Canada’s magazine for procurement and supply chain management professionals
SEPTEMBER 2013
FRAMING DIVERSITY Supply Chain Finance • Smarter Buildings • Managing Risk
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Canada’s magazine for procurement and supply chain management professionals
Contents 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
features
Vol. 55, No. 6 SEPTEMBER 2013
p.12
12 Layers of diversity Supplier diversity gains ground in Canada.
19 a taLe of two cities Comparing supplier diversity in the GTA and Chicago.
20 financing the chain
p.20
Trends in supply chain finance.
22 green buiLdings Strategies for more sustainable facilities.
PRODuCTION MANAgER
Kim Collins 416-510-6779, kcollins@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 55 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
also inside
departments 4 buylines
9 Procurement profile
6 business front
24 Le professionnel
7 commodities
25 the Professional
8 ask the expert
26 the Law
Diversity And Art
T
15 C1
Editorial
he notion is now widely accepted that supplier diversity offers procurement and supply chain management professionals more than an avenue to support corporate social responsibility. Cost savings, more agile suppliers and exposure to innovative business ideas rank among the myriad advantages realized by diversifying the supply base. At PurchasingB2B, we’ve been active in covering supplier diversity until now and we’re proud to present this issue, which boasts a large amount of coverage dedicated to supplier diversity. We offer varied voices and perspectives on the topic. For example, The Law column (page 26) compares the legislative framework surrounding supplier diversity in the US and Canada, with thoughts on what direction is best for this country. In PurchasingB2G (page 15), we describe the City of Toronto’s efforts to support supplier diversity in their procurement process. We also provide tips for establishing a supplier diversity program from TD Bank Group’s senior manager, procurement, corporate responsibility. There’s also more supplier diversity coverage inside. In keeping with this theme, we have on the cover the artwork of Métis artist Jeannette Sommers of Spruce Grove, Alberta. Through her art, Sommers strives to connect her French and Cree heritage, and the eagle you see is one of her paintings. The eagle, says Sommers, is a powerful spirit animal representing spiritual awakening, sacrifice, intelligence, renewal and courage, as well as healing and freedom. Another of her paintings, Pride & Joy, is on the cover of this month’s issue of CAR and we’re proud to feature both. Please visit www.jeannettesommersart.com to see more of Sommers’ original artwork. SEPTEMBER 2013 | 3
Buylines
Agreement Connects Automotive Buyers & Suppliers
E
-invoicing and purchase-to-pay solutions provider Basware has partnered with CEDEX e-Autohub, a Chinese supplier network, to set up the Basware Commerce Network. The network, which sees 54 million transactions annually, aims to connect automotive manufacturers in Europe and North America with suppliers in China. The agreement connects 5,000 Basware and 2,500 CEDEX e-Autohub suppliers and customers. Basware said the agreement is designed to simplify purchasing, accounts payable and invoicing processes to deliver better control, efficiency and cash flows. The partnership works to strengthen the global automotive supplier network by facilitating the exchange of electronic invoices, speeding up and making processes more transparent, while ensuring compliance with local regulations, the company said. CEDEX e-Autohub ensures Chinese supplier invoices meet local requirements of customers in North America and Europe, including the global invoicing standards used by automotive manufacturers in the EU, US and Japan, before invoices are sent.
Add www.PurchasingB2B.ca to your bookmarks
Here are some recent daily headlines from our website: • Supply chain management association launches • Strike averted at Vancouver airport • EU says Harper sounding conciliatory on stalled free trade talks • Structal-Bridges lands Canada and US contracts • WestJet to purchase 65 Boeing 737 MAX aircraft We’d like www.PurchasingB2B.ca to be your daily source of industry news. Write to mpower@bizinfogroup.ca with your feedback. 4 | SEPTEMBER 2013
Military Team Sent To UK To Evaluate Helicopters The Canadian Press
T
he Harper government may be ready to throw in the towel on the purchase of long-delayed CH-148 Cyclone helicopters and has gone as far as sending a military team to Britain to evaluate other aircraft. Defence sources say the team, which included an officer from the air force directorate of air requirements branch, visited a southern base in the UK recently to look at Royal Navy HM-1 Merlin helicopters. A spokeswoman for Public Works Minister Diane Findley confirmed the government is looking at options other than the troubled Cyclones, which are years behind schedule and billions of dollars over-budget. But Amber Irwin would not get into the details. “We are conducting an analysis of price and availability of other aircrafts manufactured by other vendors,” Irwin said Thursday. “The Government of Canada is committed to ensuring that our armed forces have the equipment they need at the best value to the taxpayer.” But sources inside National Defence said the effort is “quite serious” and more than just a warning to Sikorsky, the maker of the Cyclones, which has been publicly pressuring the Conservative government to accept four test helicopters currently at Canadian Forces Base Shearwater, N.S. It is under contract to deliver a total of 28 aircraft. The U.S. defence giant wanted to gradually introduce the helicopters into service with scheduled upgrades to the flight software until the aircraft was fully capable of handling all its missions—a proposal the government has rejected. A spokesman for AugustaWestland, the maker of the Merlin, said the company has watched the unfolding procurement drama and already conducted its own analysis of whether it can meet the Canadian air force’s statement of requirements. “We have not been asked for inputs,” said Jeremy Tracy. “But what we have ascertained is that the company is quite happy that we are probably more compliant today than we were at the time of bidding.” AugustaWestland was a contender a decade ago in the bidding, which ultimately saw Sikorsky picked as the winner. PurchasingB2B.ca
Buylines
Events Calendar For full listings of conferences, seminars, trade shows, training and more for procurement professionals, visit our events section online at www.PurchasingB2B.ca. SCMA Ontario Annual Conference October 18-19, Toronto, ON SCMA Ontario’s 16th Annual Conference brings together more than 300 supply chain professionals who learn about best practices and network with colleagues. PurchasingB2B editor Michael Power will moderate a panel session during this conference. Aberdeen Group CPO Summit October 29-30, Boston, MA Aberdeen Group’s annual Chief Procurement Officer Summit has established itself as a preeminent symposium for global procurement executives to learn, network, evaluate and develop a vision of procurement’s evolving role within the enterprise, from the long-established operational cost centre of the past to the present-day collaborative and strategic contributor to corporate performance.
Canadian Public Procurement Council Forum November 3-6, St. John’s, NL Held in St. John’s, NL, the title of this year’s conference is “Rock Solid Procurement.” The three-day event will feature plenary and concurrent sessions. Registration is now open for the event, and early bird rates are available.
National Supply Chain Forum November 12-14, Calgary, AB This event brings together top supply chain management professionals with leading supplier partners to learn, network, and share ideas on how to improve and build worldclass supply chains to meet Alberta’s growing industrial and commercial demands. PurchasingB2B editor Michael Power will moderate a panel session during this conference.
Cargo Logistics Canada January 29-30, 2014, Vancouver, BC The inaugural Cargo Logistics Canada Expo & Conference is your platform for multimodal cargo collaboration. The event will bring together an array of stakeholders with diverse interests in Canadian supply chains. PurchasingB2B editor Michael Power will moderate a panel session during this conference.
GBTA Canada Conference 2014 March 19-21, 2014, Toronto, ON The GBTA Canada conference represents the largest travel purchasing and management event in Canada. The event takes place at the Metro Toronto Convention Centre March 19-21, 2014 and will feature general sessions, education sessions, expo floor exhibitors and giveaways, along with networking opportunities with peers from across North America. Registration for the event is now open.
Your chance to WIN one of two original paintings!* To enter the draw: Visit www.PurchasingB2B.ca and complete an online entry form Or Visit our booth at the SCMA Ontario Conference October 18-19 and fill out a ballot. For complete draw details, please see “Original Paintings Draw” on www.PurchasingB2B.ca
The draw will take place on November 22nd and the two winners will be notified by phone and email. The winners names will also be posted in the November 26th PurchasingB2B eNewsletter. * Open to Canadian residents only. One entry per person. Entries accepted until midnight November 21, 2013. Canadian artist Jeannette Sommers specializes in automotive and Métis art. To learn more about this talented artist, please visit: www.jeannettesommersart.com PurchasingB2B.ca
SEPTEMBER 2013 | 5
Buylines Index Shows Weakest Pace Of Growth in Five Months
C
anada’s manufacturing sector grew in August, although at its weakest pace in five months, according to the RBC Canadian Manufacturing Purchasing Managers’ Index (RBC PMI). The headline RBC PMI—a composite indicator designed to provide a single-figure snapshot of the health of the manufacturing sector—indicated a solid improvement in Canadian manufacturing business conditions. Having fallen slightly from 53.1 to 53, the PMI remained below the series average of 54.2 and signalled the weakest manufacturing expansion in five months. The RBC PMI showed increases in both output and new orders. However, the rate of output growth was unchanged from July’s four-month low, while the expansion for new orders remained below the series average. Employment also increased, but the rate of job creation slowed slightly to its weakest since April. Input prices meanwhile increased, reversing the marginal decline in July. The volume of new orders received by Canadian manufacturers increased. New export orders also rose, with an increase in new work from the US particularly mentioned. Total new orders rose solidly, although the rate of growth
Just Win, Baby!
I
f it weren’t for sports, I’d have no use for a television set. I love sports—have all my life—and will until the day I die. Growing up, playing outside was pretty much the only thing I did for fun. Central to entertainment in my household was Hockey Night in Canada on Saturday night and NFL football Sunday afternoons. Which means that from a young age I pretty much took diversity for granted. Even while there was huge discrimination in many occupations in the 1960s and 1970s, on the gridiron it was for all intents and purposes a Cathedral of Merit—no one cared much about skin colour, only about winning. When it comes to sports, I’m pretty much a homer. My baseball team is the Toronto Blue Jays; my hockey team the Toronto Maple Leafs. Talk about two organizations that exemplify supplier diversity! The most important “supply” in sports is the athletes. As I wrote this column, I looked at the make-up of the 26 players on the Jays active roster. The majority of the players are American-born, but four other countries are represented: Canada, Japan, Venezuela and the Dominican Republic. Similarly, most of the Leafs call North America home, but there is representation from both Sweden and Russia as well…and no one dwells much on it. There’s a reason for that. Professional sports is a business, first and foremost. As much as I love the games, that fact is inescapable. And what every good business does is try to identify the key success factor and execute along those lines. What has been demonstrated time and time again is that the best way to make money is to field a winning team. If that meant—in the case of the
6 | SEPTEMBER 2013
remained slower than the series average. Manufacturers across Canada raised their production levels in August. Output has risen in each month since data collection began, but the rate of increase was unchanged from the four-month low recorded in July. The amount of inputs increased, with firms largely linking this to greater output requirements. Input inventories also rose; however, the rate of stock accumulation was only slight. Suppliers’ delivery times lengthened further during the latest survey period. However, the increase in input lead times was only marginal and the weakest in the 23-month series history. Manufacturing employment in Canada increased for the seventh consecutive month in August, with approximately 18 percent of firms hiring additional staff compared to July. Panellists generally attributed this to recent increases in new orders. The rate of job creation nonetheless slowed to its weakest since April.
Business Front
Toronto Blue Jays—nine starters from the Dominican Republic, so be it! The same is true for our hockey team as well. I am certain that if the brain trust at Toronto’s Air Canada Centre thought that more Europeans would mean a Stanley Cup, the entire team would be from that continent. There’s a wonderful teaching here for all businesses. If you’re smart, it means that you’re constantly seeking to improve your bottom line. And one of the surest ways of doing so is to find better and better suppliers. Every year, athletes compete for jobs and then they’re ruthlessly replaced midseason if someone comes along who can do the job better. Professional sports teams leave no stone unturned in their quest for talent and are blind to colour, religion and national origin. It’s a terrific model for all businesses to follow. It should be about finding the very, very best and doing what Al Davis, ex of the Oakland Raiders use to preach: “Just win, baby!” b2b Toronto-based Michael Hlinka provides business commentary to CBC Radio One and a column syndicated across the CBC network.
PurchasingB2B.ca
Head Commodities
Advanced Sourcing For Commodities by PurchasingB2B Staff
D
irect materials are both raw and processed materials used to produce goods; and for manufacturers their price is often set by commodity markets outside their control, says a white paper from CombineNet, entitled Direct Materials and Commodity Sourcing Strategies: Improving Results with Advanced Sourcing. For sourcing professionals, commodity prices are important as price volatility adds unpredictability to the cost of those goods, the white paper notes. For example, choosing an alternative material with a lower raw material cost requires an investment to qualify its suitability, says the paper. For savvy organizations, this area can have a large impact on costs and competitiveness. The white paper recommends using “advanced sourcing” as a tool to collaborate with suppliers of these raw materials and deal with the risks and uncertainty invovled in their sourcing. “Advanced sourcing is the process of working with the supply base to identify areas of cost reduction and ef�iciency improvements through a more collaborative and strategic process,” the paper states. The paper gives the example of a food manufacturer facing rising commodity costs for food ingredients and from the steel cans used to package the �inished products. This company sourced steel from several suppliers, accepting deliveries of steel coils at one of its manufacturing plants for pre-processing. The steel coils were cut into plates and laminated. Those laminated plates were then shipped to a separate plant and made into cans before being delivered to the food processing facility for �inal packaging. But through an advanced sourcing strategy, says the paper, the organization found a new sourcing approach resulting in supply chain ef�iciencies, cost savings and reduced risk. The company’s supply chain team collaborated with suppliers to look at alternative supply options, including the steel suppliers’ capabilities for managing some of the pre-processing of the PurchasingB2B.ca
steel. Suppliers provided pricing for the steel coils the company traditionally purchased, the white paper says, while providing options for pre-laminated steel coils and delivery of pre-cut and pre-laminated steel plates directly to the can manufacturing plant. The suppliers provided yield guarantees and shipping costs for each of the supply options to show the total delivered cost of the steel. The company used CombineNet ASAP (Advanced Sourcing Application Platform) to facilitate the process, the white paper notes. By the end of the advanced sourcing process, the company decided to switch its supply operations from buying steel coils to buying pre-cut and pre-laminated steel plates. The organization modeled the total cost impact on its business that included removing its own pre-processing manufacturing process from the supply chain and using suppliers’ capabilities to handle this part of the process more ef�iciently and at a lower cost for each can, the white paper says. The advanced sourcing strategy led to fewer manufacturing steps by purchasing pre-cut and pre-laminated steel plates directly from steel suppliers. Direct materials are strategic to a business and the brands they bring to the market, the paper concludes. Organizations that better manage their cost of goods sold often realize a competitive advantage as commodity costs burden less savvy sourcing and supply teams. b2b SEPTEMBER 2013 | 7
Ask The Expert
The Road To Supplier Diversity Steps organizations can take to include more diverse suppliers in their supply chains by Marcia Seymour
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o you’ve been given the opportunity to launch a supplier diversity program for your company. Congratulations! Your first reaction might be to think: “wow!” Your next thought may be “now what do I do? How do I get started?” The following are some of the steps we took that supported the successful launch of TD Bank Group’s supplier diversity program:
Secure executive level buy-in and support. Executive sponsorship of supplier diversity is an important step in setting your program up for success. That support should be visible and demonstrated on a regular basis.
“Don’t hesitate to ask other supplier diversity professionals what worked for them and what they would do differently if they could.”
Don’t be afraid to reach out. You will find that most people—perhaps even all of them—involved in supplier diversity are more than willing to share their experiences and to provide guidance and advice to the “new kid on the block” trying to set up a program. Don’t hesitate to ask other supplier diversity professionals what worked for them and what they would do differently if they could. Also, speak with organizations like CAMSC and WEConnect Canada. Ask them to share best practices and connect you with others who can provide insight. Find out what industry groups or committees you can join.
Secure a sustainable operating budget. Make sure you have adequate resources and the funding for memberships, spon8 | SEPTEMBER 2013
sorships and other activities to get started. Seek the commitment to revisit the budget as the program progresses. Proactively look for opportunities to work with other departments to cost share and maximize return whenever possible.
Align with broader organizational objectives. Supplier diversity needs to be integrated into the bigger organizational goals to be meaningful and successful. You need to be able to answer the questions when asked. Why should the organization have a supplier diversity program? What is the business value it will bring? Develop a supplier diversity mission statement. The mission statement should describe the purpose and vision of the program. Make it public to demonstrate commitment— this can be done on the company website and the mission statement should also be highlighted in key communications. An executive ambassador to launch and champion the mission can add to the impact.
Create short and long-term strategies. Lay out your action plan. Understand what you need to have in place to launch the program. What are the program objectives for the first three, six and 12 months? What are your measures of success? What’s next after the first year? Develop a threeyear plan that focuses on continuous improvement. Put the program into practice. Think about the processes and procedures you’ll need to develop and implement to operate the program. Some questions you might ask are, how will potential diverse suppliers be identified? What is the best way to create opportunities for diverse suppliers to compete for business? What type of information needs to be tracked? What reporting will be required? How will you calculate how much is spent with diverse suppliers each year?
Communicate, communicate, communicate. As part of your planning for a new supplier diversity program, develop a communication strategy. Identify your key stakeholders and keep them engaged—turn them into champions for the supplier diversity program. Finally, you are on an exciting journey, so enjoy it! b2b Share your industry expertise with PurchasingB2B readers. Contact editor Michael Power with column ideas at mpower@bizinfogroup.ca. Marcia Seymour is senior manager, procurement corporate responsibility, at TD Bank Group in Toronto.
PurchasingB2B.ca
Procurement Profile
A Passion For Variety Sherri Lapointe, CSCMP, contracts coordinator, De Beers Canada—Victor Mine
Q: Describe your educational background and work history. I got my business administration with an accounting major and later enrolled in the CGA program. When a supply chain career opportunity arose, I moved to the CSCMP to complete that designation. I work with the De Beers Group of Companies and have spent the last eight years at Ontario’s first diamond mine. I started as an IBA (impact benefit agreement) coordinator during the mine’s construction and once into operations, moved to the finance team as a mine accountant. My final spot is with supply chain (final, because I’ll always want to remain within the supply chain group). Q: How did you get into procurement and supply chain? After over 15 years in finance, I came to a crossroads and thought, what if I didn’t have to do one more month end close? What could I do instead? While I was pondering this, an opportunity presented itself within supply chain and after weighing my options I decided to go for it. I thought, with a finance background and knowing all about our impact benefit agreements, I could be a well-rounded member of the team. Q: What’s your current role? I’m the contracts coordinator for the mine. My role is unique in that our mine has signed impact benefit agreements that help dictate how contracts are sourced. I do the service buying, forecasting, planning and managing contractual services required for the operation of the mine. My role requires developing strategies and conducting contract negotiations. Q: What do you like most about your position? I like the variety; every day is different and brings new challenges. Nearly everyone I meet in supply chain says they like the variety. Working for a remote mine site is like maintaining a small town, so we have our hands in everything—from procuring Juno award-winning entertainment at site to the
diving crew required to clean screens. We manage an airstrip for the small stuff and build and maintain an ice road for the big stuff.
Q: Why did you choose procurement? I didn’t choose procurement—it chose me. I think many people happened upon procurement while on another career path and I am thrilled that mine did. I now have a passion for procurement and when you have passion, you enjoy what you do and enjoying what you do makes a big difference. Q: What’s your proudest moment? It’s not easy working full time with a young family and trying to complete a designation; there are definitely many hours spent burning the midnight oil. One of my proudest moments was completing my CSCMP designation, and doing it in 18 months.
Q: What are your future plans? One definite plan is learning. I’m a firm believer in continuing education. I just have to decide what will be the next education goal and go for it. I’ll pass on what I’ve learned and help inspire others to develop passion for supply chain and to be a good mentor.
Q: What advice/comments would you give others entering the field? Work on your education and get your designation. Take on all that you can and diversify yourself. Be known for great customer service—it goes far in developing the relationships you’ll need to do your job better. b2b
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r Professional Development for Supply Chain Professionals Better Ways to Better Deals, October 2-3, Mississauga
This seminar will add to your existing negotiation skills by providing a tool kit of effective options for handling negotiations. Using these tools will help you be better prepared, identify options, overcome barriers and measure outcomes.
Maximizing your Impact and Influence, October 16-17, Toronto
Communicate in a way that generates results. Based on methodology that assesses personal drivers, this workshop will help you learn how your motivations influence others and how to maximize your impact on them.
Strategic Supplier Performance, October 30-31, Hamilton
This seminar will assist participants in the development of a supplier management strategy. You will develop a framework that can be applied to improve supplier performance towards achieving organizational objectives.
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Want some insight? Learn from the pros what the numbers mean
Join us for the free Annual Survey of the Canadian Supply Chain Professional webinar on November 21st and find out why salaries are going up and what you need to do to see yours climb too. This one-hour live webinar will include presentations of the results by Michael Power, editor, PurchasingB2B; Carolyn Gruske, editor, MM&D; Lou Smrylis, editor, CT&L; and SCMA president and CEO, Cheryl Paradowski, along with commentary from HR professionals and recruiters.
Register at www.scmanational.ca/annualsurvey Thursday, November 21, 2013 - 12pm ET Canada’s magazine for procurement and supply chain management professionals
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SEPTEMBER 2013 | 11 Addressing issues affecting Canada’s public procurement professionals
Supplier Diversity
Layers Of Diversity Organizations in Canada are looking to supplier diversity to increase innovation, agility and product availability among other benefits by Michael Power
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he return on investment that supplier diversity can offer organizations may not always be immediately apparent. And with busy agendas, procurement and supply chain management professionals, along with the C-suite of many companies, may not think first of supplier diversity when looking to improve supply chain performance. But including diverse suppliers—as well as actively seeking them out—offers myriad benefits. Supplier diversity in the United States has a foothold dating back decades. Meanwhile, efforts in Canada to employ diverse suppliers—those 51-percent or more owned and operated by women, Aboriginals and other groups—have grown at a different pace than in the US. But efforts to raise supplier diversity’s profile in this country are bearing fruit. Several organizations, such as the Canadian Aboriginal & Minority Supplier Council (CAMSC), WEConnect Canada and the Business Diversity Network, have worked to raise the profile of supplier diversity. More and more, procurement teams are viewing the choice to search out and employ diverse suppliers as a valuable strategic move, says Mary Anderson, president of WEConnect Canada, a women’s business network that advocates for supplier diversity. The organization has a program available to businesses that are 51-percent or more owned by women. And Canada’s
“There’s more awareness building of the value proposition of making supplier diversity part of the Canadian landscape.” ~ Mary Anderson, WEConnect Canada
12 | SEPTEMBER 2013
proximity and close economic ties with the US have helped foster supplier diversity programs on this side of the boarder, Anderson says. “The North American supply chain is very integrated so that larger corporations doing business multi-nationally have been very aware of supplier diversity in the US and have reached out to look at how that could be valuable for other countries in which they’re operating,” she says. “There’s more awareness building of the value proposition of making supplier diversity part of the Canadian landscape.” The Kellogg Company has a well-established supplier diversity program south of the border, says Debra Quade, supplier diversity manager for the Battle Creek, Michigan-based company. The company is developing a program in Canada, she says. Kellogg participates in the same activities in both countries and tracks spend for Canada and the US to include in quarterly reports. “We have internal goals for our procurement teams, and last year we achieved 6.95 percent of our total US and Canadian spend with diverse suppliers,” she said. “This year, we are on track to increase that by three percent.” The company recruits diverse businesses, a process that includes an educational component for organizations on doing business with the food and beverage industry. Kellogg’s activities are then included in their annual Diversity & Inclusion Report. This year, the report’s featured supplier was a Torontobased marketing firm.
Show me the benefits Embracing supplier diversity allows organizations to re-examine their processes and adopt innovative and cost-effective methods, says Cassandra Dorrington, president of CAMSC. Employing diverse suppliers also helps keep supply chains sustainable, she says. With an uncertain business and economic climate, lining up alternative suppliers from diverse groups helps ensure the availability of goods or services. “All this allows you to take a look and ensure sustainability in the supply chain by taking advantage of what’s new, what’s innovative, what’s coming into the marketplace,” Dorrington says. “It’s an untapped market you might have been blind to. This opens you up and allows you to ask, ‘how can we take advantage of this? How does it fit into our particular model? How does it provide us with additional solutions that we haven’t used in the past?’” The business case for supplier diversity begins with diversity of thought, said Quade. Supply chains must reflect North America’s changing demographics. “We can’t successfully provide products or services to
people unless we have input into what they want and need,” she says. “After all, where will your innovative ideas or product of the future come from if your entire team thinks alike?” The Toronto-based company Aboriginal Printing is an example of a diverse supplier, and the full-service print provider boasts 60 distribution points across Canada and over 250 in the US and around the globe. The benefits of supplier diversity can be broken down into two categories, says the company’s founder and owner Steven Bolduc. The first is the direct impact such transactions have on the business and the community, he says. Whatever success Aboriginal Printing sees gets disseminated into the larger Aboriginal community through providing services and expertise, sharing knowledge and by inspiring others. As well, smaller, minority businesses can often offer highquality service. “The (buying) organization will work with people that are much more responsive and attuned to their requirements and ensure that a relationship is established for the long term,” Bolduc says. Diverse suppliers, by virtue of often being smaller, can also be more agile and responsive to changing business needs than their larger competitors, says Charles Varvarikos, head of facilities sourcing with RBC’s procurement team. He also agreed that supplier diversity helps inject competition into the supply chain. For example, Varvarikos recalls an RFP process that had only two suppliers competing for the work. To boost competition, RBC contacted CAMSC to ask about other potential suppliers. CAMSC provided a third supplier, boosting the field from two to three bidders. “It doesn’t sound that significant, but going from two to three is very significant when you’re doing a competitive exercise,” he says. “The procurement person running the RFP was very grateful.”
Best practices Supplier diversity offers access to excellent suppliers that organizations might not otherwise know about, says Bill Zakarow, director of procurement for the Toronto 2015 Pan/ Parapan Am Games. Those diverse suppliers often offer a competitive advantage not seen with larger suppliers. “A lot of the time we’re coming in under budget because we’re using companies that can be competitive because they’re not as large,” Zakarow says. The business decision to adopt supplier diversity must begin from an organization’s top, notes Zakarow, and the CEO or president must consider it an important business objective. The games have created a supplier diversity advisory council whose members represent and promote diverse businesses. Those members—including CAMSC, WEConnect Canada, the Toronto Hispanic Chamber of Commerce and the Ontario Gay and Lesbian Chamber of Commerce among others—have met quarterly for the past two years to advise the games on how to PurchasingB2B.ca
“We have internal goals for our procurement teams, and last year we achieved 6.95 percent of our total US and Canadian spend with diverse suppliers. This year, we are on track to increase that by three percent.” ~ Debra Quade, Kellogg
“It’s an untapped market you might have been blind to. This opens you up and allows you to ask, ‘how can we take advantage of this?’” ~ Cassandra Dorrington, CAMSC
“The (buying) organization will work with people that are much more responsive and attuned to their requirements and ensure that a relationship is established for the long term.” ~ Steven Bolduc, Aboriginal Printing
SEPTEMBER 2013 | 13
Supplier Diversity
best work with diverse supplier groups. “They’ve been a great advocate of getting our business requirements into the market, bringing to our attention suppliers that are a good fit, creating content and helping deliver some of these capacity-building events,” Zakarow says. The games are following Ontario’s public procurement guidelines by letting bidders know within the RFP that they will be scored on their diversity policies. A bidder can receive up to 10 points if they identify as a diverse business. Varvarikos also recommends engaging an organization’s upper executive on the subject of supplier diversity. Buy-in from the C-suite—gained through presenting a credible business case for supplier diversity—helps ensure an organization fully backs those policies. That case revolves around greater competition, innovation and agility within the supply chain. Engaging diverse suppliers also helps boost an organization’s brand. “It’s important to articulate the business case,” he says. “To do that you need to ensure that diverse supplier solutions address business needs. Ultimately, it’s not about being the right thing to do; it’s about
“It’s important to articulate the business case—to do that you need to ensure that diverse supplier solutions address business needs.” ~ Charles Varvarikos, RBC
“A lot of the time we’re coming in under budget because we’re using companies that can be competitive because they’re not as large.” ~ Bill Zakarow, Toronto 2015 Pan/Parapan Am Games
14 | SEPTEMBER 2013
being the smart thing to do. That resonates the more senior you go.” Varvarikos recommends that organizations interested in starting a supplier diversity program should align themselves with CAMSC, WEConnect Canada, The Diversity Business Network and other groups. Also, it’s important to manage expectations on both sides when installing a supplier diversity program; for example, set expectations among diverse suppliers that large organizations may take weeks or months before making sourcing decisions. For companies looking to introduce supplier programs, it should be noted that it can take time to lay the groundwork before supplier diversity gains traction with vendor managers. Suppliers can register in RBC’s database and self-identify as diverse. They can also say whether they’re certified with organizations like CAMSC or WEConnect Canada, Varvarikos notes. The bank aligns with those and other groups and reaches out to them during the RFP process in certain categories to ask whether there are diverse suppliers that can compete. RFPs also ask about diverse supplier status. The bank runs a mentorship program that includes an annual workshop, an all-day event sees between 60 and 70 people show up. “That’s been highly successful and highly attended,” says Varvarikos. “We’ve always had a full house at these events and it’s been very well received.” When beginning on the road to supplier diversity, survey existing suppliers, recommends Quade. Many organizations already have several diverse suppliers on board. Also, include processes ensuring diverse suppliers are included in the bidding process and participate in outreach programs to meet potential diverse suppliers. “We’re members of WEConnect Canada, CAMSC and the Canadian Gay & Lesbian Chamber of Commerce,” she said. “All three organizations have databases of suppliers, hold educational and networking events and can assist and support your supplier diversity journey.” The Toronto 2015 Pan/Parapan Am Games have also held workshops to help diverse suppliers build their business acumen, says Zakarow. For example, the games will have to feed 10,000 athletes, coaches and officials at the athletes’ village. A half-day session was held in which large food services companies working with the games spoke with 120 diverse companies about partnering with the games. Such events will help leave a legacy whereby small businesses have set up networks with larger firms that can last long after the games have ended, Zakarow says. “That connection between tier-1 suppliers and diverse business is what’s really going to drive this legacy,” says Zakarow. Supplier diversity—when done correctly—can offer organizations a strategic advantage in sourcing through innovative and cost-effective partnerships. Procurement and supply chain management professionals who are looking to incorporate such diversity into their operations have no shortage of examples and resources to help them on their journey. b2b PurchasingB2B.ca
Vol. 15 No. 2 September 2013
Coming Attractions What’s new for the 2014 model year
INSIDE:
4 2014 Model Previews 11 Winter Tires 8 Nissan NV200 14 Minimizing Risk
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On the cover…
Pride & Joy
Artwork By Jeannette Sommers, Oil on Canvas, 16X20
Pride & Joy was painted in memory of my father. This 1936 International Truck was excavated from a ditch covered in leaves and debris. My father brought it home and enjoyed many hours restoring it. When he sold it, the motor ran perfectly, the body like new, except left primed. His wish was to have a ride in the truck once it was painted. Dad passed away and my brother and I were allowed to drive his ashes to his final resting place in this beautiful restored truck. It was his pride and joy. My father was mine. For details on how you can enter to win 1 of 2 original paintings by Jeannette, please see “Original Paintings Draw” on www.PurchasingB2B.ca
T:10.875”
B:11.125”
S:10”
80 VALLEYBROOK DRIVE TORONTO, ONTARIO M3B 2S9
www.PurchasingB2B.ca
Vol. 15, No. 02
SEPTEMBER 2013
EDITOR: Emily Atkins (416) 510-5130, eatkins@bizinfogroup.ca ART DIRECTOR: Sandy MacIsaac (416) 442-5600 ext. 3242, smacisaac@bizinfogroup.ca PUBLISHER: Dorothy Jakovina (416) 510-6899, djakovina@bizinfogroup.ca PRODUCTION MANAGER: Kimberly Collins (416) 510-6779, kcollins@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 CAR, established 1991, is published twice annually (June and September), 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: CAR accepts no responsibility or liability for claims made for any product or service reported or advertised in this issue. CAR receives unsolicited materials including letters to the editor, press releases, promotional items and images from time to time. CAR, its affiliates and assignees may use, reproduce, publish, re-publish, distribute, store and archive such unsolicited submissions in whole or in part in any form or medium whatsoever, without compensation of any sort. Printed in Canada Publications Mail Agreement No. 40069240
GM hosts fleet launch By Howard J Elmer
General Motors hosted a Fleet event recently in Brampton, Ontario. This event though didn’t focus just on the typical trucks and vans; in a show that is mimicking the resurgence of the General itself, all the brands were represented. Firstly, Buick, Canada’s fastest growing luxury brand was on site. Sales of the all new Verano are driving Buick’s growth as customers embrace Buick’s first entry into the small luxury segment. In addition to Buick, the Chevrolet small cars are doing well and were also being shown to Fleet buyers and media alike. Two in particular are the Chevrolet Spark and Malibu. Also on hand were the popular Impala, and the new diesel-powered Cruze. The size of this show also speaks to the health of the automobile industry currently and also to the pent-up buying lag in the fleet market where everything from service vehicles, taxis and executive cars are now sought in increasing numbers. For that reason, the entire Cadillac lineup was on hand, featuring the newest ATS, as well as the CTS and XTS. The updated truckbased Escalade is also now available. On the truck side, Chevrolet and GMC also showed alternative fuel pickups in the form of GMs’ bi-fuel Chevrolet Silverado and GMC Sierra 2500 HD extended cab pickup trucks. Fleet and retail consumers can place orders now. These vehicles include a compressed natural gas (CNG) capable Vortec 6.0L V8 engine that seamlessly transitions between CNG and gasoline fuel systems. Combined, the
trucks are expected to offer a range of more than 1,000 kilometres. The Silverado and Sierra will be available in standard and long box, with either two- or four-wheel drive. The entire half-ton line was also represented—as it has just recently been updated—including a new line of engines called Eco-Tec3. As the name implies, these motors are economical and technically superior to the last generation of powertrains. With a number of European-sourced vans coming to Canada (with other manufacturers) the question has also been posed–what is GM doing? For the moment, the veteran Savana work van, in all its forms, continues to be offered directly to customers as well as to upfitters (a number of whom were in attendance demonstrating their aftermarket add-on service bodies). However, GM has taken the step of partnering with Nissan to produce a small cargo vehicle that GM will sell in the US and Canada. GM will procure the vehicle from Nissan and distribute it through the Chevrolet dealer network. Called the Chevrolet City Express, it is based on the Nissan NV200, which was recently launched here. The GM version will be available for sale in the fall of 2014. It’s anticipated that this is just the first move in a revamp of GM’s commercial offerings. The next “first” will be the update of the current Silverado/Sierra HD pickups–coming in late September. SEPTEMBER 2013 Canadian automotive Review | 3
All-new and raring to go 2014 model-year preview
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By Tony Whitney
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#1: BMW’s i3 Electric car. #2: The 2014 Impala boasts more space and an eco-tec engine. #3: Mitsubishi’s Mirage has a 3-cylinder engine. #4: Fiat 500L is a big brother for the stylish Fiat 500 coupe. #5: The new Toyota Corolla will be a likely hit with buyers.
4 | CANADIAN AUTOMOTIVE REVIEW SEPTEMBER 2013
With the North American auto industry in a buoyant state right now, it’s no surprise that automakers have been busy prepping a fair number of all-new sedans, SUVs and crossovers for 2014. In our preview of the upcoming model year, we’ve chosen some of the standouts from various model ranges and in most cases, we’ve selected only models that are all-new and stayed away from what automakers call ‘mid-cycle refreshes’. Some manufacturers have multiple new model releases for 2014 while others have little to show—usually a precursor to major activity during the auto show season. We’ve avoided new models unlikely to attract fleet interest—sports cars, ultra high-end vehicles and the like—but included some products at the entry- or mid-level of the luxury segment because of their potential for executive fleet applications.
Chrysler Corporation All the action for 2014 seems to be in the Jeep division, with the much-anticipated new Grand Cherokee taking centre stage. While picking up many styling cues from predecessors, the new model seems to be built with more of an eye to luxury than before. The cabin is especially good and as always, there’s a wide range of AWD systems to choose from, along with engine options that include a diesel. Jeep is claiming best-in-class fuel economy and towing capability. Interestingly, Jeep has reintroduced its Cherokee nameplate for a less expensive and smaller model that fits into the compact crossover/SUV class. It’s affordable yet still has great all-season capability. The new Fiat 500L is a utility version of the microcar 500 model that’s been quite a hit in Canada. It doesn’t look much like the tiny 500 and it’s a lot bigger, but it offers four doors and quite impressive people and cargo capacity. It should prove popular with buyers who like the charm of the original 500 but need more space.
General Motors The stylish new Chevrolet Impala should attract the fleet interest it’s enjoyed in the past. For 2014, it has more head- and leg-room and enhanced cargo space. There’s also a new four-cylinder Ecotec engine available as a worthwhile economy option. Over at Buick, the Regal features upgrades that include available all-wheel drive and a new and thrifty four-cylinder engine. From Cadillac, the CTS has been entirely updated for 2014, making this the third generation for the luxury sedan. Like its Buick stablemates, it should appeal to executive fleet buyers who follow a “buy domestic” policy. The CTS needn’t be expensive to run—there’s a turbocharged four-cylinder available for economy-minded buyers.
host of electronic safety features and should be a strong contender against rivals in the larger luxury sedan segment.
Kia Kia is introducing a flurry of new products, including new Forte, Rondo, Soul and Sorrento models. Highlighting the Kia range is its Cadenza luxury sedan—a new segment for the Korean automaker. Clearly aimed at the likes of Lexus and the popular German upscale nameplates, the Cadenza certainly looks the part with its tasteful, restrained, bodywork. The Forte compact sedan will likely prove attractive to fleets, as the new version offers better roominess than the car it supersedes. The Rondo is Kia’s small crossover while the Soul, a niche market product, has grown a little for 2014 without losing its design appeal. It’s also claimed to be more refined. The Sorrento is a mid-size SUV and for 2014, has been updated from end to end, but styling remains almost the same. A 290-horsepower V-6 powers the top-of-the-line Sorrento.
Mazda Mazda’s primary introduction for the 2014 model year is an all-new version of its strongest seller—the Mazda3. A compact that has hovered around the top of the sales charts for many years, the Mazda3 has been praised for its performance, quality, durability and strong resale price record. Making full use of Mazda’s much-praised SKYACTIV technology, the new car comes as both a four-door sedan and a five-door hatchback, and there are two engine options. With 3.5-million sold worldwide, it’s easy to predict that the new generation car will prolong this success. Also new is a Mazda6 sedan, replacing a model that was always greatly underrated in Canada. The new car is certainly more stylishly appealing and with a full SKYACTIV suite, it may well prove more of a competitor for its Camry and Accord rivals. A diesel version will arrive later.
Mercedes-Benz The respected German automaker has an intensively updated version of its E-Class sedan for 2014 that’s bound to garner interest around the executive fleet business. Perhaps even more important is M-B’s introduction of an entirely new model—the CLA-Class. A compact sedan that promises to combine Mercedes ambiance and performance with affordability. It should be fuel-efficient too because the only engine right now is an advanced four-cylinder turbo. Styling hints at the expensive CLS model further up the Mercedes model range.
Honda/Acura
Mitsubishi
There’s not too much action on the Honda front for 2014, but upscale sister division Acura has an all-new flagship model dubbed RLX. This sedan moves up a luxury notch or two from anything Acura has created before and boasts an impressive level of refinement and quietness. The RLX features all-wheel drive and a
The most recent Japanese automaker to enter the Canadian market, Mitsubishi has two all-new models for 2014—Outlander and Mirage. The Outlander SUV/crossover has grown a little and been endowed with a very well-executed interior that places this compact product firmly into a more competitive position in the
SEPTEMBER 2013 Canadian automotive Review | 5
hottest SUV segment in Canada. V6 and four-cylinder engines are available, and the top variant boasts such cutting edge safety aids as adaptive cruise control and lane departure warning technology. The Mirage is a subcompact that’s been shown around the word as a concept in recent times. With its 1.2-litre three-cylinder engine, it should record impressive economy figures. Mitsubishi hopes its Mirage will become one of Canada’s most affordable and fuel-efficient models for 2014. The Mirage is built at a Mitsubishi plant in Thailand—another example of automotive globalization.
Nissan/Infiniti Nissan is bringing us a new version of its popular Versa subcompact for 2014 and upscale partner Infiniti has a new car and a new name with its Q50 sedan. The sporty 4-door Q50 will be available with conventional or hybrid drivetrains and offers what Infiniti describes as “the world’s first direct adaptive steering”. Other safety features are numerous and include active lane control and available all-wheel drive. Price is said to be less than $38,000 in basic form. The Nissan Versa competes in the growing subcompact class that includes products like the Toyota Yaris, Ford Fiesta and Honda Fit. It boasts a snappier styling job than the earlier car but still carries a very affordable price tag. Hatchback (Versa Note) and sedan bodywork is offered, with the sedan being the least expensive. Fuel efficiency is a major selling point for both these new Nissans. Also being readied for the new model year is a new version of Nissan’s Rogue crossover SUV, but few details have yet been released.
Subaru Subaru is a niche player in the auto industry, but offers some fascinating products, often with unconventional features like its famed boxer (horizontally-opposed) engines, which are all but extinct among other manufacturers. A new generation Forester SUV will appear for 2014 with a wide range of updated features. Subaru is claiming best fuel efficiency for a full-time 4WD SUV with this new Forester and two boxer engines are available.
Toyota/Lexus The iconic Toyota Corolla sees yet another generation arrive for 2014—an amazing 11th. This small car will be closely watched by rivals thanks to its “benchmark” status in its hotly contested class. A model that’s sold over 40 million (1.3 millon in Canada) since its 1960s introduction, each generation is always a little better than the last, even though improving the product seems an almost impossible task. Toyota highlights the new Corolla’s added “fun to drive” quotient and a combination of more power and better fuel efficiency. Headlamps are LED as standard,and new powertrain technology promises to enhance the driving experience. Other upgrades add up to a very appealing compact car package. The rugged 4Runner SUV is all new for 2014, though it’s been on the market for some time now. The once-available V8 option has been removed from the lineup, probably because the latest V6 engine offers much the same capability with less fuel usage. Toyota’s luxury arm, Lexus, has a new-generation IS, the division’s entry-level model. Re-styled inside and out, the IS is available with a choice of V6 powerplants. Cargo space has been improved and the rear seat now splits 60/40—key points for business and family users. c.a.r.
HYBRID AND ELECTRIC VEHICLES — PLUS A COUPLE OF DIESELS Although the frantic activity of recent model years around hybrid and electric vehicles has faded a little, a fair number of products in the “green transportation” segment are poised to enter the Canadian market for 2014. Much of the buzz among EV fans has been directed at the upcoming BMW i3, a cute little electric car with a highly respected nameplate behind it. A ground-up effort with a dash of pioneering technology, the i3 is scheduled to be in the showrooms before too long, but all-new EV products often face development delays. At the other end of the size scale, Cadillac is planning an EV version of its new CTS sedan—the ELR—and it will use the same running gear as Chevrolet’s now well-proven Volt model. Both models use a small range-extending engine and for 2014 the Volt has been reduced in price. Also from GM is the Chevrolet Spark EV, which is an electric version of the existing Spark gasoline-fueled city runabout. The Spark EV is the first fully electric car from GM since the oft-lamented EV-1, which was axed in 1999. Volkswagen is rumored to be working on an all-electric Golf which may be previewed at upcoming auto shows. There’s an interesting development at Honda on the hybrid front as the automaker once again offers a hybrid version of its strong-selling Accord. At the last go-round, the hybrid Accord was dropped due to poor sales, but Honda is taking another run at this segment for 2014.
Volkswagen is introducing a hybrid variant of its Jetta sedan with a turbocharged powerplant. Given VW’s vast experience of turbocharging, this could be the peppiest hybrid out there when it arrives, excluding exotics. Lincoln is launching a hybrid adaptation of its MKZ mid-size entry-level luxury sedan. This model will bring some welcome economy to the executive fleet sector and should earn serious attention. It’s tough to make a “green statement” with a luxury automobile unless it has something special under its hood. Given that diesel power can be the best option of all when it comes to fuel efficiency, it’s good to see that, at last, more automakers are bringing us “oil burners”. Diesel engines are highly fuel-efficient, very long-lasting and offer a greater range than conventional gasoline powerplants. Today’s diesels are quiet, refined and free of the exhaust smoke that used to characterize them. Two diesel standouts for 2014 from unexpected sources are the Chevrolet Cruze diesel and the Mazda6 diesel, both of which use cutting-edge diesel technology to enhance what are already excellent products. The Mazda6 diesel makes full use of the automaker’s SKYACTIV technology, and early tests have shown this sedan offers great performance and surprising quietness. Both are welcome additions to the diesel segment, although it’s taken a while for automakers to catch on to a demand that VW and Mercedes-Benz have known about for years.
6 | Canadian automotive Review SEPTEMBER 2013
CAF
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YOUR SUCCESS IS PROPELLED BY INNOVATION.
| 2014 SIERRA 1500
| 2013 CADILLAC ATS
S:10”
| 2013 CHEVROLET TRAX
With 17 Car and Crossover models with fuel consumption ratings of 6.7 L/100 km highway or lower *, the 2014 Chevrolet Cruze Diesel rated at 4.2 L/100 km highway, and a ‘Best in Class’ 2014 full size V8 pickup† rated at 8.7 L/100 km highway, our vehicles can help lower the costs of fueling your fleet. It’s our commitment to engineering innovation that delivers technology like Biofuel, Hybrid, and eAssist™ that can make a positive impact on your business.
2013 VEHICLES WITH 6.7 L/100 KM HIGHWAY FUEL CONSUMPTION OR LESS* Chevrolet Cruze ECO
4.6 L/100 km hwy
Buick Encore (FWD)
6.0L/100 km hwy
Chevrolet Sonic (1.4L)
5.1 L/100 km hwy
Cadillac ATS (2.5L)
6.0L/100 km hwy
Chevrolet Spark
5.1L/100 km hwy
Chevrolet Equinox (2.4L)
6.1 L/100km hwy
Chevrolet Cruze (1.4L)
5.2 L/100 km hwy
GMC Terrain (2.4L)
6.1 L/100km hwy
Chevrolet Malibu ECO
5.3 L/100 km hwy
Buick Regal (2.0 Turbo)
6.2 L/100 km hwy
Buick LaCrosse with eAssist™
5.4 L/100 km hwy
Buick Verano (2.4L)
6.2 L/100 km hwy
Buick Regal with eAssist™
5.4 L/100 km hwy
Chevrolet Camaro (3.6L)
6.6 L/100km hwy
Chevrolet Malibu (2.5L)
5.7 L/100 km hwy
Chevrolet Impala
6.7 L/100km hwy
Chevrolet Trax (FWD)
5.7L/100 km hwy
Your success. It’s how we measure ours. To learn more about the vehicles that can help your bottom line, visit fleet.gm.ca *Fuel consumption ratings based on GM testing in accordance with approved Transport Canada test methods. Your actual fuel consumption may vary. †2014 Silverado and Sierra equipped with available 5.3L V8 EcoTec3 engine. Comparison based on WardsAuto.com 2013 Large Pickup Segment. Your actual fuel consumption may vary.
a good business partner
NV200 van is built to work
Pickup truck culture in North America spawned the truck cap business in the 60s. Owners in rainy and snowy climates, like ours, immediately saw the advantages and demand for these covers skyrocketed. So, while truck owners in Canada were making vans out of their trucks, Europe simply built vans. Of course Europeans never had a love affair with pickups the way we did—but a good idea, even in Europe, is still a good idea, and now these vans are coming here. The Nissan NV200 is a small utility van aimed at business users. To picture its size, think of the current Nissan NV full-size van and lop 4.5ft off the length and 2.5ft off its height. This makes it a significantly different product—aimed at a market that wouldn’t consider a full-sized van. And that is why it will really appeal to the unique, one-van entrepreneur. In California for instance, I saw a NV200 outfitted for a custom-built surfboard shop and another for Gibson, as a mobile guitar repair van. It doesn’t hurt that the body of the NV200 has no windows, so in essence it can become a rolling billboard for your business as well. Big name recognition—at a small capital cost. Both vans were wrapped with eye-catching graphics, while inside very specific features carried (and showcased) each company’s wares. What helped in this customization is the NV200’s factory installed interior metal webbing that provided standard mounting points for racks and shelves; all of which can be attached to the 8 | Canadian automotive Review SEPTEMBER 2013
webbing without drilling into the sidewalls. Also, six floor-mounted tie-down hooks in the cargo bed can be used as temporary or permanent fix points. Inside, the NV200 offers up 3,474 litres (122.7 cubic feet) of cargo space and almost seven feet of clear floor length. So, past the obvious transport duties, the NV200’s price-point, size and running costs will appeal to the small entrepreneur as well as larger fleet customers who want to do on-the-spot marketing at shows, events and cultural venues. How? Well, park your custom “woody” NV at the beach and show off your surfboards on a pull-out rack. No building, no permit, no overhead. Perfect. If you’re a big operator like Gibson, you park your fleet of custom vans at concerts and in front of music venues—interact with the bands and have fans check out your wares, do repairs and sell guitars. This new van is built in Mexico and is in use around the world (in over 40 countries). The front-wheel-drive platform uses a 2L gas engine that makes 131hp and 139 lb-ft of torque at max rpm; and, it uses all that rpm range with a sturdy CVT transmission. This combination moves the van around lickity-split. It’s nimble with a very low centre of gravity feel, a tight turning circle (37ft) and easy, quick steering. I drove a combination of freeways and city streets with the van—in-
By Howard J Elmer
cluding lots of stop, start, and U-turns up and down alleys to help out a film crew shooting a segment on the NV200. This type of driving was made really easy with the short shifter located right in the middle of the centre stack. Going from reverse to drive and back again was easy—without looking. Mirrors are decent, though a little small, while the drop-away nose of the van and large windshield made forward visibility excellent. The windows also have the auto up and down feature, one that is used a lot in the work-a-day world, and it’s standard. It’s nice that A/C is also standard at this price point. The rest of the gauges and controls are simple, large and well laid out. Nothing fancy, but then utility is uppermost in the design elements of this van; right down to an extra-tough layer of cloth sewn into the outboard side of the driver’s seat. Why? This is the spot that always wears out first from the constant in-and-out rubbing of the driver’s butt. That’s attention to detail that deserves a respectful nod. If I have to voice a complaint about the NV200 it is simply that the window-less body shell makes backing out of laneways a chore—the vehicle has a really big blind spot. My tester was empty most of the day except for a passenger. As a vehicle for a driver and partner it works well too, both space-wise and comfort-wise. Seats are supportive; legroom is good and overall riding position comfortable. The max load the NV200 will carry is 679kg (1,500lb); and while I didn’t get to carry cargo, I suspect it will perform up to expectations based on the snappy acceleration I experienced. Certainly the CVT provides infinite gearing that adjusts to load. So the torque curve should pull this maximum weight well. However, I did find that I often had the gas pedal pinned to the floor during freeway on-ramp acceleration. So, while some drivers might think this indicates a powertrain that’s a bit anemic, I appreciated the payoff of the small engine, which is small gas bills. Nissan claims 8.7L/100km City and 7.1L/100km Highway. The NV200 platform is unique because it’s a FWD configuration. With the whole drivetrain confined to the forward axle, a number of benefits make themselves known right away when driving and working with this small van. First, it has a very low load floor height
(19.5 inches) and secondly, small, unobtrusive rear wheel hubs. A standard 40- x 48-inch pallet will fit back there. Also accommodating this skid entry are rear doors that first open to 90 degrees, then with a second release swing wide and out of the way to 180 degrees. Those rear doors are also split 60/40, with the larger door being on the curbside. For deliveries this is excellent both in placement and design. Opening one door a hundred times a day beats opening two that many times. Another access design element is the twin side sliding doors—again convenient in tight delivery situations, but also best in a taxi configuration. The driver and passenger doors themselves are also large and open wide for the repetitive in-and-out that makes up a delivery driver’s day. I also noted that all the door handles/latches are light and easy to open one-handed. The van has a unique, low roof height that will allow access to any underground parking or loading dock. For city deliveries and downtown service vehicles, this is crucial. So, along with Ford’s Transit Connect, this vehicle lands in a new market niche—one that until now has forced buyers into vans too big for their needs—or into cars not really suited to their purposes. One other note on the Transit Connect—it’s taller and won’t fit every underground garage the way the NV200 will—something Nissan took pains to point out. For the necessary paperwork that goes along with any delivery vehicle’s route, the NV200 has a built-in convenient clipboard holder on the dash—and the passenger seat folds flat and has a hard back that acts as a desk surface. This is not a repurposed van—it was designed to work and I expect it will do a good job. Available now, the NV200 has a base MSRP of $21,998. c.a.r. SEPTEMBER 2013 Canadian automotive Review | 9
Including those not yet asked.
2014
+ performance
5
Roomy 5-passenger seating capacity
Transmission
CVT Lineartronic 5
+
110 %
satisfaction
1
X-ModeTM System 4
Enhanced control of the road with the push of a button
Choose PZEV technology, the affordable eco-friendly alternative without the compromise.
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+ wider 15mm + taller 20mm + longer 35mm
2,115 L
cargo capacity
Fuel consumption 2 6.2L / 100km
(highway) for the 170 hp., 2.5 litre version.
3
250 x
Subaru BOXER Engine
Innovation meets technology. The Subaru BOXER® engine produces dynamic low-end response. Available on the 170 hp/2.5L or 250 hp/2.0L turbocharged versions.
Fonction 6 SI-DRIVE Hands-free system
7
680 kg
2014 FORESTER
To consult our Fleet ordering guide or for more information please visit www.fleet.subaru.ca or call 1 877 293-7272 for the National Fleet Sales department.
1. Only on Limited models. 2. Fuel consumption figure rating posted by Natural Resources Canada of 6.2L/100 km (highway) for a 2014 2.5i Forester equipped with continuously variable automatic transmission and a 60L fuel tank capacity. Fuel consumption figure should only be used for vehicle comparison purposes. Actual fuel consumption will vary based on driving conditions, driver habits and vehicle load. 3. Available on the 2.0XT model. 4. Automatic transmission only. 5. Not available on the 2.5i (EJ1-X0) model. 6. Available on the 2.0XT model. 7. Ratings of “Good” are the highest rating awarded for performance in five safety tests (moderate overlap front, small overlap front, side, rollover and rear) conducted by the Insurance Institute for Highway Safety (IIHS) (www.iihs.org). To earn a 2013 Top Safety Pick+, a vehicle must receive a “Good” rating in at least four of the five tests and a “Good” or “Acceptable” rating in the fifth test. Technical specifications are subject to change without any prior notice. Vehicles shown for illustration purposes only.
THE ANSWER TO ALL YOUR QUESTIONS
conducted by the Insurance Institute for Highway Safety (IIHS) (www.iihs.org). To earn a 2013 Top Safety Pick+, a vehicle must receive a “Good” rating in at least four of the five tests and a “Good” or “Acceptable” rating in the fifth test. Technical specifications are subject to change without any prior notice. Vehicles shown for illustration purposes only.
By David Taylor
Get your winters on Tires for cold, snow and ice
Ever driven on one of those infrequent winter days when the sky is a brilliant blue, the sun is shining–and your vehicle’s heater is blasting away as you warm your nether regions with your heated seat? Even on clear, moisture free pavement, in situations such as this, winter tires can be a formidable ally. Winter tires are designed for cold conditions–and not necessarily just for snow or ice. Manufacturers have long concentrated on the fact that tire treads are susceptible to temperature. The effectiveness of all-season tires drops off sharply as the thermometer falls below seven degrees Celsius. That is the point at which winter tires start to gain the edge, providing better traction. With winter tires and lower temperatures, stopping distance is greatly improved. As the temperature drops further, the gap between the two widens, regardless of surface conditions. All winter tires combine flexible rubber compounds with small tread blocks and hundreds of small cuts known as “sipes”, in the tread itself. These blocks and cuts are designed to keep the tire constantly flexing and biting at the road surface. This helps maximize grip on unpredictable surfaces. You have to decide which type of winter tire makes the most sense for you. While branding and tire compounds do vary between manufacturers, there are three basic approaches to winter grip. “Studless” tires are the type most vehicles run. They provide optimum ice and packed snow grip, but are less responsive on dry roads–especially if you’re a fast driver with a sportier vehicle. To achieve high traction levels on snow and ice they offer less grip on dry roads and your vehicle will not respond as crisply or quickly to steering inputs, under hard braking or hard acceleration. Studded tires can be run studded or unstudded. Studded, they’ll give comparable ice and packed snow grip but they may be less responsive on dry roads. When unstudded, they’ll lack grip on ice and packed snow, but will perform well in moderate and deep snow. Ensure you may run with studs in your jurisdiction—if this is your preference. We show studded tires with an (*S*). Performance winter tires will exhibit similar dry-road deficiencies to a much lesser degree than studless. If your vehicle came with summer performance tires, these tires will be more comparable in steering response, acceleration, braking and cornering grip. Do not expect miracles on ice and snow. Below is a selection of currently available winter tires: BF Goodrich, Winter Slalom KSI State-of-the-art looks and the ability to take you where you want to go throughout the winter make this a great choice for all types of cold weather adventures. With optimized sipe configuration and full lateral grooves for hydroplaning resistance and deep snow traction, a solid all-round tire.
Bridgestone, Blizzak WS-70 Engineered with the latest advances in Bridgestone winter tire technology, the tire’s ZigZag sipes maintain stability of the tread blocks, allowing superb directional control, whether on ice, snow, wet or dry surfaces. Bridgestone, Blizzak DM-V1 Suited for vehicles ranging from light trucks and SUVs and available in 46 R-speed-rated sizes ranging from 15-22in and 75-45 series. Highly versatile, this tire provides sure-footed traction regardless of the surface–or conditions. Continental Tire Canada, Inc, ExtremeWinterContact Part of a new family of performance tires, engineered with an advanced tread compound and structured siping to dramatically improve ice and snow traction. Continental Tire Canada, Inc, Gislaved NordFrost 100 (*S*) An all-new winter tire for the Canadian market, developed in Sweden. Outstanding snow traction, high grip on ice and exceptional dry road handling. Dunlop Tires, Dunlop Winter Sport 4D Featuring enhanced grip and performance, this tire has the 4D Sipe System, which includes an increased number of shoulder area sipes to enhance braking and acceleration on snow and ice. And provides excellent handling overall. Dunlop Tires, Dunlop Winter Maxx With excellent ice grip, this tire achieves its top performance through a higher blade density, preventing distortion and increasing tread-to-ice contact.
SEPTEMBER 2013 Canadian automotive Review | 11
General Tire, Altimax Arctic (*S*) Innovative technology provides increased traction and even wear for the life of the tire. Noted for exceptional cold-weather flexibility and outstanding wet traction. Goodyear Canada Inc, Goodyear Ultra Grip Ice WRT A winter tire for enhanced traction in challenging winter conditions. With 2D blades in the centre zone, 3D TredLock Technology blades in the shoulder zone, and a specialized ice compound, it’s available in passenger car and light truck/SUV designs. Goodyear Ultra Grip Winter For confident winter traction, this tire has a directional tread pattern, multiple biting edges and wide tread grooves to help push away snow and slush.
Pirelli Tire Inc, Sottozero 3 Considered by the manufacturer as being their best, all round winter car tire. A combination of balanced sporty performance with excellent braking and traction. Sailun Tire, Ice Blazer WSL2 A performance winter tire with a unique L-shaped main groove. Designed to promote an aggressive bite in deep snow, slush, and wet conditions. Maximum stability and multi-directional grip, all while minimizing road noise. Sailun Tire, Ice Blazer WST2 (*S*) Intended for light trucks, the WST2 has aggressive multi-directional sipes, engineered for excellent grip on snow and ice. Its angled grooves effectively help clear slush and water for extreme grip and control.
Kumho Tire Canada, Inc, I’ZEN KW23 Designed with three-dimensional sipes for improved traction on snowy and icy roads and manufactured from a special compound with new silica for improved ice traction, this tire is optimized for performance at low temperatures.
Yokohama Tire (Canada) Inc, iceGUARD iG52c The tread design in this popular tire has been refined to offer superior grip during acceleration, cornering and braking in the most severe winter conditions. Optimized to provide long-lasting even wear and low road noise.
Kumho Tire Canada, Inc, I’ZEN RV KC15 An aggressive asymmetric pattern designed for SUVs and light trucks, this tire provides powerful snow traction with wide lateral grooves and multi sipes for snow and ice braking. A well-balanced choice–especially on wet surfaces.
Yokohama Tire (Canada) Inc, iceGUARD iG51v Engineered for light trucks and SUVs, this tire has an aggressive, performance-oriented tread pattern. Its unique construction and compound provide excellent wear, long-term durability—and even improved fuel economy.
Michelin North America (Canada) Inc, X-Ice Xi3 This tire’s full-silica compound maintains flexibility at lower temperatures, improving performance on ice and in snow. It also maintains firmness at moderate temperatures, improving wear and grip and allegedly stops up to 10 percent shorter on ice than the competition. Michelin North America (Canada) Inc, X-Ice Xi2 Designed to help Crossovers and SUVs hold the road in a variety of wintery conditions. A wide tread contact patch generates acceleration and braking power, as well as cornering traction, for outstanding winter maneuvering. Pirelli Tire Inc, Scorpion Made for SUVs, this tire has an optimized sipe layout and new tread pattern compound, which allows for shorter breaking distances in all conditions.
12 | Canadian automotive Review SEPTEMBER 2013
Here’s a tip that could save a life and thousands of dollars. Winter tires should always be installed on all four wheels. Never install on only the drive wheels. Four winter tires are much safer. They will optimize the performance of the ABS braking and electronic stability systems—the steering too. Never compromise. Winter tires are like any other replaceable component on your car. Their lifespan is directly related to the quality of the product that you buy and the type of use that they see. Rubber softness, UV exposure, tire construction and even vehicle weight all figure into the equation. If you store your winter tires properly—indoors, away from light and heat and limit them to winter use only—several seasons of safe driving is the norm. Remember, however, that any tire requires tread depth to be effective. The average winter tire produces its maximum traction on snow and ice when it’s brand new. Once a tire reaches 6/32” of tread depth, you likely have one good winter driving season left—before you start the cycle over one more time. It’s always a good thing when the rubber hits the road—and stays there. c.a.r.
Fleet safety Minimizing risk and liability
By Paul Wingate
Think about everything you and employees of your business, organization or company typically do during the day. What represents one of the greatest risks to your health and safety? In a word: driving. In a typical year Canadians collectively drive over 290 billion kilometres on the nearly 900,000 kilometres of roads nationwide. Unfortunately, there are on average over 170,000 injuries annually and over 2,000 fatalities. Traffic collisions continue to be the biggest transportation safety problem in Canada. The annual economic cost to society from injuries and property damage has been estimated at between $11 and $27 billion depending on the calculation method used. Careful planning to prevent or mitigate liability with regards to fleet operations is essential. For example, by law, in most jurisdictions, a vehicle used for business purposes is considered part of the “workplace” and subject to workplace health and safety regulations. In addition, Bill C-45, an act to amend the Criminal Code, came into force March 31, 2004 and defines who is responsible for the safety of persons in the workplace and to allow for prosecution under charges of “criminal negligence” when those responsibilities are recklessly or willfully disregarded. The amendment states in part that: “Every one who undertakes, or has the authority, to direct how another person does work or performs a task is under a legal duty to take reasonable steps to prevent bodily harm to that person, or any other person, arising from that work or task.” Determining the appropriate insurance coverage for company vehicles is just the beginning. Effective risk management requires much more. It is a mistake to think of accident management in isolation or simply in terms of “how do I get a damaged vehicle repaired?” A systematic approach to your fleet policy that takes into account not only how accidents are handled, but also investing in positive actions to mitigate risk, is essential. This involves minimizing the situational stress to employees when accidents occur and the procedures, programs and services you have in place to maximize
the safety of your drivers before and after the fact. Best practice starts with a commitment to manage fleet safety as a critical business activity. Some of the best practices that Element Fleet Management recommends are: • Include safety considerations in vehicle selector and up fit choices. • Track preventive vehicle maintenance. • Ensure you have an up to date Fleet & Safety Policy that is clearly communicated with management and employees. • Perform a periodic review of employee driving records (abstracts) to identify the high-risk drivers. A recent study determined that drivers with five or more driving violations were almost three times more likely to have a fatal accident than a driver with a clear record. • Review reporting and conduct thorough investigations of all road incidents. Another recent analysis highlighted that if a driver had two at fault accidents (major or minor) over a three-year period, without additional training, their risk is substantially higher to repeat. • Use of telematics data (speeding, harsh braking etc.). • Provide additional driver safety training to reinforce safe driving practices. • Confirm that you are protected if employees and volunteers do not have adequate insurance when using their personal vehicle for business purposes. An important aspect of a good fleet safety initiative is the insight it will provide about your drivers’ behaviour, and identifying the steps that should be taken as a result of this behaviour. One area that companies should focus their attention on is ‘aggressive’ driving. Not only is this a major cause of motor vehicle collisions, but it can also increase fuel consumption by up to 37 percent. A fleet safety strategy will fall short of its objective if a company fails to provide assistance to improve driver behaviour and/or does not identify and communicate the potential consequences of a driver’s actions. We encourage our clients to be proactive in creating, implementing, monitoring and enforcing a comprehensive fleet safety program. There are significant financial reasons for doing this, but ultimately protecting lives is the priority. c.a.r.
“Careful planning to prevent or mitigate liability with regards to fleet operations is essential.”
Paul Wingate is National Director, Sales Force Effectiveness with Element Fleet Management Inc. He has more than 32 years of experience in the fleet industry, with management positions in operations, fleet optimization and sales.
14 | Canadian automotive Review SEPTEMBER 2013
Alternative fuel options found here. Turn to Ford for a wide range of alternative power choices. Beyond ex fuel, diesel and biodiesel, our work vehicles offer CNG/LPG conversion. You can also choose from a number of hybrid models, as well as the 2014 Focus Electric. To ďŹ nd out how Ford technology can take your company in new directions, visit ford.ca.
Vehicles may be shown with optional features. Alternative fuel options vary by model and trim. See dealer for full details.
Addressing issues affecting Canada’s public procurement professionals
15 Supplier Diversity Steps towards social procurement The City of Toronto is planning consultations and pilot projects to incorporate supplier diversity into its purchasing framework
17 18
The p’s and q’s of RFPs
Techniques that bring clarity to your request documents
Proactive Risk Management
Tips for using systemic risk management in public procurement
Steps Towards Social Procurement The City of Toronto is planning consultations and pilot projects to 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 PurchasingB2B.ca
procurement concepts added to the process, Pacholok says. That process will include two key concepts: encouraging workforce development and promoting supplier diversity.
“To me, this is a chance to help prove competition 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.”
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. SEPTEMBER 2013 | 15
“They may have a perception that it’s dif�icult to get work with a government or the City, or maybe they have particular concerns” he says. The �irst step in the process is outreach to organizations like the Canadian Aboriginal & Minority Supplier Council (CAMSC) and the Diversity Business Network, Pacholok says. As well, the City will meet with vendors themselves to uncover any roadblocks they might be facing. “We want to make sure that people are coming to the door and are trying to participate,” he says. “So the main focus is going to be outreach.” The City averages about $1.5 billion in procurement annually, with perhaps half of that in construction. Pacholok notes that one of the pilot projects under consideration involves investigating ways to encourage supplier diversity within that category. For example, there could be subcontracted opportunities for diverse suppliers, or ways to get them interested in opportunities in the under-$50,000 category. Procurements at the City over $50,000 are published online so that bidding is open to everyone, while those under that amount are subject to a three-quote system. “Maybe we need to �ind a way so that in that three-quote system, we make sure we’re getting more variety,” Pacholok says. As well, the City plans to survey vendors to �ind out how many are at least 51-percent owned by women, Aboriginals or other diverse groups, he says. Toronto also plans to work with CAMSC and other groups to identify those diverse suppliers. Since its amalgamation in 1998, Toronto has had a non-disclosure policy attached to all call documents. That has helped the City collect some information, since companies are able to self-identify as diverse. “We’re getting some baseline data but I think we need to still do more to actually be able to feel the data is solid,” Pacholok says. The point of collecting such data—and of supplier diversity initiatives generally—is not to provide certain groups with advantages over others, he stresses. Rather, the City is looking to better understand its vendor community and respond properly to it. Toronto is a diverse city, Pacholok notes, so letting all its communities know the municipality is open for business is good policy. The municipality’s purchasing and materials management division will also work with Toronto’s legal resources to ensure call documents comply with provincial legislation and trade agreements. “To me, this is a 16 | SEPTEMBER 2013
chance to help prove competition and get better value for the city, including not just price but better services,” he says. “We can say to the taxpayers, we are trying to get better value and it has spin off bene�its.”
Workforce development Workforce development is the second aspect of the City’s social procurement framework, and has a limited impact on how the supplier diversity portion plays out, Pacholok notes. Through this initiative, the City will look to encourage contract winners to set up an apprenticeship or training program, or to otherwise use a social enterprise within their supply chain. The municipality has been involved with pilot programs run by organizations associated with the City that have used the workforce development model. For example, the contractor employed by the Toronto Community Housing Corporation (TCHC), in a project to develop the City’s Regent Park neighbourhood, brings at-risk youth into the system, trains them in construction and helps them to �ind work afterwards, he says. “We know it can work in construction projects, so we’re going to try to see where else it can work,” Pacholok notes. While the use of supplier diversity is a wellknown concept in the private sector, it remains less utilized in public procurement. That’s changing, Pacholok notes, with events such as the 2010 Winter Olympics in Vancouver and the Toronto 2015 Pan Am/Parapan Am Games making strides to raise supplier diversity’s pro�ile in the public sphere. The City is beginning outreach in September and October with groups such as CAMSC and with the vendors themselves. As well, it will begin working to determine pilot projects and deciding which aspects of the social procurement framework to test in each pilot. “Our ultimate goal is to report to council in 2015 with an actual policy based on the lessons we’ve learned from the pilot projects we can �inish by then,” Pacholok says. “I think a lot of municipalities are waiting to see what Toronto ends up doing.” b2b
The p’s and q’s of RFPs Techniques that bring clarity to your request documents by Rusty Joerin, SCMP
W
riters of supply request documents like RFPs and RFQs must ensure the document is clear and accessible to the reader. This is particularly important to demonstrate integrity in public procurements. A clearly written request document encourages participation by better quality suppliers. This article provides techniques that I employ when drafting requests and builds upon the communications article I wrote in PurchasingB2B’s May 2013 edition. The supplier community will welcome consistent structuring of the request components. I consider the essential components of every request document to be: title page; table of contents; executive summary; boiler plate; de�initions; speci�ic conditions; evaluation process and criteria; response form; scope of work—speci�ications and contract format. A document receipt con�irmation form is optional but useful to gauge interest in the request during the response period. Organizations should apply a similar structure to all request documents and all public sector organizations adopt a more standardized document format. Clarity is writing it once clearly and concisely. This avoids confusion through inadvertent variances in conditions, dates and document numbers in the body of the request. It happens, and can be time consuming and expensive to rectify. I like to put all the essential information on the title page. This includes the request title and reference number; a one-sentence overview of the request; contact person’s name and contact information; site visit date; time and place if applicable; enquiry deadline date; the response format requested; closing date and time and closing location (address). Wherever any of this information is referenced in the body of the request, I refer to the title page and do not duplicate this data.
“A section describing the evaluation procedure—along with the weighted evaluation criteria— demonstrates integrity of the procurement and your organization’s commitment to fairness.”
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Use the software tools such as the table of contents tool along with the styles tool. I number my pages using the x of y format. The table of contents and page numbering will assure recipients they have a complete document. The executive summary is a short paragraph about the request intended as a courtesy to the reader, who can decide if the request is of interest. Procurement people are familiar with “boiler plate” clauses, however I recommend they be reviewed in the context of the request and reviewed from time to time to re�lect changes in the laws of procurement and fairness in risk allocation. De�initions are self-explanatory and essential where TLA’s (three letter acronyms) are employed. Clearly state any conditions speci�ic to the request. A section describing the evaluation procedure—along with the weighted evaluation criteria—demonstrates integrity of the procurement and your organization’s commitment to fairness. A carefully designed response form will assist you in response evaluation. I like to be directive even with requests for proposals to ensure that respondents will address all components of each evaluation criteria. The response form will also contain language committing the respondent to the request conditions and a clearly identi�ied signature �ield. The work scope and speci�ications should be clearly stated and written in a manner easily understood by the request’s audience. This section will address all components of the criteria for evaluation in the same order as given in the response form. Finally, the request will include an outline of the form of contract with the selected respondent. The contract language may be mandated by your organization’s legal resource. I suggest giving careful thought to this section to ensure it’s appropriate to the request. British Columbia has—and I expect other provinces have—standard form request document templates containing most or all of the above components. Consider structuring request documents similar to your provincial jurisdiction’s documents. Rusty J. Joerin, SCMP is a consultant specializing in public sector procurements. He authors the free monthly newsletter Better Value Procurements. To subscribe email rusty@woodsgift.com
SEPTEMBER 2013 | 17
Proactive Risk Management Tips for using systemic risk management in public procurement by Rosslyn Young
C
lients responsible for purchasing within the public sector tend to be risk averse, and for good reason. Public tendering in Canada has historically been subject to costly lawsuits and highly public scandals. While tasked with meeting challenging operational requirements, public procurement professionals must constantly worry about legal risk and exposing their organization to reputation damage. Because of this challenging environment, many public procurement professionals take a reactive approach to risk management, addressing issues as they arise. However, there is another way to approach procurement risk: adopting a proactive approach to risk management focusing on systemically identifying areas of risk, legal exposure and non-compliance across the organization. When reviewing an organization’s procurement processes with a view to minimizing risk, the lens should be contextual. The legislative, trade and policy framework that applies to an organization will vary depending on its sector, geographical location and operation purposes. A central government agency that focuses on administrative oversight will clearly have different risk management requirements than a municipality that maintains front-line infrastructure and services for citizens. Calibrating the appropriate matrix of external procurement requirements and internal operational needs, and mapping those challenges to public procurement best practices, is the �irst step to identifying areas that could present exposure.
“To strike the right balance between managing risk and achieving timely results, public institutions should be taking the time to step back from the day-to-day aspects of their projects.”
A second major �ix is creating an effective internal governance roadmap with a clear policy requiring that business and project planning be integrated into the procurement cycle and 18 | SEPTEMBER 2013
aligned with the budget approval process. Effective planning during the early phases means projects can be resourced and issues identi�ied before they create liabilities and delays. This requirement should be implemented for all projects, not just those that are enterprise-wide or major endeavours. Another important component of risk management is ensuring that the ethical dimensions of procurement are understood across an organization. While ethics should always be top-of-mind in purchasing, in the public sector ethics take on this paramount role given the duty to taxpayers to prudently spend public resources. Public sector entities must ensure purchasing decisions are conducted ethically and are free of con�licts of interest or bias. While some ethical elements of purchasing are obvious, other aspects—like the downstream con�lict of interest when external consultants advise in early project planning and then want to bid on the work—are more challenging since they’re ingrained by long standing custom within some sectors. Ensuring public procurement ethics are addressed and understood across the organization is another important aspect of proactive risk management. Finally, a review of an organization’s existing suite of procurement templates is essential to streamline risk. Procurement templates should be periodically reviewed to ensure they meet policy and trade treaty requirements, are keeping pace with case law developments and ful�il operational requirements. Consult in-house or external legal counsel to ensure templates contain the necessary legal language to ensure they minimize risk. While business and commercial risk can never be completely removed from the procurement cycle, the purchasing professional’s role is to minimize those risks while meeting the timelines of the speci�ic project. To strike the right balance between managing risk and achieving timely results, public institutions should be taking the time to step back from the day-to-day aspects of their projects to systematically review their organization’s procurement processes. Experience proves that being proactive is a large step in the right direction in minimizing risk. Rosslyn Young is a commercial lawyer whose practice focuses on procurement and competitive purchasing. She can be reached at rosslyn.young@procurementof�ice.ca.
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Supplier Diversity
A Tale Of Two Cities
Research compares supplier diversity in the Greater Toronto and Chicago areas by Paul D. Larson, Ph.D and Jairo Viafara
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tatistics Canada projects Canada’s visible minority population will rise from 16.3 percent in 2006 to 30.6 percent in 2031. In the Toronto Area, The forecast for the “minority” population is from 42.9 percent in 2006 to 62.8 percent in 2031. Supplier diversity means purchasing policies and practices centered on doing business with suppliers for which more than 50 percent of the ownership and/or management is controlled by people other than straight white men. While this includes Aboriginal people; visible minorities; women; disabled people; and lesbian, gay, bisexual and transgendered (LGBT) people, this article focuses on visible minority suppliers. Your supply chain includes your organization, employees, first- and second-tier customers and first- and second-tier suppliers. These are becoming more diverse. In a time of increasing transparency, your customers and employees will wonder who your suppliers are. Given the trend toward consolidation of first-tier suppliers, supplier diversity action may be at the second-tier, where newer, smaller suppliers compete. We analyzed content of social responsibility or diversity reports of organizations based in the Greater Toronto Area (GTA). We also studied a group of companies based in Greater Chicago. For this analysis, we drew 95 organizations totaling 474,476 employees from Greater Toronto’s 2012 Top Employers. Also, the GTA’s largest 43 firms, with annual revenues ranging from $2.5 billion to $37.5 billion, were taken from The Financial Post 2011 (FP500). Another 32 companies, the largest in or around Chicago, were identified using the 2012 Fortune 500. The 2011 revenues for these firms ranged from $5 billion to $81 billion. Employees, suppliers and size Content analysis reveals a strong connection between employee diversity and supplier diversity. Among Greater Toronto top employers, nearly half of organizations with employee diversity programs also have supplier diversity—but none of these organizations has supplier diversity without employee diversity. Further, only one FP 500 company has supplier diversity without employee diversity. There’s a strong link between an organization’s size and supplier diversity. GTA top employers with supplier diversity employ an average of 16,113 people, while those without average 3,323 employees. Among the Fortune 500 in and around Chicago, firms with supplier diversity report average annual PurchasingB2B.ca
revenues of $30.8 billion, compared to $8.2 billion for those without. Born in the USA Interest in supplier diversity started in the US, partly explaining why supplier diversity is more likely at Canadian companies with American ties. A US connection (as parent or subsidiary) doubles the odds a GTA top employer has a supplier diversity program. Only 6.7 percent of large (FP 500) GTA companies with no direct link to the US have supplier diversity programs. However, 20 percent of FP 500 firms with an US parent and 46 percent with an US subsidiary have supplier diversity. Large US organizations are clearly the continental leaders in supplier diversity. While 21 of the largest 22 Fortune 500 companies in and around Chicago have programs, only seven of the largest 22 FP 500 firms in the GTA have supplier diversity. Of all the large companies analyzed, 77.4 percent in Chicago—and only 23.3 percent in Toronto—have supplier diversity programs. The case for supplier diversity reaches beyond social responsibility. Supply chain strategy may call for multiple sourcing for better quality and lower costs. This allows more suppliers and greater supplier diversity. Large customers expect first-tier suppliers to initiate supplier diversity programs at the second tier. Customers, employees, investors and taxpayers in the GTA are becoming more diverse. In the future, procurement will seek—and find—this diversity in their suppliers as well. b2b
Paul D. Larson, Ph.D is CN professor of supply chain management, University of Manitoba. Jairo Viafara is former research associate, University of Manitoba Transport Institute.
SEPTEMBER 2013 | 19
Services
Financing The Chain
Recent trends in supply chain finance help procurement take advantage of a shrinking world by Michael Power
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s supply chains lengthen to accommodate global sourcing patterns, banks now offer new and innovative ways to finance those longer supply chains. Emerging trends in supply chain finance offer organizations ways to do this. Supply chain finance represents early payment tools companies can provide to their suppliers allowing them to get paid early. Typically, the buyer wants to pay as late as possible, says Jason Palmer, director, Canada trade head at Citibank. Meanwhile, the supplier is looking to be paid as early as possible. Supply chain finance allows for a discount on the buyer’s receivable. “The supplier receives the money early and they pay a small discount fee, but the buyer still ends up paying on the original due date,” he said. “The bank basically bridges the financing from the time the supplier would like to be paid until the time the buyer would like to pay.”
“Another trend is using supply chain finance to accomplish sustainability or corporate social responsibility goals.” Recent trends in the practice include using supply chain finance to manage early discount programs, Palmer says. In commercial terms negotiations, suppliers sometimes offer discounts if the buyer pays early. For example, a 2/10 net 30 arrangement means two percent is deducted from the invoice if a buyer pays a supplier within 10 days. Recently, these types of arrangements have been put within a supply chain finance program. Another trend, Palmer notes, is using supply chain finance to accomplish sustainability or corporate social responsibility goals. Certain companies, such as those with sustainability or CSR practices, can be invited 20 | SEPTEMBER 2013
to join a supply chain finance program, since it’s a form of financial support as the supplier is paid early. “We’ve seen it used as a means to support small businesses operating around or near a company,” Palmer says. “You could also use it as a tool to support sustainability. It’s a carrot.” Organizations can also dedicate supply chain finance programs to a specific spend or supplier category. Companies can use a program to support organizations that they buy transportation services from or launch a program targeting fuel suppliers, Palmer says. “Not a program that’s suitable for all suppliers, but a very targeted program with a smaller number of the same type of suppliers,” he says.
Suppliers in China Canadian retailers are using supply chain finance—or more specifically, payable finance—when sourcing from multiple suppliers in China, says Ben Arber, head of global trade and receivable finance, Canada, at HSBC. For example, retailers often negotiate 60-day terms with those Chinese suppliers. Many Canadian retailers have long-standing overseas relationships but still want the best deal without harming suppliers’ interests. “We’re seeing increasingly in the retail space and other industries those retailers offering finance to their suppliers—in China, in my example—off the back of their stronger credit rating,” Arber says. “Usually, a bank will provide that finance. Whereas an invoice may say the retailer will pay the Chinese supplier on day 60, suppliers can get finance on day-one.” The supplier gets paid immediately, while the cost of that finance is almost always lower than if the supplier had gotten it from a bank in China, since Canadian retailers often have lower finance costs than small- to mid-sized Chinese companies with borrowing costs of eight or nine percent. “Being paid early and having a cheaper cost of working capital for a Chinese supplier is a pretty major benefit,” he says. That can also give a retailer leverage to push their terms from 30 to 90 days, Arber notes. Or, the company can request to pay two percent less on the goods because of the working capital benefits they’re giving the supplier. “Those are the sorts of conversations we’re seeing happening a PurchasingB2B.ca
lot more because that payable finance option wasn’t really there 10 or 15 years ago, and it’s now easier to put in place in today’s environment,” he says. Another trend in supply chain finance specific to procurement involves the use of Chinese currency, the Renminbi, when buying in China rather than paying in US dollars as is often the case, says Arber. Many Chinese suppliers prefer US currency because they can add a small margin to protect themselves against foreign exchange risks. In recent years, that five percent has become more of a profit driver than a means to cut risk. But if Chinese suppliers quote in Renminbi, buyers automatically save that five percent. “It’s a fairly quick and straight forward way for procurement functions to actually save three, four, five (percent), sometimes even more than that on their next purchase from China,” he says. Still, supply chains have challenges, like ensuring product quality and timeliness of delivery (even with long-term suppliers), says Arber. Letters of credit can give purchasers peace of mind that what they’re buying is going to be delivered on time and to the standards they expect, he notes. And as supply chains globalize, Canadian procurement will deal with suppliers in more challenging locations. “The challenge is managing the complexity and risk involved in those sorts of supply chains,” he said. “There’s complexity in keeping tabs on administration, invoicing, inspections certificates, quality assurance for those goods moving along the supply chain.” Organizations can help ensure their supply chain finance programs run smoothly, says Palmer of Citibank. For example, ensure procurement and finance are on the same page. Program roll out affects various parts of a company, so clear communication between buyer, bank and supplier is a benefit. He also recommends choosing a bank with a solid track record in supply chain finance. “Suppliers need to understand the value of the programs,” he says. “They need to understand how to use them and how to accelerate the payment. The programs only work when suppliers enroll, so very clear messaging to suppliers is critical.” In using supply chain finance and related tools like dynamic discounting, Rinus Strydom, chief marketing officer of Hubwoo, recommends cutting paper invoice presentment and lengthy approval processes. For example, if an organization approves invoices on day 20 or 30 of a 2/10 net 30 arrangement, they lose the ability to offer those early payments to suppliers. A best practice is shortening the approval cycle to day one for the bulk of invoices. One way to do that is by maxiPurchasingB2B.ca
mizing catalogue-based orders. Organizations can put preferred suppliers into a multi-supplier catalogue, similar to online shopping companies like Amazon. “By using those preferred suppliers in catalogues there’s an already agreed upon price,” says Strydom. In business network catalogues such as the one Hubwoo operates, suppliers update pricing and buyers can approve those updates. When the supplier invoices, they’re simply flipping a purchase order into an invoice. Maximizing PObased invoicing and electronic invoice presenting can also help speed up the invoice approval process, he says.
“Suppliers need to understand the value of the programs. They need to understand how to use them and how to accelerate the payment.” Strydom recommends that procurement and accounts payable communicate adequately and remain on the same page for supply chain finance projects. “If procurement and accounts payable can agree on using the same on-boarding vehicle upfront, it pays dividends downstream.” b2b SEPTEMBER 2013 | 21
Facilities Management
Greener Buildings Can Mean Smarter Buildings
Taking advantage of available programs can help raise the sustainability IQ of your facility by Michael Power
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hen it comes to promoting sustainability in buildings, procurement professionals and facilities managers have a number of resources available to help keep their buildings green. For example, BOMA BESt is a commercial building sustainability certification, which the organization says is the only assessment and certification program of its kind for commercial buildings in Canada. The voluntary national program assesses the environmental performance and management of buildings and is offered by the Building Owners and Managers Association of Canada (BOMA Canada) to commercial building owners and managers.
“We’re finding that a company established as sustainable and socially responsible has a strong tool to engage with employees, especially new recruits out of university.” The program gives a framework for owners and managers to assess six areas of environmental performance and management: water; waste reduction and site; emissions and effluents; indoor environment; and environmental management system. BOMA BESt is a national program delivered through 11 local associations. Since launching in 2005, the program has seen over 3,500 buildings across Canada apply for either certification or recertification. The Canada Green Building Council offers the Leadership in Energy and Environmental Design (LEED) Canada, a third-party certification program that has certified hundreds of buildings since it began in 2002. LEED promotes a holistic approach to sustainability by recognizing performance 22 | SEPTEMBER 2013
in five areas, including sustainable site development, water efficiency, energy efficiency, materials selection and indoor environmental quality. Credits and prerequisites are organized into these five categories and certification is based on the total point score achieved in these five areas. LEED offers four certification levels: certified, silver, gold and platinum. The Canadian rating systems are an adaptation of the US Green Building Council’s (USGBC) LEED Green Building Rating System, tailored specifically for Canadian climates, construction practices and regulations. For Ontario businesses, the Ontario Power Authority (OPA) offers a retrofit program under its suite of saveONenergy initiatives, says Andrew Pride, VP of conservation with OPA. The retrofit program encourages building owners to install more energy efficient products, technologies and processes, says Pride. “It gives them an incentive to move forward with projects that make sense, but sometimes owners need a bit of a push to make the energy efficiency project work for them,” Pride says. Typically, commercial building energy efficient projects give about a 20- to 25-percent return on the investment, he notes. To increase that return, the program provides an incentive that pays up to 50 percent of capital costs at roughly 10 cents per kilowatt hour. This brings the payback down to between two to three years, sometimes as low as one year, Pride notes. That’s roughly a 50-percent return on the investment. “It starts to open the eyes of more building owners to say ‘this is really a good opportunity to take advantage of a program and to do the right thing for my building and renew my assets,’” he says. Every distribution company in Ontario offers the program. Organizations first put together a project and OPA refunds a sizeable portion of that project’s cost, Pride says. The commercial retrofit program is fully comprehensive, covering any project that saves energy and can be proven to do so by saving kilowatt hours or shaves off peak demand. The program has three tracks: the first covering simple retrofits such as changing out lighting to a more sustainable option. This track is prescriptive and would pay for each light fixture an organization installs. The program offers an engineering track for more complex projects. A third track, the custom track, covers projects not captured in other areas. How much an organization saves depends on the nature of the program itself, Pride notes. Project values have ranged from a small, $10,000 retrofit to large chiller replacements in the millions of dollars. Such projects could qualify for up to 50 percent of the capital cost as an incentive, Pride says. Often, for organizations that go to a more energy-efficient product, PurchasingB2B.ca
the incentive covers all or most of the incremental costs, Price says. For large projects the incentive typically covers a bit more than 100 percent of the cost. “We’d hope that what a purchaser would do is when they get a purchase requisition in, they would ask questions like, ‘is there a more energy-efficient product available?’ ‘What kind of incentive?’ They may find that they’re actually going to be procuring at a lower cost than they would have otherwise done.”
Green energy Another organization, Bullfrog Power, provides businesses with 100-percent green energy, says Anthony Santilli, the organization’s vice-president of sales and marketing. Bullfrog Power sells renewable electricity or renewable natural gas, Santilli says, allowing organizations to shrink their environmental footprint through a reduction in admissions. Those organizations are injecting that renewable energy into the grid, which can be claimed by companies that carbon report. Organizations pay a premium for renewable power, which goes towards projects that develop new renewable energy. “They’re indirectly responsible for that because they’re a customer of Bullfrog Power,” Santilli says. “Their premiums are going to those new environmentally deserving projects. They can take benefit and claim that they’re supporting renewable energy in Canada.” Such programs benefit more than just the environment, he notes. As HR departments look for ways to attract fresh talent, organizations with sustainability practices are more likely to retain employees for whom social corporate responsibility initiatives matter. “We’re finding that a company established as sustainable and socially responsible has a strong tool to engage with employees, especially new recruits out of university,” he says. Bullfrog Power self audits each year and is also audited by Deloitte to ensure its energy comes from certified developers and generators, Santilli says. “There’s a string of assurances that we deliver—when you’re looking at procuring this you want to make sure you’re asking the right questions to ensure the supplier has an audit and that they operate in Canada and that the funds are going back into renewable power.” Among the organizations using Bullfrog Power are Staples Canada and Staples Advantage. Through a pilot project started in June, the organizations purchase power for their headquarters and across 11 retail stores. Through the agreement, Bullfrog Power’s generators inject renewable electricity onto the grid to match that used by the Staples Canada home office in Richmond Hill, Staples Advantage Canada home office in Mississauga, and 11 stores across Canada. “The power that we’re buying is certified as low impact by Environment Canada under its EcoLogo program,” says Michael Zahra, president of Staples Advantage. “It’s exclusively coming from wind and low-impact hydro.” Getting started with Bullfrog Power was easy, Zahra says. Staples met with the organization, which presented how the process works. Bullfrog Power then determined what the company’s energy usage was and Staples purchased that equivalent amount off the traditional grid as part of green power. PurchasingB2B.ca
The partnership with Bullfrog Power fits with the company’s Staples Soul program which, among other areas, works to reduce the organization’s impact on the environment, Zahra says. That could include Staples Advantage’s internal processes such as optimizing the routes that drivers follow, recycling corrugate, using energy-efficient lighting and so forth. As well, such initiatives also help clients of Staples Advantage meet their own sustainability goals, Zahra adds. “They look at all their internal processes but they also look at their relationships with their vendors,” he says. “If we’re a vendor and reducing our carbon footprint then their whole supply chain is getting greener.” b2b
Resources for smarter, greener buildings Several organizations across Canada offer resources to help ensure that buildings are as sustainable as possible. Check out the list below for more information: BOMA Canada The Building Owners and Managers Association (BOMA) Canada offers BOMA BESt, a national environmental recognition and certification program for commercial buildings. The program is third-party certified and covers several categories, including office, multi-unit residential, open-air retail, light industrial and shopping centre. www.bomacanada.ca SaveONenergy The Ontario Power Authority’s (OPA) saveONenergy program is a retrofit program that encourages building owners to install more energy efficient products, technologies and processes. Organizations can put together an energy-saving project and OPA will refund part of the costs for that project. www.saveonenergy.ca Bullfrog Power Bullfrog Power provides businesses with 100-percent green energy. The company sells renewable electricity or renewable natural gas, allowing organizations to shrink their environmental footprint through a reduction in admissions. www.bullfrogpower.com Canada Green Building Council The Canada Green Building Council works to change industry standards, develop best design practices and guidelines, advocate for green buildings and develop educational tools to support members in implementing sustainable design and construction practices. The council offers the Leadership in Energy and Environmental Design (LEED) Canada, a third-party certification program tailored for Canada’s climates, construction practices and regulations. www.cagbc.org
SEPTEMBER 2013 | 23
le professionnel
Par Cheryl Paradowski
Prêts à diriger : Trois p.g.c.a. se distinguent à l’examen final
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nviron 250 candidats ont récemment passé l’examen final en vue d’obtenir le titre de professionnel en gestion de la chaîne d’approvisionnement (p.g.c.a.). Cet examen basé sur des cas permet de valider leur expérience pratique et les connaissances acquises dans le cadre du programme menant au titre de p.g.c.a. de l’Association de la gestion de la chaîne d’approvisionnement. Cette étape finale du processus d’accréditation suit le cours d’une semaine en résidence, un cours intensif de cinq jours comprenant des études de cas, des présentations et une préparation à l’examen, qui complète des années d’études en classe ou d’autoformation à l’aide de modules. Pour s’inscrire au programme, il faut avoir suivi certains cours postsecondaires et posséder une expérience de travail progressive appropriée. Synonyme de leadership stratégique, le titre de p.g.c.a. est la désignation la plus prestigieuse qui soit dans le domaine. Le programme menant au titre de p.g.c.a fournit les connaissances et les compétences requises pour jouer un rôle de leader en GCA dans tous les secteurs de l’économie. À l’examen final, Erika Borgersen, Chuck Pelton et Karina Wang ont obtenu les notes les plus élevées. Nous vous présentons ces nouveaux p.g.c.a. Erika Borgersen Erika Borgersen, SCMP, a commencé sa carrière à titre d’administratrice des subventions, au ministère de l’Agriculture et de l’Aménagement rural de l’Alberta. Au fil du temps, elle a touché au domaine des contrats et des appels d’offres, ce qui l’a vivement intéressée. Elle est actuellement directrice en gestion de projets pour Service Alberta. Elle a été détachée à ce service afin d’offrir de la formation au sein du Contracting Centre of Excellence, l’unité qui gère l’ensemble de la formation et des modèles d’approvisionnement pour le gouvernement albertain. Mme Borgersen voulait faire pro24 | SEPTEMBER 2013
gresser sa carrière en suivant des cours. « Je me suis renseignée sur la formation nécessaire pour travailler au sein de la chaîne d’approvisionnement, dit-elle. La réponse a été unanime : le programme menant au titre de p.g.c.a.! » Elle est fière de son résultat à l’examen final et de son titre de p.g.c.a. Elle considère que le processus d’accréditation lui a apporté davantage : il lui a fait connaître des gens du domaine, lui a ouvert diverses avenues et lui a enseigné la terminologie nécessaire pour évoluer dans le secteur. Selon elle, le titre de p.g.c.a. lui sera profitable : « Je m’attends à des retombées positives telles que le respect et la crédibilité, ainsi qu’un salaire potentiellement plus élevé. » Chuck Pelton Chuck Pelton, SCMP, s’est distingué à l’examen national et s’est aussi classé au premier rang au Manitoba. Il a commencé dans le domaine par un stage à titre de planificateur de la production, pendant ses études en administration. « Après avoir travaillé pendant 18 mois, j’ai constaté que j’aimais vraiment relever les défis que pose la GCA, dit-il. Après mes études, j’ai travaillé comme planificateur, puis à des postes en logistique et en approvisionnement. » Pour lui, le programme menant au titre de p.g.c.a. était une étape logique pour accroître ses compétences en GCA. Il est actuellement directeur de la chaîne d’approvisionnement à Monarch Industries, à Winnipeg. Il croit que le programme menant au titre de p.g.c.a. lui a permis de mieux comprendre les préoccupations liées à la chaîne d’approvisionnement et d’approfondir ses connaissances afin de relever les défis propres à ce domaine. Il sait que le titre de p.g.c.a. sera un atout pour lui et pour ses employeurs. « Ce titre confirme mes compétences en GCA et démontre que j’ai le souci d’exceller dans ma profession et que je peux apporter une valeur ajoutée à mon employeur, explique M. Pelton. Grâce au
titre de p.g.c.a., ainsi qu’aux valeurs et aux compétences qui y sont associées, je peux apporter une contribution à des échelons supérieurs (et plus stratégiques), ce qui s’avèrera profitable pour ma carrière et pour mon entreprise. »
Karina Wang Karina Wang, SCMP, est coordonnatrice de l’approvisionnement pour la North West Redwater Partnership (NWR) à Calgary. À ce titre, elle gère les activités liées à la chaîne d’approvisionnement, de l’achat à la livraison, pour l’une des principales unités de traitement d’une toute nouvelle raffinerie. Mme Wang a commencé dans le domaine de l’approvisionnement après ses études universitaires, lorsqu’elle est entrée au service d’une petite société d’ingénierie. Elle a alors acquis de l’expérience dans diverses disciplines liées à la gestion de projets et a vite découvert que la chaîne d’approvisionnement l’intéressait. « J’ai constaté que la chaîne d’approvisionnement est un élément essentiel pour la réussite d’un projet et que la GCA serait pour moi une carrière très enrichissante, a-t-elle indiqué. Je travaille dans ce domaine depuis ce temps. » Mme Wang croit que le titre de p.g.c.a. et son appartenance à l’AGCA sont des atouts pour sa carrière. « Ce titre est reconnu mondialement et permet d’obtenir les titres de CPSMMD aux États-Unis et de MCIPS en Europe, dit-elle. Je peux donc travailler à l’étranger. De plus, je me suis déjà fait beaucoup d’amis et j’ai rencontré de nombreux partenaires d’affaires dans le cadre du programme menant au titre de p.g.c.a. C’est fantastique d’être membre d’une association telle que l’AGCA, de pouvoir se tenir au fait des tendances et des stratégies en GCA et de rencontrer des gens qui évoluent dans le domaine. » Félicitations à Erika, Chuck et Karina, et à tous les nouveaux p.g.c.a. pour leur réussite. b2b PurchasingB2B.ca
the professional By Cheryl Paradowski
Ready to Lead: Three SCMPs earn top scores on their final exams
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early 250 candidates recently wrote their final examination in pursuit of certification as a Supply Chain Management Professional (SCMP). The exam tests their practical experience, as well as the knowledge acquired throughout the Supply Chain Management Association’s SCMP designation program, in a two-day case-based exam. It is the final step of the process, coming after the completion of In-Residence Week, an intense 5-day week of case-studies, presentations and exam preparation, and years of studying through in-class or self-study modules. Post-secondary education components are also required prior to enrolment in the program, as is related progressive work experience. The SCMP is the highest achievement in the field and the mark of strategic leadership. The designation program provides the knowledge and skills necessary to tackle supply chain leadership roles in all sectors of the global economy. Three candidates stood out among their peers for achieving the top three scores on their final exams: Erika Borgersen, SCMP; Chuck Pelton, SCMP and Karina Wang, SCMP. Here is a little about these newly accredited SCMPs and what being accredited means to them.
Erika Borgersen Erika Borgersen, SCMP, started in grant administration for Agriculture and Rural Development with the Government of Alberta shortly after university. She eventually started handling contracts and RFPs, and found the tendering process to be really interesting. She is currently Project Contracting Manager with Service Alberta, on a secondment opportunity delivering procurement training with the Contracting Centre of Excellence; the unit that manages enterprisewide procurement templates and trainPurchasingB2B.ca
ing for the Government of Alberta. Erika was looking to advance her career through education and asked around for recommendations. “I was looking for information on the required education to get into supply chain,” says Erika. “SCMP was the program that everyone came back with!” She is pleased to receive one of the top three scores on the final exam, and to have earned her SCMP. She feels the designation process has had an added bonus. The process brought her in contact with others in supply chain, opened her up to the different areas in the field, and taught her the terminology needed to operate in supply chain. In future, Erika believes that holding the designation will be worth it. “I expect a very positive impact: respect and credibility in the supply chain field, and higher earning potential,” says Erika.
Chuck Pelton Chuck Pelton, SCMP, not only achieved one of the top three scores on the exam nationally, he also scored highest in Manitoba. He became involved in supply chain on an internship as a production planner while in business school. “After working there for 18 months, I found that I really enjoyed the challenges in supply chain management,” says Chuck. “I continued to work in planning after university, eventually moving on to take positions in logistics and then purchasing.” He saw the SCMP program as a natural next step to further develop his skills as a supply chain manager and as a purchaser. Currently, he is Supply Chain Manager at Monarch Industries in Winnipeg, Manitoba. He feels the SCMP program has broadened his understanding of supply chain issues and deepened his knowledge on how to address supply chain challenges. He expects his designation will have a positive impact, not only for him, but for his employers as well. “The SCMP designation is a confirmation of competence in supply
chain management that demonstrates to others that I am striving for excellence in my profession and can provide value in addressing supply chain challenges,” explains Chuck. “This designation, with the value and competence that it infers, provides me with the foundation to contribute at an increasingly senior (and strategic) level, benefiting both my career and the company for which I work.”
Karina Wang Karina Wang, SCMP, is Procurement Coordinator with North West Redwater Partnership (NWR) in Calgary, Alberta, where her role is to manage the supply chain activities, from purchasing to delivery, for one of the main process units in a brand new refinery. Karina started in supply chain shortly after university, when she became employed in a small engineering company, and was exposed to different project disciplines. She soon realized supply chain was for her. “I realized that supply chain is crucially important for overall project success and SCM would be a very exciting and fun career to pursue,’ says Karina. “I have been in SCM ever since.” Karina feels the SCMP designation and her SCMA membership will be beneficial to her career. “SCMP is well recognized worldwide and transferable to CPSM® in the U.S. and MCIPS in Europe,” says Karina. “It opens doors for me to work internationally as an expat when the opportunity comes.” She adds, “I’ve already met many new friends and business partners through the Supply Chain Management Professional designation program. It is fantastic to be a member of a respectable organization like SCMA, learning new trends and strategies in SCM and meeting many great people in the field.” Congratulations to Erika, Chuck and Karina on their exam scores, and to all our new SCMPs on their achievement. b2b SEPTEMBER 2013 | 25
The Law
A Made-At-Home Framework The legal realities of supplier diversity in Canada by Courtney Betty
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anada is recognized as one of the greatest multicultural countries in the world. This did not happen by chance, but as a result of speci�ic federal government policies that encouraged immigration and multiculturalism. In fact, Canada is the only country in the world in which multiculturalism is enshrined in the Constitution. Legislation in the form of employment equity laws played a major role in ensuring that the workplace and the opportunities it provided are re�lective of our population. While most would agree that we have made great progress in the area of employment equity, the same cannot be said for supplier diversity. The main reason for this is Canada’s failure to implement a legal framework similar for diversity in the supply chain. Without a proper legal framework, Canada will continue to spin its wheels while other countries take advantage of supplier diversity as a means to grow their economy.
“Absent a specific legal and regulatory structure, we will continue to see supplier diversity as corporate social responsibility and fail to grasp the fact that supplier diversity is a tool to grow the Canadian economy.”
It is a mistake for companies to believe that we simply have to adapt the US approach to supplier diversity. The US federal government requires that suppliers of goods and services meets aggressive goals of subcontracting spend with a list of enumerated categories of underrepresented small businesses. These designations include ethnicminority-owned, woman-owned, and veteran-owned businesses and others. In the 26 | SEPTEMBER 2013
United States, most companies design their supplier diversity programs to comply with federal, state or city legislation or regulations. The key focus is to comply with these mandated requirements in order to gain access to contracts. These compliance requirements are now the norm, having evolved over the past 50 years. Most states, municipalities, school districts and other public sector entities have adopted the federal requirements as a framework for supplier diversity. This has created an element of standardization and easy acceptance. Corporate America recognized the economic bene�its of compliance and followed suite by implementing similar requirements. The end result is that despite the challenges supplier diversity has faced in the US, the regulatory framework continues to ensure its survival. This is the missing link for supplier diversity in Canada. Absent a speci�ic legal and regulatory structure, we will continue to see supplier diversity as corporate social responsibility and fail to grasp the fact that supplier diversity is a tool to grow the Canadian economy. Canada is unique and our supplier diversity programs must re�lect our cultural differences and realities. While the model in the United States can be of assistance to us there are major differences, such as the lack of a legal framework, which are barriers to success. The solution for Canada is to �irst look internally at our Aboriginal set asides program. We have certainly recognized the importance of the Aboriginal community with the establishment of the Federal Government Procurement Strategy for Aboriginal Business. PSAB is a strategy that was launched by the Government of Canada in 1996 to increase the number of Aboriginal suppliers bidding for—and winning—federal contracts. The strength of the program is the setting aside of speci�ic contracts for Aboriginal companies. Aboriginal Communities such as the Mississauga New Credit First Nation in South-Central Ontario recognize that joint venture opportunities with non-aboriginal companies are a win/ win for everyone involved. Diverse suppliers can position their company for tremendous opportunities by working with the Aboriginal communities. Through my work with the Mississauga New Credit we have been able to create a framework for joint ventures with non-aboriginal companies, opening the door for contract opportunities which otherwise would be unavailable. What diverse companies are seeking is a level playing �ield on which to compete. Absent supplier diversity legislation in Canada, working with the Aboriginal community in positioning for contracts is the next best thing. b2b Courtney Betty is a lawyer and the president and CEO of the Business Diversity Network.
PurchasingB2B.ca
FORGING CANADA’S ENERGY SUPPLY CHAIN Canada’s premiere energy supply chain forum. NOVEMBER 12–14, 2013
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BMO CENTRE
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CALGARY, ALBERTA
The National Buyer/Seller Forum (NBSF) and Supply Chain Management Association Alberta (formerly known as the Alberta Institute of Purchasing Management Association, or AIPMAC) Annual Conference have joined as one to form the National Supply Chain Forum (NSCF). For the last 12 years, the NBSF has been the pre-eminent gathering for energy sector leaders and supply chain management professionals. Given the significant activity, challenges and opportunities ahead for the energy industry, the NSCF is more important than ever.
FIND OUT MORE AT sUppLYChAINFORUM.CA EVENT PARTNERS:
EVENT SPONSORS:
SUPPLYCHAINFORUM.CA
Cardinal Carter Catholic High School (YCDSB)
Tempo Plastics
Woodrill Farm
Shoppers Drug Mart
Saving energy makes sense – business sense. Incentives are available on: • Energy audits • Energy-efficient lighting • Equipment and system upgrades • Energy-efficient new construction
Energy efficiency incentives are available for businesses of all types and sizes from your local electric utility. Small businesses may be eligible for incentives to upgrade lighting. Commercial, agricultural, institutional and manufacturing operations may tap into funding for lighting, system and equipment upgrades, energy audits and shifting energy usage away from peak demand times.
Big or small, every Ontario business can benefit from energy efficiency. Contact your local electric utility or visit saveonenergy.ca/business
Subject to additional terms and conditions found at saveonenergy.ca. Subject to change without notice. A mark of the Province of Ontario protected under Canadian trade-mark law. Used under licence. OM Official Marks of the Ontario Power Authority.