Canada’s magazine for procurement and supply chain management professionals
OCTOBER 2014
2014
PM 40069240 $18.00
ANNUAL SURVEY OF THE CANADIAN SUPPLY CHAIN PROFESSIONAL
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Canada’s magazine for procurement and supply chain management professionals
features 80 VALLEYBROOK DRIVE TORONTO, ONTARIO M3B 2S9
www.PurchasingB2B.ca
PUBLISHER
Dorothy Jakovina 416-510-6899, djakovina@bizinfogroup.ca Addressing issues affecting Canada’s public procurement professionals EDITOR
Michael Power 416-442-5600 ext 3259, mpower@bizinfogroup.ca FLEET MANAGEMENT/CAR EDITOR
Emily Atkins 416-510-5130, eatkins@bizinfogroup.ca ART DIRECTOR
Sandy MacIsaac 416-442-5600 ext 3242, smacisaac@bizinfogroup.ca PRODUCTION MANAGER
Karen Samuels 416-510-5190, ksamuels@bizinfogroup.ca CIRCULATION MANAGER
Barbara Adelt 416-442-5600 x 3546, badelt@bizinfogroup.ca BIG MAGAZINES LP
EXECUTIVE PUBLISHER: Tim Dimopoulos VICE-PRESIDENT OF CANADIAN PUBLISHING: Alex Papanou PRESIDENT OF BUSINESS INFORMATION GROUP: Bruce Creighton For over 56 years, PurchasingB2B has been a trusted source of information for Canadian purchasing/supply chain management professionals in the private and public sectors. Special features and supplements include Fleet Management, Canadian Automotive Review (CAR), PurchasingB2G, and Travel Management Canada. PurchasingB2B is published eight times a year, except for occasional combined, expanded or premium issues which count as two subscription issues, by BIG Magazines LP, a division of Glacier BIG Holdings Company Ltd. © 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 416-442-5600 or 1-866-543-7888, ext 3258, apotal@bizinfogroup.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 E-Mail: jhunter@bizinfogroup.ca 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. 40069240 We acknowledge the financial support of the Government of Canada through the Canada Periodical Fund of the Department of Canadian Heritage
Contents Vol. 56, No. 7 • OCTOBER 2014
10 W HAT ARE YOU WORTH? Results of the 2014 Annual Survey of the Canadian Supply Chain Professional.
29 PROCUREMENT SKILLS A look at the skills the procurement professional needs to succeed.
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31 A ND THE WINNERS ARE... The winners of the CAMSC annual Business Achievement Awards.
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32 SUPPLIER PROFILES A look at some diverse suppliers that may be just right for your business.
also inside
departments 4 Whats New Online 5 Business Front
7 Procurement Profile
16
34 The Law
6 Ask The Expert
19
Salary Expectations
Editorial
A
s always, our October issue features the Annual Survey of the Canadian Supply Chain Professional. Each year, we team with SCMA and sister publications MM&D and Canadian Shipper magazines to ask those in supply chain about salary, job satisfaction, priorities, challenges and more. The survey generates many responses and lots of information. With regards to salary, procurement and supply chain have done better than the Canadian average and remain better-paid field than many. However, 2014 also saw a dip in respondents’ average salaries. Supply chain professionals earned an average of $86,987 this year; down slightly from $87,908 in 2013. At one percent, the difference was slight. So what does this drop mean? Sean Naidu, Hays Procurement, notes the job market has seen fewer jobs available for a large number of candidates. Companies now have a great pool of candidates to choose from and can pick those with less experience—and a lower salary expectation—and train them rather than an experienced person who expects more money. Those with a speciality looking for full-time work may have trouble finding work, and may have to look for something different than what they’ve done in the past, Naidu says. Despite the overall drop, the mean base salary before incentives and bonuses actually went up slightly: $83,534, as opposed to $82,800 last year. So perhaps incentives and bonuses are simply less generous this year? Only after incentives and bonuses are added does the average drop. I’d be interested to know your thoughts on the subject. If you’ve noticed salary fluctuations and have a theory as to why they’ve taken place, email me at mpower@bizinfogroup.ca, or call me at 416-442-5600, ext. 3259. OCTOBER 2014 | 3
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What’s new on
.ca We encourage you to visit us online to stay in touch with what’s happening in your industry! Features www.PurchasingB2B.ca/features
Fleet Management www.purchasingb2b.ca/category/3-fleet/ Check out PurchasingB2B’s homepage for regular Fleet Management updates.
Travel Management Canada For more survey results specifically from PurchasingB2B readers, read our enhanced version online.
http://www.purchasingb2b.ca/category/5-tmc/ A new study from Egencia looks at the attitude and behavior of travellers to their mobile devices.
PurchasingB2G Inclusive Prosperity Summit Brought to you by CAMSC, highlights from this event show the business impact and best practices in implementing supplier diversity.
http://www.purchasingb2b.ca/category/2-purchasingb2g/ The CPPC conference takes place in Montreal, October 27-29. Check us out online for agenda highlights and more!
Upcoming Event State of the Supply Chain Webinar
Submissions
Looking for insight into whether you’re being paid fair market value? Want to hear about your future career prospects? We invite you to join us on Thursday, November 27, 2014 from 12pm-1pm ET for a one-hour webinar presenting the results of the 2014 Annual Survey of the Canadian Supply Chain Professional.
Calling all writers! PurchasingB2B is looking for articles, case studies, blog entries and other contributions from our readers. If you’re looking to connect with colleagues across Canada and flex your creative muscle, email editor Michael Power at mpower@bizinfogroup.ca.
Social Media Follow us on Twitter for industry events, conference highlights and more. (@PurchasingB2B)
Thank you for the photos! Your response was overwhelming, and we would like to extend a special thank you to all readers who submitted photos of Canada. Photos used on the cover as well as inside this issue were submitted by: Cassandra Dorrington, CAMSC Wendy Bonnie, Government of Manitoba Cathy Rodgers, Regional Municipality of Halton Dale Wagler, Hutton Bielmann Design Inc. Louise Wyllie, Canadian Medical Protective Association PurchasingB2B Staff 4 | OCTOBER 2014
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Connect with editor Michael Power and stay up-to-date with what we post online. PurchasingB2B.ca
14-10-15 11:32 AM
Business Front
Inflation, Stealth Style by Michael Hlinka
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here are two key economic indicators that people in positions of power—and by that I mean politicians and central bankers—look at very carefully, and those are unemployment and inflation. Since the so-called financial crisis (I say “so-called” because I believe that what it really signalled was serious structural problems) of 2008-09, unemployment on both sides of the 49th parallel has remained stubbornly high. The latest numbers from Canada suggest that it’s hovering around seven percent while in the US it stands around six percent. As I’ve noted on several occasions, I think that these numbers grossly understate the real unemployment rate: I’d put it around 10 percent in Canada and 12 percent in the US. I suppose that one could say, “Okay, Hlinka, I’d agree that we’re not seeing the labour markets spring back in the manner we would have hoped. But at least there aren’t inflationary pressures.” That is seemingly a fair comment. In North America, we measure inflation with the consumer price index. It has held steadily around two percent in Canada over the past while, slightly below the longer term average of three percent. It’s been even lower in the US over the past three years, bouncing between 1.6 percent and 1.7 percent. This has surprised many people. In addition to governments on both sides of the 49th parallel, running large deficits (the federal deficit in this country understates the true picture because of the province’s spending), both the Bank of Canada and Federal Reserve have pushed short-term interest rates down into uncharted territory. The target for the bank rate—which is the rate at which the major financial institutions can borrow from one another in the overnight market—is one percent, while the Fed Funds rate, the US equivalent, ranges between zero and one-quarter of one percent. For all intents and purposes, money is free, which means that there is a lot of it sloshing around in the system. Therefore, by the simple dynamics of supply and demand, you would think that there would be inflation, wouldn’t you? According to the CPI there isn’t; however there is something else going on right now in North America and I think of it as inflation, stealth style. Years ago, economist Milton Friedman famously said that inflation was always a monetary phenomenon. What he meant was that it only results when there is a shortage of desired goods and services, relative to the money that is there to purchase them. Let’s say that a country produces 100lbs of peanut butter and 100lbs of jam, and each is equally valued. There are $200 in the economy. Doesn’t it stand to reason that the price of both peanut butter and jam would be $1 a pound? Now let’s say that the money supply doubles, but the output remains the same. Isn’t it equally logical that the price of both products will double, along with the money supply? The answer is self-evident. Okay. But what if after the money supply is doubled, people aren’t interested in buying any more peanut butter? They only want jam. It’s common sense that the price of peanut butter would remain where it was, while the price of jam would soar to $3 a pound. If PurchasingB2B.ca
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this simple example makes sense, then we can transport it to today’s world and understand the inflation that is occurring in front of our eyes, that is not being captured by the consumer price index. It’s asset inflation. Housing prices are at an all-time high in this country and what few Canadians realize is that the average price of US homes has surpassed the previous high water mark from 2007-08. Both the Dow Jones Industrial Average and Standard and Poor’s index have been hitting all-time highs virtually every month. While it’s true that commodity prices are well off their peaks, it is equally true that if you look at a slightly longer time horizon—here I’m thinking 10 years—many have appreciated sharply. Gold, for example, has increased at a compounded rate of 11.5 percent in the past decade. And for goodness sake, several months ago two paintings by Andy Warhol sold for $100 million!
“Housing prices are at an all-time high in this country and what few Canadians realize is that the average price of US homes has surpassed the previous high water mark from 2007-08.” What does all this mean? For one thing, it points out how badly those in charge have done in “fixing” the North American economy. By running deficits and slashing interest rates, they’ve been applying bandages when, if I may extend the triage metaphor, the bleeding has been internal all along. We’ve seen a widening in the gap between the have-a-lots and have-a-littles. The jump in housing prices, in particular, will lead to less social mobility than we’ve enjoyed before in this continent. So while the inflation of today isn’t as bad as the inflation of yester-years, it’s not to say it isn’t happening. B2B Toronto-based Michael Hlinka provides business commentary to CBC Radio One and a column syndicated across the CBC network. OCTOBER 2014 | 5
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Ask The Expert
Changing Duties Procurement must deal with changes to the general preferential tariff By Jeff Russell
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ur ability to source globally and acquire low-cost product from low-cost countries will be more difficult in 2015. The Canadian government is revoking the GPT (general preferential tariff) treatment from 72 countries, effective January 1. What does this mean, and how does it impact you as the importer? A critical element when importing is the determination of the country of origin, which is used to identify the duty rates assigned for the product. The wrong tariff treatment could mean paying duty on a product that is actually duty free. It’s the importer’s responsibility to ensure that the proper tariff classification is used. In Canada, there are four country classifications for determining the appropriate duty rate: other (free trade agreements); least developed country tariff (LDCT); general preferential tariff treatment (GPT); and the most favored nation (MFN) treatment.
“Next year, importing will be costlier—higher duty rates mean lower margins and profitability.”
6 | OCTOBER 2014
At the highest level is the “other” category. Basically, Canada signs a free trade agreement with a country or economic unions for beneficial trade. As the classification states “free trade,” products imported from that country get duty free status, provided the proper country of origin determination is submitted at time of import. Canada has a free trade agreement with Chile (CT) and the Cayman Islands (CCCT). Currently, Canada has 13 FTAs, with talks with another 60 countries for future roll out. The next level is the LDCT, or “least developed country tariff treatment”. As the name implies, these are countries that are not as developed economically, or are considered disadvantaged in competing in global trade. Thus, anything imported from these countries is duty free, allowing those products to compete in the Canadian mar-
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ketplace. Burundi, Cambodia, Cape Verde, Central African Republic and Chad are listed as LDCT countries. In total, 50 countries have LDCT status to 50 countries. The third level is the GPT or “general preferential tariff treatment”, allowing products to be imported at preferential tariff treatment levels. This is a form of granting special treatment to a country to allow that country’s products and services to compete in Canada’s market. Depending on the imported products or items, some may be duty free and others may have lower-than-normal duty rates. These countries are more developed than the LDCT countries, but still have disadvantages. China, for example, has this status. The last, most basic level is the MFN or “most favored nation” tariff treatment. This status is granted to countries that are signatories to the World Trade Organization (WTO). All countries are granted MFN status, and it means all countries and their products are treated equally. If Canada lowers the applicable duty rate for a product, it must do so for all countries, whether rich or poor, strong or weak. There is no discrimination. If Canada decides to treat a country differently, it must assign GPT, LDCT status or negotiate a FTA with that country. As stated, effective January 1, 2015, the Canadian government will revoke the GPT status from 72 of 176 countries. These countries have been identified as higher income and trade competitive, so their products and services no longer require special treatment (for a complete list of countries impact, please see customs notice 14-019). All imports from those countries will be treated at the MFN level, which means higher duty rates for products imported after January 1. Imports from China are a concern, since many finished goods are imported from there. For example, if you imported a vacuum cleaner from China with a self-contained electric motor today, the product is duty free. After January 1, the same product carries a 7.5-percent applicable duty rate. If your purchase volume is $1 million, that 7.5 percent is a $75,000-impact to your bottom line. What if your expenditure was $10 million— now you have an impact of $750,000 to the bottom line? Next year, importing will be costlier—higher duty rates mean lower margins and profitability. Is this a cost that can be passed onto the customer or must companies absorb it? Can you negotiate the applied duty rate with the manufacturer so your cost savings negate the cost increases from the higher duty rates? With rising energy cost and labor rates in China, can manufacturers afford a 7.5-percent price reduction on current costs? As procurement professionals, we must develop a new set of strategies, taking into consideration the tariff treatment levels afford to each country, and the new tariff levels assigned. Plan today for tomorrow’s imports to avoid the increases. B2B Jeff Russell, SCMP, CSMP, MCIPS—CIPS, is director of procurement for Crane Supply. PurchasingB2B.ca
14-10-15 11:19 AM
Procurement Profile
No Two Days Alike Warren Sarafinchan, CCLP, vice-president, supply chain/information services, Sun-Rype Products Ltd
How did you get into the procurement/ supply chain field? Ironically, my original career goal was to go into banking. While attending university, I had worked as a forklift driver at a plywood factory and, in my final year of school, applied for a job as a distribution supervisor. Once in the role, I realized that supply chain was an emerging field that had tremendous potential. I haven’t looked back since investing in developing my career in this field. Q: What does a typical workday look like? I can easily say that I do not have two days that look alike. My days include working with our customers, the myriad suppliers we use as well as every function in our business. One of the best parts of working in the supply chain field is you touch all parts of your business everyday so it’s critical to understanding your company’s overall strategy as well as each function.
Q: What do you like most about your job? There are a number of things I enjoy about my role. First, I am always excited to watch the team around me grow and develop in their roles and deliver outstanding results. In addition, I enjoy working with our customers to help them grow and develop their business. Q: What are some of the skills that supply chain professionals need to acquire? The three areas I would encourage supply chain professionals to invest in developing are: • Leadership: Every person in a business has a responsibility to be a leader. It may look different for each role but I believe that leadership is the responsibility of all versus the right of a few. • Financial management: It’s critical to understand how every decision you make impacts the profit and loss statement as well as the balance sheet.
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• Understand how supply chain enables all the functions of the business: It’s important not to have silos in your decisionmaking.
Q: What career highlight stands out the most? It would be difficult to call out one particular highlight. I have had the benefit of working with great people across a number of organizations and my overall career highlight is watching people deliver on initiatives that they potentially did not think they could deliver. It’s very rewarding to watch your team achieve impossible dreams.
Q: What are your future plans? Without a doubt, I am having the time of my life at Sun-Rype. In addition to my responsibilities with the company, I also sit on the board of directors with CITT as well as doing speaking at events across North America. I like to find ways to give back as much as I can. Q: What advice would you give to those considering a career in supply chain? I would strongly encourage those considering careers in supply chain to gain a professional designation. I earned my CCLP designation from CITT in 1995 and I believe this was instrumental in my having the opportunity to take on increasingly senior roles. B2B
7 | MAY 2014
OCTOBER 2014 | 7
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Head Professional Development Directory
CORPORATE ON-SITE TRAINING byline
WHY CHOOSE ON-SITE TRAINING? On-site training offers a variety of benefits to both employers and staff. In addition to cost savings and convenience, on-site training can be customized to meet different business needs. On-site training ensures consistent learning across the board from a single team to an entire organization.
WHY CHOOSE SCMAO TO PROVIDE YOUR TRAINING? Expert Instructors – Our expert instructors are leading supply chain academics and experienced practitioners who have real-world SCM experience. Our Programs – Our programs are designed to enhance skills development, professional competence and strategic perspective of SCM professionals at all levels of career progression from entry, to mid, and executive levels of functional responsibility. Our Reputation – As the leading supply chain association in Ontario, SCMAO has established a reputation for excellence in education and professional training. Over 70% of our corporate training is provided to repeat clients.
For more information on corporate training with SCMAO, please contact Carol Ship Spencer, Director, Education and Professional Programs at 416-977-7566 x2146 or csspencer@scmao.ca.
StatE oF thE Supply Chain WEbinaR
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2014-09-25 4:32 PM
Brought to you by
thursday, november 27, 2014 – 12:00pm-1:00pm Et Looking for insight into whether you’re being paid fair market value? Want to hear about your future career prospects? Learn more about the results from the
2014 Annual Survey of the Canadian Supply Chain Professional.
We invite you to join us on November 27th for a FREE one-hour webinar that will include presentations of the survey results by Michael Power, editor, PurchasingB2B; Julia Kuzeljevich, editor, Canadian Shipper; Emily Atkins, publisher/editor-in-chief, MM&D; and SCMA president and CEO, Cheryl Paradowski, along with commentary from top Canadian HR professionals and recruiters.
2014
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8 | OCTOBER 2014
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Professional Development Directory
The Canadian Public Procurement Council
Our Mission
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The CPPC is the leading voice for professionals involved in public procurement in Canada. Our members are organizations at the federal, provincial/territorial, and municipal levels of government, and in the health care and education sectors and Crown Corporations. • • • •
Promote dialogue and networking; Facilitate information and knowledge exchange; Develop approaches to common issues; Provide Leadership for the resolution of shared challenge. OCTOBER 2014 | 9
14-10-14 4:04 PM
Head
byline
HOLDING STEADY Brought to you by our survey partners:
We’ve once again surveyed the supply chain field to find out how much you’re making, how you feel about your jobs and what challenges you face.
u For nearly 150 years we have been where the growth is, connecting customers to opportunities. Today, HSBC serves businesses in over 60 markets around the world. Whether it is working capital, trade finance or PCM solutions, we provide the tools and expertise that businesses need to thrive. hsbc.ca/business
hile remaining higher than the overall Canadian average, the mean salary for the Canadian supply chain professional dropped in 2014. Supply chain professionals earned an average of $86,987; that’s down just slightly from $87,908 in 2013. In terms of percentage, that difference remained slight at just a one-percent drop. That’s according to the results of the 2014 Annual Survey of the Canadian Supply Chain Professional, conducted on behalf of the industry’s three leading magazines—PurchasingB2B, MM&D a nd Canadian Shipper —a nd t he Supply C ha in Management Association of Canada (SCMA). This year, 1,509 people across the country responded to the survey. The statistics are considered accurate +/-2.1 percent, 19 times out of 20. As in past years, the survey asked about factors such as type of position, sex, age, job satisfaction, education and geographic location. In addition to broader topics, each year the survey emphasizes a particular issue, with this year’s focus on the public sector. The survey also provides a breakout of responses from readers of each magazine. The mean salary in 2014 of PurchasingB2B readers was $80,164, before taxes and other deductions but excluding bonuses and other incentives—that’s an 8.1-percent difference compared to the overall average. But the amount jumps to $84,679 when bonuses are included. However, despite the overall drop, the average gross base salary (before taxes and other deductions) went up from $82,800 in 2013 to $83,524 this year. But when bonuses and incentives are added, the average comes in at $86,967 as compared to last year’s $87,908. And while the average reported salary dropped, the percentage of those who say there are more jobs in supply chain compared to five years ago remains the same as 2013 at 65 percent. while 11 percent say fewer jobs as compared to five years ago. The majority of respondents also noted that they had seen an increase in their pay. Overall, 65 percent reported getting an increase to their base salary this year, as opposed to just three percent who had seen a decrease. Another 31 percent answered
u As the leading and largest association in Canada for professionals in supply chain management, the Supply Chain Management Association (SCMA) is the national voice for advancing and promoting the profession. SCMA strives to ensure that employers recognize the critical contribution that SCM professionals make to the success of their organizations. SCMA sets the standard of excellence for professional skills, knowledge and integrity. With nearly 8000 members working across the private and public sectors, SCMA is the principal source of supply chain training, education and professional development in the country. www.scmanational.ca 10 | OCTOBER 2014
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Men and Women
Male supply chain professionals report higher overall salaries than female, with men earning $92,276 as compared to $78,819 for women. That difference remains as supply chain professionals gain experience. Men with over 31 years of experience earned $107,542 as compared to women at $96,225. As well, men with between 16 and 20 years of experience pulled down $93,771 while women earned $82,620. Men with five years or less experience earned $68,508 and women earned $60,647.
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Manitoba/ Alberta Saskatchewan
British Columbia
Region
MEAN SALARY BY GENDER Gender by 5-year–overview 100,000
Mean Salary ($)
90,000
80,000
71,000
60,000
Male Female Average
2010
2011
2012
2013
2014
Year
Your average
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survey respondent works 43.7 hours per week and has 18.5 years’ experience in the field, 10.5 years at their present company and seven years in their current job.
Salary by Region
MEAN SALARY – BY REGION 120,000 100,000
Mean Salary ($)
that their base salary remained the same. If PurchasingB2B readers are isolated, 56 percent saw a salary increase while six percent saw a decrease. Meanwhile, 36 percent of our readers saw their salary stay the same. Among those who got an increase, 32 percent had received two percent or less, while 40 percent had received an increase of between 2.1 and four percent. Another 11 percent had gotten a raise of between 4.1 and six percent while seven percent saw an increase of between 6.1 and 10 percent. The remaining nine percent saw an increase of 10.1 percent or greater. The majority of respondents remained hopeful of future raises, with 67 percent saying they expected a salary increase next year and 33 percent anticipating no such increase. The typical respondent is 45.2 years old and works an average of 44 hours per week (down slightly from 44.3 hours per week in 2013). A total of 58 percent of respondents are male— and 39 percent female—with an average of 16.8 years of supply chain experience. Overall, 95 percent of respondents work fulltime in supply chain. On average, that experience includes 8.7 years at their present company and 5.8 years at their current job. A total of 33 percent have a university degree as the highest level of education. They personally have an estimated average sourcing volume of $25.3 million, while their department’s supply chain budget is $135 million. Overall, 80 percent of respondents have procurement responsibilities other than for transportation while $25.3 million is the mean amount of annual sourcing volume personally placed by respondents with those procurement responsibilities. The annual sourcing volume placed by their department is $63.9 million, while the average supply chain budget of their department is $135 million. As well, 50 percent said their organization’s total revenue was over $100 million. Your average PurchasingB2B respondent works 43.7 hours per week and has 18.5 years’ experience in the field, 10.5 years at their present company and seven years in their current job. They supervise 3.6 people, and 89 percent of them have procurement responsibilities outside of transportation (with nine percent saying that they did not). The estimated average personal sourcing volume is $21.4 million and their departments’ supply chain budget is $123 million. Similar to surveys of past years, the type of position supply chain professionals hold affects salary levels. Executives earn the highest salaries in the field, with the average pay at $141,813. Next were consultants, who earned $102,461 followed by managerial staff, who earned $99,462. Supervisors pulled down $85,690 and those in engineering/professional positions made an average of $83,434. The “other” category saw an average salary of $82,322, while operations/tactical earned an average of $70,261.
Atlantic Quebec Ontario
Mean Salary 2012 Mean Salary 2013 Mean Salary 2014
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Atlantic Quebec Ontario
Manitoba/ Alberta Saskatchewan
British Columbia
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Head That story has been similar in past years, for example with men with 31 or more years of experience earning $110,181 in 2013 and women with the same experience getting $92,515. Men with 16 to 20 years of experience that same year took home $93,238 and women respondents’ average salary at $82,866. However, when men’s and women’s salaries are compared between 2013 and 2014, men saw their average earnings drop from $94,492 to $92,276. Women, on the other hand, saw salaries increase from $77,842 last year to $78,819 in 2014.
byline
Regional differences
AVERAGE SALARY BY TYPE OF POSITION POSITION 2011 2012 2013 Executive $140,000 $142,322 $139,747 Supervisor $76,200 $75,890 $83,025 Managerial $93,300 $95,389 $98,656 Consultant $86,400 $85,596 $106,601 Engineering/ $80,400 $83,047 $87,815 professional Operations/Tactical $67,700 $63,082 $68,859 Clerical/admin $54,000 $55,905 $57,997 $68,863 $76,413 Other $77,000 Overall Average
$82,800
$85,178
$88,770
2014
PB2B Respondents $141,813 $127,750 $85,690 $79,296 $99,462 $91,452 $102,461 $84,937 $83,434 $79,938 $70,261 $72,209 $56,479 $62,138 $82,322 $75,007 $89,805 $87,618
In 2014
men reported earning $92,276 as compared
to the $78,819 reported by women. That difference remains as supply chain professionals gain in experience.
Supply chain professionals in Alberta earned the highest salaries of any region in the country, although that amount dropped slightly in 2014. Those in that province earned $98,109—as compared to $103,049 in 2013—for a 4.7-percent decrease. The next highest amount went to Ontario at $85,612, up just slightly from $85,254, while British Columbia saw a slight drop from $85,831 to $85,542. Quebec supply chain professionals earned an average of $80,580 ($80,493 in 2013) while the combined provinces of Manitoba/Saskatchewan earned $80,266 as compared to $81,519 in 2013. Atlantic Canada professionals, who earned $74,220 last year, saw a 2.6-percent drop in 2014 to $72,279.
Industry
While the natural resources industry saw a drop in average salaries this year to $101,023 from $105,979 in 2013 (a 4.6-percent change) that sector remains the highest paid in the country. Next is the service industry at $87,109 (up 2.6-percent from $84,777 last year). Those in the manufacturing industry also saw a dip from $82,222 last year to $80,810 in 2014, while healthcare professionals took home an average of $83,991 (up slightly from last year’s $83,404). The education sector saw a 4.3-percent jump in salaries to $80,493 from $77,113. Meanwhile, trade/wholesale supply chain professionals earned $81,209 and government employees took home $82,341—up from $80,225 in 2013. Having the Supply Chain Management Professional (SCMP) designation meant higher salaries among respondents, although that amount fell compared to last year. Those with the designation took home $95,781 in 2014 compared to $98,924 in 2013—a difference of 3.2 percent. Those working on the certification earned $76,856 this year, up from $71,795 in 2013 (a seven-percent increase), and those without the SCMP saw a drop in salary in 2014 to $82,698 from $84,782.
Government challenges AVERAGE SALARY BY EDUCATION LEVEL LEVEL 2011 2012 2013 2014 PB2B Respondents High school or less $73,100 $79,261 $81,818 $74,386 $79,241 Trade/technical $77,500 $83,556 $86,573 $84,152 $86,239 diploma College diploma $75,100 $80,333 $80,197 $79,805 $77,364 Some university $81,400 $85,854 $87,115 $85,304 $83,117 Bachelor’s degree $84,800 $87,101 $89,600 $91,307 $88,847 MBA $98,700 $100,914 $111,596 $107,131 $106,506 Masters $93,500 $91,018 $104,973 $88,884 $102,846 n/a PhD $117,500 $100,875 $94,400 $140,000 Overall Average
$82,800
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$85,178
$87,908
$86,987
$84,679
As mentioned, this year we focused a section of the survey on the supply chain professional’s relationship to government. When asked which external groups have the biggest impact on their role, 67 percent said suppliers, while 60 percent said customers. Government and regulatory agencies came in third with 44 percent of respondents noting that that’s where the biggest impact came from. Twenty-one percent said that shareholders and investors had the largest impact, while industry and professional associations—as well as the local community—each had 12 percent of respondents saying those groups had the largest impact. In terms of which level of government most impacted respondents’ roles, 39 percent answered federal while 38 an-
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Head
AREAS OF GOVERNMENT REGULATION THAT TAKE UP THE MOST TIME AREAS OF GOVERNMENT 2014 SCMA MEMBERS NON-SCMA PERCENT OF RESPONDENTS Customs & security 35 30 44 Government procurement rules 33 38 28 Employee health & safety 23 21 27 International supply chain 19 15 24 Competition 16 19 13 12 12 Taxation 12 Business reg. 12 13 12 & reporting requirements Sustainability 12 12 12 Consumer safety 8 8 9 Intellectual property 8 10 4 Employment 7 6 9 Privacy 7 9 5 Building permits 6 7 3 Surveys & statistics 4 4 3 Immigration & foreign workers 3 4 3 Other 10 10 10
The natural
resources industry saw a drop in
average salaries this year to $101,023 from $105,979 in 2013. That sector is the highest paid in the country, with service industry next at $87,109 and the manufacturing industry third at $80,810.
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swered provincial/territorial. Local/municipal accounted for 16 percent of respondents. Respondents were asked what areas of government regulation take up most of their time. A total of 35 percent said customs and security, while 33 percent said government procurement rules. Employee health and safety accounted for 23 percent, and international supply chain accounted for 19 percent. Overall, 16 percent noted competition was the area of government regulation that took up most of their time while taxation was 12 percent. Business regulation and reporting requirements and sustainability both accounted for 12 percent of respondents. Respondents’ answers were similar when asked in what areas they experienced the most growth in regulatory burden in the past five years: customs and security was the largest for 27 percent of respondents, while 26 percent said government procurement rules. Employee health and safety was 21 percent while international supply chain was the largest area of growth for 16 percent. Sustainability and competition both represented the largest regulatory growth for 13 percent; meanwhile taxation, business regulation and reporting requirements—as well as privacy—each took that spot with nine percent.
How happy are you?
Once again, our survey looked at job satisfaction among supply chain professionals, asking respondents how fulfilled they were with various aspects of their employment. Compensation has remained largely unchanged for the past four years in terms of its importance. Once again this year, 72 percent of respondents said salary was “very important,” with 98 percent overall answering that it was important. 26 percent said that it was “somewhat important” while only two percent said it was “not at all important”. Meanwhile, 72 percent overall said they were “satisfied” with their salary and 18 percent said they were “very satisfied.” A total of 53 percent said they were “somewhat satisfied” while 21 percent noted they were “not very satisfied.” Meanwhile, seven percent said they were “not at all satisfied.” A healthy work/life balance remained a priority for most supply chain professionals, with 97 percent noting it was “important” and 71 percent saying it was “very important.” A total of 25 percent called it “somewhat important,” while three percent said it was “not very important.” Overall, 83 percent said they were “satisfied” with their work/life balance with 34 percent answering “very satisfied.” Forty-nine percent called themselves “somewhat satisfied” while 14 percent said they were “not very satisfied.” Only three percent called themselves “not at all satisfied.” When asked about opportunities for advancement, 86 percent said that it was “important” while 49 percent called it “very important.” As well, 37 percent noted that they thought opportunities for advancement were “somewhat important” and 11 percent said they were “not very important.” A further two percent noted they were “not at all important.” A total of 60 percent of respondents said they were satisfied with those advancement opportunities—with 15 percent saying they were “very satisfied.” The answer “somewhat satisfied” accounted for 45 percent of respondents, while 29 percent said they were “not very satisfied.” As well, 11 percent noted they were “not at all satisfied.” When taken as the big picture, satisfaction rates remained high this year. A total of 88 percent said they were satisfied with their
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When asked
with their job overall, while 30 percent noted they were “very satisfied.” Fifty-nine percent said they were “somewhat satisfied” with their jobs and 10 percent answered that they were “not very satisfied.” Only two percent said they were “not at all satisfied.” What’s more, 42 percent of respondents noted that they had influence at their company’s C-level, and 73 percent said their companies realize the importance of the supply chain function. With PurchasingB2B readers isolated, 32 percent said they were “very satisfied” with their jobs overall, while 60 percent said they were “somewhat satisfied.” Seven percent said they were “not very satisfied,” while two percent said they were “not at all satisfied.” For our readers, 43 percent noted that they had influence at their company’s C-level, and 74 percent said their companies realize the importance of the supply chain function.
which level of government most
impacts their role, 39 percent of respondents answered federal, 38 percent said provincial/territorial, while local/ municipal governments was the answer for 16 percent.
Skills
Supply Chain issues faced in the last 12 months TOPTop SUPPLY CHAIN ISSUES FACED IN LAST 12 MONTHS
25
20 Percent of Respondants
The survey also asked about the skills supply chain professionals needed to be successful. Respondents ranked “people skills” as the top skill at 27 percent and “strategic leadership” next at 15 percent. Another 13 percent noted “decision making” as the top skill, with another 11 percent answering “negotiation skills.” Pursuing education was also important to respondents, with 72 percent saying that they felt they needed further education or professional development to get ahead. According to 37 percent of respondents, a professional designation was necessary to advance in their careers. Thirty-nine percent said that “industry specific training” was needed to progress, while 30 percent felt an MBA was necessary. When asked about the SCMA accreditation program leading to the SCMA designation, 18 percent said that they were enrolled in it (26 percent for SCMA members) while 19 percent planned to enroll (26 percent for SCMA members). A total of 81 percent didn’t plan to enroll (74 percent for SCMA members) and 39 percent overall already had the designation (52 percent for SCMA members). Overall, 72 percent said they planned to register for further education in the next 12 months.
15
SCMA Member Non-SCMA Member Total 2014 respondants
10
5
Summary
0
Cos t co ntro l Reo rgan izat ion Fore cast Sup ing plie r rela tion ship s Skil ls sh orta ge Cap acit y sh orta ges Risk Man age Gov m ent ernm ent regu latio n Tran spo rtat Tech ion nolo gy u pgr ade Inve nto ry v isib ility Poli tica l un cert Soft aint war y e/Sa aS in stall atio n Ove rsea s So urcin g Out sou rcin g
Despite the salary dip, many responses remained consistent compared to last year. The supply chain professional continues to earn significantly more than the average Canadian salary, and levels of job satisfaction also remain high. B2B
HOW DOES YOUR SALARY MEASURE UP? Visit the PurchasingB2B Online Salary Calculator! www.PurchasingB2B.ca Brought to you in partnership with
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Addressing issues affecting Canada’s public procurement professionals
State of Peril The Impact of major procurement failures By Paul Emanuelli
W
e can measure the success and failure of governments by how well they marshal resources for the greater public interest. Functioning state institutions, national defence and security, transportation systems, clean water, affordable power supply, public education and health care are the core underpinnings of government operations. When governments fail to provide these core public needs, they are often referred to as “failed states”. When government institutions fail to deliver on the procurement projects critical to meeting those needs, they can equally be defined as failed institutions. Using recent case studies dealing with many of these core government areas, this article will analyze a number of high-profile procurement failures that have put the government’s ability to maintain its core operations in a state of peril.
The Ontario auditor general found significant oversight issues at the ORNGE air ambulance agency.
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Indefensible delays in military procurement Procurement failures have had a major impact in recent years on military operations. News highlights have featured an incessant cycle of stories about bureaucratic infighting between the defence and public works departments, resulting in delays in the procurement of everything from helicopters, maritime patrol aircraft and close combat vehicles to naval ship repairs and helicopter flight hangers. The government’s ongoing epic retreat on
the F-35 fighter jet file, which came after it took heavy fire from the Auditor General over the controversial multi-billion dollar sole source decision, remains the single biggest example of indecision and delay on the defence procurement front. This ongoing comedy of errors is no laughing matter when we consider the adverse impact on Canada’s military capability as we face threats to our Arctic sovereignty, ponder escalating military campaigns against Russian aggression in Eastern Europe and consider a new Middle East mission to fight terrorism in Syria and Iraq. Intrigues in transportation tendering Transportation procurements have also attracted significant recent attention. In February 2014 the Federal Court ruled against the Canadian Air Transport Security Authority, the agency responsible for security at Canada’s airports, after finding that the agency’s RFP for new security screening equipment was tainted with hidden evaluation criteria and a flawed internal reporting process. The court ordered CATSA to redo its procurement process, resulting in delays in upgrading the equipment used to ensure the safety of airline passengers. Procurement failures have also impacted transportation at the local level. In April 2013 the Ontario Superior Court of Justice granted an injunction against Southwestern Ontario Student
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Transportation Services that effectively put the brakes on school transportation tendering across Ontario. The case was one of many lawsuits launched by small bus operators who claim that new provincial tendering rules are stacked against them as they are bid out of business by large corporate operators. These legal battles have put what is Canada’s largest transportation system in a state of ongoing uncertainty.
“Canadian public institutions must reboot their procurement practices and put a greater focus on ensuring that their procurement projects achieve their operational needs.”
Infrastructural entanglements Public infrastructure projects have also provided high-profile case studies. For example, the Alberta government faced an uprising from local school boards in March 2014 after it received only one bid in response to a major P3 tender for the construction of 19 new schools and cancelled the project. As Canada’s third-largest city, Calgary has an unprecedented number of students crammed into temporary portables. After the P3 failure the Calgary School board called on the province to abandon large scale P3 projects due to delays and to proceed with traditional single-school construction projects. Meanwhile, the City of Brampton, Canada’s ninth largest city, remains mired in a $28.5 million lawsuit over a controversial downtown redevelopment project that has attracted allegations of secret procedures and inappropriate political lobbying. In its February 2014 interim decision in Inzola Group Ltd. v. Brampton (City), the Ontario Superior Court of Justice ordered the winning bidder to turn over the contents of its bid to the losing bidder in what promises to be a protracted legal battle. These municipal case studies illustrate the impact of project failures on local public services.
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Air ambulance audits The health care file recently delivered a trilogy of high-profile provincial audits involving the procurement of emergency air-ambulance services. First, in March 2012 the Ontario auditor general found significant oversight issues at the ORNGE air ambulance agency, which included concerns over procurement practices and the ability to properly care for transported patients. Then in March 2013 the BC Auditor General found that the contract award process for air ambulance services in BC had not ensured that “paramedics and aircraft are located and dispatched to best meet patient needs.” Finally, the March 2014 report of the Manitoba Auditor General concluded that the provincial government breached its procurement rules by sole sourcing air ambulance services and failing to conduct adequate cost assessments after finding that the rates “were likely to be 231 percent to 618 percent higher than other province’s programs.” These recent audits can be added to an escalating pile of health sector procurement scandals that are undermining public confidence in the state of our health care system. Re-energizing the good government debate The Ontario power plant scandal is probably the most compelling recent case study on the perils of failed procurement projects. As the Ontario Auditor General found, the politically motivated decision to cancel a power plant construction contract during an election campaign could ultimately costs Ontario taxpayers up to $1 billion. The resulting fallout led to a legislative inquiry, to contempt charges against a government minister, to the premier’s resignation, to the proroguing of the legislature while a new party leader and premier was chosen, to a police investigation and police raids of the premier’s office over deleted emails, and, in the spring of 2014, to the ultimate collapse of the provincial government. As this crisis escalated and brought government business to a grinding halt, it served as a prime example of how failed procurement projects can put ongoing government operations in a state of peril. To avoid a similar fate, Canadian public institutions must reboot their procurement practices and put a greater focus on ensuring that their procurement projects achieve their operational needs on budget, on time and according to the rules. B2B
Paul Emanuelli is the general council of the Procurement Law Office. he can be reached at paul.emanuelli@procurementoffice.ca OCTOBER 2014 | 17
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STANDARD ALL-WHEEL DRIVE ISN’T SO STANDARD.
An easy way to limit your expenses is to make sure your employees drive quality cars. If you opt for the brand new and redesigned 2015 Subaru Legacy and its legendary All-Wheel Drive system, they will. They’re also going to be able to count on renowned safety features, high residual value, and great fuel efficiency.
To consult our Fleet ordering guide or for more information
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fleet.subaru.ca or call 1-877-293-7272
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IN THIS EDITION 22 2 015 FORD TRANSIT
OCTOBER 2014
22 26
Another elegant European comes to Canada
26 DR. DIESEL
Ram 1500 worth a few extra bucks
Fleet Management is a special section of PurchasingB2B magazine, running in the January-February, March-April, May, July-August, October and November-December issues. It is an important resource for Canadian procurement professionals who recommend, select and manage fleet vendors and service providers. Editorial inquiries: Emily Atkins, 416.510.5130, eatkins@bizinfogroup.ca. Advertising inquiries: Dorothy Jakovina, 416.510.6899, djakovina@bizinfgroup.ca.
LA Auto Show to feature 30 world firsts The Los Angeles Auto Show confirmed 30 world debuts (totaling 60 vehicle unveilings overall) will be made in front of a global audience during its 2014 Press & Trade Days (November 18-20) at the Los Angeles Convention Center. Almost every manufacturer has news to make in Los Angeles, but several automakers stand out with multiple global premieres of significant new vehicles. Audi is planning one of its biggest LA Auto Shows to date, with up to eight total debuts, three of which are global, all to be presented by chairman of the board, Rupert Stadler. Mercedes-Benz will feature three world premieres, which will be showcased alongside the brand’s two North American debuts, while Porsche will hold several world reveals. Mazda will feature three global premieres, one of which is an all-new vehicle. BMW has confirmed two world debuts and three North American debuts, and Chevrolet has also committed to two global premieres. Cadillac has already announced its world reveal of the high-performance 2015 ATS-V, while Chrysler plans to introduce its completely refreshed 300 and 300C models. Scion also recently announced its plans for a global premiere of an all-new vehicle. Other brands making big statements with world premieres include Acura, Lexus, Toyota and Volkswagen. A few other brands keeping their plans under wraps are expected to add to LA’s roster of global launches. At least a dozen manufacturers have confirmed North American introductions, including Land Rover, who will reveal its all-new 2015 Discovery Sport crossover. Also expected are the MINI hardtop four-door and the Superleggera Vision concept, a redesigned Kia Sorrento, the convertible versions of the 228i and M235i from BMW, the Mitsubishi XR-PHEV concept vehicle and a dramatic statement PurchasingB2B.ca
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by Volvo, which is re-launching its entire brand with the introduction of the second generation XC90, the company’s first model in four years. Fiat, Infiniti and Nissan are also verified to make North American debuts. Volvo’s “Drive Me” autonomous vehicle will also make its North American premiere on the Connected Car Expo (CCE) show floor on November 18, with executives discussing the car’s progressive autopilot technology. For the second consecutive year, the LA Auto Show’s CCE will take place in conjunction with Press & Trade Days and will feature 80 presenting experts, 20 conference topics and executive interviews, multiple news conferences and an expanded 50,000 square foot exhibit space.
The Toyota C-HR Concept is the carmaker’s vision of for a C-segment crossover. The Toyota C-HR Concept made its world debut at the 2014 Paris Motor Show in early October. Using a hybrid powerplant, this crossover gives a first hint of a type of vehicle that Toyota would like to bring to the C-segment market. OCTOBER 2014 | 19
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News continued from pg 19
EyeSight technology now available on Impreza Subaru is making its EyeSight driver assist system available as an option on 2015 models. The EyeSight system integrates Adaptive Cruise Control, Pre-Collision Braking and Vehicle Lane Departure Warning using Subaru-developed stereo camera technology. The 2015 model also has new exterior and interior styling and enhanced infotainment systems. Technology improvements include a standard MediaHub with Bluetooth, iPod and USB connectivity, audio integration, a 6.2-inch colour touch screen and Subaru’s STARLINK system. Standard safety equipment on all 2015 Impreza models is a newly added backup camera, front dual-stage airbags,
driver knee airbag, front seat side-impact airbags and side curtain airbags. New for the 2015 model year, all Subaru Imprezas will be equipped with Partial Zero-Emission Vehicle (PZEV) rated 2.0-litre SUBARU BOXER engine. PZEV equipped vehicles produce zero evaporative emissions, offering extremely clean emissions, and make the most of the fuel. Capable of achieving 8.5 L/100 km in the city and 6.4 L/100 km on the highway, the 2015 Subaru Impreza promises to be one of the most fuel-efficient compact cars in the segment.
2016 Volt to be unveiled in Detroit
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S i b o f
The next generation Chevrolet Volt will debut at the 2015 North American International Auto Show in Detroit. Volt sales were up 13 percent in July and more than 65,000 have been sold since it was introduced, making it the bestselling plug-in passenger car in the US market. Volt owners are driving more than 63 percent of their overall distance in electric vehicle mode, collectively logging more than 805 million gas-free kilometres since the Volt’s retail debut in 2010. That has saved more than 95 million litres of gasoline. While the driving range in EV mode can be affected by temperature, driving technique and terrain, the ease with
which Volt drivers are avoiding gasoline use demonstrates the Volt’s suitability for almost any lifestyle. Volt owners who charge regularly typically drive more than 1,560 km between fill-ups and visit the gas station less than once a month. The Volt continues to draw buyers from non-General Motors’ products. In the 2013 calendar year, nearly seven of 10 new Volt buyers in the US traded in a non-GM vehicle, the majority of which were Toyota Priuses.
Chevrolet Volt Chief Engineer Andrew Farah and his team have been driving camouflaged 2016 Volts to validate ride, handling and powertrain performance. Photo by Chris Guddeck for Chevrolet.
* Ba co
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BUSINESSES LOVE US. ALMOST AS MUCH AS THEY LOVE SAVING MONEY.
Style, safety, fuel efficiency, advanced technology and a spacious, comfortable interior. With all of that and more, the new Toyota Corolla is perfect for your business. Combine all of its features with the fact that it has the lowest cost of ownership in its class* and you’ve got a fleet vehicle you and your business can feel good about – today and tomorrow.
fleet.toyota.ca * Based upon 2014 independent 3rd party automotive research company study looking at fuel costs, depreciation costs and maintenance costs for base model Corolla and comparative in market compact segment vehicles over a 10-year period (2004-2013). The study includes competitive models that have been available in Canada for 10 years. Actual cost of ownership may vary.
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ELEGANT EUROPEAN HITS CANADIAN ROADS 2015 Ford Transit By Howard J Elmer
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T
he all-new 2015 Ford Transit offers as much as 44 per cent better gas mileage than the old Ford E-Series; plus it offers more body choices and capability. In short that’s why the Transit was imported from Europe. However Transit’s commitment to Canada is long-term, it is not just an import, so it’s being built in Kansas City and its offering is unique among North America powertrain options. Transit comes standard with a 3.7L V6 engine, but customers also can choose the optional 3.5L EcoBoost or 3.2L Power Stroke diesel. For fleet customers, a compressed natural gas and liquefied petroleum gas prep package is also available on Transit when it’s equipped with the 3.7L V6. These combinations of powertrains strike at Ford’s competitors; one of which offers only diesel and the other only gas. Mind you, this roll-out is also in keeping with typical Ford offerings. When it comes to trucks, Ford has always understood that the more build choices they offer the more customers they will attract. To that end the Transit comes in van, wagon, chassis cab and cutaway body styles. It offers three body lengths and two wheelbases in either van or wagon, along with three roof heights; and XL and XLT trim levels. In the people-carrying wagon models most configurations have a centre aisle for easy access, plus wide-opening side doors and ample legroom to allow for fast pickups and drop-offs. The high-roof van offers upright access to someone as tall as 6-ft, 4-in. The van version is available with shelving systems such as cargo dividers, multi-racks, bulkheads and a sliding platform. However most customers will probably use
their own upfitters. To cover this need Ford offers products and packages that create a uniform base product the aftermarket can build on. Right here it’s probably appropriate to mention that the Transit, while new to Canada, is not new. Transit has been available in the rest of world for more than 40 years, with over seven million units sold. Of course, it has gone through several generational upgrades since 1965, but this lifespan also speaks to the culmination of engineering refinements found in the Transit today. Recently Ford released fuel economy figures for the Transit as estimated using Natural Resources Canada testing methods. The popular 3.5L EcoBoost engine has been estimated (on the regular wheelbase wagon) to get 16.6 L/100km city and 12.5L/100km highway. Interestingly, the standard 3.7L V6 engine gets almost the same fuel mileage. The gain between the two though is the superior horsepower and torque of the EcoBoost engine (310 hp and 400 lb-ft of torque). In comparison to the old 4.6L V8 engine that powered the E-series, this new 3.7L V6 improves its fuel consumption by 16 per cent. Both the 3.7L V6 and the 3.5L V6 EcoBoost can be found in the F-150 pickup. As such, they are both familiar engines here in Canada. The one that we are not familiar with is the new 3.2L Power Stroke diesel. Again this is not a new engine; it’s just new to us. It’s built in South Africa and powers the majority of Transits around the world. It makes 185hp and 350 lb-ft of torque. It uses a variable geometry turbocharger; and it’s the one I The van version has shelving and cargo management systems available.
There are three sizes of Transit for different needs.
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The door opens wide and the step up is comfortably low.
was most interested in driving during the recent introduction. My first observation was how well this small diesel moved the Transit van I tested. Granted, my van was empty, but the low-end torque off the line was impressive. So, even fully loaded, I’d wager that it will push the van from a dead stop very quickly. This is because 90 per cent of the engine’s peak torque comes on between 1,500 and 2,750 rpm. This trait makes it ideal for city work where stop-and-go demands more of an engine’s low-end capability. Entry into Transit is via wide doors and an easy step up. The seating has a wide range of adjustment and the leg to floor angle is comfortable. The steering wheel adjusts as well. Once I was positioned properly I looked out through the large sloped windshield. This glass is stretched across the Transit frame ending in skinny A-pillars; it’s also aggressively raked. This adds up to excellent visibility; in front and to the sides. Driving around the city where vehicles, pedestrians and hazards abound, this design feature of the Transit proved good. But forward vision must be combined with good side sightlines and decent mirrors. Transit has both of these. The side windows have low sills (below the line of the front windshield) that almost allow a clear line-of-sight 24 | FLEET MANAGEMENT | OCTOBER 2014
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to the ground. The mirrors are tall and pulled in to the body for easy clearance while the lower portion has a frame-wide adjustable convex mirror on either side. With this mirror it’s possible to see the rear corner bumper and the top roof corner by moving your head just slightly. Inside, this van is quiet (by commercial standards) and the dashboard controls are large, easy to read and well laid out. Storage (including a large overhead loft-type space) is ample and varied. Side cargo doors open easily with one hand and slide close to the van body while the full-size rear doors open as wide as 270 degrees, pulling the hinges completely out of the way for easy in-and-out of large cargo or palletized freight. By the numbers, Transit will haul as much as 2,109 kg and tow up to 3,402 kg while carrying up to 487 cubic feet of cargo. After several hours on the road what I can share with readers is the steering response was good, road manners decent and overall drive impression positive. As a successor to the E-series the Transit is not just the next generation, it’s a distinct leap forward. Canadian pricing for the Transit starts at $28,699 and runs up through 23 versions to a price of $35,749. These trucks are available now. B2B PurchasingB2B.ca
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I
A r a c M
L w
It… is about action not reaction. ARI is known and trusted by fleet decision-makers throughout Canada to minimize risk control costs. It is about keeping drivers safe. About data. Presenting it through alerts, trends and safety profiles. The result is a world with fewer violations, accidents, costly repairs, downtime—and less exposure. It is about fleet management success. Moving the needle, and the bottom line. Learn more about ARI’s professional fleet management services: 1-800-361-5882 www.arifleet.ca
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Dr. Diesel’s Dream Truck
2015 Ram 1500 Diesel is worth the extra cost By Alan Sidorov
A
s chief instructor for the BC Forest Safety Council’s resource road driving course, I spend a lot of time in pickup trucks. These trucks are assigned to drivers or crews early in the year, and spend all their time as genuine workhorses. It is a tough test for any vehicle, and design flaws are quickly revealed. Not that many years ago, it was rare to see a Dodge among the crew trucks. These days they are quite common, for a simple reason. Today’s Dodge, or Ram, is a much-improved vehicle. My recent test vehicle was a fully optioned Ram 1500 Diesel. It was gussied up to full urban cowboy specs. My goal was to find out if the 1500 Diesel was still an honest truck under the glitz. First, at 5-ft, 7-in long, the cargo box couldn’t really be called a bed. A mattress, for stargazing or watching the northern lights, would only fit with the tailgate down. After picking up the truck in Vancouver, I headed north, grabbed my camping gear, and headed into the Coast Mountains. From there, I turned left at Pavilion, into the ranch country of the Chilcotin Plateau. From highway to dirt track, asphalt to washboard, the engine did exactly what it
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should: Deliver effortless torque and pulling power, while sipping quite discreetly on fuel. Even with the mountains and gravel, I made the 700 kilometres to Prince George with about a quarter of a tank left. In the engine bay of the Ram sits an Italian engine, a 3-litre turbocharged V6 that produces just 240 horsepower, but 420 pound-feet of torque. Those are figures to delight those of us who use pickups for work, and make it a useful recreational tool as well. The engine is mated to an eight-speed automatic; a fine combination, though I know many backcountry workers would prefer a manual gearbox. The only flaw with the automatic is that the gear indicator is a tiny white letter, too low on the instrument panel to be in line of sight. Quality control, as well as ergonomics, have been on an upward trajectory since the Fiat takeover at Chrysler. Nice PurchasingB2B.ca
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Veh
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“Quality control, as well as ergonomics, have been on an upward trajectory since the Fiat takeover at Chrysler.” seats, excellent driving position, and everything seems well bolted together. Beyond that, coil springs are vastly superior to leaf springs in terms of roadworthiness, because axle movement can be better controlled. That actually becomes a money-saver, because suspension pieces, cargo, and passengers take less of a beating. Something to be aware of with any light pickup truck is that adding options cuts cargo capacity. Get too fancy and you won’t be towing, or carrying, much without exceeding the Gross Vehicle Weight Rating, or GVWR. For heavy loads move up to a three-quarter-ton truck, or travel alone. Some vehicles are hard to criticize because they are simply well done. The Mazda 3 comes to mind, along with some BMWs, and this Ram nudges into that category. Even the locking boxes in the cargo area are well thought out. If there is a design flaw, especially for off-road use, it is the massive hood and grill which hurt sightlines to the front. But it’s a moot point, since all the competitors have copied the big-rig design. Assuming a $3,000 surcharge for the diesel over the Pentastar V6, it would take me a couple of years to get that back in savings. Worth the price, however, especially 28 | FLEET MANAGEMENT | OCTOBER 2014
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because the diesel is easy to drive. It is not as fast as the Hemi, but who cares. I’ve never understood the delusion that has so many pickups being driven so aggressively. They are utility vehicles; the rest is makeup and fabrics. A bit of personal opinion: I cannot imagine paying $70,000 for a half-ton, no matter how good. However, using the build tools on the Ram Canada website, I can put together a very good diesel 4x4, quad cab, with a real bed, for around $40,000. B2B PurchasingB2B.ca
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Professional Development
Procurement’s Evolving Skills A look at the necessary expertise for procurement professionals and how to get it By Kathy Simon
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he need to have a “well-rounded skill-set” has never been as important to procurement and supply chain professionals than it is now. The procurement profession has found itself in a highly competitive landscape. Procurement and vendor management professionals not only must compete with various internal departments for status within the organization but also for acceptance of expertise. The general sentiment is that everyone can do procurement but procurement does not know much about anything. The hiring tendencies are now tipping the scale to preferring trained professionals in their trade (logistics, marketing, real estate—to name a few) who can then “learn” how to procure. Or, as an alternative, thanks to the numerous start-up consulting firms specialized in everything from procurement to outsourcing, organizations nowadays can hire them for certain assignments. There is also an abundance of small e-procurement or analytical suites that can be acquired at a reasonable cost, making the procurement process more automated. None of these options really is a good substitute for a strong, in-house, dedicated procurement team that brings value to the organization beyond cost savings. The challenges we are facing can’t be viewed as good or bad. The point is: we have to acknowledge it. The landscape has changed and people who choose procurement and supply chain as their profession must evolve too. One way of adapting to the new environment is through procurement’s organizational realignment. This could include “dual citizenship” where an existing procurement team member is planted into another department so they can gain full insight and valuable trade knowledge, build relationships and be available as a dedicated resource. A variation is to cross-train a procurement professional who wishes to specialize in a business area such as marketing or IT. The question of whether to hire someone from another department with strong trade skills who can then be ‘converted’ to procurement is a sensitive subject. This approach carries the risk of such a person being too technical, focused on minor details of his or her profession and potentially loses objectivity and neutrality required to manage the procurement cycle. In our very dynamic world, for those who are already in procurement and supply chain continuous professional development is a great approach regardless of whether the realignment is attainable or not. Gone are the days when one obtained a professional designation at the early stages of his or her career and that was sufficient for gradual advancement. The challenge is to get your organization to recognize the importance of training in procurement, and then to follow through. I love the following quote, which I found on the Internet, about the dilemma of spending money to train employees.
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CFO to CEO: “What happens if we invest in developing our people and then they leave us?” CEO: “What happens if we don’t, and they stay?” There are several areas on which we can focus for our development. At the early stages in our career, it’s recommended to pursue a certificate or professional designation in procurement and supply chain to set the tone and to commit to this career path. I remember when I was in kindergarten people always asked me and other kids, “what do you want to be when you grow up?” You could get answers like doctor, lawyer, and firefighter. Then, as our world opened up, more options presented themselves: economics, accounting, marketing, logistics, teaching, law, and so on. Have you ever heard anyone in high school or even in university considering pursuing a career in procurement? A lot of people accidentally “fall into” a procurement role. Formalizing the professional commitment is the first step. Knowing a thing or two about RFPs, inventory management, operations, logistics and materials planning is table stakes.
“Negotiation skills can always be improved and they do serve a dual purpose. It’s not just the external stakeholders/vendors we negotiate with.” The certificate and designation can be obtained through the Supply Chain Management Association (SCMA) and courses can be taken through the universities and community colleges affiliated with this program. The designation, coupled with many years of experience in procurement, serves well for future advancement. But is that enough? Where do we go from there? It depends on the chosen career path: horizontal enrichment or vertical acceleration. For those who wish to remain individual contributors, one option is horizontal
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Professional Development
enrichment, meaning specialization in areas like marketing; construction; logistics; engineering; HR; IT; production; public procurement; outsourcing; or law/contracts. A variety of university and community college courses are available. The above-mentioned “dual citizenship” is also a great way for cross training in a specific department and to learn and bond with colleagues. Outsourcing is still in the forefront for a lot of organizations and there are resources and training through the International Association of Outsourcing Professionals (IAOP). Specialization isn’t in the cards? There is always skills enhancement. How about project management? The procurement/ supply chain profession is highly project oriented—think about some of the RFPs we issue—chances are they may be part of a greater, ground breaking project. The RFP itself effectively qualifies to be a project. It has the triple constraints of time, budget and scope. Did I mention that you have to know how to effectively manage your stakeholders?
“Procurement is anything but onedimensional. It’s an ever-changing job that forces us to continuously evolve whether we like it or not.”
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Negotiation skills can always be improved and they do serve a dual purpose. It’s not just the external stakeholders/vendors we negotiate with. Internally, we use our negotiation skills with business units, with our bosses and with our employees. The SCMA offers webinars, seminars and workshops on a variety of topics such as negotiations, interview skills, and vendor relationship management. Want to aim higher? Vertical acceleration is the way to go. Taking people management courses (team building, motivation, change management) would offer an additional layer of skill-set that comes in handy
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when managing teams. Inquire with your HR department for in-house courses as those may already be offered at no cost to you. Outside of your organization I would recommend the Franklin Covey workshops as a good start. I also found the Dale Carnegie training to be very rewarding. However, as one advances in his or her career there are more, subtle, harder-to-define skills that need to be acquired. We all hear about having leadership skills and the ability to formulate strategies and translate them to actionable tasks. Leadership is a tough skill to acquire in the classroom. Rather, I’d encourage everyone to build a leadership roadmap filled with traits and characteristics of a good leader and to pursue them by observing other leaders, having a mentor and taking feedback whether it’s good or bad. The best leaders stay true to themselves, preserve their integrity and show respect to others. In return, they gain a large base of dedicated, loyal employees and earn their respect. What else is out there for leaders? Great problem solving and strategy building can be acquired through an MBA program—Wilfrid Laurier University offers an MBA program with a concentration on supply chain management. I also think that Ivey Business School’s eMBA is a great program and a tremendous leadership networking opportunity to exchange best practices and to instil innovative leadership skills. It’s always fun to learn something perceived to be completely different, such as selling skills, public speaking, psychology, or to delve into organizational behaviour. Once you get to know more about these subjects you realize how helpful these are for a procurement leader. Have you ever thought about how people make buying decisions or accept/deny your proposition? What guides them to choose one thing over another? What part of the brain is responsible for these decisions and, if you are armed with that knowledge, can you influence a positive outcome? Let me tell you, there are courses for that! I recently attended a webinar organized by Procurement Leaders and presented by David Kurkjian on how to influence people’s decision making by understanding how the brain works. It was truly an eye-opener for me. Procurement is anything but one-dimensional. It’s an ever-changing job that forces us to continuously evolve whether we like it or not. To summarize, the characteristics of a great procurement/supply chain professional are: visionary leader; change-agent; strategic thinker; excellent communicator; strong relationship builder; astute salesperson; highly organized good planner; frugal buyer; thinks like a lawyer-acts like a mediator; challenger; a project manager; math genius; multi-tasker; and someone who can think on his or her feet while negotiating—all this to deliver savings for significant financial advantage and added value for their organizations. Now it’s up to us to create this awareness. The choice is yours which areas you want to develop. You won’t be bored. B2B Kathy Simon is director, indirect procurement, Indigo Books & Music Inc.
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CAMSC Business Awards
A Night of Diversity Diverse suppliers celebrate $1.2 billion in business over the last decade By Kim Laudrum
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here was much to celebrate at the 10th-Annual Canadian Aboriginal and Minority Suppliers Council (CAMSC) Business Achievement Awards, held September 24 at Toronto’s Liberty Grand. Since its inception, CAMSC has encouraged corporations to increase spending with diversity suppliers from $27 million in 2005 to $471 million in 2013, said CAMSC executive director Cassandra Dorrington. This means more jobs and greater wealth in Aboriginal and minority communities. “We’re here tonight to celebrate the entrepreneurial achievement of aboriginal- and minority-owned businesses and to recognize our corporate partners,” she said to 400 guests. “We are delighted that since 2004 to this day major corporations have spent more than $1.2 billion in total with CAMSC diversity suppliers,” Dorrington said. “That number jumps even higher if we include the American diversity suppliers we are working with.” One speaker, David Zimmer, Ontario’s Aboriginal Minister, lauded CAMSC’s diversity procurement fair and certified supplier database. “You are creating an incredible market for access to opportunities for aboriginal- and minority-owned businesses,” he said. In his speech Zimmer leaked a $25-million Aboriginal Economic Development Fund announcement. This three-year fund is intended to help aboriginal communities develop long-term strategies to diversify their economies. Hosted by CBC’s Anne-Marie Mediwake, highlights include keynote speaker Nigerian-born Masai Ujiri, president and general manager of the Toronto Raptors. Ujiri spoke about the importance of inspiring others to act respectfully when he toured Africa with Basketball Without Borders. And the winners are… Supplier of the Year Award Mississauga’s New Malwa Express took this award. New Malwa Express provides transport solutions throughout North America and began with three trucks working as owner-operators for other transportation providers. New Malwa Express now owns more than 95 trucks and 250 various types of trailers providing services to General Motors, auto-parts maker Linamar and many others. CATA Technology Innovation Award This award went to Canadian Prairie Garden Purees, Portage La Prairie, Man. Founded by Sandy Bay First Nation member Kelly Beaulieu, Canadian Prairie Garden Purees is an agri-business that takes the 30 to 60 percent of locally grown vegetables that do not meet retail quality standards and creates purees. “Innovation is a mindset that we embrace,” CPG president Beaulieu said. “Many of our purees are unique and first in the marketplace. That’s because of the innovation in our technology.”
Outstanding Small Business of the Year Award Manitobah Mukluks won this award. Founded in 1997 by Sean McCormick, this footwear company based in Winnipeg takes traditional mukluks and moccasins and adapts them for modern wear. “The aboriginal people of Canada have a lot to offer Canada, not
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only through our culture and our beautiful spirituality, but through business,” said spokesman, Mohawk and former Olympic athlete, Waneek Horn Miller.
Corporation of the Year Award General Motors took home this award, with Reginald Humphrey, senior manager, supplier diversity for General Motors accepting. “General Motors has a very rich history and we are very proud of it,” he said. “We were one of the first automotive companies to provide supplier diversity programs. That goes back to 1968. We’ve spent over $78 billion with diverse suppliers.”
Tier 1 Champion of Supplier Diversity— New this year Flex-N-Gate won this new award, which recognizes b2b, Tier 1 organizations that include certified Aboriginal and minority suppliers in their procurement. With 123-percent growth in its spend with CAMSC suppliers from 2012 to 2013, auto parts supplier Flex-N-Gate won this year’s award. “It’s really special when one of your biggest and best customers notices your performance,” William Beistline, vice president, Flex-N-Gate, Ventra Procurement said of being nominated by Chrysler Group.
Procurement Business Advocate of the Year This honour went to Edet Umoafia, ABC Group, lead coordinator, supplier diversity program. Umoafia encouraged over 60 small businesses to apply to the CAMSC diversity supplier program, explaining the benefits of CAMSC and how they could become certified suppliers to ABC Group. This process increased ABC Group’s diverse supply base and improved program spend with suppliers.
Collaboration Award—New this year This award went to Accenture, which contributes to the mentorship of other CAMSC members through its Diversity Supplier Development Program. Accenture’s program inspired others to get involved, and the company partnered with investors and others on Indigena Solutions, a First-Nations owned IT and business process services provider, to build IT capacity among First Nations in B.C. B2B
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Supplier Profiles
Profiles In Diversity A common refrain within supplier diversity circles is that it’s not simply a charitable pursuit, and involves more than expanding a supply base. It represents a proactive approach to including under-utilized groups within the supply chain. As well, such suppliers are often small- and medium-sized businesses with fresh perspectives and ideas, as well as the ability to react quickly to the market. In this issue, PurchasingB2B has profiled a few such suppliers.
Forward Signs
When brothers Simon and Philip Ho founded Forward Signs in 1986, the company had two employees and 300sqft. In 2014, the Toronto-based company boasts 80+ employees and 50,000sqft of space and clients that include airports, banks, governments and food & beverage companies. The signage industry is constantly in flux, says Aaron Madar, marketing manager for Forward Signs. “We have to move with the times and see what the hottest products are out there,” he says, and the company works constantly to improve its offerings. Its product line includes 3D graphics; awnings; digital printing; kiosks; light and menu boxes and more. www.forwardsign.com Forward Signs founders Simon and Philip Ho.
Master Manufacturing The word “growth” has helped define the journey of Master Manufacturing. The company, launched by Pradeep and Neera Saxena in 1993, provides packaging solutions for the automotive industry. It started as a rack manufacturing facility before expanding into design and fabrication of vinyl bags for automotive clients. The company now boasts GM, Chrysler and Ford as clients. “We try to make it one-stop shopping for the automotive industry,” says Pradeep. Master Manufacturing, based in Mississauga, specializes in the design and fabrication of racks, vinyl pouches, steel carts and bins. www.mastermanufacturing.com
Pradeep Saxena of Master Manufacturing
Green Processing Inc.
Green Processing co-founders Mohit Nayer, Jeremy Berger and Sam Farhat.
Green Processing Inc’s start is impressive not only for its speed but also the timing. The Windsor, Ontario-based organization started about six years, says co-founder Jeremy Berger. It began in 2008/09 during the height of the economic downturn. Berger and two of his high school friends, Mohit Nayer and Sam Farhat, got together and formed the company. “The three of us were all involved in different industries and saw a need and literally formed the business within a couple of days,” he says. Green Processing has two core offerings: industrial plastic recycling for tier 1 and tier 2 automotive suppliers and other companies and metal and plastic packaging, both used and refurbished. www.green-processing.com
PRODUCT BULLETIN
Launc hin Novem g ber 2014
An exciting new resource for our readers. Contact Dorothy Jakovina, publisher, for information. Djakovina@bizinfogroupca 416-510-6899 32 | OCTOBER 2014
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The Law
Great Big World Protecting interests when entering into contracts with foreign suppliers By Bill Woodhead and Doug Sanders
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he world has become more interconnected. Through advances in technology and transportation, it has become increasingly easier and, in many instances, cheaper to seek suppliers from outside of Canada. With these global supply chains, purchasers are faced with various challenges. Many involve business issues including finding a reliable supplier, transportation logistics and duties that may be associated with importing certain goods. Another concern faced by Canadian purchasers is how to document this complex global relationship in a contract. Purchasers will want to ensure, amongst other things, that the risk of transportation of the goods is placed on the appropriate party, that protection is placed on any payments and that disputes are resolved in a practical and cost effective manner.
“Purchasers will want to ensure, amongst other things, that the risk of transportation of the goods is placed on the appropriate party, that protection is placed on any payments and that disputes are resolved in a practical and cost effective manner.”
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While price and quality are always essential terms of a contract, the risk for delivery of goods becomes increasingly important when your supplier is located on another continent. Often international contracts for the supply of goods will rely on International Commercial Terms or Incoterms. Incoterms are a series of pre-determined commercial terms published by the International Chamber of Commerce. These three-letter trade terms are intended to clearly communicate which party bears the responsibility and risks during the shipment of goods. For instance, FOB stands for “Free on Board”. When this term is used in a contract, the seller pays for the transportation of goods to the port of shipment and the buyer pays the cost of freight transpor-
tation, insurance, unloading and transportation costs from the arrival port to the destination. There are 10 other terms that are widely used through international supply contracts. Being familiar with Incoterms and the various ways they affect the risk in a contract is essential when negotiating contracts for the delivery of foreign goods. As with most contracts, the amount and type of payment for the delivery of goods is a key term. When dealing with international suppliers with unknown reputations and reliability, it is often prudent for Canadian purchasers to protect payments made and require proof of delivery (including quantity and quality) prior to payment. However, suppliers will often want payment in advance or some guarantee of payment. One common method used to reduce these concerns in international transactions is a letter of credit. A letter of credit provides the seller with a guarantee by the purchaser’s bank that payment will be made if the goods are delivered. Purchasers and suppliers will want to do their due diligence to ensure that the issuing bank and its jurisdiction do not create additional issues. It is important to recognize that in international supply agreements disputes can often be difficult and costly to resolve. While negotiating the contract, Canadian purchasers have the ability to reduce such risks. Through the supply contract, the parties have the opportunity to establish what law applies and where and how disputes will be resolved. Laws vary significantly across the globe and it is prudent to consider whether the law chosen by the contract will be beneficial or at least neutral to the parties. Another factor to consider is whether disputes should be resolved by mediation, arbitration or court proceedings. Each process has different advantages and disadvantages that need to be carefully evaluated before being agreed to in the contract. There are many other areas of concern that Canadian purchasers should attempt to address in their purchasing contracts, such as ensuring suppliers comply with laws relating to the corruption of foreign public officials, criteria for evaluating the performance of goods, the return of defective goods and the various types of insurances that should be taken by both purchasers and suppliers. Ensuring that international supply contracts address when risk passes during the transportation of the goods, protection of payments and resolving disputes in the most practical and cost effective manner are steps in the right direction. Due to the complexity associated with global supply contracts, businesses should consult with their lawyers prior to negotiating these types of transactions. B2B This article is for information purposes only and may not be relied on for legal advice. Doug Sanders is a partner in the Vancouver office of Borden Ladner Gervais LLP. Reach him at dsanders@blg.com. Bill Woodhead is an associate in the Vancouver office of Borden Ladner Gervais LLP. Reach him at bwoodhead@blg.com.
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A snapshot of how PurchasingB2B provides you with opportunities to stay connected with Canada’s supply chain community… Head Thought Leadership
Vol. 16 No. 1 JUNE
Best Practices For Inclusion How to establish a supplier diversity program
Canada’s magazine for procurement and supply chain management professionals
APRIL 2014
by Michael Power
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SAFE SUPPLY CHAINS Mitigating the Risks of Global Sourcing
Also inside: Public Procurement Scrutiny SaaS Negotiation Tips ProcureCon Canada Highlights PM 40069240 $18.00
Indy Sian
Jamie Crump
Marcia Seymour
Cassandra Dorrington
Director, business strategy development, procurement and supply chain management TELUS
Director of strategic sourcing and supplier diversity United Rentals
Senior manager, procurement and corporate responsibility TD Bank Group
President and CEO CAMSC
Measuring Due Diligence PurchasingB2B.ca
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upplier diversity can provide a return on investment to organizations that work to build an inclusive supply chain, while also creating opportunities for businesses owned by Aboriginal peoples and minorities. But for the uninitiated, getting started with a supplier diversity program can be daunting. Procurement practitioners might not know where to look for best practices or may lack an understanding of the steps for engaging diverse suppliers. Implementing supplier diversity requires an understanding of these best practices before customizing them to fit a particular organization. To discuss the issue, PurchasingB2B held a panel in partnership with The Canadian Aboriginal & Minority Supplier Council (CAMSC) at the SCMA National Conference in Edmonton on June 13. Participating in the panel were: Cassandra Dorrington, president and CEO of CAMSC; Indy Sian, director, business strategy development, procurement and supply chain management at TELUS; Marcia Seymour, senior manager, procurement and corporate responsibility at TD Bank Group; and Jamie Crump, director of strategic sourcing and supplier diversity at United Rentals. Michael Power, PurchasingB2B’s editor, moderated the session. To set the stage for the discussion, panelists talked about what the term “supplier diversity” actually means. From her perspective, Dorrington said that supplier diversity represented a “proactive program” to ensure inclusion in the supply chain. “You traditionally have major partners that you worked with and within this new definition it’s, ‘let’s try to make sure that you’re being inclusive and provide opportunities for different groups that you might not normally have done business with that can bring solutions to the table,’” she said. “For us, diversity is about broadening that scope.” Diversity means more than expanding a supplier base, but also includes focusing on a return on investment, said Sian. Small, diverse suppliers can often provide new ways of solving problems. As well, they potentially provide a faster time to market because they’re located across the country and don’t need to be flown in to do the work, he noted.
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INSIDE: 4 Diesel in the News 8 Tundra goes North 11 Safety 14 Roadwork
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EYE ON THE BALL Juggling procurement standards at Cirque du Soleil
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Did you snap a lot of pictures during your summer holidays? We’re looking for your Canadian landscape and city scene photo submissions for our October 2014 issue. Send your high-resolution images by October 6 to Sandy MacIsaac at smacisaac@bizinfogroup.ca.
The University of Manitoba looks at just how much more male supply chain practitioners make over their female counterparts.
www.PurchasingB2B.ca/news Calling all writers! PurchasingB2B is looking for articles, case studies, blog entries and other contributions from our readers. If you’re looking to connect with colleagues across Canada and flex your creative muscle, email editor Michael Power at mpower@bizinfogroup.ca.
Events
SCMAO 2014 Annual Conference October 24-25 Mississauga, ON This conference brings you two days of quality education, networking and up-to-date information on industry trends and best practices. This year’s theme focuses on the necessity and value of collaboration in the supply chain.
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CPPC Forum 2014 October 27-29 Montreal, QC The Canadian Public Procurement Council’s annual forum serves the broad public procurement sector, with the forum attracting delegates and speakers from across Canada. Public procurement practitioners can network, share best practices and collaborate to support the profession.
Canadian Energy Supply Chain Forum October 28-30 Calgary, AB The CESCF provides world-class examples of supply chain management excellence and guidance on how to think, interact and approach the supply chain in new and innovative ways.
How did you get involved in procurement and supply chain? I wished to work in a business environment where what I did helped a company succeed. I held a clerical roll and as I was gaining business experience found that buying was a place I could cultivate opportunities. Initially, I struggled to apply some of the supply chain learning to professional services, though as the education programs matured it became easier to apply the techniques and theories to services spend. I remember using EOQ on office supplies just to keep practicing the theories from class. Describe your current role. My role as Canadian procurement leader is to provide management of spend, keep direction for sourcing focused on cost-saving activities and reduce potential risks. I work in a collaborative global team where the Canadian team supports strategies and goals with in-depth knowledge and experience.
What does a typical day look like? A typical day is filled with analysis of spending, meetings with internal clients and suppliers, with a keen focus on reducing costs and streamlining processes. We find the time to meet with our clients and listen to their needs. We need their subject matter expertise to ensure we’re applying our sourcing strategies effectively and in the right direction. By applying emphasis on demand levers I look for any opportunities to eliminate and simplify while we perform the traditional procurement of consolidation, RFx’s contract compliance and rationalizing.
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Describe your educational background and work history. I studied at Ryerson University obtaining the advanced purchasing certificate in 1992, continued studies through the Supply Chain Management Association (SCMA) for my SCMP designation in 1994, CPSM in 2010. I started my supply chain career at Coopers & Lybrand in 1982, later transitioning as Canadian purchasing manager at PwC. In 2007 I moved to Ernst & Young as the Canadian procurement leader.
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The City of Toronto is planning consultations and pilot projects to incorporate supplier diversity into its purchasing framework
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incorporate supplier diversity into its purchasing framework by Michael Power
T
he City of Toronto’s motto is Diversity Our Strength, and the municipality is working to live up to that creed through upcoming consultations and a series of pilot projects focused on “social procurement.” This April, Toronto’s procurement division presented council with a Social Procurement Framework Report, says Michael Pacholok, Toronto’s director of purchasing and materials management division. The framework involves a series of pilot projects aimed at investigating ways a social procurement policy would work with the City’s existing system, and to decide what kinds of procurements the policy would work best with. “At the City, we purchase a variety of goods and services and a social procurement policy may not work well for everything,” Pacholok says. According to the City of Toronto’s website, social procurement represents purchasing that “encourages the use of the procurement process for goods and services to advance positive economic, workforce, and social development outcomes.” Social procurement works to deliver on buying the best goods and services possible at the most competitive prices and to use public resources towards the City’s strategic objectives. The purchasing and materials management division will work with a few City divisions to identify procurements in 2014 that can have social
procurement concepts added to the process, Pacholok says. That process will include two key concepts: encouraging workforce development and promoting supplier diversity. 14-05-21
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“To me, this is a chance to help prove competition
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and get better value for the city, including not just price but better services. We can say to the taxpayers, we are trying to get better value and it has spin off benefits.”
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To discover all that PurchasingB2B has to offer, and how you can get involved with our publication, visit www.PurchasingB2B.ca or contact us today! What do you like most about your position? This career provides me with the best networking opportunities with business people from various industries and I learn new things almost every day. I’ve always found myself questioning, what is the meaning of value to the internal clients, suppliers and how does this support the stakeholders? In a negotiation, I found the goal is different for each player and finding a sweet spot is critical to success. You don’t always get a win-win for everyone though striving for
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The City’s census data show that more and more companies can be identi�ied as diverse suppliers, Pacholok says. The municipality wants to reach out to companies in Toronto and surrounding municipalities to ensure that those suppliers are interested in working with the City. Most of those businesses are small- to mid-sized organizations that might not realize that opportunities exist to work with the municipality.
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PurchasingB2B is FREE to qualified subscribers. Visit www.PurchasingB2B.ca to subscribe. Dorothy Jakovina, publisher, 416-510-6899, djakovina@bizinfogroup.ca Michael Power, editor, 416-442-5600, x 3259, mpower@bizinfogroup.ca @PurchasingB2B
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Michael Power, editor
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