANADIAN AUTOMOTIVE REVIEW | 11

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By Lesley Wimbush

INNER CITY RIDE Nissan NV200 T

he commercial van segment has gone through sweeping changes in the last 15 years. Until Daimler brought over the Sprinter in 2001, contractors and commercial drivers made do with rudimentary cargo vehicles that were little more than pickup truck chassis with boxes fixed to the frames. The new wave of vans were versatile, efficient, easily up fitted, and had enough overhead room to walk upright through the cargo space. But it wasn’t until 2009 with the Ford Transit Connect, that compact cargo vans were introduced. These little workhorses have been common on Europe’s narrow streets for decades. The Transit Connect’s popularity virtually kick started the Class #1 compact van segment into a competitive market. They’re an idea long overdue for small businesses, package deliveries, tradesmen and passenger transport. Nissan’s NV200 has a lot to offer the inner city contractor or fleet manager. Its unibody construction is based on Nissan’s small car platform, giving it the handling and maneuverability of a sedan. It fits into narrow parking spots and loading docks thanks to its smaller, narrower chassis. Unlike some competitors, the NV200 is available in only one length; 186.3 inches. While it may not have the overall cargo capacity of a full-size delivery van, the NV200 has 122.7 cubic feet of volume. The cargo floor, at 21 inches, is lower than either the Ram ProMaster City or the Transit Connect, which aids in loading cargo. However, the NV200’s max payload of 1,480lbs is less than either the

Ram or the Ford. Entry and accessibility are easy thanks to dual sliding side doors and rear doors that open 180 degrees. The rear doors are split 60/40 rather than the conventional 50/50. The larger door opens curbside and provides a wide opening, while the smaller door protrudes minimally. Up fitting is simplified thanks to plenty of reinforced, integrated mounting spots for shelves and partitions—no drilling necessary. The interior is comfortable but utilitarian, with surfaces engineered for durability. The cabin has two-bucket seats, with the passenger seat folding flat to create extra workspace. All switchgear is large and easy to operate while wearing work gloves. The NV200 is available in two trim levels: a base model S offering manual seats, air conditioning, power windows, cargo bay floor protector and audio system. Top trim SV models add power door locks with remote keyless entry, cruise control, cargo floor mounted D-rings, additional 12-volt power outlet and heated side mirrors. Optional equipment includes rear windows, backup sensors, passenger side sliding door window and Bluetooth. Available on SV models only are optional rearview camera, Navigation and a connectivity system with 5.8" touch screen and voice recognition. That enormous windshield provides terrific forward visibility, but we recommend the optional back door windows, otherwise rear visibility is limited to side

mirrors. There’s a single powertrain; a 2.0L 4-cylinder with 131 hp and 139 lb. ft of torque paired with a continuously variable transmission. While the output sounds meager, the CVT does a decent job of making the most of the engine’s powerband, while still returning 7.1L/100km on the highway and 8.7L in the city. It tends to labour under full load, however. Those requiring more power might consider the ProMaster City or Transit Connect. The NV200 has a nice firm ride and U-turns are easy thanks to electrically assisted steering and a 36.7ft-turning radius. What the NV200 lacks in power, payload or options compared to competitors—it makes up for in price. At $23,448– $24,748 the NV200 comes in below the Ford Transit Connect at $25,959-$27,219, but it’s comparable to the Ram ProMaster City at $23,245-$24,770. Car-like manners, excellent fuel efficiency, decent cargo capacity—and above all, reasonable price—make the Nissan NV200 a compelling choice as an inner city commercial van. C.A.R.

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THE DRIVING TEAM BEHIND YOUR BUSINESS. The 2016 Fusion offers you a choice of powertrains: a standard 2.5L and two turbocharged EcoBoost® 4-cylinder engines, or for even more fuel-efficiency, Fusion Hybrid and a plug-in Hybrid, Fusion Energi. Each is an ideal complement to Fusion’s responsive, comfortable and quiet chassis. Fusion offers the choice you want without compromise. Make Ford Fleet the team behind your team. Visit www.ﬂeet.ford.ca or contact us at 1.800.668.5515

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2016 FUSION

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By Kara Kuryllowicz

RUBBER RELIANCE

n the road and even at rest, drivers are well aware of their vehicle’s performance, handling, fuel efficiency, operating costs and safety features but rarely contemplate the tires’ often-profound impact on any of those. Fortunately, the manufacturers consider tires standard equipment and select the brands and models that will keep occupants safe while delivering a comfortable, enjoyable and cost-effective ride. Yet as much as the tire itself matters, the air in those tires is also of paramount importance, because the weight of the vehicle, its engine and everything in it—including the occupants and their luggage—rides on that air and those sidewalls. Despite the fact both under- and over-inflation will negatively affect safety, performance, fuel consumption and wear, drivers rarely check their tires’ air pressure because it’s an awkward, often dirty task that takes a few extra minutes. Notably, underinflation is far more common as the typical passenger vehicle loses 1 psi per month and another 1 psi for every 10F drop in temperature. T.J. Tennent, engineering manager, Bridgestone Firestone, consumer products, motorcycle and karting, government, products, Nashville, TN, and John Meiklejohn, account executive, Element Fleet Management, Mississauga, Ont., note

that an under-inflated tire produces far more friction than normal and the resulting heat build-up could cause a catastrophic tire failure. Meanwhile, an over-inflated tire can extend the braking distance on wet surfaces and is more susceptible to breakage on impact, for example, if a pothole is hit. As a result, tire pressure monitoring systems (TPMS) and run-flat tires continue to be of interest. In Canada, TPMS is not a requirement although it has been mandatory on all new light vehicles sold in the U.S. since September 2007. Transport Canada recommends inspecting and servicing tires regularly and always inflating tires to the correct pressure for safety’s sake. In fact, Transport Canada also suggests checking tire pressure and wear on a monthly basis, even on TPMS-equipped vehicles. “Manual tire pressure checks are vital, because TPMS may not kick in until the pressure is 15- to 20- percent below the vehicle manufacturer’s minimum recommended specification, and rubber manufacturers note that if your tires are under-inflated by 20 percent, you may have done irreparable damage to the tire,” says Tennent, who notes accurate tire pressure readings are possible only if tires are at the ambient temperature, and suggests adding if pressure is at or just under the specifications.

©efks/Getty Images/Thinkstock

Safety, comfort, cost efficiency and more ride on a vehicle’s tires

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Tennent notes that driving even five to 10 minutes will heat the tires and subsequently the air in them, which temporarily expands and results in a higher air pressure than if the air pressures were checked at ambient temperatures. How much higher the air pressure readings will be depends on everything from the size of the tire and the moisture content of the air in the tires to whether or not the air mix contains nitrogen and how hot or cold it is outside. That makes it impossible to predict whether the air pressure reading is 2, 5 or 10 PSI over what is actually in the tire. “I’d rather you check your tire pressures occasionally or regularly and get a somewhat inaccurate reading than never pay any attention to it at all,” says Tennent, who says you virtually never have to let air out of tires and typically need to inflate them. Drivers who are more than just a few minutes drive to a service station should consider buying an air pressure gauge at retail for use at home to ensure accurate readings. A digital air pressure gauge, readily available at retailers such as Amazon and Wal-Mart ($13 and up), are typically less prone to inaccuracy than dial ($8) or pop-up ($4 and up), particularly over time and if dropped. TPMS may be direct, pulling the pressure and temperature data from on-wheel or on-tire sensors that identify each tire by location, or indirect, working off the ABS and other systems, such as vehicle stability assist. Direct TPMS tends to provide detailed data on each wheel, while indirect will communicate only

mance as safety, today’s run-flat tires focus on safety and security rather than the trunk space they free up. Run-flat tires allow travel with a punctured, virtually airless tire at reduced speeds, typically 80km at 80kph or lower until the tire is repaired or replaced, although not all repair shops carry run-flats. Years ago, consumers complained about the trunk space consumed by full-size (even the subsequent, smaller, temporary) spare tires to the point some carmakers replaced the spares with pumps and repair kits, but security and convenience also played a key role in the advent of run-flats, says Cowger. The Porsche 959 was the first mass-produced vehicle equipped with run-flat tires, making them standard equipment in 1987, while they became a Corvette option in 1993. Run-flats were standard Corvette equipment from 1997 on and are now standard in the Cadillac ATS and CTS, which were designed without a spare tire tub in the trunk. “We typically only see run-flats on executive vehicles such as BMWs, and Mercedes however they have started to trickle down to less expensive models such as the Nissan Rogue,” says Meiklejohn. The run-flats have developed a more comfortable ride and improved durability and affordability, with run-flats such as Bridgestone Firestone’s DriveGuard tire line similar in ride and cost to mass-market, all-season tires. DriveGuard is the first full line of mass-market replacement tires for coupes, sedans and wagons not originally equipped with run-flats and comes with an 80,000-to-100,000km mileage treadwear warranty.

Manufacturers consider tires standard equipment and select the brands and models that will keep occupants safe while delivering a comfortable, enjoyable and cost-effective ride. that there is under- or over-inflation. “General Motors offered TPMS well before it was mandated in the U.S. in 2007, because correct tire inflation has an impact on so many performance parameters, for example steering, handling and fuel economy, and consumers really don’t pay a lot of attention to tires or tire pressure,” says David Cowger, global tire lead engineer, General Motors, Milford, Michigan. Mercedes-Benz offers a Tire Pressure Loss Warning System, which uses the ESP and ABS sensors to determine if there is a loss of pressure, on all vehicles. As a result, it doesn’t require additional sensors on the wheel, which facilitates seasonal tire switches, but also means the driver can’t get specific pressure readings on individual tires. In addition, Mercedes-Benz offers a full sensor-based Tire Pressure Monitoring System, standard on all AMG vehicles, as an option on many models. While TPMS is as much about cost, convenience and perfor-

“Puncture a DriveGuard, even at highway speeds, and you won’t know that you’re low on air or driving on a flat—you’ll have to rely on your TPMS to tell you,” says Tennent, noting Bridgestone Firestone offers its Blizzak winter tires in a run-flat version. While run-flats have improved, there may still be some tradeoff, says Meiklejohn, noting the stiffer ride, higher replacement cost, the fact they may wear 10,000kms before a regular tire and may not be available if a driver needs a replacement in a remote area. BMW offers run-flats on most models but its performance vehicles feature sports performance tires because consumers want and expect a certain kind of handling and driving dynamic. “Run-flats offer peace of mind because no one wants to be stranded or replace a flat roadside and a blow-out while driving has an impact on the vehicle’s stability as well as the driver’s ability to control the vehicle,” says Barb Pitblado, director, corporate communications, BMW Group, Mississauga, Ont. C.A.R. OCTOBER 2015 CANADIAN AUTOMOTIVE REVIEW | 15

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Breaking Down Your Fleet Spend.

Knowing your fleet costs is the first step in controlling them. espite being a significant annual expenditure,

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Depreciation is really just the fixed cost of owning or leasing vehicles. Whether it is leased or owned, it is

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management fees typically make up less than 3% of the total fleet spend. In many ways, fleet management fees are one of the most interesting line items, says Nogalo. “In some ways, they receive disproportionate attention, and other ways not enough.” At such a small percentage of the fleet spend, the attention should be focused on what value is being delivered from those fees. “At ARI, we have focused on the 97% of fleet costs that can be managed down. Our role is to work with our clients to identify potential cost savings through process improvements and best practices. We report on those targets and return the savings back to our clients, which are often more than the fees themselves,” says Nogalo.

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associated costs and potential savings.

CAR Entire issue.indd 17

10/7/2015 11:11:57 AM 15-10-07 1:22 PM

By Emily Atkins

Brains over Brawn

Agility makes up for lack of power in the new smart fortwo agreeably, matching revs to the correct speed. In fact the car was a delight to drive both in the city, where it excels, and out on twisty, hilly mountain roads. In the city, the smart fortwo has the chops for nearly any errand—except bringing home that new dining room table, perhaps. Its new turning radius is 6.95 meters; small enough that you can just about turn in one lane. It can park perpendicular to the curb if need be and goes far on a little gas (fuel consumption numbers are not yet available for the new model, but should be in the 5 litres/100km range. Out of town, the car is not really set up for longer trips. Although the seats are really comfortable, there are a few he smart fortwo has always been a good city car; its ergonomics issues in the cabin, such as poor cup holders, low fuel consumption, relatively economical entry price and controls that get accidentally shifted by errant knees if and ease of parking have made it the hands-down you’re not vigilant. favourite of car-sharing programs and frugal urban-dwellers The smart fortwo also raises some eyebrows about safety, around the globe. given its tiny dimensions. But its cage is designed to protect And now, with the 2016 model year, the smart fortwo improves occupants like a nut in a shell, and the car is loaded with dramatically on its performance in the niche. safety features. The old smart had one major flaw. Its automatic transmission Its looks have changed a bit for this was horrible. It would grind away making version. It’s 10mm wider than before, giving more and more noise as the car accelerated, SPECS AT A it a lower-looking stance. The main differgrudgingly moving up a gear only when the GLANCE… ence, however, is the flatter, longer hood driver was about to give up and return it to PRICE: and more vertical grille. Gone is the demure, the nearest dealership. $17,300-$20,900 sloping nose in favour of this more aggresThank goodness Mercedes Benz listened CARGO: sive appearance. to complaints. The new car has not one, but 190-350 litres There are three basic trim levels available two really good transmissions delivering ENGINE: in the Canadian market—the car is on sale power from the tiny 89HP, 3-cylinder engine. 3-cylinder turbo engine now—along with various optional extras. One The base model is a really smooth fiveTRANSMISSION: to watch out for is the smart cross connect speed manual, equipped with a hill-holder 5-speed manual transmission app that lets you use your smartphone as the function that prevents back slipping or or 6-speed twinamic dual infotainment and navi interface. It’s under clutch burnouts on those tricky hill starts. clutch transmission (DCT) development, and at the time of testing was The clutch is easy and the gear shift precise. not a trustworthy navi companion. Mercedes says it’s conBut the version that most Canadian buyers will take is the stantly upgrading the system, so hopefully by the time cars hit seven-speed automatic. It’s a double clutch system that shifts the market in large numbers the issues will be sorted out. up and down almost flawlessly. In testing there were a couple The smart fortwo is still no hotrod, but the improvements moments when the car seemed to lug a bit in too high a gear incorporated into the 2016 new generation certainly make the after a near stop and quick go situation, but generally the new little car seem brainier. C.A.R. transmission is a delight. On hard braking it downshifts

18 | CANADIAN AUTOMOTIVE REVIEW OCTOBER 2015

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WE DO NOT BUILD SAFE CARS JUST TO WIN AWARDS. BUT WE STILL WIN THEM. Part of your job is to ensure your team’s safety. At Subaru, we make it our job too. That’s why every Subaru model was named Top Safety Pick by the IIHS for six consecutive years. Go for safety experts trust. Go for renowned reliability and great residual value. Go for Subaru.

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fleet.subaru.ca or call 1-877-293-7272 1. Ratings are awarded by the Insurance Institute for Highway Safety (IIHS). Please visit iihs.org for testing methods. 2. EyeSight® is a driver assist system which may not operate optimally under all driving conditions. EyeSight® is not designed as a substitute for due care and attention to the road. The system may not react in every situation. The driver is always responsible for safe and attentive driving. System effectiveness depends on many factors such as vehicle maintenance, weather and road conditions. Finally, even with the advanced technology activated, a driver with good vision and who is paying attention will always be the best safety system. See Owner’s Manual for complete details on system operation and limitations. 3. 2015 ALG Canadian Residual Value Award for the 2015 Subaru Impreza in the Compact Car segment. ALG is the industry benchmark for residual values and depreciation data, alg.com.

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SHOW GUIDE November 10, 2015 Mississauga Convention Centre

NationalIndustryExpo.ca Event Partners:

Presented by:

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Staples Advantage has everything your business needs to keep moving. You’ve got a job to do and we’ve got the supplies your employees need to get it done. At the job site, on the road or in the office - we’ve got you covered. • • •

Tool & toolboxes Industrial shelving Fans & heaters

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Spill clean-up supplies Safety supplies Carts, dollies and more

And with fast, free delivery on every order, your business never has to slow down. 1.877.272.2121

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eway.ca

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WELCOME TO THE INAUGURAL NATIONAL INDUSTRY EXPO 2015

The National Industry Expo 2015 is a collaboration between PurchasingB2B, Canada’s Supply Management magazine, and FRASERS.com, Canada’s leading industrial search engine, to provide a forum for face-to-face interaction between buyers and suppliers from all industry sectors. Engage, network, discover new innovations, products and services as well as the latest technologies and applications that drive your business. Michael Power Editor, PurchasingB2B PurchasingB2B magazine is Canada’s magazine for purchasing, procurement and financial professionals, with the mandate to provide multiple opportunities for our readers to connect with suppliers. We are therefore excited to co-host this one-of-a-kind event. PurchasingB2B provides leadership to Canadian procurement, financial, and supply chain management professionals whose responsibilities including sourcing, recommending, purchasing and approval of goods, services or works. We deliver industry news, analysis and best practice information, and provide multiple channels for our readers, partners, and suppliers to connect and share their expertise.

Derek Morrison Publisher, FRASERS.com FRASERS.com, Canada’s leading online industrial search engine, welcomes suppliers, buyers and attendees to the 2015 National Industry Expo. FRASERS has a rich heritage of bringing buyers and sellers together and promoting new and long lasting business relationships. In today’s business environment there is a new breed of buyer who conducts their own product research and do not contact their chosen suppliers until 60- to 90-percent through the buying process. FRASERS recognizes this new buyer ability and positions the supplier to engage the buyer during the research phase, dramatically increasing their chances of being the supplier of choice. This is just one of the many ways product sourcing and purchasing has changed in recent years.

PurchasingB2B.ca >> FRASERS.COM

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We will also host four education seminars, featuring panelists from several industry leading companies and associations. These education seminars will be of interest to both buyers and suppliers. The following sessions are FREE to all registered attendees.

Financial Resources: Resources to grow your business

While working capital is a constant challenge for many businesses, grants, government funding, tax credits and other incentives exist to help businesses. Resources for suppliers are also available to fund the gap between invoicing clients and getting paid. Unfortunately, many organizations are unaware of these grant options and other resources.

SMEs: Overcoming challenges in today’s economy. Join us for a conversation focused not only on the challenges that today’s SMEs face in the Canadian marketplace, but also recommendations on how to overcome these barriers.

The Buyer-Supplier Relationship: The ties that bind.

Panelists will discuss the characteristics and benefits of a healthy buyer-supplier relationship, tapping into diverse suppliers, as well as tips and strategies that can be employed to get the most from any supplier-buyer exchange.

Clearing Customs: Streamlining cross-border shipments.

This panel discussion will outline some of the main challenges and pressures associated with getting goods and products across borders, along with tips and strategies to make the process as smooth and effective as possible. Session times are listed in this Show Guide.

The National Industry Expo is a valuable forum to create lasting business relationships, new streams of revenue, product sourcing and an opportunity to gain new insights into product innovation and sourcing, along with practical advice through our education sessions to overcoming obstacles to growing your business.

We welcome everyone to the National Industry Expo 2015!

NationalIndustryExpo.ca

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GETTING TO WIN-WIN The evolving world of collaborative procurement By Jacob Stoller

n 1981, two academics, Roger Fisher and William Ury, published their groundbreaking book Getting to Yes, which introduced to many the idea that the best results from negotiations occur when both sides are satisfied with the outcome. The book became a perennial bestseller, and it’s still one of the most widely read business books available. Nearly 35 years later, the quest for mutually productive buyer/vendor relationships has largely supplanted the older practices of positional bargaining. In the business-tobusiness world, vendors seek customers who will “partner” with them over the long term, and many buyers are making the most of scarce internal resources by consolidating their vendor lists down to a small group of suppliers who can be trusted to go the extra mile.

Strategic partnerships According to Margaret Blake, VP of merchandising and purchasing at Toronto-based Staples Advantage, the scope of relationships has broadened considerably. “The first thing to realize is that procurement practices are changing and have been changing for a while. It now encompasses more than cost.” This wider conversation tends to look long term. Some of the basics beyond cost include having a solid, reliable supply chain supported by service level agreements, and in the case of primary vendors, having a strategy in place to preserve the integrity of their brands over time. “Then there are issues around warranty and product guarantees,” says Blake. “Do suppliers stand behind their products?” Staples Advantage is committed to a number of targets around sustainability and corporate responsibility, and this also broadens the conversation. “Sustainability practices are ever more important,” says Blake. “How do you reduce packaging, which in turn can reduce costs? Are they utilizing factories overseas, and do they audit their buildings to make sure that employees are being treated fairly?” Technology has also made it easier for the respective

parties to share the logistic workload in creative ways depending on who can execute a given task most efficiently. For example, changing the order frequency, or changing the pickup arrangements, might improve efficiencies for a manufacturer, but not have a negative impact on the buyer. “I think strategic partnerships with suppliers are vital to drive efficiencies throughout the procurement process, as well as to drive operational efficiencies for both the supplier and the customer,” says Blake. All this means that Blake’s staff have a lot more direct conversation with trusted vendors. For example, there are intensive strategic planning sessions with suppliers. “Each year, we do this with major suppliers,” says Blake. “It’s a brainstorming session. How do we drive efficiencies? How do we drive costs out? What innovation do we see on the horizon, and how do we put it into practice? Lots of interaction.”

Formal Procurement Public sector procurement has followed a different path—in some ways, processes are actually more restrictive, and in other ways, more open. “The public sector has become more sensitive to external review and criticism which has led to more rigid and detailed procurement procedures, resulting in more control and less

PurchasingB2B.ca >> FRASERS.COM

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“It was about a customer saying, ‘can you help us?’ and us going out and finding the right solution. That’s how our programs evolved.” Ken Chamberlin, VP and General Manager, Eastern Canada, Acklands-Grainger

latitude,” says Greg Dadd, Vice-President, Procurement and Fairness Advisory Services at SEG Management Consultants in Toronto. “However, even within the boundaries of a more restrictive regime, there’s been a shift to better, more open relationships with vendors.” A high proportion of public sector business, of course, is negotiated through public tenders and RFPs. To help steer the process towards more open relationships, some of the practices that SEG recommends to clients include increased consultation before an RFP is issued, outcome-based service contracts, and partnership approaches that benefit both the vendor and the client.

A key objective for governments is to ensure that the very best vendors are encouraged to participate in the process. Dadd notes that it is critically important to assure potential vendors that they will be treated fairly. Furthermore, vendors need to be able to quickly learn whether to pursue an opportunity or pass on it. “Bidders want to know, ‘what is the prize? And what is required to get the prize?’” he says. Recommended practices include clearly identifying any conditions that might be unacceptable to a vendor, such as the presence of an incumbent supplier, clearly spelling out evaluation criteria, and keeping mandatory requirements to a minimum in order to give vendors the flexibility to comply according to their own unique capabilities. “Vendors should be encouraged to provide their perspective on the procurement process and allow a candid exchange of information,” says Dadd. “It’s been our experience that this insight can be very helpful in improving documents and the overall process and increase vendor participation in future bids as well as identifying areas that unintentionally could be a source of additional costs to the client.” All this can be particularly helpful to smaller players, who tend to have fewer resources and need a chance to showcase their strengths. Blake finds that entrepreneurial companies often have the most creative solutions. NationalIndustryExpo.ca

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“The number one key for us has been being very selective and analytical of our suppliers before committing to them. Once we commit to them we remain loyal to them through good times and bad.” Steve Ruple, CEO of Markham-based distributor Mod-Tronic Instruments

“Often entrepreneurs are the most creative thinkers,” says Blake, “and we welcome the opportunity to work with them. It’s exciting to see innovative ideas take off.”

Vendors get creative This new procurement environment is causing some vendors to get more creative in finding ways to add value. Acklands-Grainger, Canada’s largest distributor of industrial safety and fastener products, have introduced a range of innovative stocking solutions, where inventory is maintained and managed on customer sites. “We take charge and manage customers’ inventory,” says Ken Chamberlin, VP and General Manager, Eastern Canada, Acklands-Grainger. “It might be filling a bolt bin, or something more technical like a dispensing machine.” Dispensing machines offer a variety of benefits. They deliver needed supplies directly to the employees who use them, on an as-needed basis around the clock. The machines track withdrawals by employee, giving the company tight control. According to Chamberlin, employees no longer feel the

HOLD THE DATE The 2nd annual National Industry Expo is set for

November 8, 2016 6

need to stockpile commodities like safety gloves, because they know there is always a ready supply when they need it. “We see significant reduction in consumption, which is truly hard savings for our customers,” he says. A unique advantage is that dispensing machines can be strategically located in the workplace so workers can minimize their travel to retrieve needed supplies, improving the efficiency of the customer’s operation. Another practice is the location on-site 53-foot trailers that contain either managed inventory owned by the customer, or function as a standalone branch of Acklands-Grainger. On a construction site, for example, this means that subcontractors also have onsite access to safety and other products from the trailer. All these innovations, says Chamberlin, originated with discussions where a customer asked for help about solving a problem. “It was customers that brought us into the dispensing technology world,” says Chamberlin. “It was about a customer saying, ‘can you help us?’ and us going out and finding the right solution. That’s how our programs evolved.”

The ultimate test In the final analysis, buyer/vendor relationships are about companies having compatible needs, and people working well together productively. For procurement professionals, this means finding the right relationships, and then managing them in an open and constructive fashion. “The number one key for us has been being very selective and analytical of our suppliers before committing to them,” says Steve Ruple, CEO of Markham-based distributor Mod-Tronic Instruments. “Once we commit to them we remain loyal to them through good times and bad.” The results speak for themselves. “We still have all of the original three suppliers we started with 43 years ago and we have never been fired as a distributor by any of the dozen or so suppliers we have added since.”

EXHIBITORS: Early Bird Special: book your exhibit space by May 31, 2016 Contact your representative today to discuss how you can get involved with speaking, sponsorship, and/or exhibit opportunities. Dorothy Jakovina, publisher Derek Morrison, publisher PurchasingB2B magazine FRASERS.com djakovina@purchasingb2b.ca dmorrison@frasers.com 416-510-6899 905-409-6976

PurchasingB2B.ca >> FRASERS.COM

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THE BENEFITS OF SUPPLIER DIVERSITY

Balancing short-term business value with long-term economic inclusion

ou needn’t look far for evidence that organizations are grappling with making our economy more inclusive. Between 2012 and 2014, World Economic Forum members identified inequality as the most likely threat to the global economy, and numerous analyses document the rise of inequality in Canada. There are concerns that income inequality is contributing to economic stagnation, hampering growth across almost all business sectors. A wide range of factors is contributing to the challenge. Yet Mark Carney, Bank of England governor, noted that globalization and technology are two key factors magnifying market distributions, contributing to capitalism’s growing exclusivity. Are corporations and governments considering how procurement strategies contribute to this challenge, given that sourcing strategies have leveraged globalization and technology for cost efficiencies, and vendor consolidation strategies have concentrated opportunities among fewer suppliers?

“Since 2004, CAMSC corporate members have spent more than $1.7 billion with Aboriginal and minority certified suppliers.” Corporations committed to an inclusive supply chain are tackling this challenge with leadership of their procurement and supply chain organizations. Twelve companies, including BMO, Coca Cola, FCA, GM, Johnson Controls, Kellogg’s, Magna, PepsiCo, RBC, TELUS, TD Bank and Toyota have joined the Inclusive Procurement Leadership Roundtable launched by the Canadian Aboriginal and Minority Supplier Council (CAMSC) on October 1. The roundtable will drive research highlighting the business value—and demonstrate the economic impact—of an inclusive supply chain. CAMSC is a non-profit organization created in 2004 to advance the economic strength of Aboriginal and visible minority communities through business development and employment. CAMSC’s mission is to facilitate business relationships between Canadian corporations and supplier organizations owned by Aboriginal peoples and minorities. Canadian corporations have been investing in supplier diversity for 10 years to leverage its business value, rather than targeting inequality and capitalism’s growing exclusivity.

By Katie Motta Supplier diversity is an initiative by companies to ensure they are being inclusive in their supply chain practices to Aboriginal, minority, women-owned and other diverse suppliers, by providing them with equal opportunity to prequalify and bid on corporate sourcing opportunities. In researching its Impact Report, CAMSC corporate members reported cost competitiveness, cost savings, and enhanced product/service quality as top business reasons for awarding contracts to Aboriginal and minority-owned suppliers. By actively reaching out to include diverse suppliers, CAMSC corporate members have also benefitted from innovative solutions that diversity of thought offers, as well as enhanced market linkages, knowledge and relationships with growing Aboriginal, minority and immigrant communities. CAMSC certified Aboriginal and minority suppliers leverage the certification as a market access tool, gaining access to bid and business opportunities, as well as supplier development programs at major corporations in Canada and the US. They can also demonstrate their value proposition to secure contracts. CAMSC’s Impact Report also demonstrated Aboriginalowned and minority-owned businesses are more likely to create jobs for community members than large corporations, making supply chain diversity part of the solution to challenge of economic inclusion. Corporate leaders don’t pretend this is simple. There are pressures for procurement to demonstrate cost savings and minimize risk in the short-term, while enhancing opportunities for and building capacity of Aboriginal, minority and other diverse suppliers is a long-term challenge. And yet, since 2004, CAMSC corporate members have spent more than $1.7 billion with Aboriginal and minority certified suppliers. As corporations calculate the ROI of supplier diversity investments, they can track cost savings or innovative solutions, but must also measure non-financial value like flexibility, brand enhancement, community engagement, local wealth creation and so on. As procurement continues to take leadership positions in the C-suite, they should ask how sourcing strategies contribute to long-term economic prosperity, as well as delivering business value. Organizations don’t need to do this individually. Working with CAMSC and other leaders, the Inclusive Procurement Leadership Roundtable will highlight practices that advance the business value and economic impact of supply chain inclusion. KATIE MOTTA is director, business development & partnerships, Canadian Aboriginal and Minority Supplier Council.

NationalIndustryExpo.ca

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AGENDA

NOVEMBER 10, 2015 • MISSISSAUGA CONVENTION CENTRE PurchasingB2B, Canada’s Supply Management magazine, in collaboration with FRASERS.com, Canada’s Leading Industrial Search Engine, brings you a one-day, table-top tradeshow that will provide a forum for interaction between buyers/purchasing professionals and suppliers from across multiple industry sectors. MEET face-to-face with new suppliers DISCOVER new innovations EXCHANGE ideas and advice DEVELOP new relationships GAIN new insights and solutions SOURCE new products and services BENEFIT from infomative education seminars

National Industry Expo education seminars - FREE to all registered delegates. Moderator for education seminars: Michael Power, editor, PurchasingB2B magazine Visit www.NationalIndustryExpo.ca/Agenda for speaker information.

8:30AM– 3:30PM

On- Site Registration: Available until one half hour before close

10:00AM – 4:00PM

Tradeshow is open

9:15AM – 9:45AM

EDUCATION SEMINAR: THE BUYER-SUPPLIER RELATIONSHIP: THE TIES THAT BIND

All business is built on relationships, and this statement is certainly true of the ties between buyers and suppliers. This relationship thrives when both sides employ a comprehensive approach to dealing with one another, and developingstrategies in this area provides numerous benefits for both organizations and their vendors. As well, developing and benefiting from an inclusive supply chain that ensures Aboriginal, minority, women-owned and other diverse suppliers are also utilized can advance relationships with an even broader range of suppliers. Focused on best practices, this panel will delve into techniques for deepening the buyer-supplier relationship, whether the ties are new, long-standing or in need of mending. Panelists will discuss the characteristics and benefits of a healthy buyer-supplier relationship, tapping into diversesuppliers, as well as tips and strategies that can be employed to get the most from any supplier-buyer exchange.

9:45AM – 10:15AM

Coffee Break

11:00AM – 11:30AM

EDUCATION SEMINAR: CLEARING CUSTOMS: STREAMLINING CROSS-BORDER SHIPMENTS

While shipping goods across borders takes centre stage in today’s supply chain, it can be fraught with difficulties for both large and small organizations. Whether transporting goods internationally or across provinces, issues such as security, regulatory requirements and other concerns can make the process confusing, time-consuming and intimidating for many businesses. This panel discussion will outline some of the main challenges and pressures associated with getting goods and products across borders, along with tips and strategies to make the process as smooth and effective as possible. Dealing with duties, taxes and fees, properly preparing documentation, as well as streamlining customs clearance are just some of the issues that will be touched on during the panel. Buyers and suppliers alike will find this discussion relevant and effective in removing the fear, confusion and hassle from cross-border shipping.

PurchasingB2B.ca >> FRASERS.COM

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Attendance is FREE - Register today at NationalIndustryExpo.ca

ATTEND FOR YOUR CHANCE TO WIN A $300 APPLE GIFT CARD! *Only qualified delegates are eligible for the Apple Gift Card draw to be held at 3:30pm on November 10th at NIE.

1:00PM – 1:30PM

EDUCATION SEMINAR: SMES: OVERCOMING CHALLENGES IN TODAY’S ECONOMY

Small- to medium-size enterprises (SMEs) are integral to Canada’s growth and represent an essential component of the country’s prosperity. At the same time, this crucial segment of the economy faces some serious obstacles on the path to success. Join us for a conversation focused not only on the challenges that today’s SMEs face in the Canadian marketplace, but also recommendations on how to overcome these barriers. Essential skills like negotiations, responding to RFPs and developing contracts will be discussed, while the current state of the economy—and its influence on small- to mediumsize organizations—will also comprise part of the discussion.

2:00PM – 2:30PM

Coffee Break

3:00PM – 3:30PM

EDUCATION SEMINAR: FINANCIAL RESOURCES: ASSISTANCE TO GROW YOUR BUSINESS

While working capital is a constant challenge for many businesses, several grants, government funding, tax credits and other incentives exist to help businesses. Resources for suppliers are also available to fund the gap between invoicing clients and getting paid. Unfortunately, many organizations are unaware of these grant options and other resources and, at any rate, may lack the knowledge, resources and time to access them. Join this panel discussion to hear what resources exist to help tap into the myriad funding programs available to organizations today. Topics to be discussed include available grants and incentives, business loans, sales tax recovery and more.

3:30PM

DRAW FOR $300 APPLE GIFT CARD*

10:00AM – 3:00PM

Concession stands are open

PurchasingB2B feature editorial report on the National Industry Expo 2015: December 2015 issue of PurchasingB2B magazine and published online at www.PurchasingB2B.ca To receive your FREE subscription to PurchasingB2B, please visit: www.PurchasingB2B.ca/subscribe

YOUR CONTACTS FOR THE NATIONAL INDUSTRY EXPO ARE: DOROTHY JAKOVINA

DEREK MORRISON

TIFFANY GIN

Publisher, PurchasingB2B magazine Publisher, FRASERS.com Event Coordinator, Annex Business Media djakovina@purchasingb2b.ca dmorrison@frasers.com tgin@annexbizmedia.com 416-510-6899 905-409-6976 416-510-5211

Thank you to our event partners for their generous support!

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EXHIBITORS Connect with suppliers from across multiple industries at the tradeshow! Here’s a sampling of exhibitors that will be attending the Expo. For an up-to-date list, please visit NationalIndustryExpo.ca/exhibitors. AHEARN & SOPER | PROVISION WMS Toronto, ON 416-675-3999/800-263-4258 www.ahearn.com salesdept@ahearn.com ARI Mississauga, ON 905-804-2129 www.arifleet.ca pnogalo@arifleet.ca ATLAS PRO SERVICE Kitchener, ON 519-579-5500 trufuel50.com mmcnab@mtdproducts.com BOHNE SPRING INDUSTRIES LIMITED Toronto, ON 416-231-9000 www.bohnespring.ca sales@bohnespring.ca BRADY CANADA Richmond Hill, ON 905-764-1717 www.bradycanada.ca torbradycs@bradycorp.com

CANADIAN ABORIGINAL & MINORITY SUPPLIER COUNCIL Toronto, ON 416-941-0004 www.camsc.ca kmotta@camsc.ca CAPS‘N PLUGS Brampton, ON 647-284-6704 www.capsnplugs.com paul@capsnplugs.com CIRCA METALS Vaughan, ON 905-669-5511 www.circametals.com kfleming@circametals.com EGENCIA Mississauga, ON 1-888-397-2677 egencia.ca

EXEL NORTH AMERICA INC. Scarborough, ON 416-431-5017 sandy.lavergne@exel-na.com

FEDEX TRADE NETWORKS Mississauga, ON 905-677-7381 ftn.fedex.com lesley_foster@ftn.fedex.com FEIN CANADIAN POWER TOOL COMPANY Mississauga, ON 1-800-265-2581 www.fein.ca kbovey@fein.ca FLEXIBLE TECHNOLOGIES (CANADA) LTD. Mississauga, ON 905-602-9660 www.hitechduravent.com anne.duck@flexibletechnologies. com HYDROLICO INTERNATIONAL INC. Laval, QC 450-628-6644 www.hydrolico.com strembley@hydrolico.com INGENIOUS MEDIA - DIGITAL EDGE PRINT & MEDIA Mississauga, ON 905-829-8900 www.digitaledgeservices.ca steve@ingeniousmedia.ca INTERNATIONAL SEW RIGHT Niagara Falls, ON 905-374-3600 www.safetyclothingcanada.com intsewright@safetyclothing.com KEYSTONE STEAM SUPPLIES Mississauga, ON 905-361-0270 keystonesteamsupplies.com sales@keysteam.ca MEGGER LTD. Markham, ON 416-298-6770 megger.com mark.stathenas@megger.com

MISTER SAFETY SHOES Toronto, ON 1-800-707-0051 www.mistersafetyshoes.com paul@mistersafetyshoes.com

PROCESS INSTRUMENTS AND COMPONENTS INC. Markham, ON 905-513-7653 www.process-instruments.net dominic@process-instruments.net

MOD-TRONIC INSTRUMENTS LIMITED Brampton, ON 905-457-6322 www.mod-tronic.com sales@mod-tronic.com

ROTEM INDUSTRIAL PRODUCTS INC. Toronto, ON 1-800-498-8773 www.rotem.ca paul@rotem.ca

NITOR PARTNERS Ottawa, Cleveland, ON 866-663-3111 www.nitorpartners.com info@nitorpartners.com OFFICE OF THE PROCUREMENT OMBUDSMAN BUREAU DE L’OMBUDSMAN DE L’APPROVISIONNEMENT Ottawa, ON 1-866-734-5169 www.opo-boa.gc.ca david.rabinovitch@opo-boa.gc.ca

SUPPLY CHAIN MANAGEMENT ASSOCIATION Toronto, ON 416-977-7111 www.scmanational.ca acormier@scmanational.ca SHAVER INDUSTRIES INC. Kitchener, ON 519-894-4800 shaverinc.com mark@shaverinc.com

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ONTARIO SOCIETY OF PROFESSIONAL ENGINEERS Toronto, ON 416-223-9961 www.ospe.on.ca jgerson@ospe.on.ca PARZEE & ASSOCIATES INC. Mississauga, ON 905-629-9898 www.parzee.ca info@parzee.ca POWER PUSHER CANADA Richmond Hill, ON 800-461-6734 www.powerpusher.com sbaksh@pushorpull.com PROCESS HEATERS INC. Toronto, ON 416-747-8250 www.processheaters.ca harry_k@processheaters.ca

SHELL CANADA PRODUCTS Calgary, AB 1-888-212-8916 shell.ca/fleetcards

STAPLES ADVANTAGE Mississauga, ON 905-696-4218 staplesadvantage.ca susan.mackay@staples.com T.A. WIRE AND HARNESS INC. Montreal, QC 514-341-2131 tawireandharness.com trevor@tawireandharness.com TECO-WESTINGHOUSE MOTORS (CANADA) INC. Cambridge, ON 519-624-1616 www.tecowestinghouse.ca sales@tecowestinghouse.ca

PurchasingB2B.ca >> FRASERS.COM

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MRO Buying

Beyond lowest price When it comes to optimizing MRO spend, purchasers have a number of tools at their disposal By Michael Power

n procurement, all spend categories have unique challenges and maintenance, repair and operation (MRO) is no exception. To the outside observer, buying for this category can appear complex and specialized. Spend is spread across several sites and categories. A large number of suppliers, the prevalence of maverick buying and a decentralized process can all present hurdles to the MRO buyer. Not only that, but the products can be highly technical and end-users can have strong emotional attachments to specific parts and suppliers. But strategies exist to not only reduce costs within MRO but to also make the area less daunting and more strategic. Establishing strategic partnerships with suppliers is critical to that process, says Larry Berglund, principal at Presentations Plus Training & Consulting Inc. Berglund previously worked in forestry and, at the time, buying MRO in that industry meant a focus on getting the lowest price, he notes. Multiple contractors provided similar goods and services, which led to consolidation agreements. And while the bottom line remained paramount, the trend was towards reducing the number of suppliers from dozens to, say, five or seven.

“We found when end users had a larger input into what the brand preference was, they were far more willing to commit to buy-in for the MRO standardization program. That drove substantial savings.” As well, one of the strategic challenges surrounding MRO is whether buying in this area should be handled in-house or through the use of vendor managed services. But the choice isn’t strictly either/or, Berglund notes, with hybrid arrangements also possible. “It’s not all or nothing, all the time,” he says. “But generally, you’ll find the larger percentage should be done either in-house or vendor managed. That gives a good balance of on hand availability, competitive pricing, that goes along with that.” End user input When it comes to typical MRO categories such as electrical, plumbing or steel, there’s a large role that end-user input can play in terms of standardizing brand preferences, Berglund notes. Purchasing is often a price-driven process, and the focus on getting the optimal brand for the job can get lost. But getting end users involved in choosing the brand or model increases the chances that they would feel they had some “skin in the game” regarding a supplier rationalization strategy—leading to greater savings for the organization in the long run. “We found when end users had a larger input into what the brand preference was, they were far more willing to commit to buy-in for

the MRO standardization program—that drove substantial savings.” Some of those savings come from a lower total cost of ownership of MRO items, Berglund notes. Often, those end users wind up choosing higher quality items that last longer, which in turn reduces the overall total cost of ownership for those products. The risks associated with items breaking, getting damaged or compromising worker safety drop, Berglund says. Tied to reducing that total cost of ownership is looking at the business process costs for an organization to manage its MRO supplies, Berglund says. Companies might save small amounts of money by buying items off contract, but the burden to the organization of processing one-off invoices erases any savings associated with the buy. Single sourcing MRO products can also result in cost savings, Berglund says. As a rule of thumb, he notes, organizations can expect savings of between five and 15 per cent when moving from multiple sources to single sourcing for typical MRO items. For example, for a budget of $1 million, companies can expect around $50,000 to $100,000 in savings. Category management As part of an overarching procurement strategy, there’s been a resurgence of interest in category management when dealing with MRO, Berglund noted. Category management has morphed away from simply being commodity management and now encompasses not only goods but also more services. “MRO is a significant part of overall category management for larger organizations,” Berglund says. “Look at things like inventory turnover rates. Some large organizations will simply expense MRO items, where others may inventory it depending on the needs or the overall structure of the organization whether it’s an expense or inventory item.” As well, beneficial to larger organizations is the drafting of service level agreements with MRO suppliers with committed volumes of certain products included, he notes. For example, an organization may buy a minimum of 100,000 units of a certain product in order to get access to free PurchasingB2B.ca / October 2015 / 19

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MRO Buying

point-of-sale software. Also, when analyzing spend analysis, it can be helpful to take a look at p-card transactions related to MRO, Berglund says. Lots of money can be put on p-cards in the field that could easily be brought into inventory. “You can get vending machines for safety supplies now,” he added. “They’re very common as part of service level agreements, where they weren’t 10 years ago.” Order from chaos Purchasing professionals must also guard against buying MRO stock that they don’t need, says Vince Sheeran, CEO of California-based inventory management solutions company MarginPoint. It may sound obvious, but plants and field operations workers often order automatically, without looking at whether that material is already in stock, Sheeran notes. “When we discontinue buying what we already have, we can transfer material to where it’s actually needed,” he says.

Some MRO categories can be quite expensive, Sheeran says. As well, stocking locations can be disorganized and remote, he notes, and purchasing decisions can rest with staff. But that staff can change. Applying basic supply chain analytics to MRO spend can get rid of some of the waste that can creep into the process, he says. “It gives them a whole new workflow to reduce the cost—that, in essence, is the advantage to applying supply chain and inventory management,” Sheeran says. It also benefits suppliers to optimize the process, Sheeran says. The unenlightened supplier may simply try to get as much material out the door and into a customer’s hands as possible. But the smart supplier will help customers optimize the process. If the customer gets help in buying smarter, he notes, they might buy less each time but they’ll ultimately buy more from that supplier due to the advantages of doing so. “Because if they do that, they’re going to have a much stickier customer,” he notes. In conclusion, organizations can realize cost savings not simply by getting the lowest price possible for MRO goods, but also by approaching MRO strategically. Vendor consolidation, end-user input and supply chain analytics are just some of the tools that purchasers can use to optimize the process. B2B

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State of Flux

The 2015 GBTA Convention offers a look at current and future business travel trends

By Michael Power

hese days, there is little that remains the same for very long in the world of business, and corporate travel is no exception. Issues such as dealing with rogue travellers, gamification, navigating the sharing economy and other areas affect how travel managers—and those who buy managed travel services—perform their jobs. New technologies, products and processes seem to hit the market on a daily basis. This constant state of flux was one of the driving topics at this year’s GBTA Convention, held in Orlando, Florida in July. The annual convention took the rise of the so-called “sharing economy” as its theme this year, with one of the opening panel sessions discussing both the definition of the sharing economy along with how organizations can differentiate their brands within the new normal. The notion of a shared economy is not a new one, panelist Gregory Stubblefield, CEO and executive vice-president, global sales and marketing at Enterprise Holdings, told the audience of over 6,000 attendees. Customers and business travellers alike are looking for access and convenience, low cost, and plenty of information on what they’re using—and they want immediate access to all of this at any time, day or night. Consumers are therefore changing their habits, he told the audience, and organizations must change along with them. Fellow panelist Kaye Ceille, president of Zipcar, noted that the sharing economy held the potential to boost an organization’s effi-

ciency. She noted that the average North American car sits idle for 23 hours a day. For Zipcar, the sharing economy involves making that process more efficient. For example, she said, the company had been in business for 15 years and its members now have access to roughly 150,000 vehicles. As well, most of those users are in urban centres, with 25 percent as corporate members who use the service as an alternative transportation method to augment or replace fleet vehicles and similar reasons. The rise of bleasure Panelist Chip Conley, head of global hospitality and strategy at Airbnb, told the audience that the rise of “bleasure”, which is a mix of business and leisure travel within the same trip, has helped to boost the notion of a sharing economy. When travelling on bleasure, corporate travellers will often stay in a location for the weekend after business concludes, Conley said, and many of those travelling for an extended time want to live as the locals do. The trend also exists in the broader economy, he noted. For exTRAVEL MANAGEMENT CANADA / PurchasingB2B.ca / October 2015 / 21

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ample, in Brazil during the 2014 FIFA World Cup, many of the event’s attendees found accommodations in that country through Airbnb. The company hadn’t focused on business clients until about a year ago, he said. But in order to meet that need, Airbnb now has a portal specifically for corporations to access. “We’re constantly evolving for different markets,” he said. When it comes to the influence of disruptive technologies and developments, Ceille admitted that Zipcar had certainly disrupted car ownership, a trend that’s carrying over into the corporate travel arena. Fellow panelist Rufino Perez Fernandez, chief commercial officer, NH Hotel Group, said that his organization embraced disruption, regardless of where that influence comes from. For example, it’s motivating when others disrupt the economy because it motivates your own organization. “We love to be challenged,” he said. The right motivation It’s impossible to create a business travel model without some friction, with the only question being how much friction gets created. At the same time, the interests of companies and their travelling employees are often misaligned. So how can organizations turn employees from having to keep costs down to wanting to control their expenses? That was the question posed by Rocketrip founder and CEO Dan Ruch, who spoke during an education session at the GBTA 2015 Convention. During the session, Ruch stressed that while it was impossible to force employees to spend below policy, it was possible to motivate them to want to do so. Cost control, duty of care, reporting and customer service remain central themes of managed travel, even as the field evolves, Ruch told the audience. Still, employees often don’t understand what the travel manager’s role is, and getting them to comply with company travel policy can be a challenge. This disconnect tends to worsen over time, Ruch said. And while many employees do comply, they aren’t where the challenge lies. At the same time, millennial travellers are more common and organizations and travel managers must work with them while, at the same time, giving them some breadth to book the way they want. And while not a “different species,” millennial travellers are more brand disloyal, tending to break cor-

porate policy more readily than more experienced workers. Often, he noted, new technology can make the situation worse. Advances can mean that travellers have access to options that are not on a company’s approved vendor list. Travel managers are supposed to be servicing employees on the road, yet those employees are saying that consumer travel portals are often better than what organizations provide. Rogue travellers, Ruch said, can act as the “canary in the coal mine” regarding what needs to be improved in a company’s travel program. The solution doesn’t lie in getting angry with these travellers—rather, it’s about creating boundaries but then allowing travellers to “do their own thing.” “It’s not about turning screws on employees any more,” he said. With all of these conditions at play, organizations can work to reduce travel expenses by motivating employees to act in ways they otherwise wouldn’t, Ruch said. Rocketrip, for example, provides employees with a travel budget that they must then try to beat. If employees can spend under budget for a particular trip, they are entitled to keep half of what they save. Rewarding the good behaviour of travelling employees isn’t a new concept, Ruch said. Many “gamification” strategies offer gold stars, badges and other incentives; and while those strategies can work when not much is at stake it’s tougher to gain compliance for more important policies like booking a trip in advance. A traveller’s priorities include convenience, comfort and air miles, while company priorities include cost, compliance and safety, he noted. Companies must therefore offer meaningful rewards if they want travellers to

“Customers and business travellers want access and convenience, low cost, lots of information on what they’re using—and they want immediate access at all times. Consumers are therefore changing their habits, and organizations must change along with them.” behave in certain ways. And a great way to do that, he said, was to offer cash in exchange for those behaviours. In one example Ruch provided, a company’s efforts to reimburse travellers for saving money led to an average savings of $349 per trip. The plan was embraced by senior leadership, leading to 23 percent of those savings generated by the director level and above. To conclude, Ruch stressed the notion that—while employees need boundaries—business travel should more often focus on saying “yes” rather than “no.” Understanding what employees want is a big step in getting them to do what companies want them to do. Overall, the convention provided insights into current trends in managed travel, as well as a glimpse of those on the horizon. Staying abreast of such developments is truly one of the main roles of today’s travel manager. B2B

22 / October 2015 / PurchasingB2B.ca / TRAVEL MANAGEMENT CANADA

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EVEN

Attendance is FREE! Register at NationalIndustryExpo.ca BROUGHT TO YOU BY:

NOVEMBER 10, 2015 • MISSISSAUGA CONVENTION CENTRE PurchasingB2B, Canada’s magazine for purchasers and supply management professionals, in collaboration with FRASERS.com, Canada’s Leading Industry Search Engine, brings you NIE 2015—a one day tabletop tradeshow that will provide a forum for interaction between buyers/purchasing professionals and suppliers from across multiple industry sectors. EXHIBITORS and DELEGATES from the following industry sectors will be attending: • Machinery & Equipment • Courier & Express Services • Office Products & Solutions • Travel Services • Plastics, Metal Fabrication • Environmental & Safety • Automotive • Technology & IT • MRO • Electronic Components • Material Handling • Government • Utilities • Maintenance • Heating & Cooling • Industry Associations • Business Solutions • and many more!

NIE 2015 is YOUR one-stop shop to: • MEET face-to-face with new suppliers • SOURCE new products and services • DISCOVER new innovations • GAIN new insights and solutions • DEVELOP new relationships • EXCHANGE ideas and advice • BENEFIT from relevant & informative education seminars • FREE ON-SITE PARKING

Attend for YOUR chance to WIN a $300 Apple Gift Card!* *Only qualified delegates are eligible for the Apple Gift Card draw that will be held at 3:30pm on November 10th. The winner does not need to be in attendance at the time of the draw but does need to have attended the Expo. A representative from PurchasingB2B or FRASERS will contact the winner of the gift card.

We look forward to seeing you on November 10th! PurchasingB2B feature editorial report on the National Industry Expo 2015: December 2015 issue of PurchasingB2B magazine and published online at PurchasingB2B.ca. To receive your FREE subscription to PurchasingB2B, please visit PurchasingB2B/subscribe EVENT PARTNERS:

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