PurchasingB2B June 2017 by Annex Business Media

JUNE 2017

CANADAâ&#x20AC;&#x2122;S SUPPLY MANAGEMENT MAGAZINE

MAKING A DIFFERENCE LouAnn Birkett shares her passion for a supply chain career

TENDER PRICING SUPPLIER DIVERSITY PROCURECON

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Table of Contents

Vol. 59, No. 3 • JUNE 2017

Features

DIVERSITY FROM THE TOP The CAMSC Diversity Procurement Fair offers supplier diversity insights. 8 THE VALUE OF PARTNERSHIPS ProcureCon Canada addresses innovation and supplier relations. 12 A PASSION FOR TEACHING LouAnne Birkett is one of two recipients of the 2017 SCMA Fellow Award. 14 PROMAT 2017: FROM THE SHOWFLOOR Supply chain trends and solutions at ProMat 2017.

17 EVALUATING TENDER PRICE Price will always anchor the outcomes of contract awards. Also inside

UP FRONT

IN THE FIELD

BUSINESS FRONT

THE LAW

Cover: Joel Robertson

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@PurchasingB2B

Michael Power

Features AT HOME AND ABROAD Experts weigh in on the benefits and challenges of global sourcing. http://bit.ly/2pVtvVy

NEGOTIATIONS Tips for getting the most out of the negotiation process. http://bit.ly/2pYFqRG

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Up Front 80 VALLEYBROOK DRIVE TORONTO, ONTARIO M3B 2S9

www.PurchasingB2B.ca

PUBLISHER/ADVERTISING SALES

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

Where Innovation Lives

hatever other favourable business conditions Canada can boast at home and abroad, apparently we also happen to be known for our lackluster history of innovation. Indeed, it’s been an ongoing issue in this country for a while—in 2013, the Conference Board of Canada noted that we ranked near the bottom regarding innovation, or 13th, among 16 peer countries. And countries that are more innovative than we are surpass us in areas including income per capita, productivity and the quality of their social programs. On top of that, our productivity growth is only about one percent a year. Indeed, the government of Canada has focused attention on this and last year released a report called Canada: A Nation of Innovators that outlined six areas for action it planned to focus on: an entrepreneurial and creative society; global science excellence; world-leading clusters and partnerships; grow companies and accelerate clean growth; compete in a digital world; and ease of doing business. What does all this have to do with procurement? For one, procurement’s role within organizations has developed over the past few decades. Organizations now look to procurement not just as a department that can produce POs, but also for new ideas and ways to not only save cash but potentially to make money as well. Innovation often lies within the cracks and crevices that some people and organizations are prone to overlook. Small- to medium-sized enterprises are often where innovation lives. Due to their size, many of these organizations can be nimble and react quickly to buyer requests or changing circumstances in the marketplace. For its part, procurement is always out there, looking for and meeting suppliers. The department is uniquely poised to tap into these companies, and transfer that innovation along to their own organizations. Procurement professionals would do well to watch for innovation at this grass roots level, which in turn benefits procurement departments, their organizations and Canada as a whole. Best-in-class procurement organizations realize this and are seeking to make their vendors into not just vendors but also strategic partners. By challenging suppliers to bring innovation to the table, procurement is well poised to offer new and horizon-broadening solutions.

EDITOR

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

Brooke Shaw

ACCOUNT COORDINATOR

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

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VICE PRESIDENT/EXECUTIVE PUBLISHER: Tim Dimopoulos 416-510-5100, tdimopoulos@annexweb.com COO: Ted Markle, tmarkle@annexweb.com PRESIDENT & CEO: Mike Fredericks, mfredericks@annexweb.com For over 59 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. PurchasingB2B receives unsolicited materials including letters to the editor, press releases, promotional items and images from time to time. PurchasingB2B, its affiliates and assignees may use, reproduce, publish, re-publish, distribute, store and archive such unsolicited submissions in whole or in part in any form or medium whatsoever, without compensation of any sort. SUBSCRIPTION SERVICES: To subscribe, renew your subscription, or to change your address or information, contact us at 416-510-5713 or 1-866-543-7888, ext 3258, apotal@annexnewcom.ca, or visit us at www.PurchasingB2B.ca. Subscription price per year: $99.95 CDN; Outside Canada per year: $172.95 US; Single issue Canada: $18 CDN. Annual Supply Chain Survey issue, Canada: $45; Outside Canada: $70 US. Taxes extra. From time to time we make our subscription list available to select companies and organizations whose product or service may interest you. If you do not wish your contact information to be made available, please contact us via one of the following methods: Phone: 1-800-668-2374, Fax: 416-442-2200 Mail to: Privacy Officer, 80 Valleybrook Drive, Toronto, ON M3B 2S9 Printed in Canada. ISSN: 1497-1569 (print); 1929-6479 (digital) Publications Mail Agreement No. 40065710 We acknowledge the financial support of the Government of Canada through the Canada Periodical Fund of the Department of Canadian Heritage

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Business Front

If Only They Were Kidding Intrusive labour reforms won’t help Ontario’s economy

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

By Michael Hlinka

he Province of Ontario—Canada’s largest province and where I reside—is contemplating the most sweeping labour reforms in my lifetime, according to reporting from The Toronto Star. Among the proposals on the table are: • Moving the minimum wage from its current $11.40 per hour to $15; • Reducing the hurdles to unionization in “key sectors” of the economy, including cleaning staff and home-care workers; • Forcing employers who are hiring part-time to demonstrate why they are not providing fulltime opportunities; and • Boosting vacation pay from two weeks to three weeks.

ture inevitably leads to lower production at higher prices than would be achieved in competitive markets, which is why we go to great pains to prevent monopolies from forming in the first place—with one exception—and that is labour unions. The bottom line is that our current laws grant labour unions monopoly-status and it’s simply a common-sense proposition that as they exist today, unions are productivity killers. The idea that more of them will help an economy grow and lead to high employment is ludicrous. There are several good reasons why employers hire part-time rather than full-time. One reason surely revolves around benefits: it’s frequently cheaper to employ two people for 20 hours a week than one person for 40. This is good because to the extent that a business keeps its costs down, it means lower prices for consumers. If you force that business to employ one person, not only will there be an increase in unemployment, there will be an inflationary effect at the same time which is understood as stagflation, the worst of all possible economic worlds. Vacation pay is a lie. It’s a lie because “It’s simply a common-sense proposition that as they the adjustment that any business makes exist today, unions are productivity killers.” is to reduce the wages for weeks actually worked to pay for it. Mandatorily Ontario’s Liberal government has held a majority increasing vacation pay from two to three weeks exacerbates the probsince 2003. I point that out as they have had lots of lem. Things like wages, working conditions, and vacation should be time to enact this agenda, but haven’t in the past. It negotiated between employer and employee. There is no reason for seems to me that after the many scandals that have Big Government to stick its nose into business where it doesn’t belong. befallen it over the past 14 years, the party must Of course, there’s a populist appeal to having more time off, but once believe that this is their best hope to achieve success again, the practical implication is less work will be done, meaning that a in the next election and hold on to power, because province whose economy is stagnant, will only get worse. holding on to power is the prime directive for politiIt’s not difficult to predict what the economic impact will be if the cians. It’s clearly not serving the best interests of its proposals on the table go through. Jobs will be lost. A greater percentconstituents, because this is economic hari-kari. age of the working-age population will be unionized, at least short run. In the opening paragraph, I lied. I indicated that Any business that has the choice of operating here or somewhere else the minimum wage is currently $11.40 an hour. The where the rules and restrictions are less onerous will choose somewhere truth is that it’s actually $0.00. If you don’t have a else. And the idea of “vacation” will increasingly become almost a sort job, that’s how much you’re going to get paid! One of of cruel joke, because only people who have well-paying jobs can afford the foreseeable consequences of a $15 an hour minthe luxury of vacationing in the first place. imum wage is that jobs will be lost and hours will The only good news—I suppose—is that these are only proposals. be cut back. We know that lost jobs and fewer hours Nothing has been enacted into law yet. But even the fact that there is a work will mean that real output will be lower, and cohort of politicians who seriously believe that there is something desirit is real output, not a fiction like money, that deterable about this agenda is bad enough. The only way that everyone in mines a community’s standard of living and quality this province gets ahead is when the economy grows. This province’s of life. economy has flat-lined for at least a decade, in no small part because There is general agreement that monopolies are a government is too big and intrusive and making it even bigger and more bad thing. Economic theory tells us that this strucintrusive is not the solution. B2B

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By Michael Power

Diversity From

THE TOP

Photo courtesy of CAMSC

CPO panel offers tips and advice for

running a supplier diversity program

nnovation, growth and technology were among the themes running through the Diversity Procurement Fair 2017 in Toronto last April and hosted by the Canadian Aboriginal and Minority Supplier Council (CAMSC). The fair provides networking and learning opportunities for corporations as well as Aboriginal and minority owned businesses. A panel, sponsored by GM and Ongweoweh and entitled The View from the Top: C-level Supplier Diversity Strategy, offered insights from two procurement executives: Peter Conrod, global head of procurement, enterprise services at RBC and Marcelo Loureiro, head of procurement for the Americas, GSK. The panel discussed supplier diversity targets while providing the audience with tips for developing strategy that ties to those targets. GSK has targets driven primarily by sub-contract targets established with the government, said Loureiro. For each category, the company looks at the potential for diversity spend. Those targets are then part of the overall development of the category strategy, and category leaders incorporate supplier diversity as part of their strategy. For each strategy approval, the company must ensure they not only address targets and outline how those targets are addressed. The company is based in the UK, so no government-enforced mandate exists surrounding supplier diversity. “The reason we do this is not because we have a mandate,” Loureiro said. “It’s much more important than that. It’s the impact that you create in the community. It’s the innovation that you can use the program to bring to your procurement team.” Meanwhile, RBC has an overall corporate social responsibility program, of which engaging diverse suppliers is a part, Conrod noted. The program is not government mandated, so procurement is free to set its own goals. There’s a financial goal based on the dollar amount of spend in any given year with a diverse supplier. RBC asks suppliers and potential suppliers about ownership and if they are registered with organizations like CAMSC. “Through the registration process, we get good clarity around which of our suppliers are minority suppliers,” said Conrod. The bank also sets goals around growth in the number of minority suppliers. GSK operates in several markets, said Loureiro, noting that while his category scope is Americas-centric it takes a global outlook when it comes to supplier diversity. GSK is constantly looking to what’s happening internationally and searching for suppliers that can operate in other markets and therefore help develop those markets further. GSK also looks at Canadian

Peter Conrod (left) of RBC and Marcelo Loureiro of GSK provide insights during the CPO panel at the CAMSC Diversity Procurement Fair.

suppliers they currently do business with to see if there are opportunities for them to mentor other suppliers in different markets, Loureiro said. Innovation The panelists were also asked about innovative processes they’ve established surrounding supplier diversity. Loureiro noted that each time GSK runs an RFP it solicits diverse suppliers to be part of the tender. The company outsources to a third-party to manage its tail spend and works to influence that small spend, so that what’s not in their control can also be funneled to diverse suppliers. RBC has run a mentoring program since 2012, said Conrod. But when the bank realized that the program wasn’t hitting enough people it changed the program and asked category managers to lead sessions involving a group of minority suppliers to see whether they could be given any business. This is the first year that process has taken place, Conrod noted. As well, among other initiatives, the bank plans to focus more on the Aboriginal community. “We’ve embedded that in our existing policies up to now but I think clearly we need to put some additional focus on that,” he said. No supplier diversity program is without challenges, and Loureiro noted that both onboarding and monitoring suppliers requires risk and work, as well as keeping those suppliers qualified to do business with the company. Supplier simplification is therefore important—it’s easy to add new suppliers but not always desirable because it may be difficult to establish controls with those suppliers. “When you have a simplification strategy that’s so aggressive, you have to be very careful so that doesn’t impact your ability to bring in small businesses because that’s where your innovation comes through,” he said. Controls are therefore necessary so that category managers can’t eliminate suppliers without have a backup strategy in place. Clearly, supplier diversity affords several advantages to organizations. By learning about supplier diversity through the operations of other companies and organizations like CAMSC, it’s possible to reap those benefits. B2B PurchasingB2B.ca | June 2017 |

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By Michael Power

The Value Of

PARTNERSHIPS

Speakers at ProcureCon Canada look to vendor partnerships and innovation to drive procurement forward

rocurement, like other areas of life and business, is driven by strong relationships. Procurement professionals looking to develop such relationships with suppliers received no shortage of great advice during this year’s ProcureCon Canada conference, held in Toronto in April. The fourth-annual event saw speakers address procurement’s changing role inside their organizations through themes that included innovation, technology, supplier relations and the future of the profession in the global economy. According to Vitold Horodecki, chief procurement officer, North America with Capgemini, one of the keys to developing those strong relationships with suppliers is to challenge and be challenged—don’t surround yourself with those who will simply agree or toe the line, he told the audience during a discussion called Partner Up: Strategic Sourcing and Supplier Relationships. “If someone is a ‘yes man,’ he’s not a strategic partner,” he said. “We want someone that will say, ‘you guys can do better.’” If a supplier feels that an orga-

nization’s policy is inadequate, it’s better if that supplier expresses their dissatisfaction with it. As in any business relationship, it’s important that both sides—supplier and buyer—are able to make money if that relationship is to be successful. Squeezing a strategic supplier too much can lead to trouble, Horodecki noted. To ensure that happens, there must be healthy and open discussion with a supplier, said Horodecki. It may even benefit the relationship to open the books and share spend, P&L and other financial information. Horodecki cautioned against expecting that a supplier will be able to swallow costs in order to give a buyer the lowest possible price. “They need to make a living,” he said. “If you think that your supplier can survive with no money, then you have no supplier and your supplier will file for bankruptcy pretty quickly.” Innovation through collaboration The theme of using supplier relations to push innovation forward came through during another session at the con-

ference, entitled Prepare For Liftoff: Getting Innovation Off The Ground By Leveraging Supplier Relationships. The multi-member panel looked at themes that included finding innovative suppliers in new markets, encouraging existing suppliers to be a potential source of new products or services and collaborating with startups. The panel outlined several reasons why innovation was important to contemporary procurement and supply chain. The answer depends on what industry a particular procurement professional is in, said Christopher Marko, strategic sourcing and category manager with Shaw Communications. Revenue can erode year over year because customers expect to pay less for more, he said. Marko also encouraged the audience to consider key resource constraints within a given industry. “We’re constantly looking at when we’d move from the technology we’ve adopted today to the next technology that’s coming forward,” he said. His organization works with several

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Image: Dorothy Jakovina

of its key suppliers to identify what they will deploy in the next three to five years. “It’s very important to understand, what are the key constraints in your business,” he said. “I encourage you to look at adjacent industries that are facing similar constraints to the ones you’re facing and look at how they’ve overcome them. And engage your distinct suppliers—set targets for them to help you improve your performance per constraint.”

suppliers make suggestions, the bank tries to have those suppliers limit the proposal to a 12- to 18-month timeframe showing ROI. One of the main constraints on innovation is that it’s hard, noted Marko. Some projects take a long time, the process is messy and they may still fail before they get off the ground. There can also be a lot of testing involved, which can cause anxiety. “Sometimes you’re on this roller coaster ride where the product looks good for a couple of weeks and then, all of a sudden, there are some major challenges,” he said. “One key thing is, you don’t want to bet your business on an untested product so you have to have that long-term view.” While there’s a perception out there that innovation costs a lot of money, panelist Jack Bradley, VP of supply chain and inventory, Strongco, said that perception is false. Many suppliers are out there driving innovation, he said. He also recommended visiting suppliers regularly. “Don’t wait for them to come to you,” he advised. “Get up, off your butt, and go out and see these people. Go to trade shows and conferences and you can learn a lot, but the easiest way to do this is the old fashioned way.” Bradley also stressed the importance of keeping the customer in mind when chasing innovation. Every company has customers—so if you’re going to take something to the boss, ensure that it’s customer-facing. “If you want a quick hit on something that’s innovative, put something

“If someone is a ‘yes man,’ he’s not a strategic partner— we want someone that will say, ‘you guys can do better.’”—Vitold Horodecki Fellow panelist Dimitrios Manolopoulos, senior director, strategic sourcing and IT, National Bank of Canada, said that customers want innovative ways to deal with the bank, which pushes the innovation the bank looks at. At the same time, operational efficiency is an industry metric that banks are measured against. These pressures drive the bank to seek out innovative solutions, he said, and the internal infrastructure must adjust to that. To determine return on investment on innovation, Manolopoulos said that, when existing

in front of your boss that’s customer facing and prove the customer service and you’ll have a better chance of success,” he said. Meanwhile, panelist Ryan Fernandes, director of supply chain at Sun Rich Fresh Foods, stressed the importance of getting as many stakeholders as possible on board before launching an innovation. Whether a sales team, operations or the finance department, everyone in an organization impacts innovation in some way and getting their buy in increases the chances of success, Fernandes said.

Manolopoulos stressed the importance of curiosity in driving innovation, noting that those lacking curiosity won’t know who is out there or who the startups are. As well, when considering partners, the ones that appear like “renegades” are the ones that you want to get close to because they’re the ones looking to to bring change, he said. “The renegades are the ones that are trying to change things, and they may not be following all the procedures but if you get tighter with them you’ll know what the future entails,” Manolopoulos said While procurement has a tendency to look at things from a vendor or category perspective, Manolopoulos recommended viewing things as an ecosystem—from end to end. There are multiple vendors and categories within those ecosystems that can bring new suppliers that organizations can consider because they specialize in certain areas or do things more efficiently. Marko also supported the idea of “guided curiosity,” and recommended challenging vendors with that guided curiosity. Look at disruption and encourage stakeholders to always bring a disruptor to the table, he recommended. “You want to do research into your market space and understand what are the guiding principles that lead to success and then go back to the supplier base and challenge them,” Marko said. Fernandes recommended the audience looking to the RFP—a simple tool that everyone uses—to seek out innovators within an industry. Rather than simply asking a yes-or-no question about whether they consider themselves innovative, present vendors with a problem and let them come back with a solution, Fernandes suggested. “A lot of times you’ll see the innovators in the mix that truly stand out, that don’t give you the generic answers, that have actually taken the time to think it through, that are thinking differently,” he said. Overall, the conference offered a wide range of insights and advice across its five main themes of supplier relationships, the global economy, technology, innovation and developing talent. Those procurement professionals looking to drive value for their organizations would do well to look to improving in all of these areas. B2B PurchasingB2B.ca | June 2017 |

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By Michael Power

Travel And

BIG DATA How information can cut costs and boost traveller satisfaction

ith the rise of technology, there’s more data available than ever, and organizations are taking advantage of this. A recent report on travel trends from Carlson Wagonlit Travel, for example, notes that travel managers now are seeking more data on traveller behavior and program performance, with 58 percent noting they expect having more data to consolidate their program. But the challenge many companies face is deciding what to do with the information once they have it. Data reporting and analytics is now crucial to business. This is as true in the travel management field as in other areas, where information about travellers’ habits, how much they spend and where, can affect everything from safety to stopping rogue spend to the bottom line. Analyzing the data. Effective data analytics can impact an organization’s travel costs and employee satisfaction, says Dan Ruch, founder and CEO of Rocketrip. Organizations are looking to discover what factors affect those costs and traveller behaviour, he says. They’ve also become more strategic about program goals and creative regarding where they source data. “The traditional emphasis on data use in travel management has been for rate negotiation,” he says. “That’s still important, but increasingly companies are looking to analyze more than just what vendors employees are using. Better systems for data capture are producing a more complete overall picture of employees’ 10

spending.” Rocketrip helps to motivate employees to make cost-effective, policy compliant travel spending decisions. Since employees must book through an approved channel to earn rewards, Rocketrip promotes the use of the travel management company and booking tool. The company also provides visibility through receipt forwarding. Identifying patterns within that data makes travel spend more predictable, he says. This predictability can improve a company’s capital allocation. Data can also be used to personalize the travellers’ experience. The information reflects employees’ travel habits and preferences, Ruch says. If employees don’t think the company’s travel program serves their needs, they’ll opt out and make their own arrangements. Meanwhile, intelligent data analysis lets organizations get ahead of the problem. Employees might be overspending and going out-of-policy in some destinations more than others, says Ruch. This shows the company’s policy requirements don’t align with what travellers require in this case. “Reworking spending guidelines or expanding permitted options would give travellers more choice, and bring them back into the cost-effective, managed travel program,” he says. Having data capture through a system like Rocketrip or Concur TripLink means organizations can leverage travel volume during vendor negotiations; employees can utilize affordable options and travel managers can focus on specific areas with leaked spend, Ruch says.

Weeding through all the data to get to what matters starts with knowing what kind of insights each data source can deliver, Ruch notes. Data from travel management companies is very detailed but may not reflect spend outside of official channels, while expense reports rarely have the detail needed to analyze spend in a meaningful way, he says. Data from cards Big data has always had a role with cards, says Steve Pedersen, VP and head of North American corporate card program, BMO Financial Group. Procurement departments and travel managers are always looking to optimize their supplier base, he notes, so getting the data lets them focus on where money is being spent. The information can help them negotiate better terms with a supplier. Travel managers are in a good position to leverage data, Pedersen says. When it comes to corporate travel, people tend to gravitate towards their own bias—for example, with hotels and airlines. A travel manager can use that data to determine if they’re getting the best deal. The data inherent in cards can also be used to track down an employee if they’re not easy to reach for some reason, for example if they’ve been sent to an unstable region and suddenly can’t be contacted by conventional means. Overall, big data and its analysis have the potential to offer insights that can help support a travel program. Travel managers and buyers would do well to take advantage of these possibilities. B2B

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A Passion For

TEACHING LouAnn Birkett is one of two winners of the 2017 SCMA Fellow Award

ach year, the Supply Chain Management Association (SCMA) recognizes those who have contributed to the field. The SCMA Awards of Distinction are presented at the association’s National Conference, held this year in Winnipeg. LouAnn Birkett, CSCMP, was one of two winners of the 2017 SCMA Fellow, the highest honour the association can bestow on its members. Glenn Gray, SCMP, also won the award. Fellows are recognized for demonstrating the highest excellence in supply chain management and dedication to promoting the profession.

How did you get involved in procurement and supply chain? Like many people my age I “fell into it.” I had just graduated from college and my first job was as a secretary to a buyer in a manufacturing firm. After a couple of career moves I found a job in the purchasing department at Delta Faucet of Canada. In 1985 when I had my twin girls, and went back to work after only six weeks off, the position of buyer became available. After going through the interview process I was told that I did not get the job as I had just returned to work from having the twins and the plant manager didn’t feel I could do the job. I decided I would do whatever it took to prove that wrong and started in what was then the PMAC program. I eventually moved up to the position of buyer and I knew it was the career for me. 12

What career highlights stand out, and what do you like most about your job? Although I’ve had many highlights throughout my years in supply chain, there are two that really stand out for me. Number one was getting my first job in public procurement at the Town of Newcastle (now the Municipality of Clarington). I had no public experience and it was a whole new world for me. I was fortunate the Municipality supported me in my professional development and helped me to achieve my CPP designation. Marie Marano, my director, taught me many of the skills that assisted me moving forward in my career and involvement in SCMP. The second highlight is working for the Regional Municipality of Durham. I loved what I was doing at the Municipality of Clarington but was ready for a move and new challenges. This was such a rewarding experience as I had never worked for such a large organization and found it very different than a small one. I got the challenges I was looking for and during the nine-plus years I was there the experience helped me to grow, especially in the area of implementing change and relationship building. The commissioner, Jim Clapp and the director, Mary Simpson were very supportive of me both professionally and in continuing to serve in a volunteer role in the association. Combine this with the best procurement team behind me and I couldn’t fail. Without their support I wouldn’t have

achieved what I have. What I like most about procurement is the change and ability to “make a difference” through contributing to the success of the organization.

What’s your educational background and why is continuing education important? I graduated from community college and then obtained my CSCMP (CPP) designation in 1995. I do not have a university degree—my one regret. I have taken many educational programs ranging from warehousing to project management—anything supply chain related. I believe if you are going to be successful at any career that professional development is important. Too often when we achieve success in a position it is easy to say “I am too busy.” We live in a world of constant change and if we don’t keep up or change with it, the world and the opportunities pass us by.

Why did you earn your SCMP designation? When I had my twin girls and went back to work I realized that if I really wanted to stay in supply chain, I’d to give it 110 percent to be successful. For me, it meant obtaining the designation. I was fortunate to have the support of my family as that decision meant many long hours of being away from home taking courses and studying. Work experience isn’t enough. When you are in a position of hiring you want

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assisting other organizations. I plan to continue both teaching and consulting and have enjoyed being able to pick my own hours of work.

Tell us something about yourself that most people in supply chain wouldnâ&#x20AC;&#x2122;t know. Shortly after I first started with the Municipality of Clarington I decided I was ready to take the CPP Challenge exam. At that time, once you finished the courses you had to write an essay on your organization and do an oral exam. Much to my surprise I had to write the essay twice before it was accepted and my oral exam consisted of many questions about the public sector, which I thought I could bluff my way through. Needless to say failed the exam. I was so disappointed it took me many years to get up enough courage to try it again. When I did finally try again my essay was accepted the first time and I passed the oral.

image Joel Robertson photography

the best and that means a combination of skills, experience and education.

What does receiving the 2017 SCMA Fellow Award mean to you? I am really overwhelmed! I attended my very first SCMA Conference in Winnipeg and have attended for 32 straight years since then. I remember the first time I saw this award presented I was in awe! I honestly never thought it would be something I could achieve nor did I ever set out to achieve it. I do what I do because I love it and know no other way. When I think of those before me that have been awarded this honour I am truly humbled to be included in such a group of professionals.

I would like to thank Dorina Vandramin for believing in me and taking the time to submit an application to nominate for me for this award.

What future plans do you have in the field? I decided many years ago that my passion was teaching others in supply chain so I obtained my certificate in teaching adults. Teaching and mentoring is such a rewarding experience and I continue to learn through those I help. In May of last year I made the difficult decision to retire from the Region of Durham. It was time for me to move on and let others learn and gain the experience I was so fortunate to have obtained. It also allowed me to focus on teaching and

What skills or education will procurement and supply chain professionals require in the future? The focus of the supply chain professional will be to continue to contribute to the strategic direction of organizations and therefore leadership and change management. Customer demands require organizations to react quickly to remain competitive or they will be left behind. Managing relationships will become a more critical skill required in both working with suppliers as well as internal clients. As baby boomers retire our workforce will continue to change. Younger people will demand a rewarding work experience as they will not have the same desire to work for any one organization for as long as my generation did. Lastly, one of the biggest challenges professionals will face is keeping up with technology.

What advice would you give those just starting out, or considering a career in the field? Never give up on your dream. Failure is fine unless you let it beat you. Pick yourself up and learn from the experience. Supply chain is such a rewarding career with many dimensions that allows you to specialize in any aspect you choose. The key is to never stop learning. B2B PurchasingB2B.ca | June 2017 |

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From The

SHOW FLOOR

Supply chain solutions on display at ProMat 2017

he ProMat show in Chicago, April 3-6 offered a look at not only an enormous array of supply chain solutions, but a glimpse at trends like artificial intelligence, automation and smart technologies. Once again, PurchasingB2B attended the show and we’re presenting a roundup below of some of the trends and innovations the show had to offer.

LIFT TRUCKS

CONVEYORS

KION North America has recently released the Linde Series 1279, which is an electric Class I truck with pneumatic tires and a load capacity of 13,000Vincent Halma 17,500lbs. The truck is one of the most compact units in its class, says Vincent Halma, KION North America’s CEO. The company announced five new Linde and Baoli forklifts, including the 1279. Other releases include the Linde Series 1347, an electric, cushion tire truck powered by a 36V or 48V battery. The Linde Series 1219 and 1319 are internal combustion, counterbalanced torque converter trucks. Powered by a Ford 2.5L fuel-injected engine, the 1219 suits outdoor applications and the 1319 suits indoor use. All trucks feature load capacities between 5,000-6,500lbs. The Baoli KBD Series features a Kohler Tier 4 Final diesel engine and load capacities up to 7,000lbs. In terms of innovation, the company is introducing a dual motor drive, which helps steer the front wheels with a sensor that knows which direction the truck is going. “This means a lot more efficient technology,” Halma says. “The customer is going to save about 30 percent in electricity and it means less wear on the tires because the unit doesn’t need to be pushed around.” www.kion-na.com

These days, business is apt to change quickly and adaptability is important for organizations. Global conveyor component Ken Ferguson manufacturer Interroll and Giulio Bassi highlighted its modular conveyor platform at ProMat 2017. The product is interchangeable and adaptable to the needs of the end-user, says Giulio Bassi, marketing manager. “This can handle different configurations, it can also change your conveyor lines at another destination,” he says. The modular conveyor platform can handle speeds up to 3,500 units per hour with the company’s High Performance Divert, and has up to 30 percent in energy savings due to the EC310 24V RollerDrive. It offers reduced cost of ownership due to low maintenance and no pneumatics. And the versatility offered through its conveyors is helping Interroll move organizations towards Industry 4.0, says Ken Ferguson, sales and marketing director – USA. That flexibility is where automation is heading. “We’re versatile in terms of what we can move,” he says. “We’re versatile to all the specifications to all the different industries. And a lot of companies are very specific.” www.interroll.ca

SORTATION With the rise of e-commerce, organizations face fierce competition. Downtime is no longer an option, says Chris Cole, chairman and general manager, Intelligrated. “Your business stops if you can’t make the shipment, but costs don’t,” Cole says. The automated material handling solutions provider debuted its IntelliSort HDS at ProMat 2017, a high-density parcel and e-commerce sortation solution. With a dual-sided design, the solution accommodates a high density of divert destinations in minimal floor space, an ideal solution for zone-skipping applications that pre-sort orders according to destination region before releasing them to last-mile carriers. The sorter can handle cartons, jiffy mailers and polybags with specially designed inductions and discharges. The positive sliding shoe sorting process uses patented flights and can fit a high number of destinations in a small facility footprint. “Contemporary pressures on fulfillment operations squeeze them to deliver orders faster and more cost-effectively,” says Chuck Adams, chief commercial officer and general manager. “Increases in shipping rates and challenges with delivery capacity have driven e-commerce retailers to find ways to manage costs. The addition of IntelliSort HDS to Intelligrated’s broad range of sortation solutions offers another option to reduce shippers’ operating costs and increase speed of delivery.” www.intelligrated.com DIGITAL SIMULATION In manufacturing, time to market counts. From concept development to delivery to the customer, that time to market is critical. Siemens offers both software and hardware that helps products get to market in the least possible

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time and with the least number of errors, says Chintan Patel of Siemens. “Siemens looks at this as an entire, holistic approach,” he says. Chintan Patel The company’s solutions can create a “digital twin” of the process to create what-if scenarios in a virtual world. For a potential digital product, a company can run simulations on that product, applying heat, pressure, stress and other factors. This allows users to see how production will come to life on the factory floor, including what equipment or robots will be needed. By speeding up that virtual world, users can go 10 years into the future with the simulation, Patel says. www.siemens.com SORTING SYSTEMS When it comes to business, expectations are changing. Customers now want goods in just a few days, and to make that work requires either autoMark Diehl mation, plenty of labour or a combination of the two, says Mark Diehl, business development manager with logistics systems provider Beumer Group. And the trend, he says, is towards more and more automation. “It’s definitely higher automation, less labour because of service levels and labour availability,” he says. Through traditional paper-based systems, getting out a certain number of orders might take a about 100 people to do it manually with some help from technology, Diehl said. “With our systems you’d do it with 15 to 20.” The payback comes from savings in labour over the course of a few years. At ProMat 2017, The Beumer Group highlighted several of their sortation and distribution systems, including their fully automated high-performance sorting systems such as cross-belt and tilt-tray sorters. Small and large packages, product trays and products in bags can be sorted in an energy-efficient manner. Courier, post and parcel services and DCs worldwide use their systems. www.beumer.com

VEHICLE MOUNTED TERMINALS Like many other professions, the workforce that uses forklifts is aging. That means, older workers may have trouble seeing the screens of vehicle-mounted termiEric Miller nals, says Eric Miller, CEO of JLT Mobile Computers. Having a screen that older workers can see boosts both user acceptability and productivity, and JLT can help with their mobile computers. JLT highlighted compact VERSO+ 10 mobile computer and JLT1214P forklift computer. Both feature PowerTouch display technology and offer an experience similar to consumer devices, the company says. The screen has a 0.07in. thick, chemically toughened glass cover. The screens are suitable for use with virtual keyboard technology, giving users more flexibility. The screens have an Intel quad-core processor and fast response times. They can also be customized to make certain, heavily used keys bigger, or put them wherever on the screen that a user would like. “It gets back to user acceptance,” says Miller. “Once you have user acceptance, you have the productivity gains you need.” www.jltmobile.com END-TO-END AUTOMATION While people want autonomy no one robot can meet all of a customer’s needs, says Daniel Theobald of Vecna Technologies. Vecna Technologies has Daniel Theobald solutions ranging from fully autonomous robots that can carry a few totes, all the way up to full material handling equipment like pallet jacks, lifters and stackers. The robots all run the same software, can communicate and integrate with each other and can operate seamlessly in the same environment. The company’s task management system can also work with a WMS or manufacturing information system, then assign tasks to robots based on those robot’s capabilities. “It always chooses the best agent in the environment to perform the task it needs to get done at the moment,” Theobald says. As well, all of Vecna Technologies’ robots feature built-in robotic tele-pres-

ence, so users can log into any of the robots to see what’s happening. www.vecna.com 3PL SOFTWARE When a third-party logistics provider has multiple clients’ inventory in a single facility, there can be some confusion and complexity that goes along with Melroy Coelho that. Supply chain network solutions provider HighJump offers a 3PL WMS solution to help simplify the process, says Melroy Coelho of HighJump. There can be complexity when there are different owners with products in the same facility, with challenges revolving around where product goes, ownership of different products, and so on. “We enable them to manage that complexity,” Coelho says. For example, challenges can arise related to billing. Multiple customers in one building can mean billable charges get swept aside and not everything gets charged back to the client. HighJump’s solution allows the 3PL to charge for everything that gets done. The software can create profile or templates, and users can create templates of requirements based on customer requirements. Onboarding customers is fast and the set up time is about 700 hours, Coelho says. www.highjump.com MOBILE TECHNOLOGY Where automation stops, Infinite Peripherals begins, says Mark Uppaluri, head of strategy for the mobile payments company. Humans still Mark Uppaluri must collect and act on data. Infinite Peripherals creates a “sled” that connects to an iOS device. “We then collect data that the iOS device can’t,” Uppaluri says. If an iOS can’t scan a certain type of barcode, for example, Infinite Peripherals will fill the gap and provide that information to the iOS system. And just like in the consumer world, users are looking for a sleeker device that’s smaller and lighter. ipcmobile.com PurchasingB2B.ca | June 2017 |

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CAROUSELS

PACKAGING

The White brand horizontal carousel from Sencorp White is an automated storage and retrieval system that consists of a closed-loop horizontal Chris Lingamfelter track used to hold carriers (bins). Chris Lingamfelter, who was recently named president of White Systems, attended the ProMat 2017 conference to unveil the technologies to the show’s attendees. When activated, the bins can rotate to bring the requested items to the operator. The company’s carousels come with available integrated inventory control software and barcode scanning. The product’s features include picking rates that are up to 950 lines per operator, per hour, which results in savings of 60 percent or more in floor space, reduced errors with a picking accuracy of 99 percent as well as a 70-percent reduction of the required operating man-hours. www.sencorpwhite.com

Signode Industrial Group had 10 brands represented at ProMat 2017 that make up the company’s protective packaging portfolio. Those brands cover the Simona Georgescu supply chain effectively from case erecting through to logistics, says Simona Georgescu, the company’s PR manager. For example, the company’s Little David machine, is a high-speed, high-throughput tape sealer. Further down the supply chain, the company also displayed the Muller’s Octopus 1825 B automatic rotary ring stretch wrapper. The Octopus can accommodate a wide range of pallet load sizes and a variety of applications. While packaging isn’t always top of mind for many within the supply chain, these solutions play an important role in total cost of ownership, stresses Georgescu. “It’s the one piece of the puzzle that’s protecting the upstream value and ensuring the product arrives as intended to its final destination,” she says. www.signodegroup.com

LIFT TRUCK INNOVATIONS The company’s focus over past few years has been innovation and solutions, says David McNeill of Hyster-Yale Group. The company introduced the latest in David McNeill its robotic lift truck lineup at ProMat 2017. The Yale MC10-15 Driven by Balyo is a counterbalanced stacker model capable not only of point-topoint horizontal transportation but also vertical movement. The vehicle can autonomously retrieve or deposit pallets from elevated spaces. The solution can also switch from automatic to manual mode by touching a button, providing additional flexibility, McNeill says. “But that truck can also be operated manually,” he notes. “We can actually put an operator back on it and operate it as if it were a manual-operated piece of equipment.” The stacker uses the same infrastructure-free navigation technology as some other models, and requires no installation of extra infrastructure like wire, magnets or tape. www.hyster-yale.com

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EVALUATING TENDER PRICE Is your price scoring prone to collusion? And unfair?

he cliché that you get what you pay for takes on a dangerous twist when it comes to the evaluation of price in tenders. Price, no matter how you downplay it in these days of ‘innovation procurement’ and ‘best value procurement’, is always a key driver to contract award decisions. Although price may be relegated to a minor percentage in overall evaluation weighting, it is always prudent to the organization to assess the price per quality benefits of the potential purchase. In other words, it’s important to know whether the better product, service or solution is worth paying more for if the potential winning bid does not offer the lowest price. This in effect is the proverbial cost benefit analysis in economics. Regardless of how one weighs price in the ranking of procurement criteria, it will always anchor the outcomes of contract awards. Given that price is such a critical component in the decision making process in tendering, it is surprising that most organizations use what is essentially a single methodology. That methodology can be described as the relative scoring approach (a.k.a. the “lowest price formula”) in evaluating the price component in a tender. The generic formula is shown in Figure 1. The wording commonly seen in rfp’s has the form, “the proposal with the lowest cost receives the maximum points allowed”. All other proposals receive a percentage of the points available based on their relationship to the lowest. Although there are variations around this version, most utilize a comparison against other bidders’ values and in effect, will create the same challenges that will be identified below. FIGURE 1

pricing scorei =

lowest price x (weighing) supplier pricei

where i is to represent the notation of one of many suppliers

The fundamental tenet in the formula is that the lowest price bid receives all (100 percent) of the price scoring points. Other bidders are then allocated points based on the relative ratio of their price against the lowest price submitted. While this is a

simple formula to use the basic theory around it is flawed numerically and is unfair to bidders. Here’s a breakdown of these issues. First, let’s look at an example to illustrate how relative scoring works. Three suppliers are scored in an RFP competition with scores weighted 40 percent for price and 60 percent for technical Table 1). The lowest price formula is used to calculate the pricing scores. Supplier B wins with 76.29 points (note: variance is ignored to focus on the formula). TABLE 1

EXAMPLE SCORING

Supplier

Price

Price Score (40)

Technical Score (60)

Total Score (100)

400

30.00

75.00

350

34.29

76.29

300

40.00

70.00

However, imagine if Supplier D submitted a bid with a price of 200 units and received a technical score of 15. Clearly Supplier D does not have the technical qualities asked within the tender; but it does present the lowest pricing. The resulting scoring changes are shown in Table 2. TABLE 2

EXAMPLE SCORING WITH ADDITIONAL SUPPLIER D

Supplier

Price

Price Score (40)

Technical Score (60)

Total Score (100)

400

20.00

65.00

350

22.86

64.86

300

26.67

56.67

200

40.00

55.00

This time, Supplier A is the winner. The original technical scores for Suppliers A, B and C have not changed. The changes cascade from the fact that Supplier D submitted a bid that has the lowest price. The end result is that although neither PurchasingB2B.ca | June 2017 |

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PUBLIC PROCUREMENT

By Eddy Jin

2017-06-01 2:37 PM

PUBLIC PROCUREMENT

"There are many alternative tools to score pricing other than the lowest price method.”

Supplier A nor B made any changes to their bids, their outcomes have been significantly changed. This is often called a ranking paradox in decision making because you get different results using the same formula and data. Practically, many extreme conclusions can be drawn from this example. First, the principle of fairness dictates that the determination on the outcome of a bid should be based solely on the merits of a bid’s qualities. Its scores should not be influenced by the uncontrollable factors of other bidders. However, as demonstrated in the example, the use of relative price scoring essentially creates an unfair methodology in assessing a bidder’s submission. A supplier’s score is highly influenced by other bids. How is that fair? Secondly, let’s imagine the role of Supplier D’s submission as a “strategic pricing” bid. Supplier A and D could hypothetically work together to craft their bids such that it would provide the outcome that is illustrated in Table 2. The strategy would be for Supplier D to submit a ‘low ball’ price with (probably) bogus technical responses. Supplier D’s bid is submitted purposely to influence the scoring with it’s unrealistic price. Supplier D has no intention of winning the tender. This is a classic example of collusion. And, unfortunately, facilitated by the buying organization’s evaluation process. It’s even more troublesome when you look at the actual mathematics of the formula. In math terms, the formula creates “non-linear calculations”. For a practical explanation, we can use Supplier B’s price score (Table 1) to illustrate the problematic nature of this formula. Its price of 350 is exactly between Supplier A (400) and Supplier C (300). Using the formula, Supplier C receives 40 points (for being the lowest) and Supplier A receives 20 points (for being the highest). Logically, Supplier B should receive 35 points because its price is exactly in the middle and should get the ‘middle’ points. Using the formula, Supplier B scores only 34.29 points. Applying the same logic to Supplier B’s price scoring in Table 2, it should receive 25 points instead of 22.86. What’s obvious, and alarming, is that if Supplier B had actually received 25 points, its resultant overall score would be 67. That would have made it the winner! Supplier B lost points (and the tender) not because of any18

thing it did; nor even what the other suppliers did. It was due to the scoring formula itself. The final concern in the use of relative price scoring is the technical problem in dealing with a zero price submission. In theory, a tender using relative price scoring could receive a zero price bid. This would result in a contract award purely on technical qualifications. That’s because the lowest price is the denominator of relative pricing formulae so the result would be null or zero. In other words, all bidders get a zero score for pricing. As ridiculous as this situation may be, the reality is that tenders need to incorporate rigorous tools to ensure fairness. It’s demanded of suppliers to be exacting with their submissions so the evaluation tools used to assess their submissions should be of the same standard. That would be, at the very least, fair. As a summary, it is important to emphasize the two key messages from the examples described in this article: A) There are loopholes in the use of the relative scoring formula that may be easily exploited by bidders. The recent audit findings of bid rigging at the City of Toronto is a cautionary reminder on the importance of vigilance in re-evaluating, what seemingly are, bullet proof methods. B) Public procurement prides itself in maintaining fairness in its processes so it should be alarming to have demonstrated, albeit inadvertently, the tools used may not always meet that standard. Finally, it’s not the end of the road if you are using relative price scoring. There are many alternative tools to score pricing other than the lowest price method; and they are both fairer and not prone to collusion. Perhaps a good perspective to end with is to note that Portugal outlawed the use of ‘relative scoring’ methods in 2008. We just need to catch up. Stay tuned, as alternatives to relative pricing calculations exist and are forthcoming. B2B Eddy Jin is an international procurement consultant. He can be contacted at eddy@ eddyjin.ca.

| June 2017 | PurchasingB2B.ca

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President’s Corner Michael Zahra, President, Staples Business Advantage Canada During the past year, our reinvention reached a critical milestone; thanks to rapid growth in facilities products, technology, print solutions, and furniture, traditional office supplies are now less than half of what we do. Our growth is no longer just about products. Like IBM and HP did in the past, we are transitioning from being a box moving company to one that delivers integrated product-service solutions that our customers value. The rationale is the same as it has been for expanding our product portfolio—our customers have asked us to do this so they can focus more attention on their own core business. For example, a customer might say, “we’ve got 15 employees who have sore necks from sitting at their desks. Could you send an ergonomics expert in to do an audit?” In response, we will arrange for a certified ergonomist to conduct the audit and deliver a written report, complete with a set of recommendations so they can implement a solution. Whatever the category, we have a product specialist who can work with the customer to test various options, and then deliver the best solution, all within the Staples Business Advantage delivery framework. For us, this is part of a natural evolution. In the early years, our reinvention was about stocking more items in our warehouses. That evolved to working with vendor partners who stock the items on our behalf. Service solutions are a logical extension of this, and to support this initiative, we’ve hired subject-matter experts in key areas, as well as established partnerships with leading service providers. Consequently, we design office spaces, plan and manage direct marketing campaigns, and train groups of employees in CPR, or proper use of a defibrillator. Often, products and services go together. For example, we sell large floor-cleaning machines that you see in shopping malls. Many customers prefer to purchase those bundled with a care package that includes maintenance and other in-field support services. Our service partnerships allow us to provide that, allowing our customers to once again leverage the convenience and single-point accountability that’s so central to our offering. Customers can expect us to make rapid progress here. In the past, if a restaurant was implementing an electronic

system where diners can order from their tables, we might provide 100 iPads. Today, we can deliver the iPads with software fully installed, with training and extended warranty. Soon, we’ll offer turnkey solutions where we actually develop custom apps. So we’ve come a long way from being a box-moving company. The driving force behind this is that our customers are evolving and have an urgent need to consolidate vendors. This is something that I hear constantly from customers. People with procurement responsibilities are busier than ever, and it’s much easier for them to manage a handful of vendors than it is to manage 100. When a vendor is a trusted partner that sticks with them over the long haul, this leads to the kind of synergy that reduces overhead and delivers the best value over the long term. Many people are unaware of how much we’ve changed recently, and we’re urging our customers to re-discover Staples. This year, we’re putting a special focus on the mid-market, and to reinforce this, we have introduced two membership programs—Plus and Premium. Both programs provide special pricing and free services, such as audits and other perks. All this is very exciting for our associates. As we grow, our account managers and product specialists are constantly learning about new products, and increasingly, find themselves collaborating with other lines of business to give customers that singlepoint solution. With all the hard work, we like to have fun. Holidays are a great opportunity for that. We’re very proud to have virtually every race, religion and language represented in our offices. We have celebrations for Chinese New Year, Easter, Passover, Eid al-Fitr, Diwali, Christmas, and Halloween, to name a few, and use it as an opportunity to share the culture with others. It’s a lot of fun, and we’ve had great participation and feedback from our associates. All this helps us create the kind of inclusive teamwork we need to deliver our value proposition. Building bonds across cultures and religions helps us build bonds across departmental silos, and it helps us to see the world from our customers’ perspective. When people understand each other better, they work better together, and that’s really what our company is all about. Staples Business Advantage Advertorial Feature

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EASING the

GROWING PAINS

hen organizations grow rapidly, keeping dayto-day business tasks under control can be a challenge. Kids & Company, a national childcare provider founded in 2002 that now has over 90 locations across Canada and the U.S., is a case in point. With multiple locations being added every year, product selection and purchasing was inconsistent and fragmented. As Linda Starr, Director of Sales and Marketing explains, this was disruptive for people in the local centres as purchasing supplies and office materials is not their core function. “Our core business is childcare,” says Starr, “and that’s where our resources are. We don’t have a large central office. So our directors were getting involved in trying to find the best place to buy things like paper, pens, and soap. But that’s not their job.” Kids & Company got to know Staples Business Advantage at a Chamber of Commerce event in Richmond Hill, Ontario, the location of Kids & Company’s head office. “They said there were some things they could do to help us make our purchasing more consistent, and also consolidate our buying power,” says Starr, “and this included both office products and facilities products.” Today, all purchasing is controlled centrally by a purchasing manager in Richmond Hill, who receives direct support from the Staples Business Advantage team through a dedicated sales representative. This has allowed Kids & Company to establish a centralized purchasing strategy. “We’ve gone from a fragmented approach to a consistent one,” says Starr. One of the keys to the relationship has been Staples Business Advantage’s strong capability in the facilities category, which includes janitorial products, breakroom supplies, and safety and first-aid—all critical to operating a clean and safe childcare environment. Staples Business Advantage now has 30 facilities specialists across Canada, including Matthew Laird, who joined Staples Business Advantage four years ago. Laird employs his facilities knowledge to help the peo-

ple at Kids & Company make the best decisions, some of which aren’t immediately obvious. “If you’re buying paper towel, you can look at the cost of a carton, but you can also look at the cost of drying each pair of hands,” says Laird. “You might be using a 36” sheet of towel to dry your hands, but also might be able to do that with a 20” sheet of towel. That switch will save you 20% on your annual budget.” Trust is key here. “I don’t know what mop to get,” says Starr. “Some may be too expensive and completely out of line for what we need to do. Staples will tell us that we don’t need that expensive mop—maybe there’s one that just came out that’s fantastic and costs a lot less.” Another key has been eway.ca, the Staples Business Advantage online ordering system that gives Kids & Company a convenient platform for controlling the spend centrally. “All the pricing is loaded on their favorites list, and each location places their order at the end of the month,” says Laird. “The system gives them central control of what each daycare can order, and it also allows them to categorize and track costs.” Staples Business Advantage’s next-day delivery is also key for unexpected shortages. “When you do run out, you need to have those cleaning supplies fast, because our guidelines are very stringent in childcare,” says Starr. “So next day shipping is key.” In a nutshell, Staples Business Advantage made the relationship with Kids & Company work by combining the ordering and delivery capabilities of the digital age with the kind of support that can only come from people in the field. “A lot of suppliers are actually cutting back on support,” says Jeff Milton, Director of Facility Supplies for Staples Business Advantage “because they probably see that we’re in an electronic age, and people are ordering online. But we’re actually expanding the number of people we have in the field, because we see that as a competitive advantage. As we see it, people like Matthew are really where the rubber meets the road.” Staples Business Advantage Advertorial Feature

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TAKING AWAY the

DISTRACTIONS WE BUILD PRINTERS

ne of the keys of making things happen in a business is focus. When companies are able to avoid distractions and stick to their core business, it helps them channel their energies towards what matters most—their customers. Staples Business Advantage helps companies achieve this by doing whatever it takes to free them from resource-consuming diversions. The answer here is not just to deliver product—Staples Business Advantage is increasingly providing customers with the expertise and the services that allow them to avoid the resource drain that often occurs when companies acquire and maintain technology, or create and distribute printed materials. Andrew Peller Limited, producer and marketer of familiar wine labels such as Peller Estates, Trius, and Wayne Gretzky, is a case in point. In order to support their business, they distribute significant amounts of printed material, including bills of lad-

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ing, and branded paper napkins that are provided in their tasting rooms and restaurants. When ordered in volume, printed materials take up valuable floor space, and managing them can be a distraction. Sheri McDougall, a buyer for Peller, recently turned to Kim Prangley, her Staples Business Advantage Print Specialist for a better solution to their branded paper napkin program. “What has attracted us to Staples Business Advantage is their ability to warehouse and release as needed,” says McDougall. “Having our real estate freed up for other functions is very important to us. The service, the pricing, and that warehousing component all work very well expand the portfolio. “We’ve partnered with a preferred together, and are very beneficial to us.” supplier for Canada Post for mailing services,” says Knox, Kim Knox, National Director for Technology and Print “So we’re now providing an entire suite of direct mail and Services at Staples Business Advantage, notes that marketing services—anything from addressed direct mail, volume orders don’t have to be a headache for business non-addressed direct mail, postal code drops, invoicing, customers. “At Peller, they really need the floor space for T4 slips and rebate cheques for membership programs.” their wine, which is the core of their business,” says Knox. The message coming from customers is loud and “With us, they can still get a high volume discount, but that clear—many companies don’t want to be juggling cartons doesn’t mean they have to take the product all at once. of printed items, or stuffing envelopes, because that isn’t We can keep it in our warehouse and deliver on demand.” part ofSBA_Ad their Supplement_MRO_2017 core business. Fortunately, Business The key, of course, is responsiveness—McDougall HR_P074_17_QT_ACCO needs final.pdf 1Staples 2017-04-12 2:39 PM Advantage is there to make it happen. to be confident that her stakeholders will get product when they need it. “The people at Staples Business Advantage have been extremely responsive, and helped us with this process immensely,” says McDougall. “Our stakeholders now order napkins directly, and I no longer have to monitor things closely. Staples engages directly with them, and takes on the inventory management aspect. This greatly reduces the time and efRUGGED. fort that I have to put into that.” McDougall has just begun to DEPENDABLE. expand the program to include bills of INNOVATIVE. lading. “Staples Business Advantage had a much more attractive program through pricing and process improvements,” says McDougall. “So that’s why we’re trying to deplete our inventories and transfer things over to them.” Durable construction delivers dependable According to Knox, the rapid growth performance and the yellow in this area is typical of the way the frame of these whiteboards is print services business is expanding. highly visible in manufacturing “We’ve doubled our head count of locales or comparable worksites. print specialists in the past year,” says Knox. Partnerships are also helping

Industrial Magnetic Whiteboards

CMY

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MANAGING facilities when

DETAILS MATTER

eritage buildings have a special place in our cities, reminding us of our past, and reinforcing the character of our downtown areas. Organizations that choose to locate in these buildings, understandably, have high expectations—they expect that the interior of the building will reflect what people see from the street. Larry Swift, Operations Manager of Talia Jevan Properties Inc., manages two heritage buildings in downtown Vancouver, including the prominent * 29737 Mod* Electronic Birks building, which was completed HRT Dispenser in 1906. “We have two of the most • Combine touchless technology beautiful buildings in the city,” says with bacteria-reducing benefits Swift. The buildings, Swift notes, of drying with paper towels are frequently sought out for movie which decreases bacteria on 1 shoots. fingertips by up to 77% Older buildings, however, have their ® • Use compostable Scott and 36034 ® 2 Mod* Slimroll* challenges. Traffic in washrooms, for Kleenex brand towels Towel Dispenser 34830 example, is much higher than it was a Mod* Slimfold* Towel Dispenser century ago, and Swift had begun to look for ways to accommodate larger numbers of people while maintaining the character of the building. As well, he was concerned the company was To learn more, search Mod* Towels at kcprofessional.ca wasting large quantities of paper tow¹ Comparative Hygiene Study on three different hand drying methods: paper towel, els and toilet paper due to outmoded warm air dryer, jet air dryer – UNIVERSITY of WESTMINSTER (November 2008) All Kimberly-Clark Professional* paper towels can be aerobically composted in dispensers. municipal or industrial facilities in the United States and Canada by ASTM D6868-11. ®/* Trademarks of Kimberly-Clark Worldwide, Inc. or its affiliates. Marques déposées While Swift was considering the opde Kimberly-Clark Worldwide, Inc., ou de ses filiales. © KCWW. A15-6181C 04/15 tions from his vendor, a janitorial sup-

They say image is everything. We say performance helps, too.

Mod Towel Dispenser Systems:

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S R

plier, Matthew Priest, Facility Supply Specialist at Staples Business Advantage, dropped by to introduce himself. Swift was already purchasing office supplies from Staples Business Advantage, but wasn’t aware that they had a facilities line of business. “We weren’t aware that they could provide facilities products,” says Swift. “They showed us how they could save us money, and also supply our tenants with better quality product.” What Swift needed, it turned out, was a more compact dispenser solution that would also help to reduce waste. “We were using massive rolls of Grade-B paper towel,” says Swift. “In order to prevent running out during the day, we were replacing rolls that were sometimes half full. So we were wasting about 20% of our product.” Priest introduced Swift to a new line of products from Georgia Pacific that were small and elegant, and used less paper. The solution features smaller 8” wide sheets, and adjustable motion sensors. Swift is now encouraging tenants to use a single sheet, and the motion sensor is helpful—he is able to adjust the time delay so that people will have a moment to think. Toilet paper dispensers were a special challenge. Because the stalls are marble, the existing dispensers were mounted on the stall doors, and as a result, the doors wouldn’t open properly. Priest found a smaller format dispenser, complete with the capacity for a reserve roll, that could attach to the marble stall wall with a single screw. The stalls now look better, and paper utilization is up to around 95%.

“When we got the dispensers off the doors, we got all kinds of comments,” says Swift. Another improvement is that thanks to the combined volume of facilities and office supplies, Swift never pays a delivery charge any more, because his orders invariably exceed the $50 minimum. Swift reports that he is saving thousands of dollars a year on paper alone, providing better product for his tenants, and has less hassle as well. Whenever there is an issue, Priest is on it. “When I email Matthew, I have not had a time when I didn’t get a response on the same day,” says Swift. “Staples Business Advantage is an international corporation,” Swift continues, “and they’ve got a guy taking care of my needs on something as simple as a floor that has a slippery surface. I asked Matthew if he had a product that I could use to make the floor safer for the tenants, and four days later, he walked in the front door with a free sample for me to try out. I cannot tell you how happy we are with them. It’s a phenomenal service.”

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Promoting a BRAND C

ustomer expectations are always important in the highly competitive financial industry, but when customers are also owners, their voice takes on a special significance. Such is the case at the memberowned Servus Credit Union, which serves 59 communities across Alberta. “We have to be accountable to anyone who opens an account with us,” says Servus procurement manager Brenda Dyck, “so we always have to get the best value for members. But it’s not just about money—sustainability and social responsibility are important to us. So it’s a fine line to walk.” When it came to promoting their brand, Servus needed a vendor that understood their organization and their culture, and could deliver branded promotional items, such as apparel and pens, efficiently across their entire organization. “We have more than 100 branches across the province, from Fort McMurray, to Medicine Hat, Crowsnest Pass and Lloydminster” says Dyck. “So we really needed a vendor that could take our distribution needs and run with it.” It’s no secret that Staples Business Advantage has the largest distribution network of its kind in Canada, and was more than ready to take on Servus’s delivery requirements. Few realize, however, that Staples is the largest promotional product company in Canada. “It’s sort of a best-kept secret,” says Hugh Lawson, Director of Business Development, Staples Promotional Products Division. “People don’t realize that we’re doing

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logos and merchandise for 20 of the 100 world’s largest brands. All those valued brands trust Staples to manage their brand merchandise program.” The promo team includes over 150 members across Canada, who provide a full suite of promotional marketing services including creative teams, campaign experts and merchandise specialists. “They have a fantastic team in Alberta that support us locally,” says Dyck, “and it is an amazing relationship. They understand our brand, and they understand our corporate culture. Quite often they comment on our local campaigns. So they are watching the marketplace, checking our website, understanding what’s important to us, and then they will find products that suit us at a given time.” The combination of delivery capabilities and promotional product expertise has made Staples an ideal partner. “Apparel can be an expensive product to hold, and there’s a lot of competition for things like golf shirts” says Dyck, “so we have to make sure the price is right. But Staples also has an arrangement where we don’t have to hold that entire inventory in our on-line store. Instead, we have purchasing events where employees can place orders, and Staples ships directly to them.” One of the aspects of the relationship that Dyck finds most helpful is that the Staples promo team thinks ahead. “When we started looking at providing branded pens, Staples asked us for samples of all of the types of paper we would need the pens to write on. Well, it turned out that this includes thermal paper, so it was a good thing that they checked. It is unusual for vendors to be that proactive.” Another advantage is that Staples keeps track of international trends, helping ensure that promotional items won’t seem old fashioned. “Apparel is fashion, and fashion trends and colors and cuts and styles change every season,” says Dyck. “You don’t want to have old stock sitting when people want the new, fresh look of the season.” Sometimes it takes a very unique item to fill a promotional need. “Our branches wanted something special that they could give away at parades in our communities,” says Dyck. “Staples found us the ring flyer—a flying ring anyone can play with that reinforces the Servus Circle, a key element of our brand. The ring flyer is flexible, so you can toss it around without hurting anybody, the price is great, and it fits perfectly with our brand.” “Promotional products are a very powerful medium,” says Lawson. “They’re much more cost-effective than print and TV advertising, and they have a long shelf life. So, it’s very effective, and it’s something that we’re very good at. So what we try to do with customers like Servus is be another extension of their mandate to make more happen for their business.”

T re

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CREATING

a Beautiful Workspace

s Brittney Valentic, Sales and Marketing Coordinator for appliance distributor Helen of Troy, was preparing for the company’s upcoming move, she received an unexpected call from her Staples Business Advantage Account Manager.

“He asked, ‘Did you know that Staples Business Advantage can supply furniture?” says Valentic. Valentic had no idea Staples Business Advantage is one of the largest office furniture providers in Canada, with a full complement of design, project management and installation services. “I agreed to have a look at their furniture catalogue,” says Valentic. “When he showed it to me, I thought, ‘Wow, there is a lot that could really work for us here.’ ” Valentic was then introduced to John Perrault, Furniture Account Representative for Staples Business Advantage. “We basically went from scratch,” says Valentic. “I told him what I wanted and what my thoughts were, and I gave him a floor plan.” Perrault came back with some configurations to start off, and then scheduled a design session with Staples Business Advantage designer Susan Vallescura to work on details like styling and colours. Valentic had a bold

scheme in mind. “I wanted to bring a more modern, bright, and inviting type of atmosphere to the space. I wanted to make sure that when people walked in, the reaction would be, ‘Wow!’” Vallescura, a design graduate with furniture experience on the client and manufacturer sides, was up for the task. “I’ve got a really good foundation of contract furniture and space planning,” says Vallescura, “and I feel like I have a really good sense of understanding the client’s needs.” When she and Valentic sat down to work, Vallescura had a solid team behind her, a showroom, and strong alliances with the manufacturers. “The interesting thing about this project is the client wanted a lot of colour,” says Perrault, “so there was a lot of focus with the client on fabrics, finishes and colour right at our showroom where we were able to show them exactly what they were getting.” The project had distinctive features. Valentic wanted to avoid the institutional atmosphere some find intimidating. “In the reception area, you feel like you’re sitting in a kitchen—so it has a sort of homey feel,” says Valentic. The boardroom, Valentic’s “pride and joy”, has charcoal walls, a chalk-white conference table, and highbacked chairs in red faux leather vinyl. Workstations are equipped with rolling pedestals stowed under the desks that allow visitors to take a seat. Perrault and Vallescura managed the project from start to finish, ensuring the installation went smoothly and all aspects met expectations “John was great through the whole thing,” says Valentic. “We literally spoke every day. If I had an issue or question, he would be right on it with his team. I can’t say enough how well it went.” Even more important, the people at Helen of Troy and their customers are enjoying their new environment. “It’s beautiful, and we get compliments all the time,” says Valentic.

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SUSTAINABILITY is always

IMPROVING

n September 26, Susan D’Souza, Senior National Manager, Quality, Sustainability & Regulatory at Staples Business Advantage, will address the ASQ (American Society for Quality) Canada Conference 2017 in Ottawa. In her one-hour presentation, she will address one of the hottest topics in sustainability—how to foster a culture of sustainability within your organization? D’Souza, whose background is in chemical engineering, comes with plenty of real-life experience to share with her audience—sustainability has been a central pillar of Staples Business Advantage’s strategy for many years, and today, the company shares their expertise with customers, showing them how to set up their own sustainability programs. Furthermore, D’Souza has worked tirelessly to bring sustainability thinking to the entire organization. “Sustainability is not just a program to us but rather an integral part of our business and values,” notes D’Souza in her covering letter for the company’s 2017 Corporate Social Responsibility (CSR) report. One of the most essential aspects is that sustainability is not a destination—it is a journey that never ends. For example, when it comes to product mix, the merchandising team is always looking for products that have a minimal impact on the environment. “You can look at any product and say, I want to produce this product to have less of an effect on the environment,” says Margaret Blake, Vice President, Merchandising and Purchasing, Staples Business Advantage Canada. “Even a pen. What’s the ink comprised of? Is the barrel made of recyclable plastic?” Currently, 30% of the products Staples Business Advantage carries are either certified by a third-party organization, or meet Staples criteria for sustainability. Category managers who source products are expected to continually move the needle on sustainability. “Every year, we want a higher percentage of our assortment to have those qualities,” says Blake. Sustainability, however, isn’t just about product—it’s also about practicing Continuous

Improvement (CI) in order to drive out waste in the company’s internal business processes. Progress here can only be achieved, D’Souza notes, with the help of employees in the field who work with those processes every day. “Essentially, it’s ‘how do we leverage our associate engagement to drive our sustainability efforts?’” says D’Souza. “There’s waste we can identify in our organizations, but we’ll only move the needle forward if we educate, empower, and engage our associates. Using ISO 14001 and 9001 as guidelines Staples Business Advantage has developed a process where employees can identify wasteful practices, and then design and test solutions to correct them. This begins with a Corrective Action Request (CAR), where the employee in the field identifies a problem such as a lighting system that is wasting energy, or an inefficient layout in a warehouse that is forcing employees to repeatedly backtrack. “You’ve got to tap into the associates,” says D’Souza. “They’re doing the job day in and day out, so they definitely know things that we may not know. They’re the experts.” Once a problem has been identified, the company follows a disciplined, five-step process to find the true root cause of the problem, test the corrective action to ensure that it addresses the root cause, and then standardize the corrected process as a long term solution. Awareness of continuous improvement is spread in the workplace through lunch-and-learns and training for employees directly involved in the ISO certification activities. As well, it is part of onboarding for new employees. “New associates obviously have a fresh set of eyes, so that’s the best time to reach them,” says D’Souza. When it comes to creating a sustainability strategy that leads to real action, Staples Business Advantage has an important message. Hopefully, D’Souza’s audience in Ottawa will be listening.

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BRIDGING the technology

GAP

echnology is everywhere these days, and it’s changing so rapidly that it’s almost impossible to keep track of the options. Consequently, most businesses rely on having trusted partners to guide them through their technology purchasing decisions. Staples Business Advantage now has a long-standing track record of supplying businesses with laptops, monitors, printers, toner cartridges and other technology products. However, as more organizations rely on Staples Business Advantage for timely supply of these items, more are asking for guidance on how to make the best business decisions about technology. Consequently, Staples Business Advantage is strengthening its technology team to provide the guidance that customers need. Furthermore, the company has entered into new partnerships that will allow the delivery of services such as break-fix maintenance, cloud hosting and storage, and training. “We’re moving away from just selling something in a box, to selling all the services that people need to support it,” says Steve Brown, Manager of Technology Products for Staples Business Advantage. “We doubled our technology staff last year, and we expect to double it again this year.” The expertise of the team is key in establishing Staples Business Advantage as a single source technology supplier, capable of managing all the aspects of technology so that people involved with the business don’t have to. This expanded role is a natural extension of the Staples Business Advantage mandate to make more happen for businesses. “If you’ve got a new employee,” says Brown, “we can do everything from supplying them the laptop, the monitor, and all the things they need at their desk, to

meeting their maintenance and support needs, to providing training on Excel, Word, and PowerPoint.” Another rapidly expanding area is managed print services (MPS), where customers engage Staples Business Advantage to procure, maintain, and manage their printers. The entire service is charged on a per-page basis, so customers pay only based on the value they receive, and avoid all hassles of printer management. One organization that depends on Staples Business Advantage for purchasing guidance is Montreal-based HR consultancy, Morneau-Shepell. The company’s manager of technology and administrative services, Nathalie Bernier, is in frequent contact with her Technology Specialist, Martin Dubé. “In a lot of ways, I’m not familiar with IT equipment,” says Bernier. “So when I need advice, I find that Martin knows these things very well. So I know I’m going to get the right answers to my questions, and then be able to make the right decisions.” Often, it’s about finding lower cost alternatives. “If I mention a product that I’ve heard about, he is often aware of something similar, but at a lower cost.” Dubé has the deep technology knowledge that enables him to serve in this advisory role. “I’ve worked in technology since 2001,” says Dubé, who discovered his passion for technology by custom-building his own PCs. “Knowledge is where we differentiate ourselves at Staples Business Advantage. This helps us see our products in the context of what our customers want to do.” “If I have to sum this up in one word, I’d say Martin is a professional at what he does,” says Bernier.

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Save thousands for your business. Get everything your business needs from Staples Business Advantage™—from legal supplies and cleaning products to furniture, technology, and more.

Plus you’ll get access to exclusive discounts and promotions that can save you thousands*.

Visit StaplesPremium.ca to sign up.

*Additional savings on our top products over standard Staples nationally advertised pricing. Standard membership price of $299 CAD. Speak to a Staples Business Advantage representative for complete membership details.

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JUNE 2017

22 NAFA INSTITUTE & EXPO

Highlights from the NAFA 2017 Institute & Expo in Tampa, Florida.

26 CROSSOVERS

A look at what’s new in the world of SUVs and crossovers.

30 LIFECYCLE MANAGEMENT

Tips for successful vehicle lifecycle management.

32 TELEMATICS

A look at trends in the world of telematics.

34 VARIETY AND VALUE

Test drive: The 2017 Chevrolet Cruze hatch.

36 INDUSTRIAL FLEET

A roundup of industrial fleet batteries, tires and more.

Fleet Management is a special section of PurchasingB2B magazine, running in the February, June, August 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.

Ford

Ford F-150 Raptor named best pickup The 2017 Ford F-150 Raptor drove away with top truck honours in the Northwest Outdoor Activity Vehicle of the Year Mudfest. The “Best Pickup” award is based on two days of on-road handling and off-road testing courses driven by 28 members of the Northwest Automotive Press Association at Ridge Motorsports Park in Shelton, Washington. The competition featured 27 crossover and sport utility vehicles vying in six categories, including compact, premium compact, family, premium, pickups and extreme capability. “The pickups category was extremely tough this year,” said Tuan Huynh, NWAPA Mudfest Event Chair, Northwest Automotive Press Association. “Ford F-150 Raptor won the hearts of our members for its prowess both on-road and off over two days of rigorous testing.” The F-150 Raptor was also named Pickup Truck of the Year by FOUR WHEELER and Best Pickup for 2017 by Cars.com, and was honored with the Autotrader Must Test Drive award. Raptor was also named Truck of the Year by Popular Mechanics and AutoGuide.com.

Shell Canada signs fleet card agreement with ATCO Shell Canada has announced an agreement to provide Shell Fleet Navigator Card services to ATCO, a leading global corporation in the structures and logistics, electricity, pipelines and liquids, and retail energy space. ATCO will transition more than 2,500 of its drivers across all of ATCO’s business units in B.C., Alberta, Saskatchewan and Manitoba to the Shell Fleet Navigator Card. “ATCO is a diverse company providing products and services to many different industries,” said Josh Ferguson, national sales manager, commercial fleet, Shell Canada. “We are thrilled to be working with each of their business groups to develop customized programs and ultimately, help streamline ATCO’s fleet operations.” The Shell Fleet Navigator Cards’ online management tool, eTRAC, will enable ATCO’s fleet managers to manage fuel spend and gain important insights to help identify new efficiencies. “We have been fortunate to partner with Shell on a range of projects over the years, and we recognized very quickly the exceptional expertise in fuel management they could bring to bear,” said Sett Policicchio, managing director, shared services with ATCO. “As we continue to drive efficiency throughout our global operations, we have pursued cost-effective solutions that will help automate, streamline and simplify our business - the Shell Fleet Navigator Card does all of those things, and it will play an important role in supporting our fleet operations moving forward.” FLEET MANAGEMENT | PurchasingB2B.ca | June 2017 |

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Dorothy Jakovina

Ford debuts police responder hybrid sedan concept

ARI recognized as one of the best workplaces in Canada

Ford Motor Company unveiled its new hybrid concept police car at the NAFA 2017 Institute & Expo in Tampa in April. The 2019 Ford Police Responder Hybrid Sedan delivers several benefits, Ford said, including potential fuel savings, reduced CO2 emissions and potentially fewer fill-ups, resulting in less downtime. The vehicle has a pursuit mode, which detects aggressive driving and more aggressively charges the battery for maximum performance. The front seats have heavy-duty fabric and slimmer bolsters for comfort when wearing a duty belt. The vehicle also has a lithium-ion hybrid battery that can provide benefits given the unique idling demands of police use, the company said. It’s optimized for local patrol and response and the standard console mounting plate is provided instead of a floor console, allowing for installation of aftermarket equipment and channeling of wiring. There’s an auxiliary power distribution box in the trunk. Purpose-built for police applications, the sedan is projected to deliver 188 total combined system horsepower. The 2019 Ford Police Responder Hybrid Sedan will be available in summer of next year.

ARI, a global fleet services provider, was named among Canada’s Best Workplaces in Canada—Large and Multinational for 2017. Coming in at number 32, this is the first time the company has been named to the list. “We are incredibly proud to be recognized as one of the Best Workplaces in Canada,” said Rick Tousaw, senior vice-president and general manager of ARI Canada. “At ARI, we seek to foster a culture that is supportive, collaborative and based around a sense of family. We invest in our people, and in their development and well-being because at the end of the day, our success as a business is the direct result of their hard work and dedication.” ARI was recognized for fostering open, transparent, twoway communication between the employees and leadership, as well as its intensive on-boarding program and its internship program, designed to thoroughly prepare participants to take on full-time employment at ARI after graduation.

Natural Resources Canada recognizes fuel-efficient vehicles

Toyota

Each year, Natural Resources Canada recognizes the most fuel-efficient new light-duty vehicles sold in Canada. The 2017 winners were announced recently. This year’s winners in the car category Toyota’s Prius made the NRCan list of include: smart fortwo cabriolet; fuel-efficient vehicles. Fiat 500 Hatchback; Ford Fiesta SFE; Toyota Prius c; Toyota Prius; Ford C-MAX Hybrid; Kia Niro FE; Toyota Prius v. Winners in the 2017 light trucks category include: Chevrolet Colorado; GMC Canyon; Ford F-150; Toyota RAV4 Hybrid AWD; Lexus RX 450h AWD; Mazda5; Tesla Model X 75D; Chrysler Pacifica Hybrid. Best-in-class vehicles have the lowest combined fuel consumption rating, based on 55 percent city and 45 percent highway driving. 20

NAFA awards first-ever sustainable fleet certificates The North American Fleet Management Association (NAFA) has graduated its first group of recipients of the sustainable fleet certificate. The recipients received recognition during the association’s annual Institute & Expo in Tampa last April. Launched in April 2017, the Sustainable Fleet Certificate Program was developed through a partnership between NAFA, CALSTART, and NC State University, and is designed to educate fleet professionals in methods to develop sustainable fleet initiatives, providing the tools and skills to help them succeed in their sustainability goals. In order to earn a Sustainable Fleet Certificate, individuals had to attend a full-day training session for which they received a comprehensive study guide. The study guide provided the basis for the course materials, as well as the exam on which individuals were tested. Those who successfully completed the exam at the end of the training session earned a Sustainable Fleet Certificate. NAFA is working to offer the sustainable certificate training in autumn 2017. For information about NAFA’s Sustainable Fleet Accreditation Program and future training events, visit www.nafasustainable.org.

| June 2017 | PurchasingB2B.ca | FLEET MANAGEMENT

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Resale. Safety. Versatility. It adds up. Subaru makes the most sense. Earning your trust... At Subaru, our number one priority is to provide Canadians with vehicles that instill high levels of confidence. Over the past few years, our efforts have earned recognition from customers and third-party organizations alike, which is something that fills us with a definite sense of pride. More importantly, these awards and accolades should make you feel very good about your choice in Subaru.

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2017 3 Subaru models achieved an IIHS Top Safety Pick+:

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 To determine crashworthiness, IIHS rates vehicles good, acceptable, marginal or poor, based on performance in five tests. To qualify for 2017 Top Safety Pick+, a vehicle must earn good ratings in the small overlap front, moderate overlap front, side, roof strength and head restraints tests. Vehicles must also offer, as optional equipment, either forward collision warning and/or autonomous braking system(s) (Subaru EyeSight®), HID headlights and earn an advanced or superior rating for front crash prevention. For more details, visit www.iihs.org. The Insurance Institute of Highway Safety (IIHS) rates models with optional or standard front crash prevention systems as superior, advanced or basic based on the availability of autonomous braking (autobrake) and its effectiveness in 12 mph and 25 mph tests. *ALG is the industry benchmark for residual values and depreciation data, www.alg.com. Based on ALG’s 2017 Residual Value Award. Subaru was awarded the 2017 Residual Value Award for the overall Mainstream Brand 3rd year in a row.

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NAFA Hits The Sunshine State The 2017 NAFA Institute & Expo in Tampa offered a week of education and networking

leet managers are constantly looking for ways to manage the cost of their fleets while simultaneously seeking ways to increase profitability. But it’s becoming more difficult to identify those savings. Most are familiar with identifying the return on investment (ROI) of initiatives, it’s rare for fleet managers to look at the COI, or cost of ignoring. This was the theme of a panel discussion, called ROI versus COI: Finding New Savings to Reduce Fleet Costs, held at the North American Fleet Association’s (NAFA) Institute & Expo, held in Tampa in April. The continent’s largest show for fleet professionals, the annual I&E draws over 1,000 professionals from around the world. The panel looked at several areas— safety, fuel maintenance and productivity—to show the audience how fleets can estimate potential savings in these areas and ensure nothing is overlooked. On the panel were: Colin Sutherland, executive VP, sales and marketing, Geotab; Erin Gilchrist, director of fleet operations, Safelite; and Mike Baessler, fleet manager, Rollins-Orkin. Up first was Sutherland, who discussed how to take a deeper look at the data that’s available, as well as different ways to use that data to increase profitability and cost savings. To start, he noted that ROI is only as good as the culture in a business. For example, realizing a potential savings of $2,000 can be hindered if senior management doesn’t want to make the necessary changes. But there is “hard-and-fast ROI” that fleet managers can pursue, with fuel being among them. “This session is about how to change the discussion within your organization,” Sutherland told the audience. What is fleet’s role in a connected world? The traditional fleet manager’s role is evolving, he said, and there’s a cost of ignoring technology. The telematics world began around 2000 as descriptive analytics, which focused on solving problems by looking at ‘what happened?’ while measuring things like fuel, carbon footprint and output. “It was really just gathering things for the first five or six years,” he said. From 2007 to 2015, the shift was to predictive analytics, which is a maintenance-based approach with the vehicle telling us it needs to be maintained, Sutherland said. This approach asks the 22

The Tampa Convention Center

question ‘what could happen?’ But since 2016, the shift has been towards prescriptive analytics, which looks at the question of ‘what’s the best action?’ As well, the use of big data and connectivity are becoming the norm. “It’s a trend where you’re going to see, without your option it’s going to happen,” Sutherland said. “All of your vehicles and your businesses in the next two to three years will be connected. And you’re going to decide how you’re going to relate to that connection.” The quality of data used in fleet management is also improving, he said. Data will be able shave off 7 percent of mileage from the routes that vehicles drive by navigating vehicles to where they should park rather than just the street address. Sutherland advocated that the audience shift from ‘vehicle thinking’ to ‘lastmile thinking’, whereby fleet managers concentrate on the cost of fuel, safety impact and so on per delivery.

“All of your vehicles and your businesses in the next two to three years will be connected. And you’re going to decide how you’re going to relate to that connection.” —Colin Sutherland The next speaker was Mike Baessler of Rollins-Orkin, who noted that his company started with telematics in 1998. When they began, the company had over 10,000 claims and 33 percent of their vehicles were involved in an accident. As well, 25 percent of the company’s employees were injured and the cost of risk was 7 percent of revenue. But as Rollins-Orkin began using telematics the company saw good results, Baessler said. For example,

| June 2017 | PurchasingB2B.ca | FLEET MANAGEMENT

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only 8 percent of their vehicles were involved in an accident and their total claim costs dropped by 50 percent. The initiative to use telematics has senior management support, added Braessler, noting that reducing and preventing accidents is a high priority for that senior management team. As well, earlier this year the company restarted an idling policy, he said. In that program, if the vehicle idles for 20 minutes and one second, an email gets sent to a branch manager saying the vehicle violated the policy. “We anticipate that we’re going to have somewhere between $285,000-$300,000 in fuel cost savings for the rest of this year,” he said. ROI continues to be a critical topic, said fellow panelist Erin Gilchrist, underscoring the need to be able to define how her company is paying for the technology. At first, paying for telematics through picking low-hanging fruit was easy, Gilchrist said. But after a while, it becomes more of a challenge. “It’s what we’re not measuring and not managing, that’s what keeps me up at night,” she told the audience. “The cost of ignoring, that’s our next ROI.” Telematics has been great for Safelite, Gilchrist said, noting safer drivers, reduced fuel consumption and lower insurance reserves among the advantages. The executive view The I&E fleet management executive panel returned to the stage this year, giving attendees the chance to hear directly from the leaders of major fleet management companies. Panelists touched on trends on the horizon for areas including procurement, sourcing, inventory, sustainability and global expansion. The discussion also covered technology such as autonomous vehicles and connected cars. Dan Frank, president of Wheels, Inc., told the audience that the cost for technology is dropping.

Given the benefits of much of the technology those costs won’t be a problem in the next five years. Another possible hurdle is regulatory issues, which Frank said is less of an issue than people think. The benefits to society—higher productivity, safety, reduced congestion, reduced congestion, to name a few—likely means regulators will work to get such technology running. “I think there are a lot of motivated regulators who are trying to move this forward as fast as they can,” he said. Another potential impediment to autonomous vehicle adoption is societal acceptance, Frank said, citing a statistic that 78 percent of people have reported being uncomfortable with the notion of autonomous vehicles. But people are likely to get more comfortable with such technology as the grow accustomed to it, he added. The panel was asked about challenges and opportunities regarding data management for fleets. Norman Lyle, president of EMKAY Canada, noted several challenges. The first challenge revolves around what data will be available, followed by how to make that data pertinent within fleet management as well as security. “I believe that what we’re witnessing now and for the next five to 10 years, depending on what you’re looking at, is the major convergence of technology in our vehicles,” he said. Technology can now monitor much about not only the vehicle but also the driver, Lyle said. Companies must now figure out not only how to collect that data, but also how to manage the information and set it up so that it’s useful to fleet managers. “The next thing is making sure that data is usable and flexible for different fleets,” he said. “On top of that, the next challenge is making sure that data is secure as well as making sure that the vehicle is secure Chris Conroy, president and CEO of ARI, touched on how to develop new leaders within the industry. One concern is having enough good people, Conroy said. No “fleet management university” exists for fleet employees, so training needs to happen organically. The certification program through NAFA is a “tremendous tool,” he said, and companies can also have programs to develop employees internally. For its part, ARI has its own university that features online training. The company is shifting away from an annual review process to individual development plans for employees, Conroy added. ARI also has a formal mentoring program that allows newer employees to learn from veterans in the field. The company participates in Fortune magazine’s Great Places To Work. “It tells us what we’re doing well as a company, where our weaknesses are and allows us to help modify the behaviour of our employees and our managers,” Conroy said. Kristi Webb, president and CEO, North America, Element Fleet Management, commented on safety technology. Safety applies to everyone’s life whether they’re at work or not, Webb told the audience. Telematics can now yield information about driver behaviour and technology that also gives data about the vehicle, she noted, while analytics and insights can help change driver behaviour. Through the convergence of these factors, tools exist now that can not only save lives but also make fleets “safer, smarter and more productive,” Webb noted. Overall, NAFA’s Institute & Expo provided a rich source of insights and advice for fleet professionals on how to grapple not only with the present but how to embrace the changes and challenges on the horizon. B2B FLEET MANAGEMENT | PurchasingB2B.ca | June 2017 |

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Z R C A Y

For Crossovers Segment gains in popularity

n recent years, the Crossover segment has exploded in popularity. So much so that it has now overtaken the mid-size sedan as the favourite choice among Canadian buyers. Here is a roundup of some of the currently available models.

Mazda CX-5 Mazda is known for style and driving dynamics and the CX-5 is a good example. Handling and sharp steering make it the enthusiast’s choice, and its roomy, stylish interior and top safety rating should please everyone. There are two engine choices: a 155hp 2.0L 4-cylinder mated to either an automatic or six-speed manual; or a 184hp 2.5L 4-cylinder available only with 6-speed automatic. All-wheel drive is available across trim levels. Standard are Mazda’s G-Vectoring control, rearview camera, 7.0” touchscreen, and 17 inch alloys. GS models get a power lift gate, heated steering wheel and front wiper de-icer. Top-spec GT trims add LED fog lights, and heated rear seats.

Mazda

Fiat Chrysler Automobiles

Fiat 500x The Fiat 500x takes the 500’s style and wraps it around a compact SUV. But the 500x offers more space, and available all-wheel drive. There are four trim levels Pop, Sport, Trekking and Lounge. Base Pop trims come with 6-speed manual and a 184hp turbo-charged 4 cylinder—front-wheel drive only. Optional is a 180 hp 2.4L 4-cylinder and 9-speed automatic. All Fiat 500x have seven airbags, air conditioning and remote keyless entry. Top trims have leather seating, rear park assist, backup camera, 6.5” touchscreen, dual pane sunroof, lane departure warning and lane keeping assist, emergency brake assist, wrapped steering wheel, navigation and Sirius XM radio.

Chevrolet Trax Chevy’s tiniest crossover gets a few changes for 2017. The redesigned fascia brings the Trax in line with Chevy’s other SUVs with the same large grille flanked with wider headlights. The rear end receives new taillights and faux skid-plate like rear fascia. Standard are a 7.0” touchscreen with Apple CarPlay and Android Auto, and rearview camera. Upper trims get LED lighting, twin tailpipes, 4G LTE wifi, blind spot monitor, lane departure wanting, rear cross traffic alert and forward collision warning. A turbo-charged 1.4 litre 4 cylinder puts out 138 horsepower through a six-speed auto to the front, or all four wheels depending on trim level. Priced from $19,795 to $32,095. 26

Chevrolet

Nissan

Nissan Juke The Nissan Juke has three trim levels, SV FWD, SV AWD and SL AWD. Base SV models come with 6-speed manual and front-wheel drive, and CVT standard on the other two trims. There’s one engine: a 1.6 litre 4-cylinder with 188hp. Features include push-button start, heated front seats, Bluetooth and backup camera. Upper trim levels get NissanConnect connectivity with Navigation, Around View Monitor with moving object detection, leather seats and Rockford Fosgate audio system. Sporty Nismo models have tuned suspension, 18” wheels, alcantara bucket sets and aerodynamic body kit. Priced from $20,698 to $30,178

| June 2017 | PurchasingB2B.ca | FLEET MANAGEMENT

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Honda HR-V The HR-v debuted last year and is unchanged for 2017. A subcompact, two-row crossover that’s available as a front or all-wheel drive model, the HR-V offers plenty of space. It’s powered by a 141 hp 4-cylinder engine paired with a continuously variable transmission, but FWD models can also choose the six-speed manual. Standard equipment across the three trim levels (LX, EX and EX-L Navi) includes heated front seats, display audio system, rear-view camera, Bluetooth, and 17” alloy wheels. EX and EX-L Navi models get Honda’s LaneWatch Display, and the EX-L Navi is equipped with lane departure and forward collision warning systems. Priced from $21,150 to $29,147.

Honda

Kia

Kia Niro The Niro is a hybrid with a consumption of 4.5L/100 km. Even the base Niro comes loaded with standard features like LED running lights, 16” alloys, heated front seats and steering wheel, 7” touchscreen. The Niro’s powered by a 1.6L four-cylinder engine paired with an electric motor and 1.56 kWh lithium-ion battery for a combined output of 138hp and 195 lb. feet of torque. The hybrid system is mated to a 6-speed dual clutch transmission. Upper trims get Harman Kardon premium audio, steering wheel mounted controls, navigation, wireless streaming, heated and ventilated leather buckets, 10-way adjustable driver’s seat, proximity key. Priced from $24,995 to $32,995.

Subaru Crosstrek Subaru’s entry-level Crosstrek returns for 2017 with a new Limited Edition. The Kazan features Pure Red paint, a black front grille, sunroof, rear spoiler, black exterior badging and unique wheels. Inside there are aluminum pedals and red stitching. Standard are 5-speed transmission, all-wheel-drive, back-up camera, 6.2’ touchscreen, Bluetooth and 17” wheels. Moving up through trim levels adds heated side mirrors and seats, leather seats, colour driver’s information display, and automatic climate control. Options include sunroof, and the EyeSight safety suite. Underhood is a 148 hp 2.0L flat-four engine, mated to either a 5-speed, or CVT. Priced from $26,995 to $34,295.

Subaru

Mitsubishi

Mitsubishi Outlander The Outlander is Mitsubishi’s largest crossover, with three-row seating for up to seven passengers and 1,792 litres of cargo space. For 2017, the Outlander offers all-wheel-drive on even the base model, a refreshed interior, and updated technology including Apple CarPlay and Android Auto. There are two power train choices: a 166 hp 2.4L 4-cylinder mated to a CVT, or a 224 hp 3.0L V6 with a six-speed automatic with paddle shifters. Standard equipment includes ABS, hill start assist, traction control, and electronic stability control. Optional on upper trims are blind spot warning, rear cross traffic alert, lane change assist and forward collision mitigation. Priced from $28,524 to $37,824.

Buick Encore The Buick Encore has a new grille framed by redesigned headlights, LED taillights, chrome exhaust tips and 18-in. wheels. The cabin has a redesigned dash and centre stack, 8-in. touchscreen with Apple CarPlay and Android Auto, and 4G LTE wifi. The engines carry over, a 1.4L 138 hp turbo-charged four-cylinder, or 153 hp 1.4L turbo-four cylinder; both mated to a 6-speed automatic transmission. All-wheel drive is optional. Standard equipment includes Apple CarPlay and Android Auto, 4G LTE wifi, backup camera, satellite radio, Bluetooth, 8-in. touch screen and OnStar. Upper trims feature leather, heated steering wheel and LED headlights. Priced from $23,195 to $34,195.

Buick

Toyota

Toyota C-HR The name stands for “Coupe High Rider”—Toyota’s funky crossover is a front-wheeldrive urban runabout; there’s no all-wheel drive available. The sole power train consists of a 144 hp 2.0 4-cylinder mated to a CVT. Standard equipment includes 6-way adjustable cloth bucket seats, leather-wrapped wheel, Bluetooth, USB port, backup camera and dual-zone climate control. There are only two trims: the XLE and XLE Premium, which adds heated front seats, 8-way adjustable driver’s seat, blind-spot monitoring, rear-cross traffic alert, proximity entry and start. There’s only one option package; twotone paint with white roof and mirror caps. Priced from $24,690 to $26,290.

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New Jeep Compass Jeep’s compact Compass is all-new, inside and out with new engine and transmission, new AWD system and all-new tech features. Power comes from a 2.4L Tigershark 4-cylinder, with 180 hp/175 lb. ft. While front-wheel-drive models get the 6-speed automatic, all-wheel drives come with a new 9-speed auto. There’s a choice of three UConnect touch screens: 5”, 7” or 8.4”—the larger two come with Apple CarPlay and Android Auto. Standard features include seven airbags, premium fog lamps, roof rails, acoustic windshield, lower body cladding, steering wheel mounted cruise control, stability control, electronic roll mitigation, brake assist, hill start assist, tire pressure monitoring system. Options include: heated steering wheel, rear air conditioning, rear USB ports, forward collision warning, LaneSense departure warning plus, blind spot monitoring, backup camera, and rear cross path detection. Priced from $24,900- $34,895.

Jeep

Hyundai

Hyundai Tucson Hyundai’s smallest crossover was completely redesigned last year with more space and smoother ride. The Tucson offers two engines: a 164hp 2.0L 4-cylinder with 6-speed automatic transmission, and a new 175hp turbo-charged 1.6L 4-cylinder mated to a new 7-speed dual-clutch transmission. Either power train is available with all-wheel drive. Standard equipment includes 17” alloys, heated mirrors, air, height adjustable driver’s seat, Bluetooth, rearview camera,USB, cruise control and satellite radio. Upgrades include hands-free power lift gate, leather wrapped wheel, heated leather seats, LED headlights, Navigation, panoramic sunroof, ventilated seats and forward collision warning. Priced from $24,999 to $38,699.

Mercedes Benz GLA Arguably the only true premium CUV in this group, the GLA is Mercedes’ tiniest crossover and based on the CLA Class sedan. Selling well since its recent debut, the GLA receives only minimal changes for 2017. These include new wheels, front and rear bumpers, new fog lights, and LEDs for upper trims. Front wheel drive is standard, with optional AWD. Also standard is an 8” touchscreen, rearview camera, and hands-free power rear hatch. Optional tech includes Apple CarPlay and Android Auto, Dynamic Plus adaptive suspension, Distronic Plus suite of full safety tech. Two engines are available, a 2.0L turbo- four-cylinder with 208 hp and 248 lb. ft of torque, or the AMG GLA 45’s turbo-four cylinder with 375hp and 350 lb. ft., both mated to a 7-speed DCT automatic. Priced from $38,000 - $51,900.

Mercedes

Lesley Wimbush

Ford Escape A perennial leader in Canada’s compact CUV segment, the Escape had dropped to third place in the last couple of years. 2017 brings comprehensive updates that retain most of its popular styling elements, while bumping up the tech, comfort and power. Joining the base 2.5L engine are two new turbo-charged Ecoboost 4-cylinders: a 1.5L putting out 179hp and 177 lb. ft, and a 2.0L with 245 hp and 275 lb. ft. A six-speed automatic is the only transmission choice. The interior has been elevated by the use of more premium materials, and tech takes a leap forward with standard Sync 3 Connect with Apple CarPlay, Android Auto, and a FordPass App that lets you communicate with your car by smartphone. Standard and Start/Stop on all Ecoboost-equipped Escapes. Newly available tech includes adjustable adaptive cruise control, enhanced active park assist, heated steering wheel, pre-collision asset, and HID headlights. Priced from $38,000 to $51,900.

| June 2017 | PurchasingB2B.ca | FLEET MANAGEMENT

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By Kara Kuryllowicz

Fleet Lifecycle

MANAGEMENT Fleets leverage data to optimize lifecycle management strategies

ear to year, companies across Canada are expected to do more with less and as a result, fleets’ ability to manage vehicles’ lifecycle costs by tracking the most relevant data is more important than ever before. Conceptually, fleets acknowledge the importance of lifecycle management, which focuses on optimizing the asset over its usable life. Acquire the asset for the lowest possible cost, sell it for the highest price and maximize the value to the company and its customers in the interim. “Fleets are much more in tune with lifecycle management because their organizations continue to challenge them to do more with less—it’s always been about the numbers because fleet is such a large spend for so many companies,” says Greg Raven, department head, customer experience at ARI, a global fleet provider. Fleet vehicles have to get the job done safely, cost-effectively, efficiently and reliably while also holding their value for remarketing. Fleet customers require cus30

tomized analysis and hands-on expertise to get the most relevant insights into their fleet expenses and lifecycle strategies. Fleet management firms such as ARI and Jim Pattison Lease work closely with fleet managers and even drivers/operators to ensure the vehicles chosen for their various selectors will meet their true needs and that they are getting the best value at resale. “Otherwise, a fleet customer is simply getting a cookie cutter analysis that will never have the desired impact,” says Lana Prokopuik, manager, corporate accounts, Jim Pattison Lease, Burnaby, B.C. “Vehicles should be reviewed by groups such as model year, model and even the area in which the vehicles operate to accurately implement the most productive vehicle with the lowest overall cost.” While vehicles continue to be viewed as a perk, over the past decade, organizations have recognized they need to bring more value to the business. As a work tool, vehicle reliability and durability is a vital selector consideration because downtime can significantly affect the organization’s ability to satisfy its customers and effectively use its own resources. “After taking a hard look at the associ-

ated costs, they may provide a more basic or smaller vehicle that they retain for a longer period while still giving the driver the benefit (perk) of using that vehicle offhours,” says Raven. The fleet experts also pay attention to certain features, for example Bluetooth or integrated dashboards with touchscreens that will make the vehicles more attractive at resale market whether or not they meet with certain company-wide “no in-vehicle electronic communications” policies. “Overall, they increase the vehicles’ appeal at resale and while fleets won’t recoup 100 percent of the various features’ costs, they will gain more than if they didn’t have them at all,” says Raven. For the past several years, certain verticals, for example, the oil and gas industries, have experienced significant downturns and have had to react accordingly. Of course, first and foremost, the vehicles must effectively and efficiently perform the tasks required of them and since it may cost as much to upfit as to acquire, extending the lifecycle is the only way they can recoup their initial investment. “It’s really put the pressure on fleet

| June 2017 | PurchasingB2B.ca | FLEET MANAGEMENT

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managers to mitigate operating costs and they’re relying on the advanced analytics provided by their fleet management providers and their systems to do that,” says Raven. In most standard applications, the vehicles can remain in fleet service for four to five years and still realize a good return when remarketed. Because the economic conditions have been difficult and the resale market has softened slightly, some fleets are considering 12-month lease extensions provided the operating and maintenance costs don’t negate the possible benefits. “The technology in today’s vehicles pushes an extraordinary amount of data that we use to identify and leverage opportunities,” says Raven. “Technology improves the user experience and the vehicle’s usability and reliability, and educates us about the vehicle’s status mid-life cycle.” In-vehicle telematics technology accurately assesses and identifies preventive maintenance schedules based on distances travelled and track driver

“Technology improves the user experience and the vehicle’s usability and reliability, and educates us about the vehicle’s status mid-life cycle.” — Greg Raven behaviour which affects everything from maintenance and operating costs to insurance and training costs. “Telematics really allows us to determine how the drivers are impacting the total cost of ownership, which can include fuel economy, extra stress on the brakes and tires and even the suspension if it’s regularly overloaded,” says Raven. As telematics and the use of such analytics have become increasingly common, drivers recognize the technology improves safety, efficiency and productivity. ARI pushes the data to driver scorecards and identifies the drivers who put themselves, other road users and their vehicles at risk while also having the most significant impact on operating expenses. The information is also used to help change behaviour by ensuring drivers have a vested interested in driving

appropriately and providing additional training to those who would benefit. ARI recommends positive reinforcement that incentivizes those who respect speed limits and the edicts against aggressive driving with positive recognition from management and peers as well as tangible rewards. Aggressive driving is dangerous but it also boosts operating costs and can contribute to the load strain on the engine although it rarely leads to component failure unless it’s habitual. “It starts with a corporate culture that puts safety first—it’s all about getting the drivers home to their loved ones at the end of the day—that’s the overriding factor,” says Raven. “In addition, we’ve seen that when drivers operate their vehicles appropriately, they also tend to take better care of the vehicles.” B2B

PRICE? CHECK. DURABILITY? CHECK. WARRANTY? CHECKMATE. We don’t provide the best warranty in the game because we have to – we do it because we can. An unmatched combination of quality and durability means you can rest assured that you’re making the best decision when you make it a Mitsubishi.

Visit mitsubishi-motors.ca/fleet for more information on how you can add a Mitsubishi to your fleet.

** Whichever comes first. Regular maintenance not included. See dealer or mitsubishi-motors.ca for warranty terms, restrictions and details. Some conditions apply.

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Data Driven

DECISIONS More often, telematics and other solutions collect and analyze large amounts of information

ata is a buzzword these days. Fleet organizations are looking to not only collect relevant data, but also to analyze that data and use it to improve efficiency, safety and other performance metrics. Companies are therefore using telematics to deal with that data. And what a company is looking to do depends on several factors, including the type of fleet, its size and so on, says Maria Sotra, vice-president of marketing with Geotab, an Oakville-based telematics company. For small- to medium-sized fleets, the goal is improving productivity while ensuring customers are satisfied because the driver is on time and providing the right service. “When you get to larger fleets, those goals are more specific and you start getting more into safety and fleet optimization in the sense that you want to reduce fuel costs and continuously find ways to save,” Sotra says. Traditionally, companies focus on ROI, Sotra adds. But COI—cost of ignoring— is also important. Many fleets get telematics, use it for a few years, and do hit targets and save money, she says. But after a while the question is, ‘what else can the technology do for a company?’ “It’s the information that fleet managers aren’t necessarily prioritizing and setting as the goal,” she says. “It’s the cost of ignoring that they really need to set out and think about.” Geotab provides detailed, accurate data, but unless someone analyzes the information it won’t do much good, Sotra says. The company’s resellers provide consultation to help clients do that. Ultimately, that data is one tool in a fleet manager’s toolbox and it’s up to them to 32

decide who’s looking at the information and to develop a program around it. Data as intelligence Data-driven tools can help stop problems before they start. The technology in today’s vehicles has evolved ahead of technicians’ diagnostic abilities, says Tilak Kasturi, CEO of Predii, a predictive repair intelligence company. In fixing a vehicle, a technician historically diagnoses the problem using diagnostic tools and make a decision based on their knowledge. Through what Kasturi calls repair intelligence, the technician can now see a certain vehicle model and year, after a specific number of miles or road time, certain components are more likely to fail. “We could do with 95-percent accuracy that you should actually be paying attention to this (component),” he says. “This alleviates the distress for the customer. You’re actually doing a better job at diagnosing. It’s also the most efficient way, because your labour costs are much more optimized.” Some fleet organizations now understand the power of data. More and more, Kasturi says he hears of finance specialists managing fleets, as the trend is towards a data-driven approach. Its about not just collecting the data, but then managing and leveraging that information to a company’s advantage. “The data is intelligence,” Kasturi says. “When you start to process it, it becomes intelligence. Then (companies) start to think, ‘oh, I should be putting these top 10 components at that particular mileage into my product,” he says. Analytics is one of the top trends cur-

rently in the field, says Bernie Kavanagh, strategic sales and relationship executive, senior vice-president and general manager, large fleet, at WEX Inc. Not only do fleet organizations want data, they’re looking for guidance regarding what to do with that information. “No longer does anybody want reams of information, then to pick through that and find out what’s important to them,” he says. “They want me to tell them what’s important. They want me to analyze the data for them, put it together with other data and give them a solution on how they can maximize their fleet, be more efficient, control costs, whatever it might be.” Wex Inc. provides a fuel card that can provide basic information like what gets bought, where, what it cost and so on. The company can also provide a data set showing, for example, whether an alternative fueling site provides a better deal on gas. That fueling data can be combined with telematics data to, for example, alert a company that a vehicle was at one location while a card was used at another location, showing a discrepancy that company may not be aware of. “So I’m going to give you that data to make a better buying decision,” Kavanagh says. “I’m no longer just going to focus on your information. I’m going to combine it with other information that I have to help you make better decisions.” Telematics and related solutions are moving away from just collecting data towards using it to benefit a fleet organization’s operations. Fleet managers and purchasers would do well to pay attention to this trend and how it can benefit their organizations. B2B

| June 2017 | PurchasingB2B.ca | FLEET MANAGEMENT

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Images: David Miller

The 2017 Chevrolet Cruze hatch

VARIETY added to VALUE By David Miller

ver the past few years, the Chevrolet passenger car lineup has been completely revamped. It was an overhaul long overdue that started with exterior styling, and worked its way in through elevated interior materials and added technology. The retooling has bolstered a plethora of choices that includes the Spark, Cruze, Malibu, Impala and Volt. The sales leader in all of them is the compact Cruze—currently fourth in Canadian passenger car sales, up 21.4 percent from 2016. Chevrolet has done a fine job in building momentum for the second-generation Cruze by releasing the sedan first, during the spring last year, followed by the hatchback variant in the fall. Later this year, a second engine offering in the form of a diesel will continue the story of added versatility to the value-based Cruze. The staggered approach typically 34

does well, and proof has been in the pudding, as the Cruze has leapfrogged the Mazda3 for fourth in Canadian compact car sales, while narrowing the gap to the third place Hyundai Elantra, a perennial top dog. Bold looks By now, many of us have seen the Chevrolet Cruze ad that has “real people” ooh and aah over the faintest thing the host has to say. One of the women describes the Cruze hatch as, “business in the front, party in the back,” and a big chuckle ensues. It’s eye-rolling television, but the hatchback resonates with many in Canada. One doesn’t have to look far as the Cruze hatch instantly enters the market with plenty of competition from Honda, Volkswagen, Mazda, Ford, Toyota, Subaru, Kia and Hyundai. Its sporty and curvaceous tail may be

the finishing touch, but it all starts in the front with a bold, more aggressive and lowered demeanour that features a sharp, two-section grille with chrome surround. It’s swept-back headlights, coupe-like silhouette and stroking body lines provide plenty of character for the Cruze to receive some attention. Outside of eight-inches in overall length, the hatch doesn’t change much from its sedan version, until you hit its C-pillar. That’s when the edgy rear takes effect with wider taillights, a cool-looking spoiler and the addition of 280 litres of trunk cargo space, for a total of 699. My test vehicle was fitted with the RS package, which simply adds cosmetic enhancers. For under $1,000, the Cruze hatch Premier RS received a blackedout front grille with RS badging, the addition of side skirts, fog lamps, a larger rear spoiler and 18-inch aluminum-alloy wheels.

| June 2017 | PurchasingB2B.ca | FLEET MANAGEMENT

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The Premier RS has an optional eight-inch touchscreen and a modernized instrument cluster.

There is a surprisingly ample amount of headroom and legroom in the back for two adults.

Plenty of gadgets on the inside It’s impossible to provide a new Chevrolet review without talking technology. There are plenty of extra add-on packages to choose from ranging from safety technology in the True North Edition to extra comfort in the Technology and Convenience setup, but each Cruze comes standard with a rear view camera, satellite radio, built-in 4G LTE Wi-Fi, OnStar, Apple CarPlay and Android Auto, as well as Teen Driver technology. My Premier RS had the optional eight-inch touchscreen, along with a modernized instrument cluster, and it seemed to elevate the interior experience. There are a few cost-cutting measures, as hard plastics can be found, but that’s understandable given the segment, and Chevrolet does a fine job in at least keeping it fashionable. Fashion can only distract for so long; eventually that turns to comfort and con-

venience. The hatchback’s sloping roofline may feel like a concern for back seat passengers, but surprisingly there’s ample headroom and legroom back there for two adults. Has enough power to get by A diesel is on its way, but for now, this tester was fitted with the one engine option: a turbocharged and direct injecting, 1.4litre four-cylinder that produces 153hp and 177lb.-ft. of torque. The engine is matched to either a six-speed manual or automatic transmission. If you’re choosing between the sedan or hatch, there’s no difference in how this front-wheel-drive performs. Don’t let this sporty hatch setup fool you, it’s more tuned to provide a smooth ride with enough power with help from its ample torque supply. Steering can be a tad slow in responding to your inputs, but it performs those

AS TESTED: 2017 Chevrolet Cruze hatchback Premier RS Price: $25,740 ($20,595 starting price) Engine: 1.4-litre turbo four-cylinder Power: 153 hp, 177 lb.-ft. of torque Transmission: six-speed automatic or six-speed manual (standard) Drivetrain: front-wheel-drive Rated Fuel Economy (L/100 km): City 8.4/ Hwy 6.4 Observed Combined Fuel Economy (L/100 km): 6.8

manoeuvres with decent precision. One of its better attributes comes down to how well its soaks up the bumps and cracks of the road, which can be key in softening the blow during daily commutes. Seamless shifts assist that relaxing ride with only a little road noise seeping in. A start/stop feature that comes with the automatic gearbox assists in its frugal fuel economy numbers. In my drive, I was able to achieve a combined 6.8 L/100 km on mostly highway driving that’s on par, if not better than many of its compact competitors. A premium is paid for the hatch The 2017 Chevrolet Cruze hatch only comes in LT and Premium trims with a starting price of $20,595. That price may seem steep given the $15,995 price tag on the lowest Cruze sedan, made more eye-popping with the bells and whistles in my Premier RS test vehicle that brings it up to $25,740. There’s a price to be paid for the sportier-looking and more versatile hatchback. But if you were hunting for a mid- or toptrim level, the costs aren’t that much more, and it’s surprisingly more refined and technologically-advanced than many in the segment. The hatch will resonate with different people, and it’s nice to see Chevrolet offering up some variety for its customers at a reasonable price. B2B

FLEET MANAGEMENT | PurchasingB2B.ca | June 2017 |

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INDUSTRIAL FLEET

Tires & Batteries Tires, batteries and chargers to help keep your industrial fleet moving

T Trelleborg

From Trelleborg comes the Elite XP resilient tire for forklifts. The tire features the Pit Stop Line wear indicator, which helps users know when to replace the tire, keep forklift downtime low and know the tires are safe. The Elite XP’s square footprint provides stability and greater contact area, reducing uneven wear for a longer tire life. Available compounds include: Standard Black—designed for internal combustion and electric trucks; Non-Marking—a high performance non-marking compound for applications where floor care is essential. Special Compounds—the company’s expertise allows it to offer a wide range of compounds. www.trelleborg.com

Millenium The Vulkollan tire from Millennium offers a high load capacity and is designed for applications with high speeds, long runs and heavy loads. Known in Europe for durability, this high performance elastomer is specifically formulated to resist heat build-up that’s found in harsh environments. For organizations that have demanding applications, Vulkollan can reduce downtime and increase productivity, says Millennium. www.millenniumtire.com

a new technology minimizing internal heat build up and improves durability. The tire features a sidewall design that relieves stresses on the tire edges and reduces ground pressure. Camso has also unveiled the Solideal AIR 550, a new pneumatic industrial tire designed for applications that cannot run on solid tires. Camso has developed this tire with tougher materials, for a more durable product. www.camso.co/en

Image: Whatwolf - Freepik.com

ires and batteries are integral to industrial fleet operations and maintaining them is critical. What follows is a roundup of several industrial fleet products, including batteries, chargers and tires suitable for warehouses, manufacturing and materials handling environments.

Exide Technologies Exide Technologies has released the GNB Marathon FPX Premium Flat Plate battery for motive power applications. The battery suits medium- to heavy-duty industrial use and opportunity charging applications. It has up to 10 percent more active material and a higher paste density suits demanding operating conditions. The Marathon FPX is charged on Inbatec equipment to protect plate integrity and increase performance and cyclelife. It has an improved plate curing process for stronger paste cohesion and increased antimony alloy level. The battery is optimized for acid gravity for lower corrosion and is available through Exide authorized GNBbranded product dealers across North America. www.exide.com

Camso Camso offers several new forklift tire solutions. For example, the Solideal PON 775 is a press-on tire designed for intense applications, launching later in 2017. The tire incorporates 36

| June 2017 | PurchasingB2B.ca | FLEET MANAGEMENT

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INDUSTRIAL FLEET

Power Designers Sibex The new PD LiTHIUM battery from Power Designers Sibex offers an efficient and productive power alternative, with extended run times and excellent charging capabilities. The battery does not contain water or acid, so it solves the lead acid battery problems of cleaning, watering, toxic and hazardous chemicals. It takes up to four hours to charge. In addition, the trucks perform at 100 percent throughout the discharge cycle and can be recharged any time. PD LiTHIUM batteries don’t require cooling down between charging or time for equalization. Powerdesigners.com

AMETEK Prestolite Power AMETEK Prestolite Power offers a wireless battery identification device (WBID) letting operators monitor battery and charger usage through data collection. Data is transmitted wirelessly with ZigBee radio or over DC cables to one data point where it’s available to download from multiple units. Users can review data and customize reports in a graph or spreadsheet, toggling between both views. DataLink3 offers the view of an event or graphic-based report from a fleet’s 30-day overview, or its samplings can be used for a more detailed view. Connectivity range is up to 500ft while mounted in the truck. www.prestolitepower.com.

Delta-Q Technologies Delta-Q Technologies, a provider of battery charging solutions for electric drive vehicles and machines, has released its first lithium-specific battery charger, the ICL1200. The product is a 1200watt charger, designed to charge lithium battery systems with any lithium-ion chemistry. The charger is suitable for any electric machine including scooters, low speed electric vehicles, boom lifts, floor care machines, automated guided vehicles (AGV), and utility vehicles. It uses controller area network (CAN bus) communications and carries a set of global regulatory approvals. The charger has a wide AC input range and operates on any single-phase electrical grid. It has a customizable, field replaceable cable design and can act as both an on- or off-board chargers. The ICL1200 provides an IP66 rating to protect against dirt and fluids and it resists vibration, shock and temperature extremes. https://delta-q.com/ 38

EnerSys Industrial stored energy solutions EnerSys offers the EnForcer IMPAQ and IMPAQ+ modular chargers, providing increased charging capacity with its 8 bay, 28 KW model and the ability to harness the power of two 14 KW chargers in one cabinet. The EnForcer IMPAQ and IMPAQ+ three-phase 8 bay modular chargers offer an output DC voltage of 24/36/48 and 72/80. The 8 bay and 8 bay dual-port modular chargers weigh 197lbs and 203lbs respectively. Charger modules are automatically switched on and off based on charge cycle requirements. EnForcer IMPAQ chargers include a number of charging profiles, from standard flooded and Valve Regulated Lead Acid (VRLA) to cold storage and opportunity charging. EnForcer IMPAQ+ modular chargers use EnerSys IONIC charge profile to diagnose battery condition throughout charging. www.enersys.com

Delta Delta Group, a power and thermal management solutions provider, offers a wireless battery charging system. Delta’s wireless charging systems work with a wide range of industrial vehicles from forklifts to automated guided vehicles (AGVs), covering the applications from 300W to 30kW, and can be designed for any power level. The 30kW wireless system can charge a 600Ahr-48V battery in 60 minutes. The system can be mounted to the wall or floor and comes in a range of power levels. It includes a base-pad connected to a wall-box and on-board unit integrated into the vehicle. The 1kW can charge with a 20mm gap between the base-pad and on-board unit. The system can be programed for any battery. The transmitting and receiving sections communicate via WIFI and communications with the vehicle are via CANBus. www.deltaww.com. Douglas Battery Douglas Battery LegaC2 modular chargers have compact designs. Free-standing or wallmounted, advanced LegaC2 modular chargers are suitable for a wide range of battery capabilitie. They are designed to switch power modules on and off automatically. In case of a minor fault, LegaC2 chargers will bypass it and continue operating at reduced power and the charging process continues. The chargers have efficiency rates as high as 94 percent and consume below 10W in standby mode. www.douglasbattery.com

| June 2017 | PurchasingB2B.ca | FLEET MANAGEMENT

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In the Field

Peak Employment

Will you have a supply chain job in 20 years?

Larry Berglund, SCMP, MBA, is a supply chain management author, manager, business trainer, academic and consultant.

By Larry Berglund

eak Oil is M. King Hubbert’s theory that the maximum volume of oil extraction has been reached. Oil demand may be curbed by innovative energy alternatives coming into the market to mitigate rising oil prices. This author posits that peak employment in Western countries may now be at its apex. Through AI, AGVs, analytical algorithms, autonomous vehicles, blockchain, CAD, CNC, computational statistics, data mining, drones, digitalization, robotics, smart machines, 3D manufacturing, plus unforeseen transformational technologies, employment will continue to fall. We no longer need as many people to produce and deliver goods and services, and this trend will likely increase into the future. The probability of replacing jobs with technology increases for jobs characterized by performing routine tasks or well-defined repetitive procedures. Clerical

as well as people and don’t possess the market intelligence to know that a product launch requires a contractual commitment and working relationship, based on common values, between the parties. Adidas’s speed factories are a paradox, since they require employees to complement robots. Speed factories create and repatriate jobs formerly offshored to lower-cost facilities, which use mass production to achieve economies of scale. Adidas’s speed factory feasibility operations in Germany, for example, proved viable. The company is working to bring a new factory up to production in Atlanta, Georgia in order to make 500,000 pairs of athletic shoes per year. This will create 160 jobs, and Adidas will provide mass customization through its domestic production requirements. This could become a trend in manufacturing: Asian factories are adapting because low-cost labour no longer provides an economic advantage. Manufacturing outsourcing led to chronic unemployment issues in the 1980s and 1990s. US steel mills likely won’t come back or require the levels of employment to meet the production capacity they held decades ago. The Canadian lumber industry also shifted from labour-intensive to capital-intensive. Print newspaper readership is dropping. Every industry has the Supply chain professionals must re-assess our skills so potential to be affected. we remain employed and employable. A 2013 study by Frey and Osborne at Oxford University discusses the susjobs will become redundant. So will medical diagnosceptibility of jobs to computerization. According to the study, there is tic technicians. The site www.replacedbyrobot.info a 50-percent chance that robots will replace the majority of jobs. The ranks library technicians and cargo and freight agents report references the findings of a McKinsey Global Institute survey indias the positions most vulnerable to automation. Some cating that 44 percent of companies that reduced their workforce since jobs, which won’t be completely replaced—such as the financial crisis of 2008 did so through automation. MSN reported teachers, lawyers, consultants, stock brokers and marthat the Apple and Samsung supplier Foxconn replaced 60,000 workers keters—will be directly affected. These positions must through robots. The Japanese company Spread plans to produce 30,000 adapt by leveraging automation to remain relevant. heads of lettuce per day using robots in an indoor farm requiring 50-perSupply chain professionals must re-assess our skills cent less labour and a third less energy. so we remain employed and employable. Purchasing The social and economic impacts of these developments are subject to managers, for example, will need to focus on skills conjecture. While some will adapt, studies indicate that the majority won’t. relating to: emotional intelligence, interpersonal comGovernments creating income guarantees and universal social benefits is munication, negotiation, conflict resolution, leadnot that far-fetched. Business schools, quality standards, manufacturing ership and persuasion. These soft skills that have techniques, engineering disciplines and other forms of Western education received lesser attention in traditional training models and advancement are aimed at efficiencies driving financial benefits. We will become increasingly relevant. haven’t kept pace with the social problems. Procurement is driven to find A purchasing professional will still need to make value for money. Without considering the broader issues related to more judgements on data analysis, but will no longer gather, efficient supply chains, value will continue to be debatable. distill, validate or perform other analytics on the data: In the future, sellers will recognize the need for a large enough cusmachines do it better and cheaper. People’s worth will tomer base to buy machine-built products. Without customers, suppliers be found in their abilities to apply the information. will have to downsize the robots, defeating the original efficiency drive. Machines don’t (yet) understand the political milieu Ironically, procurement will be involved in ordering the robots. B2B 40

| June 2017 | PurchasingB2B.ca

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The Law

Enhanced Consensus Scoring How to use enhanced consensus scoring for fair evaluations

Paul Emanuelli is the general council of the Procurement Law Office.

By Paul Emanuelli

n recent years, group evaluations and consensus scoring have been the subject of numerous successful legal challenges that have exposed serious flaws in the evaluation practices of many purchasing institutions. This article discusses enhanced consensus scoring protocols, which allow evaluation teams to operate efficiently while staying within the bounds of their due diligence duties. Scoping: balancing efficiency and defensibility Enhanced consensus scoring seeks to strike a balance between the mechanical averaging of individual evaluator scores, which forgoes the benefit of any peer review, and the collective group scoring of every evaluation score, which tends to lead to protracted evaluation sessions with questionable end-results. To balance efficiency and defensibility, the objective of enhanced consensus scoring is to set the balance between these two extremes. Enhanced consensus scoring sessions occur after each evaluator is provided sufficient time to conduct an individual evaluation and to record his or her initial evaluation results. Only those scores that fall outside the pre-set variation tolerance are addressed during the consensus scoring sessions. Scores that fall within the pre-established range of variation tolerance are not discussed during consensus scoring and are instead simply averaged. Instead of diluting the limited resources of the evaluation team, one of the main advantages of enhanced consensus scoring is that it focuses the teamâ&#x20AC;&#x2122;s efforts on the areas with the largest divergence in initial scoring since those areas are most likely to contain errors that would impact the ultimate rankings and undermine the fairness of the process. Setting the variation tolerance The variation tolerance should be set before the enhanced consensus scoring session. There is no single formula for variation tolerance since evaluation teams use different scoring ranges between and even within specific RFPs. For example, if evaluators are scoring a category on a one-to-10 scale, the variation tolerance could be set for any scores that are more than three 42

points apart. When using a one-to-five scale, it could be set at any scores that are more than two points apart. Those scores that fall within the acceptable range would be averaged at the end of evaluations and would not be raised for group discussion. Coordinating the enhanced consensus scoring sessions The outlier scores (those falling outside of the variation tolerance) should be identified by the group evaluation moderators (typically procurement advisors who are not members of the evaluation team) prior to the enhanced consensus scoring sessions. Where possible, those items with the greatest range of divergence should be addressed first during the enhanced consensus scoring sessions. This is particularly important in situations where the evaluation group has a finite amount of time allocated to group scoring since this will better ensure that the items of greatest potential impact on the ultimate rankings are addressed by the group within the allocated time. This is less critical in situations where the project team is prepared to allow for additional sessions if all outliers are not addressed in the initial session. Either way, this issue should be addressed prior to the first group session to confirm whether the sessions will be conducted based on: (i) prioritization within a finite amount of time (where the remaining outliers would default to averaging); or (ii) non-prioritized discussion of outliers with the contingency of additional sessions if time runs out before all outliers are discussed. Rules of order for enhanced consensus scoring Enhanced consensus scoring sessions should be conducted in accordance with formal rules of order. They should be presided over by the moderator who chairs the meeting. The moderator should prepare the agenda ahead of time based on a pre-identified summary of outliers. The moderator should brief evaluators before initiating the sessions to clarify these enhanced consensus scoring protocols and confirm other meeting logistics, including how each evaluator will be provided an opportunity to speak to the group before an item is closed. The moderator should also remind evaluators to record the reasons for any revisions to their initial scores as part of their overall individual evaluation records. Once the evaluators have been given the opportunity to record any adjustments to their scores resulting from consensus scoring, either during or shortly after the meeting, the final individual scores are then averaged to arrive at the final overall scores. In summary, by applying enhanced consensus scoring protocols, project teams can streamline their evaluation process while maintaining proper evaluation records. This helps protect the evaluation team from inappropriate interference and protect the ultimate fairness of the evaluation process. B2B

| June 2017 | PurchasingB2B.ca

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