Purchasing B2B December 2015

DECEMBER 2015

CANADA’S SUPPLY MANAGEMENT MAGAZINE

SUSTAINABLE PAPER TRENDS

NATURE’S WAY Case studies in sustainable energy practices

THE CIRCULAR ECONOMY

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Cover: Joffre Lake ©Olgabatone/Getty Images/Thinkstock

From imagination to implementation.

Table of Contents

Vol. 57, No. 6 • DECEMBER 2015

Features 6 GREEN PAGES

10

A look at trends in sustainable paper.

10 WHAT COMES AROUND, GOES AROUND The circular economy can change how business is done.

16 PURCHASER POWER! Case studies for sustainable energy use.

34 FOSTERING CONNECTIONS National Industry Expo 2015 special report.

14

Cover: Joffre Lake ©Olgabatone/Getty Images/Thinkstock

Also inside 4 UP FRONT

5 BUSINESS FRONT

7 PROCUREMENT PROFILE

12 PUBLIC PROCUREMENT

24 14

21

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.

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Michael Power

© lkunl/Getty Images/Thinkstock

Features STEPS TO SUSTAINABILITY The Institute for Supply Management (ISM) has developed a sustainability best practices and implementation document to guide organizations towards becoming more sustainable.

This article highlights some of those practices, along with their benefits.

PEOPLE, PLANET AND PROFIT Susan D’Souza, Staples Advantage’s national senior manager of quality, sustainability & regulatory, discusses her job, future plans and the importance of sustainability. www.PurchasingB2B.ca/features

FROM ALL DIRECTIONS A recent survey says that Canadian purchasers are looking for a more robust omni-channel offering and strong customer service experience. www.PurchasingB2B.ca/features

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

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Up Front 80 VALLEYBROOK DRIVE TORONTO, ONTARIO M3B 2S9

www.PurchasingB2B.ca

Steps To Sustainability

PUBLISHER/ADVERTISING SALES

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

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

S

imilar to past years, the December issue of PurchasingB2B has a focus on sustainability. We do this in the last issue of the year to give readers a relevant and engaging theme to ponder as we head into a new year.

It’s especially good timing for us to take this focus—as I write, sustainability is a hot topic on the international stage. The Paris climate change summit is soon coming to a close, with Prime Minister Justin Trudeau remarking that “Canada is back” in our role in helping correct the climate crisis. Many say we’re at an environmental tipping point. In fact, our profile subject on page 7 agrees with this statement, and offers advice for procurement professionals looking to ramp up their sustainability game.

Sustainability is an important issue to cover not just—as people like to say—because it’s “the right thing to do.” It’s also now apparent that a focus on sustainability is good for companies and communities alike.

Sustainability is often likened to a three-legged stool, with community, environment and the bottom line getting equal importance in the equation. With any of these factors out of play, efforts to make any other factor sustainable will collapse.

Within an organization’s sustainability efforts, supply chain and procurement leaders can take the lead not only in repairing the environment but also bolstering sustainability objectives overall. A recent document from the US-based Institute for Supply Management (ISM) highlights this. The organization released a sustainability and social responsibility guide for supply management professionals, called ISM Principles of Sustainability and Social Responsibility with a Guide to Adoption and Implementation. It’s a best practices and implementation document to help guide organizations on sustainability practices and their benefits. It approaches the concept of sustainability from a broad perspective, with the environment a key component. It also focuses on areas like human and labour rights, financial integrity and transparency, supplier diversity and more.

The organization sums up the purpose of a sustainability document for supply management: “ISM firmly believes the supply management profession is a strategic contributor in the development and implementation of sustainability and social responsibility programs and behavior. Supply professionals are in a unique, critical position to impact the global supply chain and therefore should supplement their organization’s work in sustainability and social responsibility.”

Procurement and supply chain sit at a critical hub in the sustainability matrix. It’s within the power of supply chain professionals to promote sustainability in the way they do their jobs, ensuring goods purchased are eco-friendly while minimizing the environmental impact of transportation.

We hope you enjoy this special issue, and hope you can glean tips to incorporate sustainability into your own daily work.

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 PRINTING & PUBLISHING INC.

VICE-PRESIDENT: T im 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 Business Media. © 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.

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Business Front

The Death of the Grid?

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

By Michael Hlinka

O

n November 5, 15 per cent of the shares of Hydro One commenced trading on the Toronto Stock Exchange. Talk about a hot issue! The IPO price was $20.50 and very soon into the day, the shares were up five per cent. This shouldn’t have surprised anyone. According to Ontario’s Minister of Finance, if the large pension funds would have had their way—and here we’re talking about the Canada Pension Plan Investment Board and Ontario Teachers’ Pension Plan —they would have snapped up all of it. The smart money seemed to think that this was a rock-solid investment and one that should be held for a very, very long time.

The theme of this PurchasingB2B issue is sustainability. And I thought that there was something very appropriate about reflecting on energy policy, and the electric grid, in the wake of the Hydro One initial public offering. There’s a reason why utility companies like Hydro One are so popular with investors.

Fads and even some technologies may come and go, but if there are some things that are certain, it is that in 20, 50 or 100 years people will need water, food, shelter and power generation is crucial to the functioning of a modern industrial society.

However, it doesn’t necessarily follow that the method for delivering that energy will remain static.

If we go very far back in time, wood was the primary source of energy. There wasn’t any infrastructure that delivered it. You just picked up an axe, went into the woods, and did your best Paul Bunyan impression. Wood was replaced by coal and it had to be mined. After the black stuff was pulled out of the ground, it was physically delivered. I’m certain that there were for-profit companies that specialized in that service, and they went bankrupt a very long time ago.

Why am I bringing this up? Because my gut tells me that there are new technologies emerging, and quick, that threaten to undermine the grid and fundamentally transform how electricity is generated and delivered. This could happen sooner than you think.

You may recognize the name Elon Musk as the founder of the electric car company, Tesla. It’s been

a sensation of the auto industry, creating far more impact than its relatively modest sales (it will deliver approximately 50,000 cars in 2015).

But there’s something else that Tesla is making that could be far more important.

In May, Tesla unveiled the Powerwall, a home battery that charges itself using electricity generated from solar panels, or when utility rates are low.

According to Tesla’s website (clearly, not the most unbiased source), the Powerwall provides the following benefits: “Fortifies your home against power outages by providing a backup electricity supply. Automated, compact and simple to install, Powerwall offers independence from the utility grid and the security of an emergency backup.” One phrase stands out to me: “independence from the grid”. The Powerwall retails for about US$3,000.

That’s a price tag that will scare many people. However, I recall buying my first personal computer in the late 80s. It was a state-of-the-art system, yet it was so slow that when I typed, I had to wait for the words to appear on the screen. It cost me $3,500 (albeit Canadian dollars). Fast forward to the present. A PC has 20 times the functionality and sells for only a few hundred dollars. What was true of home computers is going to be true of home batteries like the Powerwall. It’s just a matter of time.

“There are new technologies emerging that threaten to undermine the grid and fundamentally transform how electricity is generated and delivered.”

Talk about a sustainability game-changer! Instead of building nuclear power plants, instead of burning fossil fuels, instead of harnessing wind energy, all normal everyday folk will have to do to satisfy their home energy needs is put a couple of solar panels on the side or roof of their houses, and then store the energy the sun generates until they need to use it. It will take time, yes, but what we will be seeing in the foreseeable future is more and more people getting off the grid, which will make the electricity delivered on it more expensive, which will hasten the conversion process.

As you can probably guess, I didn’t join the stampede to buy Hydro One on its debut. Look, for all I know, it might be a great investment for the short run. But if you value shares of companies for the long run – as you should because the pricing models generally imply an infinite life – it’s hard to justify the IPO price. That is, if you believe that with the emergence of truly sustainable electricity, we might soon be seeing the death of the grid. B2B PurchasingB2B.ca / December 2015 / 5

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Sustainable Paper

The Paper Road Evolving trends in sustainable paper

By Lauren Joakim

C

orporate sustainability plans are not new, and many would argue they’re simply a baseline to compete. When the idea of sustainability first became popular, many companies were focused on lofty goals that made great news stories. But the focus is shifting to smaller initiatives throughout the supply chain that, when brought together, can make considerable impacts. One area is incorporating sustainable paper products into a company’s operations, whether office paper, paper towel, napkins or facial tissue.

Sustainable paper assumes different meanings to different organizations, but one thing most agree on these days is that focusing on simply recycling paper and using recycled fibre is a narrow view of the subject.

According to Steven Sage, vice-president of sustainability and innovation at Canadian tissue and paper manufacturer Kruger Products, “we offer a wide range of paper products, from 100 per cent recycled to 100 per cent virgin that is chain of custody certified by Forest Stewardship Council because there are different demands in the marketplace.”

There are different reasons companies work to green their supply chains. In many cases, well-known brands use this as a risk-mitigation strategy to avoid negative attention or threats from NGOs, while other companies may be driven by consumer demand.

Minimum requirements Most companies proactively seek out sustainable products. In fact, according to Garrett Gerst, LEED AP O+M, manager, facility solutions for Veritiv, “customers commonly ask about sustainable paper products, and if they don’t our sales team will definitely inquire as to the importance of [these products] in the purchasing decision.”

Many companies follow corporate policies that often specify a minimum requirement of post-consumer recycled content for paper-based products. Others rely on “industry programs like BOMA Best, Green Key Global, and LEED,” said Gerst.

Kruger Products services organizations in several sectors, including hospitality, foodservice, government, health care, education, manufacturing and property management. The company has learned that some industries are more interested in sustainable paper products than others.

It also knows firsthand that many companies in Canada use the new UL Environment to identify sustainable paper products, among other types of products. The certification represents a baseline in order for many companies to consider a product sustainable.

As of December 31, 2014, UL (Underwriters Laboratories) purchased TerraChoice’s EcoLogo program and created the new UL Environment 175 Standard. In terms of paper products, this impacted companies that relied on the standards because the previous EcoLogo sanitary paper standards they were familiar with no longer exist. Companies have been working through the new requirements and are beginning to make the products that meet the new criteria available to customers.

“We are continuously working on advancing our standards to support reduced environmental and human health impacts,” says Angela Griffiths,

director of research and service delivery at UL Environment. The new standards offer advantages for manufacturers, including a greater focus on protecting human health, additional broad sustainability requirements relating to the sourcing of fibre, as well as further reducing greenhouse gas emissions. It is still a multi-attribute product certification, which many organizations appreciate.

Veritiv has found that there is also a difference in what customers in different industries tend to rely on as external validation for what constitutes a sustainable paper product. “Green Seal and UL Environment are common for janitorial paper products, while FSC and/or Sustainable Forestry Initiative [SFI] are the most common for printing papers,” says Gerst.

Recycled, virgin and alternative forms of fibre While recycling has a foothold in Canada, some companies still opt for fibre-based products made from virgin fibre, mainly for aesthetic reasons. This is where the chain of custody certification from FSC helps them keep on track with sustainability goals.

As part of its corporate sustainability program, Sustainability 2015, Kruger Products uses 100 per cent third-party certified fibre in the production of its paper products, and through this, it selected FSC as its certification scheme.

In recent years, some paper manufacturers have focused on finding alternative forms of fibre.

Kimberly-Clark, for example, has been studying various potential alternatives to trees. The company has committed to sourcing 90 per cent of the fibre it uses in production of its tissue products from environmentally preferred fibre sources by 2025. One example is using the leftover straw from wheat harvested in the US Great Plains. The company defines environmentally preferred fibre sources as the following: recycled, FSC-certified virgin fibre and sustainable alternative natural fibre.

While there is a lot of untravelled road along the corporate sustainability journey, many companies are well on their way. Research continues to uncover new ideas and ways of thinking. In the 1970s, recycled fibre was a huge step forward, but with the advent of responsible forestry management, and innovation in alternative forms of fibre, the future of sustainable paper is yet to be written. B2B

6 / December 2015 / PurchasingB2B.ca

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Procurement Profile

Sustainable Passion Frances Edmonds, director of environmental programs, HP What is your title?

I’m head of sustainability at HP Canada.

Describe your education and work history.

I have a degree in environmental science, a post-graduate diploma in occupational health and safety and am a Canadian Registered Safety Professional. After graduating in the UK, I worked as a Ministry of Labour inspector before moving to Canada to work as an environmental health and safety (EHS) manager in the chemical and pharmaceutical industries. Upon joining HP, I worked in EHS and producer responsibility before focusing on corporate social responsibility, environmental employee engagement (worldwide) and partnerships.

What do you enjoy about your position?

I enjoy both the variety of work and the breadth of people I work with at HP—and of course, the feeling I’m contributing to a reduction of our impact on the planet.

Why did you choose sustainability?

I am passionate about the environment and believe we are very close to a tipping point. We need to dramatically change our ways. I love educating and learning and there is so much about this field that is new. There is an opportunity for employees to contribute to our sustainability goals—and most often employees are keen to do their part! Sustainability is a team sport, and thankfully, there is a strong movement today. It’s almost a tide of change and this brings me great optimism.

Why is sustainability important for companies to address?

Aside from being the right thing to do, there are two

other strong reasons. The first is to attract and retain the best employees. Millennials are now the largest cohort in the North American workforce and they want to work for companies that share their values. They also want purpose in their jobs. The second is it can save money.

Often even the simplest things, like switching off office lights or setting printers to print on both sides, are not done at many organizations. These save money, but there are lots more opportunities. With technology and circular economy business models driving innovation, we are at a very exciting time. There are new opportunities with clean technology and Canada has some great research and development just waiting to grow.

What’s your proudest professional moment?

I have many and they are usually related to teaching and seeing people’s eyes open when they understand the issues and possibilities. My most recent proud experience was delivering a TEDx talk on collaboration with the World Wildlife Fund (WWF) at the University of Waterloo. Inspiring students to think differently about possibilities and opportunities ahead of them.

What are your future plans?

Global domination! With our WWF Living Planet @ Work partnership, along with a slew of champions across Canada, we will lead the charge to sustainable business.

How can organizations make purchasing more sustainable?

Getting a good baseline is helpful. Organizations must survey suppliers’ sustainability practices. You can then compare the results and set a minimum level and stretch goal to bring them up to or above your own standards. An immediate win is to make all of your paper and wood product purchases from FSC sourced material. For tech purchases, leverage the Sustainable IT buying guide whitepaper from HP. It gives examples of smart questions to ask suppliers and vendors, including whether they publish an environmental report. B2B

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Connector – A Skills-Matching Tool The answer to supply chain employers’ challenges in: • Assessing skills and knowledge • Fitting people to job responsibilities • Accurately determining skills gaps to identify training needs • Customizing learning plans to upgrade required competencies I N D U S T R Y - C R E A T E D ,

I N D U S T R Y - T E S T E D

www.supplychaincanada.org/en/Connector The Connector tool was created with funding from the Government of Canada’s Sectoral Initiatives Program.

Upcoming Events Purchasingb2b.ca/topic/events ProcureCon Canada 2016

NAFA Institute & Expo 2016

February 16-18 | Hyatt Regency | Toronto, ON

April 19-22 | Austin Convention Center | Austin, TX

Cargo Logistics Canada

SCMA 2016 National Conference

February 17-18 | Palais des Congres de Montreal | Montreal, QC

June 15-17 | Niagara Falls, ON

MODEX 2016

CITT Canada Logistics Conference

April 4-7 | Georgia World Congress Center | Atlanta, GA

October 26-28 | Delta Brunswick | Saint John, NB

CAMSC Diversity Procurement Fair

National Industry Expo 2016

April 12-13 | Sheraton Centre/Allstream Centre | Toronto, ON

November 8 | Mississauga Convention Centre | Mississauga, ON

GBTA Conference 2016 | Toronto

ACTE Global Corporate Travel Conference 2016

April 18-20 | Toronto Convention Centre | Toronto, ON

November 20-22 | Vancouver, BC

8 / December 2015 / PurchasingB2B.ca

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The Circular Economy

Good Planets Are Round

The circular economy and supply chains

By Larry Berglund

W

hat does the Namibian beetle have to do with supply chain management? Just about everything.

A sea change is occurring in Europe and the ripples are crossing the Atlantic. The circular economy (CE) is affecting environmental, social and governance values. Why? Because it makes good business sense to adapt to a world where resources are becoming scarce. The out-moded tactic of relying on cheap, cheaper or cheapest materials and labour to drive profits is running dry.

The CE provides a viable business model alternative and is restorative.

With business icons like Apple, Coca Cola, H&M, Philips, Renault, and Unilever getting on board, the CE strategy, albeit in its early days, is gaining traction.

For supply managers, if you couldn’t buy raw materials, how could you sustain your operations? The answer isn’t entirely within the procurement mandate; it starts at the design stage. Rather than design for disposal, we adopt a design for the environment. Any product brought to market is designed to be deconstructed, repurposed or harvested for its materials to contribute to future production.

Landfill sites are not a repository for poor designs and low-cost, disposable goods. Every industry and market sector has a role to play, as do customers and consumers. The fast moving consumer goods sector generates mega-tonnes of packaging that’s largely treated as an externality cost. It’s estimated that we can only recycle about 20 per cent of the volume we’re generating, and we are generating more each year.

“The circular economy proposes to manage waste by design rather than default.”

Recycling has been around for a long time. But it has failed to meet our needs. Recycling actually encouraged customers to buy more disposable products under the guise they could be recycled after use. We exceeded the capacity to recycle the mass production of cheap goods. The unit costs of the mass-produced goods were reduced, making cheaper goods available to a wider range of consumer incomes. The result is an economy that requires a segment to continue to buy and support this disposable cycle. It will be a challenge for the circular economy to transition to more sustainable economic models focused on conservation, not consumption.

Converting a company’s waste or by-products into useful materials is not new. Wood waste from sawmills goes into pulp and paper or fuel pellets.

Fertilizers are made from oil refining. Old cardboard is made into new cardboard. Scrap metal is a source for many types of alloys and can be reformed into new products. Glass can be converted to other glass products. The sheer volume of these types of common waste led to finding more useful and commercial purposes. The circular economy proposes to manage waste by design rather than default.

Critical materials, once more accessible, are now subject to two forms of risk: supply due to geopolitical conditions and environmental stress where water and soil degradation may exceed the benefits of extraction. Many precious metals are found in sensitive areas like China, Russia, and the Democratic Republic of the Congo.

Biomimicry By 2030, there will be an estimated three billion more consumers, mainly from emerging economies. The circular economy will help industry and business prepare for market growth. Economic decoupling refers to the ability to grow markets without a corresponding increase in energy and resource usage or environmental stress. Sustainable growth considers the impact on air, water, soil fertility and biodiversity.

Technology and science are contributors to advancing circular economy success through biomimicry— emulating nature to sustain business.

Biomimicry can be seen in innovations like Velcro, derived from the burdock seed’s ability to attach to the coats of animals as a means of dispersion. As another example, the desert dwelling Namibian beetle collects water on its back from fog—innovators copied this and designed dew bank bottles to convey moisture into drinking containers; microscopic tardigrades can dry out for 120 years and be returned to life by water. This realization encouraged research leading to vaccines that don’t require refrigeration and can be reanimated with water after six months— extremely useful in tropical climates. Biomimicry is creating breakthroughs using less toxic solutions in a sustainable manner.

The circular economy has automobile manufacturers designing vehicles to be deconstructed after their useful life with parts and materials going into new production. Lighting companies are turning to leasing customers their products and taking them back after use.

Tire companies won’t sell you tires, they will let you use them and pay for the wear and tear upon return.

I:CO (I Collect) participates in a closed-loop process collecting and sorting clothing, furs, socks, belts and

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other garments in more than 90 countries. Collecting used clothing to produce new products can reduce the amount of fresh water used by 90 to 95 per cent.

What lies ahead The circular economy will require a much more efficient infrastructure to collect and segregate industrial waste. It also requires changes in consumer behaviours and commitments to collection efforts. For industry, reverse logistics will play a more strategic role in supply management. Reverse logistics ensures responsible management of related materials to redirect these for further valuable uses as opposed to scrap. The collection link in the supply chain will create employment for thousands of low-skilled workers.

We can reduce energy needs and natural resource depletion through increased labour in a sustainable manner. Sweden estimates that an improvement of three per cent of its GDP will be achievable through the circular economy when using renewable energy, energy efficiency and material efficiencies along with increased employment.

Unilever’s Sustainable Living Plan provides supply chain leaders with a good framework. At its core is the recognition that while consumption of products is inevitable, innovative designs and resource conservation are fundamental in enabling sustainable busi-

ness models. Steelcase, a long-time market leader in office furnishings, sees zero landfill waste as a critical component when designing their products.

Reclaiming materials is a component in their holistic vision for sustainable and ergonomic products. Reducing waste contributes to profitability. The circular economy views waste as a target to be eliminated.

Designing products to be repurposed is not new, as Xerox was successful with this with its copier fleets. Older models were taken apart and many usable mechanical parts were recovered and installed in next generation copiers by design. The circular economy requires the majority of the players in a sector to adopt more progressive design strategies as the norm, not the exception. For example, 3D manufacturing will contribute when it achieves scalable solutions for large industrial applications.

The circular economy has grown and permeated the boardrooms of global players. It will affect all supply chains. While there will still be a need for the conventional competitive bids and negotiations, supply chain managers may need to start thinking more about critical supplies rather than tactical processes.

With an estimated consumption of 800kg of food/beverages requiring 120kg of packaging and 20kg of apparel/shoes per person, per year in the western economy, something has got to give. The circular economy is giving ideas that work. B2B Larry Berglund, SCMP, MBA has been in the supply chain management field as an author, manager, business trainer, academia, and consultant for many years. His new book, Good Planets are Hard to Buy: A Management Handbook for Creating Conscious Capitalism, Sustainability Principles and Supply Chain Excellence, was published in November 2015.

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PUBLIC PROCUREMENT

Green streets Municipal sustainable procurement in Canada

By Tim Reeve

S

ustainability is increasingly on the radar in both the public and private sectors. Most organizations now incorporate some elements of sustainability into their social responsibility plans, or even highlight sustainability in their broader strategic plans. As leaders in shaping Canadian communities, municipalities serve a particularly important role in advancing the reality of sustainable cities and towns across the country.

With the recognition that sustainability is an important value, municipalities are left to determine how best to advance sustainability goals.

More and more, purchasing professionals are being recognized as integral to realizing an organization’s sustainability commitments through sustainable procurement work. For municipalities, this is particularly important, as they often spend many millions—to several billions—of dollars each year on goods, services and capital projects, both internally and in the community. That is, their spending is significant and can have real impacts on the products and services they choose to support.

What is sustainable procurement?

While sustainability in procurement has traditionally been interpreted to refer to the consideration of green or environmental factors when purchasing a good or service, municipalities and other organizations now recognize that “sustainability” is really about supporting the entirety of their triple bottom line. Sustainable procurement is both an art and a science. The art is in creating a process where municipalities consider best value and total costs in their procurements. In other words, a process in which municipalities evaluate products based on their price, lifecycle, quality, and sustainability features rather than just on unit cost alone. The science is in choosing the sustainability features that are relevant to the organization and the procurement at hand.

Sustainable procurement can be broken down into three sub-categories that provide a deeper understanding of the scope of influence that this activity has within the marketplace. There is a broad range of different types of sustainable procurement practices, namely: • G reen or environmentally preferable procurement: Procurement to mitigate environmental impacts such as packaging, greenhouse gas emissions, toxicity, energy efficiency, waste generation, excessive resource use and so on.

• Ethical procurement: Purchasing to avoid sweatshop labour and ensure fair labour practices within production facilities; often supported at the policy level by a supplier code of conduct.

• S ocio-economic purchasing: Purchasing and promoting health and safety, local economic development, minority groups, social enterprises, living wage, local food, fair trade or other measures, which improve the health and well-being of individuals and communities.

Why sustainable procurement?

There is no doubt that sustainable procurement is on the radar for municipalities, city councils and city management teams. Why? Because few other programs can simultaneously contribute to multiple agendas

such as zero waste, climate leadership and economic and social development, cost savings and staff engagement. When done well, sustainable and ethical procurement: • Enhances a municipality’s brand as a sustainability leader; • M itigates legal and brand risk by doing business with suppliers that meet minimum standards; • Contributes to zero waste, climate change, local food and green economy objectives; • Reduces municipal operating costs by selecting products that are more durable, have less waste or consume less energy; • Enhances the local economy and potentially builds social capital; and • Enhances staff engagement by empowering staff

12 / December 2015 / PurchasingB2B.ca

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to choose products like fair trade coffee or green office supplies and by increasing the strategic value of purchasing department professionals in delivering on a municipality’s goals.

The current reality Despite the compelling business case, many municipalities across the country have long been trying to run their sustainable procurement programs off the side of someone’s desk. Despite good intentions, for the majority of the last 10 years sustainable purchasing has been a “do it when we get to it” sustainability activity, rather than a primary piece to municipalities’ sustainability efforts. Recently, however, there has been a growing recognition that sustainable purchasing is a strategic ac-

PUBLIC PROCUREMENT

tivity that can help organizations achieve their corporate priorities in an important way. As a result, municipalities are increasingly looking to their supply chains to pursue their sustainability goals, and are going beyond mitigating negative effects of procurement to actually promoting positive effects.

The Municipal Collaboration for Sustainable Procurement (MCSP) is a Canada-wide group of municipalities that has been working to collaboratively address common challenges and move municipal sustainable purchasing programs forward in their development through knowledge and resource-sharing activities. Each year, the MCSP publishes a State of the Nation Report on Municipal Sustainable Procurement. According to the 2014 report, top challenges identified by Canadian municipalities in implementing an effective sustainable procurement program included a lack of dedicated internal staff, staff’s lack of sustainability expertise, lack of money and time and internal resistance to change.

While the challenges are not insignificant, municipalities are also finding many effective ways to overcome these stumbling blocks. The top strategies identified as most effective in advancing a sustainable purchasing program were: training and education with procurement staff and other key internal groups, as well as focusing on a finite set of products and services. Municipalities also found that allocating a dedicated staff person, or a portion of an FTE to the work was extremely helpful.

Other strategies that have been successful in advancing sustainable purchasing programs include creating a sustainable purchasing committee of procurement and environmental staff that meets monthly to work on program improvements, collaborating with other municipalities through groups such as the MCSP, and integrating sustainable purchasing training/work into other municipal programs.

Some purchasing groups have found it helpful to create a strategy in consultation with other city departments, or to use external subject matter experts to inform or guide their programs. Both of these initiatives can help to gain focus and get strategic buy-in from internal stakeholders.

The [triple] bottom line Sustainable purchasing is becoming a high priority for municipalities across Canada because it has been recognized as an effective method for improving sustainability outcomes, as well as an excellent way for municipalities to exhibit sustainability leadership within their communities.

With sustainable purchasing, municipalities can realize positive economic, social, and environmental outcomes, and purchasing professionals are able to demonstrate their strategic value to the organization to an unprecedented degree, all while opening up opportunities for innovative partnerships, and shifting the focus of the economy at large.

As we move into 2016, sustainable purchasing will continue to grow in importance as part of a trend towards increased transparency and accountability. Municipalities will be wise to take action on this front by building sustainable purchasing work into their 2016 planning, and by looking to other municipal leaders for guidance, support, and collaboration. B2B PurchasingB2B.ca / December 2015 / 13

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Paying The Piper Benefits of travel card programs among topics highlighted at the ACTE 2015 Global Travel Conference

W

By Michael Power

hile many organizations still process expenses manually, adopting a card system for corporate travellers holds myriad benefits. Indeed, the area of payments is set to see a lot of change in the coming years, making the understanding of this aspect of corporate travel management more important than ever.

That was the message from Germany-based Mario Kriebel, vice-president, commercial payment solutions—global at BCD Travel, who led a discussion on the topic at the Association of Corporate Travel Executives (ACTE) 2015 Global Travel Conference. Over 350 registrants from seven countries attended the conference, held in Montreal from November 15 to 17. Attendees were treated to four general sessions and 12 education seminars, among them Kriebel’s seminar, entitled Paying the Piper: Trends and Best Practices in Travel Payments.

Those cards hold several benefits over more manual, paper-based payment methods, Kriebel told the audience. For example, when using a corporate card program, organizations can import all the available data from the credit card company into an SAP or ERP system. From there, the information can be reconciled and go directly to the cost centre, helping to optimize internal workflow. “That makes the whole reconciliation internally much easier,” he said.

A corporate card also has a comprehensive amount of data available, Kriebel noted. When organizations receive information from a travel management company, it’s usually the “booked data,” he said. But with a card report, the company is also able to see the “real spend.” If, for example, a traveller takes a business trip to Montreal and books for three nights but ends up staying for 10, card data will provide information on the full lodging.

With cards becoming more transparent recently, Kriebel recommended combining TMC reports—which are already quite comprehensive— with the detailed reports available from card companies for a 360-degree view of travel spend. “Then we have the full picture,” he said.

Cards also have a low payment cycle, he said. Those four-to-six week payment terms can definitely be of benefit. It’s rare that agencies or suppliers provide this sort of extended payment cycle. “No one acts as a bank,” he said. “Everyone tries to reduce the payment cycles—the cards are still the tool that gives you the long payment terms.”

Traveller benefits Along with the advantages that companies can see, cards can also help improve the traveller’s experience of a trip, Kriebel noted. Employees no long need to pay the costs of travel upfront, with the liability resting with the company. When using a corporate card, the traveller gets an invoice

at the end of the month, fills out an expense report and the organization pays the balance before the card company takes the money from the employee’s account.

Kriebel also noted that some cards have no spending limit—an important point to consider when choosing a new program. He advised that companies ask what the card can offer regarding those limits. If the limit is too low, it can be a complex process to have it raised. While some banks allow clients to raise the limit online, many require a phone call. It’s helpful at the outset to have a card with a high spending limit or none at all, he said.

When choosing a new card provider, or when in negotiations with an existing provider, Kriebel advised involving other parts of an organization in the discussion. Usually, purchasing or finance is involved in the process, but those departments may not have all the information needed regarding what’s going on in other parts of the company.

Choosing a new card program can impact the accounting department, travelling employees and other areas, making it a good idea to bring all involved parties to the table.

For more information about the Association of Corporate Travel Exectuves 2016 Global Travel Conference, as well as other ACTE events, please visit www.acte.org.

14 / December 2015 / TRAVEL MANAGEMENT CANADA

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His decision to cut energy costs by 70% with LED high bay lighting was a great idea.

And a great start.

Once you start seeing the benefits of our incentives for LED high bay lighting, you’ll want to start upgrading your motors, fans, pumps and compressors to higher efficiency systems as well. When you do, you’ll be joining thousands of organizations across Ontario who are already enjoying the savings that our programs deliver.

Take a look at their stories and our incentives at

saveonenergy.ca/business

Subject to additional terms and conditions found at saveonenergy.ca.

Subject to change without notice.OMOfficial Mark of the Independent Electricity System Operator.

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POWER to the PURCHASER In 2014, the Supply Chain Management Association (SCMA) launched Purchaser Power, a program providing resources and best practices for sustainable procurement when buying energy consuming equipment. SCMA is the project’s lead, while partners include the Independent Electricity System Operator (ieso), Newfoundland & Labrador Hydro; as well as ProPurchaser; and PurchasingB2B.

Purchaser Power encourages organizations to use sustainability best practices, and companies gain access to a purchasing toolkit, best practices guide, training sessions and a voluntary online reporting tool to aggregate and display energy and GHG savings.

SCMA won the ENERGY STAR 2015 Recruit of the Year award for the Purchaser Power program.

Hewlett Packard (HP)

H

The Purchaser Power program gives organizations the tools to help make their operations more sustainable The program includes case studies highlighting the achievements of organizations using sustainable purchasing practices. The case studies highlight best practices, costs and benefits of sustainable procurement for energy efficient equipment and success with ENERGY STAR. On the following pages, we’ve highlighted abridged versions of four of the five case studies.

ment scorecard with stronger SER performance incentives.

The company also launched a site-based assessment process for bringing on major new suppliers. This ensures an acceptable level of SER performance from new suppliers. Suppliers with strong SER performance can increase overall scorecard results, which increases opportunities for new or expanded business.

Suppliers with persistently poor SER performance may see a reduction in their scorecard rating of up to 50 per cent and a decrease in business awarded. HP has introduced the scorecard to six strategic commodity supplier categories. In 2014, the company extended its use to final assembly suppliers and additional commodity suppliers.

ewlett Packard (HP) celebrated its 75th anniversary in 2013 and launched the HP Living Progress—a framework building on a commitment to global citizenship that has been a corporate directive for nearly six decades. The company is at the forefront of innovation to limit the carbon impact of the information and communications technology industry. As of December 2013, HP designed over 50 per cent of all LEED Platinum and LEED Gold certified new construction data centres worldwide. The servers that populate those centres offer increased processing power while using less energy and space.

The role of ENERGY STAR HP has been part of the ENERGY STAR ENERGY STAR plays a pivotal program for over 20 years and, as an original role in HP’s business strategy, ENERGY STAR partner, worked with the US both in how the company Environmental Protection Agency (EPA) and othworks on its scope-three imers to develop early criteria. Today, about 20,000 pacts and in how it attracts and organizations from several sectors take part in the retains customers. By the end program. HP collaborated with EPA to develop of 2011, the energy consumpENERGY STAR program requirements for infortion of HP’s products was 50 mation and communication technology products. per cent below 2005 levels, surpassing the 40 per cent ob-

Eco advocate program HP encourages participation in the Eco Advocates employee training program, which educates employees to become ambassadors of the company’s environmental initiatives and help customers reduce their impact. Through training modules, employees learn about HP’s environmental portfolio and topics like environmental management systems, energy efficiency and climate change, HP Eco Highlights labels and carbon footprints. Employees are better equipped to address environmental issues with customers and partners. Since 2008, Canada still has the highest representation with over 250 employees enrolled in the program.

HP auto on/auto off technology jective HP had set to achieve.

The power save, or sleep, mode included in most printers and multifunction printers (MFP’s) still use large amounts of energy. Auto-off can use up to 26 times less WWF-Canada energy than a traditional sleep mode. Power consumption can also HP and WWF-Canada have partnered for WWF Living Planet be reduced by 44 per cent by setting print devices to turn off at the @Work, a free web-enabled program to encourage environend of the day. HP auto-off lets users set a device to automatically mental action and conservation. The program provides toolkits turn off either when it detects an inactive period or at a pre-set time to help organizations reduce their environmental footprint, eneach day. HP auto-on users can also decide whether their device gage employees and fundraise for WWF conservation efforts. will awaken at a pre-set time each day or when it senses activity.

The program includes a green IT campaign—The Smart Office Challenge—that provides information, resources and guidance Supply chain management to buy with the environment in mind, optimize IT performance HP’s procurement team is trained in social environmental rewhile reducing energy needs, managing print and recycle elecsponsibility (SER) performance evaluation, education and mentronic waste. toring. In 2013, HP introduced a more robust SER procure16 / December 2015 / PurchasingB2B.ca

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The Westin Ottawa The Westin Ottawa, part of the Starwood Hotel Group, began its commitment to sustainability in 1985 when it was the first commercial building to commission a direct contact heat exchanger to recover

sensible and latent heat from flue gases.

The Westin established its green committee in 2006, and the committee is working towards the hotel’s long-term goal of 30/20 by 2020: reducing energy consump-

Sustainability overview The Westin Ottawa has begun several projects using ENERGY STAR products to save energy wherever possible and attain the hotel’s long-term plan. Key energy efficiency projects include: • A ll meeting room HVAC and lighting is delivered through BAS (building automation systems). Meeting room heating and lighting is set on a timer. When a room is not in use, the lighting and heating/cooling are also not in use; • T he hotel converted all common area lighting to low CO2emitting LED bulbs. All exit signs have been replaced with LEDs; • E scalators are turned off when not in use; • T he Westin Ottawa retrofitted its boilers; and • Replaced 150 incandescent pot lights and table lamps in common areas with compact fluorescents.

Green Key Program The Green Key Program—specific to the hotel industry—has three components, the Green Key Eco-Rating Program, the Green Key Meetings Program and the Green Key Carbon Calculator. Based on the results of an environmental self-assessment, facilities get a rating from one to five keys, with five the highest level. Performance reports showcase a member’s accomplishments while outlining areas for improvement. In 2012, the Westin Ottawa was the first Starwood Hotel in North America to achieve five green keys for hotel and meetings from Green Key Global.

Other projects The Westin Ottawa replaced 4,000 light bulbs with LED lights, resulting in major power savings and an award from Hydro Ottawa. Another initiative in 2014 saw all common area bulbs replaced with LED bulbs. Previously, public area lighting needed traditional incandescent bulbs, which consume heavy amounts of energy and emit mercury when burning. Eliminating these reduced energy consumption, decreased CO2 emissions and stopped the bulbs from entering landfills. The project reaped an annual savings of $168,000 with lifecycle savings of over $1 million.

In 2014, the Westin Ottawa also began replacing bar fridges, retrofitting all 500 guest rooms with Domentic CL 460 LDC fridges. The hotel went from using .75kWh per fridge to

tion by 30 per cent and water consumption by 20 per cent. By 2010—compared to its 2008 baseline—the Westin Ottawa had reduced overall consumption by 9.1 per cent.

.39kWh every 24-hours. Over a year, that’s a savings of 65,700 kWh. Over a 10-year lifecycle of the fridge, it’s 657,000 kWh. In 2009, the Westin Ottawa started a project to replace the commercial kitchen ventilation system with a demand ventilation system. That system reduces exhaust and make up fan speeds during idle, non-cooking conditions. When the cooking appliance is turned on, fan speed increases based on exhaust air temperature. While cooking, the fan speed increases to 100 per cent until smoke and vapour is removed. This provides electrical savings of 66 to 74 per cent on kitchen exhaust and make-up air motors, natural gas savings of 38 to 42 per cent on dedicated make-up air, improves fire safety and increases the life expectancy of exhaust and make-up air fans.

Along with the five green keys for hotel and meetings, the Westin Ottawa has received accolades like the Energy and Environment Award, 2009 + from the Hotel Association of Canada: 5 Green Key Eco Rating, 2011; Companies for Conservation, 2008 from Hydro Ottawa; Energard Top 10: Best Performer in Full Service Category for Energy Savings, 2007; and Starwood Hotels and Resorts: Most Energy Efficiency 2006.

Potential future projects The Westin Ottawa plans to evaluate and implement sustainable design strategies and principles including: • Climate responsive strategies relevant to the City of Ottawa and site microclimate; •H igh efficiency HVAC, LED lighting and electrical systems and daylight controls; • I ntelligent building automation systems; and • Sustainable building architecture features like high performance building envelope, solar shading devices and daylighting and view optimization. B2B

Year

Total Energy (GJ)

Energy Per Room (GJ/room)

2008

68,671

137.3

2009

67,994

136

2010

62,417

124.8

2011

29,159

58.3 PurchasingB2B.ca / December 2015 / 17

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Humber College Toronto Humber serves over 27,500 full-time registrants and 56,000 continuing education registrants, and its three campuses have a significant impact on surrounding environment and communities.

T

Humber has created a sustainability plan, which includes senior administrators, along with faculty, administrative staff and students. The plan aligns with the 2013-2018 Strategic Plan covering

he college’s five-year purchasing and ethical sourcing plan addresses energy use through two points: • Develop “sustainably preferable” purchasing policies and make them accessible for campus purchasers while exploring opportunities to improve Humber’s supply chain; and •P urchase 100-per cent ENERGY STAR rated technology for all energy rating technology on campus and prefer EPAT Silver.

six areas: purchasing and ethical sourcing; recycling and waste management; sustainable transportation; energy and climate change; green buildings and landscapes; and water.

• Meet or exceed ENERGY STAR certification standards, where applicable, with automatic power down and sleep settings; • Have ECOLOGO certification; • Come from an original equipment manufacturer with a registered environmental management system; and • Contain recycled content and be manufactured with fair labour practices.

Vending machines The sustainability committee has also seen opportunity for Projects savings in vending machines, and purchasing guidelines set Humber completed a heating, ventilating, and air conditioning out a plan to ensure ENERGY STAR-certified equipment, as (HVAC) retrofit in 2014 on one building, going from a constant well as time and use of criteria. Guidelines include: air volume (CAV) to a variable air volume (VAV) ventilation sys• Vendor must provide all machines meet ENERGY STAR tem. The college installed variable speed drives on the main supspecifications for energy efficiency; ply and return fans, and VAV boxes for each classroom. Existing • M achines must come with a low-power mode lighting motion sensors in the classrooms were option that puts it into a low-energy lighting tied to the VAV box. When classrooms are or low-energy refrigeration state during inempty, or if the temperature has already been activity using vending machine sensors; or satisfied, the VAV slows down, which slows the • M achines must be ENERGY STAR-rated main fans. The main fans run at 70 per cent Energy and equipment operating on the same schedule rather than constantly at 100 per cent for esticlimate change as building occupancy; and mated annual savings of $50,000.

Humber College participated • Vendor must specify other energy-saving feain developing requirements tures.

Office equipment for the RFP process developed as part of the Ontario The RFP occurred in 2014 and the new equipHumber has included ENERGY STAR in the Broader Public Sector (BPS) ment is now in place. Calculated savings were group buy tender for many years, with Dell Procurement Directive issued $12,000 per year based on reduced hours of the incumbent provider. Part of the RFP inby the Ontario Management use by the refrigeration and lights in the macludes that the proponent describe its environBoard of Cabinet, effective chines. mental program, for example the recycling of April 1, 2011. The directive packing materials; its environmentally friendestablishes rules for BPS entiLED lighting project ly products; how it complies with EPEAT stanties for purchasing goods and Humber has completed many light emitting dard and how that standard will be mainservices using public funds. diode (LED) lighting retrofits. One project retained for the term of the agreement. placed high intensity discharge (HID) lighting The Humber IT department uses Faronics fixtures at 170W each with 30W LEDs. The project cost of Power Save software on their network. Faronics automatically $95,000 will be repaid within 1.6 years. As well, the projected turns off every computer lab computer at night. Staff computannual energy savings are $14,500, with maintenance savings ers are shipped with a standard image with the power efficiency expected at $65,000. setting activated, although users can turn them off. The estimated annual savings from this is roughly $25 per computer, Food services which on 7,000 desktops is $175,000.

Humber’s food services group pays for energy beyond what ENERGY STAR-rated equipment would use, giving incenPhotocopiers and MFDs tive for efficient equipment. Recent purchases that save energy Humber’s efforts to minimize plug load generated by photoinclude a deep fat fryer and variable speed kitchen hoods. The copiers and other office machines are similar. Humber preSpring Air kitchen hoods use TruFlow energy management. pared a separate RFP, which included several requirements, Sensors in the duct sense heat and smoke and slow down the including that the multi-function devices should: fan where it can to save energy.

•H ave EPEAT and Blue Angel designation, where available; 18 / December 2015 / PurchasingB2B.ca

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City of Markham Markham is a growing municipality with over 310,000 residents. Coupled with increasing fuel prices, the City’s energy consumption, demand and greenhouse gas emissions are more important than

ever to understand and manage. The Markham energy conservation office (MECO) works to position Markham as a leader and energy conservation champion.

In 2009, MECO joined the newly formed

sustainability office and played a key role in the preparation and implementation of the Greenprint—Markham’s Sustainability Plan—while handling expanded responsibilities including climate change.

I

Purchasing n 2011, Markham council endorsed the Greenprint, The City developed the five-year corporate energy managewith a goal of “net zero energy, water, waste and emisment plan (CEMP) to improve energy management in its sions by 2050”, as a plan for Markham over the next 100 corporate operations. One of the plan’s recommendations years to become one of the most sustainable communities in was to improve how equipment is evaluated and replaced.

North America. Through energy conservation and renewMECO is working with its asset management and recreation able energy production, Markham anticipates reaching its departments to upgrade to more energy efficient equipment net-zero energy goal by 2050. For this, Markham established at the end of the lifecycle. Typically, the equipment would be the following goals for its corporate energy management replaced with a new model of equivalent value. Asset manplan (CEMP): agement and facility supervisors must investigate more en• Position the City to move toward “net zero energy, water, ergy efficient equipment with financial supwaste and emissions by 2050”; port from MECO, government energy • Support the corporate goal of a “safe and incentives, engineering studies, qualified sustainable community” where “we will Markham’s focus vendor and engineering firm recommendaprotect the public and respect the natural centred on three approaches: tions and information support from MECO. and built environments through excellence From 2013 to 2015, Markham did a streetin sustainable community planning, infralight conversion program. The 12,300 trastructure management, and programs”; and ditional Cobra-head high pressure sodium • D evelop a corporate energy management lighting units were converted to LED on most plan meeting the requirements for Ontario Retrofitting or replacing collector and arterial roads, and many resiRegulation 397/11. equipment with that dential streets. The LED lights improve visBased on these goals, the City works towards of higher efficiency or ibility and reduce light pollution, greenhouse the objectives of managing energy consumpmore efficient gas emissions and energy costs. The life span tion and demand, as well as greenhouse gases. control method; of LED lights is typically 20 years. LED proIt also works to manage direct and indirect gram benefits include up to 60 per cent lower operating costs, increase equipment reliabilmaintenance costs, up to 60 per cent reducity and occupant comfort, demonstrate leadtion in energy costs from the 12,000-plus ership in renewable energy and efficient fuel New facilities with streetlights and elimination of “up-light” that sources, as well as enhance the culture of energy efficient technology produces obtrusive sky glow from these lights. energy management and sustainability. and controls; and Markham has approved annual energy Vending machines management budgets that provide an ROI Over 70 per cent of the City’s vending maof under five years. The budget’s purposes chines used incandescent bulbs, one-speed have varied, but have been used for funding compressors, and lacked onboard controls to the incremental cost of replacing equipment Investing in renewable “setback” during unoccupied times. All ENwith higher efficiency equipment, installenergy to expand on ERGY STAR qualified vending machines ing new control systems and equipment for community resilience, reduce greenhouse have T8 light bulbs, improved evaporator improved energy efficiency, energy awareness gas emissions and fans, variable speed compressors and onand energy training. generate revenue. board software controls that turn the machine into “storage mode” based on time of Energy skills training day. By changing the vending machine speciMarkham and Natural Resources Canada fications, the City realized an annual energy and cost reducteamed up in 2013 to produce a customized energy managetion of 171,440 kWh, 12 kW and $20,000 savings. ment workshop for City staff. Two facilitators used a variety of physical demonstrations, calculation worksheets, graphic slides, case studies and discussions. The workshop featured discussions regarding areas like reading and analyzing elecTo learn more about the Purchaser Power Program, view tricity bills, calculating energy usage, spotting and reporting other case studies, or sign up for a Purchaser Power trainenergy savings opportunities and benchmarking facilities. ing webinar on February 10, visit scmanational.ca.

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2 3:23 PM

December 2015

24 TRUCK KING CHALLENGE

24

See which truck gets crowned with the title.

29 HOW GREEN WAS MY FLEET

Tips for more sustainable fleet decisions.

32 FIRST DRIVE

32

Behind the wheel of the Toyota Prius V.

Fleet Management is a special section of PurchasingB2B magazine, running in the February, June, December, and December issues. It is an important resource for Canadian procurement professionals who recommend, select and manage fleet vendors and service providers. Editorial inquiries: Michael Power, MPower@PurchasingB2B.ca. Advertising inquiries: Dorothy Jakovina, 416.510.6899, djakovina@PurchasingB2B.ca.

Bradley Howatt appointed CFO of Element’s Fleet Management Business

E

lement Financial Corporation’s fleet management business has named Bradley Howatt as chief financial officer.

Howatt has nearly 30 years experience in finance, operations leadership and fleet expertise.

He served as vice-president of finance for the Alliance Technology Group and was responsible for managing the strategic sourcing and operations group. He was also at PHH Vehicle Management Services for nearly 20 years in finance, accounting and operational leadership roles and eventually served as chief financial officer.

Howatt received his bachelor’s degree from Towson University, an MBA from the University of Baltimore and is a certified public accountant.

“I’m pleased to join Element’s fleet management team at this exciting time in the company’s evolution,” said Howatt. “Element is dedicated to solid strategic growth, devotion to clients, and commitment to investing in the advancement of the fleet industry.”

Canadian auto sales set November record

A

uto manufacturers enjoyed their best November sales ever as the industry races toward what may well be a record year for light vehicle sales in Canada.

DesRosiers Automotive Consultants says 145,426 cars and light trucks were sold in November, up 4.7 per cent from last year.

DesRosiers said passenger car sales fell in November, off some seven per cent from last year at 50,708, and down 5.7 per cent year to date at 675,302. Light truck sales saw an increase of 12.3 per cent to 94,718 and are up nine per cent on the year to over 1.09 million.

The consultant said that if December sales match last year’s total of 131,000 vehicles, the Canadian market would exceed 1.9 million sales for the first time.

General Motors Canada was the sales leader for the second consecutive month, with sales up 13.2 per cent to 21,812. That’s slightly ahead of Fiat Chrysler Canada, whose sales were up 0.6 per cent at 21,038 and Ford, up 3.1 per cent at 20,685. Toyota’s sales increased 3.4 per cent to 14,016 vehicles, while Honda sales were up 2.3 per cent at 13,025 and Hyundai sales rose 4.4 per cent to 10,501.

FLEET MANAGEMENT / December 2015 / 21

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GM Canada to build fleet of self-driving Volts

By David Kennedy

A

utomated cars are quickly becoming more than just science fiction, and General Motor’s Canadian Engineering Centre in Oshawa, ON is soon to become one of the automaker’s leading driverless vehicle research hubs.

In remarks at the Economic Club in Ottawa, GM Canada president and managing director, Steve Carlisle, confirmed the facility has been awarded the mandate to play a “leading role” in autonomous vehicles and build a fleet of selfdriving, 2017 Chevrolet Volts.

“Our Engineering Centre in Oshawa was a logical place to locate this important work and it is the next step in growing the new mandate of the Centre to focus on work related to the Connected Car,” Carlisle said. “The Province of Ontario’s leadership in allowing autonomous vehicle testing was a helpful support in securing this advanced technology work for our Canadian facility.”

GM said the fleet of self-driving, electric Volts will first be deployed as part of a broader test program at its Technical

Pickup trucks dominate most stolen list in Canada

A

n insurance industry association says pickup trucks represent the hottest vehicle for thieves.

The Insurance Bureau of Canada says the Ford F-350 and F-250 models take up nine spots on its top 10 list of most frequently stolen vehicles. They other vehicle on the list is a Cadillac Escalade SUV. The association says Canadian border guards are seeing shipping containers stocked with car and truck parts in an effort to fool inspectors. They say they have recovered more than $10 million in in stolen vehicles at the ports this year.

Rick Dubin, vicepresident of the Insurance Bureau of Canada, says stolen vehicles are up one per cent in 2014 across Canada, with the biggest jump coming from a 29-per cent increase in thefts in British Columbia.

© GM Corp.

Centre in Warren, Mich.

“The program will serve as a rapid-development laboratory to provide data and lessons to accelerate GM’s technical capabilities in autonomous vehicles,” the company said.

Sustainable future at NAFA I&E

K

ent Rathwell had a goal: travel from one end of Canada to the other—in the dead of winter—on electricity alone. As president of Sun Country Farms, and later of electric vehicle charger company Sun Country Highway, Rathwell knew the public wanted a more sustainable alternative to conventional fuels, but the fear of EVs and its oft-mentioned range anxiety required a demonstration. Rathwell put his money where his aspirations were. Now Rathwell will be a keynote presenter at NAFA’s 2016 Institute & Expo.

The 2016 conference takes place April 19-22 at the Austin Convention Center in Austin, Texas.

Rathwell wanted to eliminate what he said were, “the excuses of people from blaming government, oil companies, automakers and, ultimately, their ancestors for the lack of sustainable transportation. That’s why we electrified the entire Trans-Canada Highway. If the longest highway in the world can be electrified, what can’t be?”

The event program features fleet training, education and workshops; and an expo floor with over 200 companies showcasing their products and services, including the Expo Floor Green Zone, showcasing the latest products and services touting sustainable practices.

22 / December 2015 / FLEET MANAGEMENT

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BE ABLE TO RELY ON RELIABLE CARS. Much like a good employee, a good car should not let you down. To make sure your team is in good hands, go for quality cars whose reliability has been widely recognized. Go for award-winning security and residual value.

Go for Subaru.

2015 XV CROSSTREK

2015 FORESTER 2015 IMPREZA

2015

3

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MODELS EQUIPPED WITH EYESIGHT® †2 COMPACT CAR IMPREZA MAINSTREAM BRAND

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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2016 CANADIAN TRUCK Ram 1500 Laramie comes out on top

By Howard J. Elmer

F

or the past nine years, veteran automotive journalists have donated their time to act as judges in the only annual North American truck competition that tests pickup and van models head to head—while also hauling payload and towing.

The Canadian Truck King Challenge started in 2006, and each year these writers return because they believe in this straightforward approach to testing and know that their readers want the results it creates.

I started the event (and continue to do it) for the same reason—that and my belief that after 40 years of putting trucks to work I know what’s important to Canadians. Now, that’s a long list of qualifications, but in a

nutshell it’s the concept that a truck can be pretty, but that alone is just not enough. It also better do its job, and do it well.

This year, nine judges travelled from Quebec, Saskatchewan and across Ontario to the Kawartha Lakes Region northeast of Toronto where we test the trucks each year.

All the entries are delivered to my 70acre IronWood test site days before the judges arrive so we can prepare them for hauling and towing. In the meantime, they are all outfitted with digital data collectors. These gadgets plug into the USB readers on each vehicle and transmit fuel consumption data to a company called MyCarma in Kitchener, Ontario. MyCarma records, compiles and translates those

readings into fuel economy results that span the almost 4,000 test kilometres that we accumulate over two long days.

These results are as real world as it gets. The numbers are broken into empty runs, loaded results and even consumption while towing. Each segment is measured during test loops with the trucks being driven by five judges—one after the other. That’s five different driving styles: acceleration, braking and idling (we don’t shut the engines down during seat changes).

The Head River test loop itself is also a combination of road surfaces and speed limits. At 17km long it runs on gravel, secondary paved road and highway. Speed limits vary from

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The off-road part of the testing is done at the author’s course in the Kawartha Lakes region, northeast of Toronto.

UCK KING CHALLENGE 50 to 80km/h and the road climbs and drops off an escapement—like ridgeline several times; plus it crosses the Head River twice at its lowest elevation.

The off-road part of our testing is done on my own course at IronWood.

Vans are not tested on the off-road though it’s note-worthy that the Mercedes Sprinter was equipped with a 4-wheel drive system this year.

This is the third year that we have used the data collection system and released the final fuel consumption report that MyCarma prepares for the challenge to the public. It’s become one of our most anticipated results.

So how do we decide what to test?

Well, as anyone who’s bought a truck knows, the manufacturers never sleep; every year brings something different to market. As the challenge looks

CONTENDERS & CATEGORIES Ford F-150 Ford F-150 Chevrolet Silverado Ram 1500

Full-Size Half-Ton Pickup Truck Platinum 3.5L V6 EcoBoost, gas, 6-speed Auto XLT 2.7L V6 EcoBoost, gas, 6-speed Auto High Country 6.2L V8, gas, 8-speed Auto Laramie 3L EcoDiesel V6, diesel, 8-speed Auto

Toyota Tacoma GMC Canyon Chevrolet Colorado

Mid-Size Pickup Truck TRD Off-Road 3.5L SLT 2.8L Z71 3.6L

V6, gas, 6-speed Auto Duramax, I-4 diesel, 6-speed Auto V6, gas, 6-speed Auto

Ford Transit 250 Mercedes Sprinter Mercedes Sprinter Ram ProMaster 1500

Full-Size Commercial Vans 3.2L Power Stroke 2.0L BLUE-Tec 3.0L BLUE-Tec 3,0L

I-5 diesel, 6-speed Auto I-4 diesel, 2X4 V6 diesel, 4X4 I-4 diesel, 6-speed Auto/Manual

Ram ProMaster City SLT Nissan NV200 Mercedes Metris

Mid-Size Commercial Vans 2.4L Tigershark I-4 gas, 9-speed Auto 2.0L I-4, gas, Xtronic CVT Auto 2.0L I-4, gas, 7-speed Auto FLEET MANAGEMENT / December 2015 / 25

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to follow market trends, what and how we test must change each year as well; and the coming 2016 model year proved no different. We had a field of 14 contenders at IronWood this year covering four categories—these are listed in the chart on page 25.

These vehicles are each all new—or have had significant changes made to them. However, this year the challenge decided to try something else new by offering a returning champion category.

This idea had been growing for a while having everything to do with the engineering cycles that each manufacturer follows. Simply put, trucks are not significantly updated each year and to date we have only included “new” iron in each year’s competition. However, we started to think that a truck being in the second or third year of its current generational life shouldn’t make it non-competitive. Certainly, if you watch the builders’ ads, it doesn’t!

So, this spring we decided that, for the first time, the immediate previous year’s winner (in each category)

The vans that are tested as part of the Canadian Truck King Challenge do not participate in the off-road portion of the event.

would be offered the chance to send its current truck back to IronWood to compete against what’s new on the market.

This year, the invitation was extended to the Ram 1500, EcoDiesel, Ford Transit 250 and Nissan NV200.

Each vehicle is a previous winner and each accepted the offer to return and fight for their crowns.

They, along with the new vehicles, took the tests over two days with the judges evaluating everything from towing feel, to interior features.

FULL-SIZE TRUCK RESULTS Powertrain Empty Test Loops (Head Lake Loop) Loaded with 1,000 lb (Head Lake Loop) Trailering 6,000 lb (Head Lake Loop) Comparable Average

FORD F-150

FORD F-150

CHEVROLET Silverado 1500

RAM 1500 EcoDiesel

2.7L EcoBoost V6 with 6-spd Auto

3.5L EcoBoost V6 with 6-spd Auto

5.3 L EcoTech3 V8 with 8-spd Auto

3.0L EcoDiesel V6 with 8-spd Auto

12.13 L/100km

11.19 L/100km

Late Arrival Not Tested

8.85 L/100km

12.29 L/100km

11.85 L/100km

12.02 L/100km

8.61 L/100km

16.84 L/100km

15.51 L/100km

17.32 L/100km

11.88 L/100km

13.78 L/100km

12.85 L/100km

14.65 L/100km

9.76 L/100km

MID-SIZE TRUCK RESULTS Powertrain Empty Test Loops (Head Lake Loop) Loaded with 1,000 lb (Head Lake Loop) Trailering 4,000 lb (Head Lake Loop) Comparable Average

CHEVROLET Colorado

GMC Canyon Diesel*

TOYOTA Tacoma

3.6L V6 with 6-spd Auto

2.8L Diesel with 6-spd Auto

3.5L V6 with 6-spd Auto

10.70 L/100km

9.54 L/100km

10.59 L/100km

10.64 L/100km

9.84 L/100km

10.21 L/100km

15.25 L/100km

13.76 L/100km

14.62 L/100km

12.23 L/100km

11.21 L/100km

11.98 L/100km

26 / December 2015 / FLEET MANAGEMENT

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It… is about being local and global.

ARI is known and trusted by fleet decision-makers throughout Canada to streamline operations and control costs. We know that every customer has unique fleet challenges. Through our six regional offices, three 24-7 maintenance call centres and Canada’s largest vendor network—we dig deeper and go further to deliver customized solutions. Across Canada, North America, and the globe—our fleet management expertise is around the corner.

Learn more about ARI’s professional fleet management services: 1-800-361-5882 | www.arifleet.ca

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The judges score each vehicle in 20 categories.

The judges score each vehicle in 20 different categories; these scores are then averaged across the field of judges and converted to a score out of 100. Finally, the “as tested” price of each vehicle is also weighted against the average (adding or subtracting points) for the final outcome.

The overall, top scoring, 2016 Canadian Truck King Challenge winner is the Ram 1500, Laramie, 3L EcoDiesel, V6, diesel, 8 -speed Auto.

Congratulations to all the winners and to the two repeating champions, the Ram 1500 EcoDiesel and the Ford Transit 250. B2B

THIS YEAR’S SEGMENT WINNERS ARE: Full-Size Half-Ton Pickup Truck Ram 1500 EcoDiesel—82.97% Mid-Size Pickup Truck GMC Canyon Duramax—76.30% Full-Size Commercial Van Ford Transit 250—73.90% Mid-Size Commercial Van Mercedes Metris—75.69%

VAN RESULTS – FULL SIZE

MB Sprinter 2500 I-4 Powertrain Empty Test Loops (Head Lake Loop) Loaded with 2,000lb (Minden City Loop) Comparable Average

MB Sprinter 2500 V6 4x4

RAM ProMaster 1500 Diesel

FORD Transit 250

2.0L I-4 Diesel with 7-spd Auto

3.0L V6 Diesel with 5-spd Auto

3.0L V6 Diesel with 6- spd Auto

3.2L I5 PowerStroke Diesel with 6-spd Auto

8.32 L/100km

11.54 L/100km

10.01 L/100km

10.10 L/100km

N/A No Data Logged

N/A No Data Logged

11.13 L/100km

11.61 L/100km

8.32 L/100km

11.54 L/100km

10.01 L/100km

10.10 L/100k

VAN RESULTS – MID SIZE Powertrain Empty Test Loops (Head Lake Loop) Loaded with 1,000lb (Minden City Loop) Comparable Average

MB Metris

RAM ProMaster City

NISSAN NV200

2.0L I-4 Gas with 7-spd Auto

2.4L I-4 Gas with 9-spd Auto

2.0L I-4 with CVT

10.48 L/100km

8.73 L/100km

8.47 L/100km

10.10 L/100km

9.81 L/100km

9.86 L/100km

10.24 L/100km

9.34 L/100km

9.26 L/100km

28 / December 2015 / FLEET MANAGEMENT

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GREEN FLEET

Tips and strategies for sustainable fleet management

By Kara Kuryllowicz

F

uel-efficient vehicles have the greatest impact on fleet sustainability, but fleets are also using a variety of strategies and tools to incentivize and encourage employees’ non-aggressive (fuel-efficient and safer) driving behaviours.

“Sustainability is always an agenda priority with many of our clients that want to take a leadership position—their fleet strategies are part of multiple commitments to being green,” says Paul Wingate, strategic consulting, Element, Mississauga, Ont., which manages 229,898 units in Canada and approximately 457,000 in the US. “We see how much it matters to them day to day and we’ve noticed a particular client’s pride in being named one of Canada’s Greenest Employers.”

Corporate interest in sustainable fleets, which tends to climb and fall with fuel prices, certainly rose with the high fuel prices from 2009 to 2011, however the various sustainability strategies implemented then remain effective today.

“It was less about saving the world and more about decreasing the fuel spend, but with today’s low gas prices, sustainability goals are more corporateimage driven,” says Scott Singsank, senior global account manager, Wheels, Des Plaines, Illinois, which manages over 12,000 vehicles in Canada and 300,000 in North America. “What works today are essentially the same strategies that have produced results over the last several years.”

Multinational firms with parent companies based in the US and Europe may also have to meet global targets and contribute to worldwide results while embracing their sustainability vision and culture. This may permeate everything from manufacturing and

operations to media and marketing strategies.

Invariably, a firm’s ability to deliver on its sustainability targets is a result of everything from the corporate culture and employee engagement to its actions. A corporate culture that embraces sustainability starts with a top-down commitment from the most senior executives to managers and employees whether they’re in corporate or private vehicles.

Sustainability can have as significant an impact on the company’s bottom line as its corporate image. Fleets recognize they can’t control the environmental impact of manufacturing or scrapping a vehicle, but can specify the number and type of vehicles required to accomplish the variety and volume of work while managing fuel consumption.

“Look at fleet utilization first because on the rare occasions you can reduce

SUSTAINABLE FLEET TIPS Embed sustainability in corporate culture Involve employees at all levels Right-size the fleet Select the most fuel-efficient vehicles for tasks Use high-, low- and no-tech tools to identify aggressive driving behaviours Mitigate and eliminate aggressive driving behaviour through training and education: 1. Focus on the safety benefits of non-aggressive driving rather than its impact on fuel consumption 2. Use a reward- and recognition-based positive approach to encourage safe, fuel-efficient driving styles

fleet size, there will be a significant impact,” says Brian Matuszewski, sustainability manager, ARI, who finds prospects are evaluating ARI’s sustainability performance more than ever before. “If that vehicle is in the lot or garage 80 per cent of the time, can you do without it?”

FIT FOR PURPOSE

Right-sizing the type of fleet vehicle must be a priority, but fleet managers also need to look at fueling options and consumption within each category.

While hybrids, plug-in hybrids and electric vehicles may be of interest, they still account for a fraction of production and are relatively rare on the road.

“Consider fit for purpose—what type of vehicle does your firm need to do the job, then look for the most fuel-efficient vehicle in that category while also taking the overall lifecycle cost evaluation into account,” says Wingate.

“Fleets differ so much in terms of size, scope, geography, drive type, purpose, goals, vehicle type and much more that even within a fleet, you may need to employ multiple strategies,” adds Singsank.

According to a Pew Research Centre survey of 40 nations, Canada has one of the world’s highest per capita carbon emissions rates and 73 per cent of Canadians agree a major lifestyle change is warranted. Yet according to Polk and Statistics Canada data, in 2014, of the 23 million cars and light-duty vehicles on Canada’s roads in 2014, just 160,000 were hybrid/plug-in, hybrid or electric.

Meanwhile, of the 1.85 million vehicles sold in Canada in 2014, 18 per cent were registered to fleets (including government and rentals), but of those just 1.7 per cent were hybrid/plug-in, hybrid FLEET MANAGEMENT / December 2015 / 29

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or electric vehicles.

“Some of it has to do with the viability of these alternative vehicles in terms of size, range, speed and charging requirements. Availability is also an issue as, depending on the vehicle, in Canada the allocation of some OEMs’ hybrid and electric vehicles goes to meet government fleet demand, then the general public or commercial fleets,” says Wingate.

Most companies offer employees a range of vehicles, which may include alternative, hybrid/plug-in, hybrid and electric vehicles in a “selector” level determined by job requirements or position. A hybrid sedan strategy will mean higher upfront costs with an unpredictable return in view of fluctuating fuel costs and the impact on depreciation, while a CNG or diesel truck will cost significantly more upfront with the payback or ROI dependent on its time with that fleet. On the other hand, a fleet dedicated exclusively to four-cylinder gasoline sedans and small SUVs is likely to produce surefire short- and long-term cost benefits.

“How anything but gasoline washes out in the long run is a gamble,” says Singsank.

Employees’ selector choices are influenced by the degree of personal and business use, regional requirements (e.g. the need for 4WD/4x4) and personal preferences. When suitable alternative, hybrid/plug-in, hybrid and electric vehicle options are offered, some employees, including senior executives, may go this route to demonstrate a corporate and/or personal commitment to sustainability.

Of course, fuel efficiency is a key up-front consideration when creating selectors but driver behaviour, whether in a company or private vehicle, also has a dramatic effect on fuel consumption, driver safety and vehicle longevity.

Some fleet management firms may consider driver behaviour and the training required to modify “low-hanging fruit” because it’s relatively lowcost. Embphasizing it effectively delivers the required results so they tend to

see a long-term commitment to it.

“A driver reducing fuel consumption by half a per cent seems insignificant until you consider the cumulative effect across dozens, hundreds or thousands of drivers over the long term,” says Matuszewski, whose firm currently manages over 166,000 Canadian vehicles and over 1.2 million vehicles globally.

An aggressive driver who does 60 per cent highway versus city driving can consume up to 39 per cent more fuel than a less aggressive counterpart at an average cost of $1,500 annually. Cruise at 120km/hr versus the posted 100km/ hr speed limit and the vehicle consumes up to 20 per cent more fuel.

whether it’s in-vehicle, in-class, online or through communications like digital or print newsletters and bulletins, can inform and remind drivers that their driving habits affect both safety and fuel consumption. Ideally, over time, consistent training and education can mitigate and even eliminate aggressive driver behaviour.

“Driver training is great because it doesn’t cost that much to do and can really affect fuel economy and consumption,” says Matuszewski, who has seen fleets continue to rank drivers’ fuel consumption and reward the top three because the program delivers results.

Reward safe, fuel-efficient driving with

Right-sizing the type of fleet vehicle must be a priority, but fleet managers also need to look at fueling options and consumption within each category.

“Driver behaviour affects fuel consumption and safety but focus on the safety first if you want the messaging to resonate with drivers,” says Wingate. “Let them know you’ve observed aggressive behaviour and remind them of the risks as well as the fact they’re representing their employer.”

How do fleets monitor and influence driver behaviour? High-tech solutions include telematics, which track everything from aggressive behaviours to idling and off-route excursions, and low-tech solutions such as fuel cards, coupled with exception management reporting and no-tech, for example, speeding tickets and driver abstracts.

“Telematics can provide almost too much information and the challenge is to identify and interpret it, then take the most appropriate action,” says Wingate. “Ideally, you identify drivers and recognize them for doing the right things.” Training and education,

one-on-one or public recognition as well as bonuses that can also foster a healthy, competitive spirit. For instance, after sharing information on how driving style affects fuel consumption, a company could recognize drivers who used the least fuel or who most reduced their fuel use over a certain time period.

Wheels has actually created a social gaming system called ChangeDriver that pits drivers against each other in quizzes tackling topics like fuel efficiency. Real-life results, based on a snapshot of their vehicles’ fuel consumption preand post-competition, are published weekly and at the end of the competition. Rewards are at the clients’ discretion but the winners generally receive gift cards.

“It is a great way of changing behaviour in a fun, non-threatening environment and their fuel economy typically improves by three per cent during the competition,” says Singsank. B2B

30 / December 2015 / FLEET MANAGEMENT

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TRANSIT IS PRODUCTIVITY YOU CAN SIZE FOR YOUR TEAM. The new full-size 2016 Transit recognizes that one size doesn’t fit all jobs. Choose yours for cargo or passengers—in two wheelbases. Three efficient engines, three body lengths and three roof heights ensure that your business has the space for whatever you move, plus the power to move it.

The compact 2016 Transit Connect offers cargo or passenger models and features standard dual sliding side doors, with 1,710 lbs maximum payload.* Make Ford Fleet the team behind your team.

Visit www.fleet.ford.ca or contact us at 1.800.668.5515

UP TO

ENGINE

487.3

CUBIC FEET*OF

CHOICES

2016 TRANSIT CONNECT

2016 TRANSIT

Vehicles may be shown with optional features. *When properly equipped. Class is Small Cargo Vans. ©2015 Ford Motor Company of Canada, Limited. All rights reserved.

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GREEN CRED The Prius V offers an eco twist along with comfortable road manners and excellent versatility

By Neil Vorano

F

or those of you who enjoy the visceral thrills of driving, of hitting apexes and the feeling of pure horsepower, the Toyota Prius may not be the car for you. But that’s alright; the Prius has never pretended to be anything but a serious-minded eco vehicle since the first one debuted here in North America 15 years ago, and it has become the best-selling and best-known hybrid vehicle in the world.

But what if you have a family and need a little more room than a compact Prius can offer? Toyota had people like you in mind when it debuted the Prius V in 2011; the V is an extended hatchback wagon aimed at families who need something like a crossover or larger car but who still want the benefits a dedicated hybrid vehicle can offer. For those people, the Prius name is probably as important as its technology; nothing gives you green cred more than having this car parked in the driveway.

And there’s really no mistaking it for any other car. While the Prius lineup has toned down its designs over the years, the V still keeps some of the quirky lineage punctuated with the steeply sloped windshield. The front fascia has an aggressive look with projector-style LED headlamps that make the car look just a little more premium. Overall, it’s a good balance between a normal car and that typical Prius form.

Cargo room is 1,906 litres when rear seats are down and 971 litres with all seats in place.

32 / December 2015 / FLEET MANAGEMENT

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2015 TOYOTA PRIUS V (BASE/AS TESTED) PRICE: $28,415/$36,191

While the Prius lineup has toned down its designs, the V keeps some of the quirky lineage.

Inside, the raked windshield and a dashboard that seems to disappear far into the horizon help make the cabin feel bright and airy, even with the sunroof covered, and sightlines all around are excellent. And the family won’t complain about room, either; up front, the simulated leather seats are comfortable and spacious as you’d expect, but passengers in the back will be blessed with plenty of leg—and headroom.

With a flat floor, three people can sit comfortably, and the 60/40 split seats not only slide back and forth but also

POWERTRAIN: 1.8L inline four cylinder, Hybrid Synergy Drive,

recline for added comfort and versatility. Plus, cargo room is a healthy 1,906 litres of space when the rear seats are down and 971 litres when all seats are in place—that’s more than some small crossovers. There’s even a handy cargo net in the back for your grocery bags.

The interior continues the quirky design, with the gauge cluster—here in the form of a TFT screen—located in the centre of the dashboard and the small electronic shift lever on the centre stack.

That’s good to save space, but with it not having the usual shift notches, a driver needs to pay more attention as to what gear the car is in. Thankfully, a loud and very annoying beep will let you know reverse is selected; a separate button engages park. Materials and switchgear are good, but the slanted infotainment screen not only collects dust easily but can reflect sunlight glare and be hard to read. The front heated seat switches, meanwhile, are located awkwardly under the dash and are difficult to get to, especially for the passenger.

If you’re looking at a Prius V, chances are low emissions and fuel economy are high on your priority list. But you don’t have to rely on the car alone for these; a series of clever and colourful information graphics on the top screen give real-time information and scores how efficiently your own driving is when it comes to braking, accelerating and keeping the car in pure electric mode, and trying to better your “green” skills using this information can actually get addictive. It’s a small addition but a welcome one in a car like this.

The Prius V gets the same 1.8-litre four cylinder as the rest of the Prius lineup, mated to a CVT and, of course, a single electric motor. While acceleration is decent—though certainly not sporty—you really have to hoof it on

CVT POWER: 134 horsepower

the right pedal, and even under moderate acceleration the CVT forces the engine up to high revs for an annoying, buzzy drive until the speed levels out.

Even with the engine at a more relaxed speed, the cockpit is louder than it should be; in electric mode, tire and wind noise is pronounced, especially on rougher roads. But while the ride can’t be labelled anything near sporty, it is responsive and solid—think of it more as a useful transportation appliance rather than a fun piece of kit, and you’ll be satisfied.

But you don’t buy a Prius just because you want a decent vehicle for the drive to work; there are plenty other cars out there that will do the job. No, the whole raison d’état of this car is its eco-friendly operation, and you can’t much argue it here. Over a week I barely made a dent in the fuel gauge, and the V managed a consumption average of just 4.6L/100km—and that is in regular driving over highways and in town, without resorting to hypermiling or other such magic. With the ability to run in pure EV mode at lower speeds plus an ECO drive mode (along with Normal), the Prius V will go a long way towards cutting your fuel costs.

Besides saving at the pumps, there’s really no penalty at the dealership, either: as tested, this model—with the optional Technology package that includes features such as dynamic radar cruise control, pre-collision braking, a panoramic sunroof and navigation, among others—lists for $36,191. That’s comparable with many other similarly sized and equipped compact crossovers and wagons. With comfortable road manners, a sizeable features list and excellent versatility compared with its competitors, the Prius V is a viable alternative with an eco twist. B2B FLEET MANAGEMENT / December 2015 / 33

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SPECIAL EDITORIAL REPORT NATIONAL INDUSTRY EXPO 2015

By Michael Power

DEEPENING CONNECTIONS National Industry Expo 2015 lets attendees gain insights, forge relations, and source products and revenue streams PurchasingB2B and FRASERS—Canada’s leading industrial search engine—are pleased to bring you the following special report on the National Industry Expo 2015, an event tailored specifically to deepen the connection between buyers and suppliers.

PurchasingB2B and FRASERS hosted NIE 2015 on November 10 at the Mississauga Convention Centre. The event brought together buyers and suppliers from across industries to network, gather information, exchange ideas and get advice from education panels.

Attendees were able to visit a wide array of exhibitor booths, and we worked to ensure the event involved industries from across the Canadian economy. NIE 2015 allowed those buyers and suppliers to create lasting business ties, build new revenue streams, source products and gain insights into product innovation and sourcing.

As well, the expo featured thought leadership education sessions covering subjects relevant to buyers and suppliers alike. Those topics included the relationship between buyers and suppliers; issues affecting cross border freight forwarding; the everyday challenges that small- to medium-sized enterprises face; plus financial tools businesses can access to help them on their path to success. You will find coverage of each education panel throughout this special report.

You can also check out our website, NationalIndustryExpo.ca, for a photo gallery of the event, exhibitor’s list, further information on speakers and their companies, as well as exciting updates regarding next year’s event, National Industry Expo 2016.

Thought leadership, practical advice, networking opportunities, innovative products and services—this was just some of what NIE offers attendees. We look forward to welcoming you at NIE 2016, and we’re confident you’ll find the event practical, informative and valuable.

National Industry Expo 2015 was made possible by the support of our event partners and exhibitors.

34

PurchasingB2B.ca >> FRASERS.COM

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THE BUYER-SUPPLIER RELATIONSHIP: The Ties That Bind

W

hile the tie between buyer and supplier is built on commerce, it involves more than exchanging money and goods. Rather, the relationship involves connection and collaboration that can take time and patience to develop. That was the message from a panel of industry experts that spoke during the inaugural National Industry Expo 2015. The panel focused on tips and strategies for both sides to get the most from their dealings with one another.

It’s important to know what an organization wants to achieve with the buyer-supplier relationship, said panelist Thomas Hudel, manager of purchasing and accounts payable at Esri Canada. Hudel recommended looking at what kind of relationship the organization is looking to develop with a supplier. “Is it strategic? Is it tactical? And how are you going to go about getting the best supplier contribution?” Hudel told the audience during the discussion.

Hudel encouraged procurement to develop a deep understanding of their organization and suppliers. A clear view of emerging trends helps purchasers speak more clearly to a vendor base. “You need to have a sense of vision for where you want to go,” he said. “What are you looking for from your vendor base? Are you looking for differentiating relationships? Are you looking for supplier development towards strategic partnerships? What

are your goals as an organization?”

Not every relationship will end up strategic, Hudel stressed. “Some of the vendors you’re dealing with are more tactical and maybe a little bit more transactional,” he said. “It really depends on the overall comprehensive view that you have of how you’re going to approach your vendor base.”

Fellow panelist Katie Motta, director of business development for the Canadian Aboriginal and Minority Supplier Council (CAMSC), stressed collaboration and connection between buyers and suppliers. Building trust is important, and Motta noted suppliers build trust by delivering on what they promise and helping clients solve problems. Suppliers can introduce organizations to innovative solutions, while buyers can work to recognize challenges that suppliers face. “The best relationships we see are collaborative,” she said. “You don’t get to that overnight, but the ones that are really work together to unlock that value from both sides.”

Motta reminded suppliers that it takes time to develop business ties with corporations that have consolidated vendor bases and a three-to-five-year sourcing cycle.

Suppliers need patience to develop an understanding of an organization’s pain points and develop trust to get invited to the next bid. Motta also noted the benefits of supplier diversity, which she said provided additional competitiveness. Aboriginal

Panelists (l-r): Katie Motta, CAMSC; Michael Power, PurchasingB2B; Thomas Hudel, Esri Canada; Jamie Button, Brady Canada.

and minority people represent 25 percent of the population—a number expected to grow over the next 15 years. Corporations can tap into that expertise, Motta said, while addressing their social responsibility mandates.

To help ensure that relationship run smoothly once established, Jamie Button, segment manager at Brady Corporation, recommended suppliers lay the groundwork during initial meetings to establish the buyer’s expectations. Knowing whether a client values fill rates, lead times, price or another metric helps suppliers understand what the customer’s needs are and the value they bring. Honesty helps companies decide whether a particular supplier can fulfill their needs. “If you’re not honest about what your complete package offering is, you’re setting yourself up for the potential to lose some credibility with your customer,” he said.

NationalIndustryExpo.ca 35

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CLEARING CUSTOMS: Streamlining Cross-border Shipments

PurchasingB2B editor Michael Power (l) and Kyri Fabios, managing director, Canadian customs brokerage, FedEx Trade Networks.

W

hile shipping goods across borders is important to today’s supply chains, myriad difficulties can emerge in the process.

Security, regulatory requirements and other concerns can make cross-border shipping confusing, time consuming and intimidating for many businesses.

To discuss these issues, Kyri Fabios, managing director, Canadian customs brokerage at FedEx Trade Networks, held an education session during National Industry Expo 2015 to shed light on duties, taxes and fees, preparing documentation, streamlining customs clearance and other topics.

Fabios listed several initiatives related to new government regulatory requirements and how importers can best prepare for them. For example, the Canada Border Services Agency

HOLD THE DATE

November 8, 2016 36

(CBSA) is introducing the Assessment and Revenue Management Project (CARM), a multi-year project to transform how CBSA assesses, collects, manages and reports on import revenue and trade information. CARM’s first phase will be an accounts receivable ledger (ARL), Fabios said, which allows importers to ensure they’re working electronically rather than on paper.

Importers won’t get a paper bill and can transfer funds electronically rather than dealing with cheques, Fabios said.

Fabios discussed the impending Trans-Pacific Partnership (TPP), an agreement designed to improve duties and taxes while simplifying the process of importing goods. The deal is designed to remove barriers and reduce duties. “It also allows us to improve the supply chain for our customers,” he noted. “We’re still waiting to hear how that’s going to be happening. But the transparency is what we’re really expecting to come from TPP.” Fedex Trade Networks has a regulatory arm to answer specific questions regarding the deal. While self-educating about the TPP is also important, so is working with someone who is knowledgeable about the partnership, he noted.

Fabios touched on tariff classifications, noting they were a uniform way of documenting applicable duty and taxes, as well as identifying goods coming into Canada.

The 12-digit classification number includes six international digits, while

the rest are mainly statistical and identify what the goods are and what duty and taxes apply.

Questions can arise about what a duty rate on imported goods should be, Fabios noted. One officer may decide goods should have a particular duty rate, while another may think it’s something else. The goods can therefore be subject to multiple rates of duty, he noted. To avoid that, FedEx Trade Networks suggests organizations get a customs ruling, which involves providing a goods sample to Canada Customs with a suggested tariff classification. The agency will then make a ruling on what the classification should be. “The benefit of the ruling is that it makes sure that right across Canada, no matter which customs officer is importing those goods, they always know that there’s been a decision by Canada Customs that says, this is what your duty rate is,” Fabios said.

Among other challenges Fabios cited was ensuring imported goods comply with duties, restrictions and regulations. FedEx Trade Networks has worked with customers to change the formula associated with an imported product line to help reduce duty rates, and can also investigate whether a product can be reclassified to import it duty free. The company also deals with taking advantage of trade agreements to reduce exposure to duties, Fabios said.

Contact your representative today for information on exhibiting, and the benefits of being a sponsor and/or speaker.

Dorothy Jakovina, publisher Derek Morrison, publisher PurchasingB2B magazine FRASERS.com djakovina@purchasingb2b.ca dmorrison@frasers.com 416-510-6899 905-409-6976

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S

mall- to medium-sized businesses are integral to Canada’s growth and essential to the county’s prosperity. But this crucial sector also faces obstacles on the path to success. This panel session focused not only on the challenges SMEs face, but also solutions and advice on overcoming those barriers.

Like all businesses, SMEs must navigate within the economy and, depending on where in Canada a business is, the economy can present formidable road blocks, said Royal Bank of Canada senior economist, economics research, Robert Hogue. Alberta has been hit especially hard, Hogue said, and its economy is in recession. In the past five years, Alberta’s supercharged economy has driven Canada’s growth, growing 4.5 percent on average per year. Now, said Hogue, expect economic activity to contract by one to 1.5 percent. “That economic engine has not only stalled but now it’s working in reverse,” he told the audience.

That said, other regions are fairing better, Hogue noted. Ontario is growing moderately and will likely continue to do so. “It really is a mixed bag in Canada in terms of economic performance,” he said. Canada’s economy is transitioning from reliance on Alberta towards other sources of growth, both in terms of regions and sectors, Hogue said. This is largely due to the drop in oil prices, which has hurt Alberta but has been a “net positive” for Ontario, Quebec and BC. “Lower gasoline prices at the pump means more money in the pockets

SMEs: Overcoming Challenges in Today’s Economy of consumers, more money in the pockets for businesses,” he said. As well, the drop has meant a decline in the loonie’s value, which has made Canadian exporters more competitive.

Finally, lower interest rates have benefited some sectors, like housing and the automotive industry, both of which are booming, Hogue said.

Not all SMEs experience economic trends the same way, he said. Winners and losers exist due to the lower dollar, with exporters benefiting and importers at a disadvantage. “It’s not a homogenous group,” he said. “You have different sets of influences, but there will definitely be opportunities for many SMEs going forward.”

With those current economic trends in mind, fellow panelist Ralf Leitner, CEO of EchoVera, noted that many SMEs share several common challenges, among them a lack of funding, cash flow and sufficient human resources. Yet another main challenge is technology, which he said is changing how SMEs do business and interact with customers. But developments like cloud computing can also offer solutions to those businesses.

“Everyone has heard about the cloud—and everyone has an opinion— but it’s changing the way SMEs do business,” he said. “It now affords them technology that was typically the purvey of the Fortune 500 or 1,000.”

Fellow panelist Riyaz Jessa of Freightcom noted that people can be a big challenge for SMEs. Jessa noted that hiring staff without the proper skills often means paying later to fix

Panelists (l to r): Ralf Leitner, EchoVera; Michael Power, PurchasingB2B; Robert Hogue, RBC; Riyaz Jessa, Freightcom.

mistakes. “It may hurt your pocket at first, but overall it will accelerate your business growth [to hire staff with the right skills]. Look at that as a challenge but also as an opportunity to take yourself away and grow your business,” he told the audience.

While technology is important for SMEs, it’s also important not to “go overboard” with it, Jessa said. Business operators should research whether a technology fits their businesses, rather than trying to fit their business to a particular technology.

Jessa stressed small businesses should stay abreast of their industries.

Those enterprises need to know where the industry is going, remain in touch with their client base and how they’re buying. “Coming to shows like this is critical for SMEs,” he said of National Industry Expo 2015. “When I was building my manufacturing plant, what I realized later on is by not attending shows like this I missed out on great opportunities.”

NationalIndustryExpo.ca 37

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FINANCIAL RESOURCES: Assistance To Grow Your Business

From left: Mike Janke, Fairtax and Ken Hurwitz, Blue Chip Leasing.

W

hile working capital is a constant challenge for many businesses, grants, government funding, tax credits and other incentives exist to help those businesses succeed. Resources are also available to fund the gap between when a business invoices a client and when it gets paid.

Unfortunately, many organizations don’t know about these options and may lack the knowledge, resources and time to access them. To cover these topics, an education session at National Industry Expo 2015 discussed available grants and incentives, as well as business loans.

Several grants exist that manufacturers and other small businesses

can tap into, said panelist Mike Janke, vice-president of FairTax, an organization that helps businesses tap into those grants. For example, one grant, called CME SMART, offered by the Canadian Manufacturers and Exporters Association, gives a grant of $100,000 for businesses that spend $285,000 on new capital equipment, provided certain requirements are met. Another grant—the Export Market Access Program—provides $30,000 to companies that spend up to $60,000 on trade shows in the US. Janke gave another example, called the Export Developer’s Fund, that provides funding to support organizations that hire new staff.

Grants usually have strings attached, Janke noted—but the conditions imposed are manageable.

Essentially, businesses must do with the money what they say they will do. “If you say you’re going to go to a trade show, you actually have to go to the trade show,” he said. “That’s what the strings are, to manage those commitments that you’re making.”

Fellow panelist Ken Hurwitz, senior account executive at Blue Chip Leasing, said his company can provide the remaining funds needed to purchase capital equipment if a business or manufacturer has hasn’t been

approved for 100 per cent of a grant.

Regarding grant conditions, Hurwitz told the audience that equipment bought through grant money must actually be in Canada. “When we’re putting financing into place, the kind of strange questions that I get are ‘Ken, I have a refinery in Illinois that I want to move to Iraq. Can you help finance that?’” As a Canadian lender, his company must be able to retrieve the equipment in the case of default.

The pursuit of grants offers businesses a strategic advantage, Janke said, and businesses would benefit by going after them as aggressively as they do sales. Business owners often don’t have the time for the search, whereas FairTax can devote the time and resources on that business’s behalf. “You should be looking at every opportunity to grow your business, and grants go right to your bottom line,” he noted.

Overall, some clear themes emerged at the inaugural expo.

While it takes time, developing a relationship between buyers and suppliers can yield rewards on both sides. As well, while SMEs experience unique challenges, resources exist to help them achieve their goal of business success.

THANK YOU FOR A SUCCESSFUL INAUGURAL EVENT!

38

DOROTHY JAKOVINA

MICHAEL POWER

DEREK MORRISON

DEBORAH ST. LAWRENCE

Publisher, PurchasingB2B magazine 416-510-6899 djakovina@purchasingb2b.ca

Editor, PurchasingB2B magazine 416-442-5600, x3259 mpower@purchasingb2b.ca

Publisher, FRASERS.com 905-409-6976 dmorrison@frasers.com

District Sales Manager, FRASERS.com 416-319-3227 dstlawrence@frasers.com

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