Supply professional April 2023

AN ETHICAL INFLUENCE

Michelle Albanese helps clients blend ESG and procurement

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THE ART OF EXPENSE MANAGEMENT

Now that spring has arrived and we’re into April, my family and I have started to think about and plan for summer holidays. Each year, we try to juggle a few different priorities in that area.

I have family in Yellowknife I’d like to visit. My wife’s family lives in Denmark, so we usually go there in the summer, as well. It would also be nice to rent a cottage for a week before our son starts grade six this coming September.

Yet inflation has driven up the cost of many goods and services – travel included – over the past few years. That has hit regular consumers like us and supply chain organizations alike.

Global supply constraints and pent-up consumer demand have conspired to push up prices. That annual inflation, at just 0.7 per cent in 2020, rose to 3.4 per cent in 2021 and even more last year. Happily, that number has dropped this year. In fact, it went from 8.1 per cent last summer to 5.2 per cent in February.

That’s good news. And according to a survey by Statistics Canada from earlier this year, fewer Canadian businesses are expecting supply chain challenges going forward. While those challenges will never completely evaporate, expectations related to supply chain challenges are improving. Overall, 40 per cent reported challenges had worsened since the beginning of 2023. That’s down significantly from 52 per cent in the fourth quarter of last year. That shows a reasonable improvement.

Still, expense management remains important, whether it’s among supply chain or procurement professionals, any of the several layers of Canadian government, or private citizens planning summer travel. While the desired outcome of value for money may be the same for all of the above, there may be no single, final path to get there. Curbing expenses can involve various strategies.

Supply chain organizations and procurement professionals must ask several questions. Do we need to buy certain items? Can we buy other items that are perhaps less expensive? Must we keep using all the services we’re currently using?

One piece of financial advice is to review your organization’s (or your own) spending patterns regularly. That helps to provide the visibility into spend that can be presented to internal stakeholders to share that visibility and provide them with a clear picture.

Having clear up-front goals, success metrics, and selection criteria can help to guide supplier decisions and rankings during negotiations. In other words, know what you’re spending and have goals that can help you reach a specific destination.

Hopefully, these are useful strategies not only for procurement and supply chain organizations, but also all of us as we deal with inflation and economic uncertainty over the course of the rest of the year.

Have any expense management advice? Drop me a note at michael@ supplypro.ca.

EDITOR

MICHAEL POWER 416-441-2085 x7 michael@supplypro.ca

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ALEX PAPANOU 416-441-2085 x1 alex@supplypro.ca

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Art Direction ROY GAIOT

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LAURA MOFFATT 416-441-2085 x2 lmoffatt@iqbusinessmedia.com

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EDITORIAL ADVISORY BOARD

LORI BENSON Procurement Compliance, L&D, Engagement and Knowledge Lead | Business Enablement, Ernst & Young LLP

THOMAS HUDEL Manager, Purchasing and AP, Esri Canada Ltd.

WAEL SAFWAT Procurement Director, Black & McDonald

SHERRY MARSHALL Senior Manager, Meetings, Travel & Card Service, PwC Management Services

KIRUBA SANKAR Director, Program Support, Purchasing and Materials Management— City of Toronto

JEFF RUSSELL Corporate Purchasing Manager & Inventory Manager, Miller Waste Systems Inc.

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THE UPSIDE OF POPULATION COLLAPSE DECLINING FERTILITY SHOWS ECONOMICS IS HARDLY THE “DISMAL SCIENCE”

I find economics endlessly interesting because it addresses the most fundamental problem that each of us faces in life: how do I get what I want? One of the first notable economists was Thomas Malthus, born in 1766. His thesis was that as food production increased so would population. Subsistence was the best we could hope for. This is why economics was termed the “dismal science.” Our species would never be able to progress.

Growing up, I heard variations on this theme. In 1968, Stanford economist Paul Ehrlich published a book called The Population Bomb, which argued that widespread starvation was imminent.

Things didn’t work out that way. From 1968 to today, global population has grown from approximately 3.5 billion to eight billion. During this period, not only has the percentage of people living in extreme poverty plummeted, but the absolute number has gone down, as well. The facts almost defy belief:

alarmism. I, for one, am so tired of the phrase “existential threats.” But I digress. We’ve seen economic alarmism before and we’re seeing it again.

Here’s the latest version. A new demographic crisis is looming. The problem will not be (as Malthus predicted) that there will be too many people. The problem is that there will be too few! What is so interesting about this thesis is that while there is an element of truth to it, upon closer examination it collapses in on itself.

One country is being held up as the canary in the coal mine for this phenomenon and it is the People’s Republic of China. Two years ago, China was the most populous country in the world. This is no longer true. It has been surpassed by India. According to Worldometer, there are currently 1,454,000,000 Chinese citizens. That same source estimates that its population will peak in 2030 and by 2050, there will be approximately four per cent fewer Chinese nationals. Then it will be downhill (in numbers) from there. Some demographers estimate that by 2100, its population could be cut in half.

welcome the best and the brightest from the rest of the world, our population would already be in a downward spiral.

Canada is a developed country. Some consider China developed as well. I have heard the argument made that sub-replacement fertility is directly correlated with wealth. That is, the richer a country becomes, the fewer children per woman. But what is fascinating is that even many developing countries are below replacement rate. In Brazil, it’s 1.65 births per woman, which is a far cry from the 6.1 which was the number in the year that I was born. Iran’s rate is 1.7. The only region in the world where population continues to grow is Africa and more specifically, sub-Saharan Africa.

According to World Bank estimates, at the end of last year, about 685 million people lived in extreme poverty, so things continue to get better.

Why am I pointing this out? Alarmism is always going to be with us. It could be environmental

Things are different in Canada. Let me return to Worldometer. It estimates that our current population is 38.7 million and it is expected to increase at a constant rate until we reach 45.7 million strong by 2050. But here’s the important distinction. This growth is due entirely to immigration. For native-born Canadians to maintain the current population (or replacement level), each Canadian woman on average would have to bear 2.1 children. The latest numbers indicate that the rate is 1.4. If we didn’t

There are different theories about why women having fewer children has more or less become a universal phenomenon. I have my own opinion, but it’s that, an opinion. What I’m here to discuss are the implications of a global population that is simultaneously smaller and older. The bottom line is there’s nothing to worry about. Robotics and technology will mean that fewer people and more machines will satisfy production. People will choose to work longer because this is the only way to maintain the desired standard of living and qualify of life. We will stop warehousing our adult children in wasteful and corrupt institutions of “higher learning” where they learn nothing valuable while taking on debt.

This is why I find economics simultaneously endlessly interesting and at its core essentially optimistic. Economics is the anti-dismal science. As long as the

invisible hand of the marketplace is allowed to do its magic, as long as utility-maximizing individuals are allowed to pursue their self-interest, everything will work itself out. It might be that the global population declines, but doesn’t that mean that on a per capita basis there will be more resources for those who will be inhabiting the planet? Yes, that’s exactly what it means and that doesn’t sound too bad to me. SP

Toronto-based Michael Hlinka is a tenured professor at George Brown College. He hosts a weekly podcast about wagering on professional football. His website is www. michaelhlinka.com

“As long as the invisible hand of the marketplace is allowed to do its magic, as long as utilitymaximizing individuals are allowed to pursue their self-interest, everything will work itself out.”

THE TIES THAT BIND BUILDING TRUST WITH STAFF AND CUSTOMERS

I give a lot of trust to my employees and customers – more than many others in my position would. I am a firm believer in the notion that trust builds the best revenue streams, the best brands, and is a strong pathway for year-over-year growth for an organization, both internally and externally.

Many people experience difficulty with giving trust freely to people. More often than not, this is because they harbour a fear of loss. When you trust someone, especially staff or customers, they might make mistakes. If the fear of losing in the short term has a hold on someone, and they put that fear in the driver’s seat, it’s tough for that person to let go and allow others to make critical decisions. Such people end up micromanaging the every action of others.

However, building trust and giving it out freely are both extraordinarily important parts of the greater equation when it comes to dealing with your team and building common ground with your customers.

How can we build and form trust? This can be a difficult question to answer. Often, the best way to build trust with an employee or with customers is to align yourself with their point of view. Ask yourself, ‘does their point of view match my own?’ If you express what is truly your authentic point of view and disagree with some individuals, you might jeopardize relationships within your workplace or with your customers. This can be further detrimental by impacting your growth.

However, I understand the point of view of those who like to chal-

lenge the status quo of their employees and customers if it means accomplishing their goals around personal or corporate growth. However, expressing your opinions, respectfully and correctly, will help you more and allow you to win big in the long run.

AN IMPORTANT BUILDING BLOCK

One example of building a form of trust is asking periodically for feedback on how to improve, then acting accordingly on that feedback. Customers are willing to trust suppliers that they have a strong relationship with and who believe that the customer matters. One of the best ways that a supplier lives up to that expectation is by demonstrating that feedback is an important building block of the foundation for both organizations improving, growing, and accelerating together.

A customer contributing in this way is important not only because it improves your relationship but your operations as well. I know that bringing up such an improvement process can strike a chord, and if you have more than one customer it could mean raising a point or issue that is brought up repeatedly. This is actually the prefect opportunity to do something about it. It is an excellent way to demonstrate that your relationship is not a one-way street. It helps develop trust by letting your customer know you are willing to hear them out.

On the opposite end of the spectrum, a lot of leaders who call on customers struggle to allow the people they work alongside the freedom to win or lose based on the

decisions they make. But allowing people to explore outside their normal pattern is the ultimate growth platform. It allows them to have that blank slate to express themselves. You can then get a transparent read on who they are and what they can accomplish.

I tell my team often that I trust them unreservedly and will continue to do so until something happens that makes me retract that trust. I don’t believe that trust is always earned. Before all else, I believe that trust is given. Who am I to say they need to earn it?

STRONG RELATIONSHIPS

By starting with this blank slate, you are able to build trust. This can create strong relationships with a customer. It can help you to illustrate your message by making it clear that you are there to help their business grow and flourish in this post-COVID-19 environment. It can help them solve problems in the process.

You can build value and maintain customer trust by upholding this principle when interacting with your team. It can help the customer solve problems by exemplifying excellent customer service.

The key factor is this: not every customer is the same and there will be unique headwinds along the way. However, by adapting and evaluating each situation internally and externally, trust within relationships will create a seamless workflow. SP

“Often the best way to build trust with an employee or with customers is to align yourself with their point of view.”

James Kenny is customer collaboration manager with Agropur.

Globalization resilient: DHL report

DHL and New York University’s Stern School of Business have released the DHL Global Connectedness Index 2022. Analyzing data from 171 countries and territories, it shows how global flows of trade, people, capital, and information move.

The report shows that international flows have been resilient in the face of shocks such as the COVID-19 pandemic and the war in Ukraine.

After a slight decline in 2020, the composite DHL Global Connectedness Index rose to above pre-pandemic levels in 2021.

The data point to a further increase in 2022, despite slower growth in some flows. International trade in goods was 10 percent above pre-pandemic levels in mid-2022. International travel remained 37 percent below 2019 levels in 2022 but doubled compared to 2021.

“The latest DHL Global Connectedness Index data clearly debunks the perception of globalization going into reverse gear,” said John Pearson, CEO of DHL Express. “Globalization is not just a buzzword, it’s a powerful force that has transformed our world for the better.”

Projects aim to reduce climate change impacts on rail sector

The federal government is providing up to $5.4 million for 20 projects across Canada under the Rail Climate Change Adaption Program, an initiative of the Rail Safety Improvement Program.

The program supports research, development, and implementation of innovative technologies, tools, and approaches to identify and reduce the impacts of climate change on Canada’s rail sector.

The recipients selected for funding will evaluate new designs and technologies, implement innovative technologies, and develop an understanding of the risks and impacts on railways to address flooding, fires, permafrost degradation, and so on.

Nathalie Pilon appointed chair of the board of directors of the Montreal Port Authority

The Montreal Port Authority (MPA) has appointed Nathalie Pilon as the chair of its board of directors. Pilon has been a member of the MPA board since 2017, when she was appointed by the federal government on the recommendation of the Minister of Transport.

Drone Delivery Canada lands federal contract

Drone Delivery Canada (DDC) has signed a contract with the Canadian government to work with Transport Canada in operating and evaluating its drone delivery platform using DDC’s heavy-lift Condor remote piloted aircraft. The $1.2-million contract is with the government’s Innovative Solutions Canada program.

DDC will provide Transport Canada with a Condor drone and collaborate

with the ministry in operating, testing, and evaluating the Condor’s capabilities. The contract extends until December and covers shortand long-range flights, along with extreme environmental testing. The multi-package payload compartment of the Condor can carry about 20 cubic feet of cargo. The Condor measures 22ft long, has a rotor diameter of roughly 20ft and is capable of vertical takeoff and landing.

Supply continuity, inflation critical to procurement

Supply continuity and inflation are the top-two priorities for procurement in 2023, while talent management jumped to the top of procurement’s list of planned improvement initiatives, says CPO Agenda research from The Hackett Group.

But strategic priorities are driving procurement’s focus on reducing spend cost, and pursuing digital transformation, improving analytics and insight capabilities remain critical.

Talent management is procurement’s primary planned improvement initiative, The Hackett Group found. But it was absent from procurement’s list of top priorities for 2023, partly because executives view talent management as relatively mature. Several other priority improvement initiatives show lower maturity levels, including supplier relationship management,

responsible procurement, and thirdparty risk management, among others. Procurement must also do more with less, the research says. An expected 10.6 per cent increase in workload, combined with smaller increases in procurement staffing and budgets, will drive a productivity gap of 7.4 per cent and efficiency gap of 7.8 per cent.

Procurement has a high level of adoption of end-to-end and core technologies, the research found, and projected growth rates are high. Large-scale deployment of some technologies is still limited, but there is a high level of piloting for supplier risk and performance management tools, along with tail spend management solutions. Nearly half those surveyed have large-scale deployments of spend analytics tools, and another 44 per cent have pilots.

She was president of ABB in Canada, member of the executive board of ABB Americas and president of Thomas & Betts Canada, where she had been with the company since 1996 as vice-president of finance and information technology.

Pilon has more than 30 years of experience in the construction and electrification industry and was named one of Canada’s Top 100 Most Powerful Women in 2011 by the Women’s Executive Network.

She received the Leadership Award from the Association of Québec Women in Finance (AFFQ) in 2015, and in 2018, an honorary doctorate from Concordia University.

She holds a Bachelor of Business Administration from HEC Montreal, is a Fellow of the Ordre des comptables professionnels agréés du Québec (FCPA), and is a board member of HEC Montreal, CSA Group, Nouveau Monde Graphite, Kinova and Lassonde.

BY MARIA A. GREAVES-CACEVSKI

THE VALUE OF GOING SOFT

SUPPLY CHAIN SKILLS FOR THE FUTURE

How to squeeze a dollar out of 10 cents? Irrespective of industry or market, worldwide we are constantly faced with the dilemma of getting more for less in the face of rising costs of goods and services. Whether we are starting out in our first job, continuing professional development, or changing career paths, soft skills are essential for

long-term employability. So how do we develop our soft skills?

Our early childhood memories are filled with being told to ‘play nice in the sandbox.’ Early childhood educators inadvertently develop our first exposure to heterogeneous social networks within the classroom through activities advocating inclusion and diversity from

a young age. In fact, market researchers have proved that lack of cooperation and trust lead to lower economic results because there is limited-to-no unity and collaboration among (team) members. As a result, soft skills in communication, collaboration, and creativity are ongoing and essential to transition from technical roles to managerial positions.

RETAINING AND ATTRACTING TALENT

Organizations are recognizing the importance of soft skills in the workforce, given the global dynamics within the market. Recent HR industry reports indicate that there is a shortage in highly skilled talent worldwide which is negatively impacting the intangible capital of organizations to retain and attract the proverbial ‘best and brightest’ while preventing burnout, as well as from fallout due to the so-called Great Resignation within the current labour force. That gap comes from the lack of formal training in skills that focus on multinational teamwork, critical thinking, and problem solving within tertiary institutions. Therefore, the talent pipeline is struggling to keep pace with cross-training interpersonal skills to develop managerial capabilities in tandem with technical skills to replace the demographic changes caused by various socioeconomic factors.

In the LinkedIn Global Talent Trends Report 2022, employees say that they are prioritizing organizations that offer upskilling. This is because the likelihood of employee retention for more than three years increased from 45 per cent to 64 per cent if given the opportunity of an internal promotion or lateral move. Modern-day managers need to develop team camaraderie, given the challenges of hybrid work environments and the complexities of global team dynamics.

At the same time, technology enables real-time connectivity, and leaders need to have purposeful interactions both top-down and laterally to foster the open and honest sharing of ideas. Employees work better when engaged and empowered but a productive team is developed through genuine and mutual respect for each member. Soft skills are the foundation for establishing and maintaining a highly functional business unit.

UNPRECEDENTED CHANGE

The uncertainty of the present economy is driving change at an unprecedented rate. There are numerous studies that support the cost to hire

right the first time and the lost productivity from high-employee turnover and low-employee morale. The infamous quote “hire for attitude, train for skills” by Herb Kelleher, founder of Southwest Airlines, reinforces that importance of interpersonal attributes that are unique to each person. The longevity of a successful career is largely dependent on 15 per cent technical knowledge and 85 per cent personal qualities and traits that influence a compatible and positive work attitude. Therefore, the development of soft skills for career success should be viewed as a continuous and lifelong journey.

Although, soft skills are not customizable, there are steps that can be taken to cultivate them. These steps focus on taking accountability and responsibility for identifying any specific soft skillset that needs to be improved through exploring subjective bias with humility and through the guidance of a mentor, manager, or trusted colleague.

This first step is in itself a sign of emotional intelligence. Having emotional intelligence (EI) means that you are self-aware and motivated to critically analyze internally where there are areas for improvement within how you self-manage, as well as how you manage others.

Here are five steps that you can take on this journey:

Step One: Complete a self-assessment or ask for feedback.

23_001277_Supply_Professional_APR_CN

Step Two: Self-register for courses, webinars, or podcasts.

Step Three: Volunteer or seek opportunities to practice.

Step Four: Give back, coach or mentor others.

Step Five: Re-evaluate and ask for feedback.

The focus on personality traits that characterize a highly adaptable mindset with transferrable skills in communication, public speaking, conflict management, time management, teamwork, coaching, decision making, and professional ethics are in demand for the sustainable future. Supply chain professionals should develop these skills going forward, to benefit not only their own performance but that of their teams and organizations.

“Organizations are recognizing the importance of soft skills within the workforce, given the global dynamics within the market.”

SP

Maria A. GreavesCacevski is senior category sourcing lead, indirect, at Chemtrade Logistics.

BY MICHAEL POWER

RESPONSIBLE PROCUREMENT

sures (TCFD): Risks & Opportunities for the Banking Industry, through the United Nations Environmental Programme Finance Initiative (UNEP FI)

“I’ve realized I need to just keep learning and keeping on top of all of these things,” she says. “I’ve taken dozens of courses throughout the years to keep up with the ESG world. I can imagine that it’s like many industries or fields right now. It’s very fast moving in terms of the knowledge base that you have to be familiar with.”

Her first professional position was as an environmental consultant in toxicology and risk assessment at Intrinsik Environmental Sciences Inc., a consulting firm in Toronto. She then worked as a senior land conservation specialist before landing a management-level procurement role at a large North American bank in 2013. There, she managed its responsible procurement program, including supplier diversity.

MICHELLE

ALBANESE ON THE IMPORTANCE OF MELDING ESG AND SUPPLY CHAIN

For Michelle Albanese, a great thing about being a subject-matter expert in ESG while also working in procurement is, the combination largely revolves around acting as a consultant. Such a role at large organizations means working as an internal consultant on ESG matters. Meanwhile, working with suppliers means guiding them and engaging those external stakeholders in ESG matters. Either way, it provides more influence than many realize.

“You’re the customer, and you can help steer them in many different directions,” says Albanese, a Toronto resident who runs MiRA Sustainable Solutions. “It’s a key role and the supplier, should really listen carefully to what their customers are asking about, whether it’s products or services, and how they’re responsible with regards to ESG and sustainability.”

MiRA Sustainable Solutions gives senior-level support and advice to help organizations navigate environmental, social, and corporate governance (ESG) targets. ESG is a framework that considers the needs of, and how to generate value for, stakeholders, like employees, customers and suppliers and financiers.

But Albanese’s journey into procurement and ESG was anything but direct. She earned a bachelor’s degree in environmental toxicology from the University of Guelph. Soon afterwards, she earned a master’s degree in environmental and health sciences from the University of Waterloo. At the time, a degree focusing on climate change or sustainability wasn’t an option.

“If I could go back, I would take one, but it didn’t exist,” she now says. “So, I got a bachelor of science in environmental toxicology with a minor in statistics because that’s really all there was for the environment. You were either an environmental engineer or you took an environmental science degree. I chose that undergrad and then I got my master’s in health and environmental sciences, so I really kind of stuck with the environmental sciences.”

Albanese has kept her knowledge current, earning certifications as her career has progressed. Among others, she has taken the Corporate Value Chain (Scope 3) Accounting and Reporting Standard Training through GHG Protocol, and the Climate Change & the Task Force on Climate-Related Financial Disclo -

“Before that role, I wasn’t really in procurement, or trained to be a procurement professional,” Albanese says. “I was more on the consulting side, responding to RFPs. So, I was on the supplier side, so to speak. I then found myself on the other side, working at the bank in a strategic sourcing department.”

GREEN PROCUREMENT

Albanese brought her environmental expertise to that role. In 2013, the discussion still focused on “green procurement,” with concepts like sustainability and ESG less commonly talked about. But the field evolved quickly to integrate more topics, like human rights, diversity, inclusion, and supplier diversity. Today, these issues are often referred to collectively as ESG.

At the bank, Albanese acted as head of responsible sourcing and supplier diversity; manager of corporate responsibility reporting; and manager, responsible procurement, among other roles. She moved on in 2021, eventually setting up MiRA Sustainable Solutions, which she now runs as senior consultant, owner, and sole proprietor.

“I’ve been in different consulting roles throughout my career, and what I enjoy about it is that you get to work with different types of companies on different types of projects, helping them solve their problems – it’s always different,” she says.

Albanese focuses on helping clients solve their ESG and sustainability challenges. Those challenges vary among clients, and Albanese works with companies of various sizes and structures. Publicly traded companies among her clients deal with specific mandates related to ESG and what they must disclose. Privately held companies aren’t necessarily mandated to disclose as much as their public counterparts. Her client

roster varies by both size and industry. They include mining, manufacturing firms, and professional services providers, among others.

“It’s about helping them solve problems,” she says. “Some need a strategy. It ranges from their operations to their supply chain. Companies are now looking outside their operations. It’s about helping them look at an ESG strategy – where they can reduce risk, what do they need to disclose – but in terms of supply chain.”

With a fast-growing list of things that must be disclosed, more clients are looking for help with their supply chains, Albanese adds. ESG is complex and changing, and supply chains have third-party partners such as suppliers. Organizations must understand where risk lies and what to do to engage those suppliers. For example, many organizations are looking at the carbon emissions of their supply chains, with those emissions divided into scope 1, scope 2, and scope 3. Scope 1 covers direct emissions from owned or controlled sources, while scope 2 covers indirect emissions from

generating purchased electricity, steam, heating, and cooling consumed by the reporting company. Meanwhile, scope 3 includes all other indirect emissions across a company’s value chain.

“Scope 3 is confusing to companies because it’s got 15 categories of how you can measure carbon emissions” Albanese says. “And this is just one example of one ESG topic that they’re struggling with. There are other issues, like human rights and modern slavery. A typical day for me is just helping these companies look at their supply chains and try to figure this all out and come up with that strategy and an engagement plan.”

Albanese speaks at colleges and other venues on responsible procurement and supply chain issues. She discusses term definitions and what they mean to practitioners. She also networks and reaches out to people who need help with their companies’ ESG programs.

Albanese has had opportunities to learn and create an impact. Yet, a few instances stand out from her years in banking. Her work in biodiversity conservation, for example, was especially

rewarding due to the tangible outcome of seeing habitat and land protected. The impact of such work remains for years, she notes.

Working for a large company can create an impact that ripples across many employees and multiple lines of business, Albanese says. Anything accomplished internally has a substantial effect. Larger companies often have larger supply chains that can be influenced. Efforts can pay off – the bank won a green purchasing award, and a program Albanese ran won a supplier diversity award. While she appreciates the recognition, Albanese says she got the most satisfaction from helping suppliers improve their ESG and supplier diversity performance.

“I worked with hundreds of suppliers on improving their environmental, social, or ethical policies, practices, doing education, and because at the

time we were one of the first banks to do that, a lot of the suppliers would say, ‘you know, no one has ever asked us these questions before.’ That was really challenging because then you had to really home in on how to educate and help them understand what you’re trying to accomplish together with them.”

It is satisfying to pioneer such work while also having some suppliers express gratitude because the questions helped them focus their internal sustainability efforts. It also helped to alert suppliers to this shift in procurement.

“When you work for a larger company like that and you have a big supply chain, you can impact so many companies and so many suppliers and help them along the way. I found that was rewarding,” she notes.

Albanese gets the same satisfaction from results in supplier diversity: “It’s when you are able to bring in a new, diverse supplier that everyone is just wowed with; to me, that means more than an award. It’s nice to get that external recognition, but I think it’s the outcomes of what you’re doing that make the difference.”

The pandemic highlighted the importance of the role played by supply chain and procurement professionals, Albanese says. Yet, some organizations struggle to realize that, perhaps because procurement, while it saves costs, is not usually a revenue-generating function.

As well, ESG should be integrated into procurement, Albanese says. When tied to ESG, procurement offers value beyond getting goods and services for the right price, in the right quantity, and other typical metrics of the field. For example, melding ESG and procurement can help to protect both an organization’s brand and its reputation.

“There are a lot of things that are outsourced; there is a lot of third-party outsourcing,” Albanese says. “You can’t really put a price on that and that includes making sure that you’re buying from other responsible companies. That’s where ESG comes in and integrating that into the whole cost and quality and all the other criteria that you have in a procurement project.”

THE VALUE OF ESG

Some still think that ESG adds no value, Albanese says. Yet, risk mitigation is a benefit to companies that engage in ESG practices. Those practices strengthen a company by making the organization more resilient and increasing governance. Many organizations, especially large companies, are gradually realizing the value of aspects of ESG policy, such as supplier diversity, she adds. “It’s really just good business to do it,” Albanese says. “It’s part of doing business and making a company stronger.”

Albanese considers herself a life-long learner and looks for opportunities to stay up to date on ESG and supply chain issues. That can include taking courses, reading white papers, and otherwise trying to absorb new information. Acquiring that knowledge is something she plans to continue. Albanese enjoys the combination of procurement-supply chain and ESG work because, despite challenges, it’s possible to engage with many companies to create ripples that cause change.

Companies will need support to navigate this terrain. Albanese looks forward to continuing to help provide that support, for example by sharing her knowledge while speaking at colleges and universities.

“Supply chain is so dynamic and challenging on its own,” Albanese says. “The more we talk about it the more we realize, there isn’t one right answer. Companies need to start going that direction and then just take steps and figure it out along the way. I feel like I have done really well in the supply chain-procurement space, and I want to continue that as much as possible.”

Outside of her business, Albanese spends time with family – her husband and two schoolaged daughters – as well as a Tuxedo cat name Milo and a fish named Giraffe. She enjoys boating, swimming, and other water-related pastimes. She also bought herself a foldable kayak during the pandemic. She is an avid tennis player and golfer and loves the outdoors. Hiking and skiing are also among her interests.

While supply chain can sometimes be overlooked by those starting their careers, the profession provides opportunities to deal with multiple stakeholders on various topics, Albanese says. It also offers various areas in which people can focus, including contract management, negotiating, as well as ESG, which should be integrated into the knowledge base of those working in the field. A practitioner need not be an ESG professional to do ESG work in the supply chain, she says, although there is now more training available on the topic.

“ESG can be part of anyone’s supply chain or procurement role and integrated into their day-to-day activities in terms of, how are you going to score the RFP? What kind of criteria are you going to put out there?” Albanese says. “There are so many different ways to engage.”

Another development in ESG is a framework for climate-related financial disclosures through the Taskforce on Climate-related Financial Disclosures, or the TCFD. The Financial Stability Board (FSB) created the taskforce to recommend on the types of information that companies should disclose to help investors, lenders and others assess and price a specific set of risks related to climate change. Another initiative, coming in September and called the Taskforce on Nature-related Financial Disclosures, aims to give financial institutions and companies a complete picture of nature-related risks and opportunities. For example, says Albanese, a food company will need to report how they’re working with farmers and how those farmers impact the land, what chemicals they’re using, how those chemicals affect local populations, and so on.

“It intersects with climate change because if you’re cutting down trees, you’re not getting the carbon sequestration, you’re not helping climate change because you’re taking away a carbon sink,” Albanese says. “Climate change is also shifting how plants grow and how soils release carbon or the permafrost in the Arctic and how that’s going to release carbon with the temperature going up. Biodiversity is going to be impacted by temperature shifts. Their reporting is going to be guided separately, but the impacts of climate change and biodiversity are intertwined. Companies will have to start looking at the biodiversity impacts in their supply chain.”

Finally, Albanese stresses, spending money gives organizations a voice. Where companies choose to spend sends a message to suppliers and allows them to ask questions about ESG to discover what impact their spending will have. That opportunity for discussion with suppliers is important, and there aren’t necessarily black and white answers.

“What’s neat about procurement is you get the opportunity to ask tough questions,” Albanese says. “Have those conversations and see if that supplier really aligns to your values. And if they don’t, then you may have that difficult conversation about contract renewals or things like that, but it opens up the door of the conversation because every time you spend money with another third party, you have significant control of who you choose and what the relationship could look like.” SP

“When you work for a larger company like that and you have a big supply chain, you can impact so many companies and so many suppliers and help them along the way.”

I remember the early days of industry-specific apps built on the MAI Basic Four. The early days of Oracle and SAP and their acquisitions and assimilation of competing platforms, as well as their mantra of “we don’t get out of bed for any project less than $1 million.”

Microsoft‘s interest in acquiring SAP (The Mendocino Project); and the high rate of ERP initiative failures, for example the Veterans Health Administration Bay Pines incident and the FoxMeyer drugstore chain collapse; the emergence of the on-demand SaaS model solutions implemented at a low cost in months or weeks versus years. Why am I sharing this history?

Because it’s time we stopped pursuing the “digitization dream.”

I could write a paper on the high rate of e-procurement initiative failures. However, I’ll talk about the few successes to explain why we

have to stop thinking about digitization and focus on digitalization.

An exception, the Commonwealth of Virginia’s eVA initiative, is an excellent place to start. eVA’s success wasn’t based on its focus on one suite or best-of-breed technologies, but its procurement leadership taking ownership of its progressive integration. Or, as the top Virginia execs put it, they would have and continue to have success with any technology.

Assistant VP of strategic sourcing and acquisition services at the University of Maryland, Baltimore Keith Gagnon, provides his take. Gagnon held senior executive positions in Virginia procurement at the state, higher-ed, and county levels.

“Stakeholder buy-in is one of those reasons,” he says. “From the beginning, there was internal buyin from the top down—from the Governor’s Office to agency heads, procurement directors, and agency staff. This internal buy-in and advocacy lead to external buy-in from vendors and the public. Another reason is that eVA’s tools and the data they gather are accessible and actionable. Buyers and suppliers can easily access a wealth of data on past and present procurements to aid them with their current work and inform them.”

One thing that impresses me regarding the stakeholder buy-in with Virginia is that over 20 years, there have been many personnel changes, including the Governor’s Office. Yet, eVA seems to be in the Commonwealth’s DNA. They prioritized people’s buy-in by understanding what they needed to do to achieve their objectives, established the best processes, and adapted technology to align with these two elements versus having people and processes adapt to the technology.

PEOPLE, PROCESS, TECHNOLOGY

Technology is evolving into an intuitive extension and an extended partner to the human interface. We are focusing on processes that are aug-

mented or assisted by technology instead of being defined by it. Unfortunately, many still look to technology to improve their processes rather than the other way around. I call this the “technology-process-people” approach to automation – which is a form of digitization.

Alternatively, some have modified the approach by focusing on “process-technology-people.” It seems like the ideal approach because you establish the process before seeking the technology to automate it. This is called equationbased modelling. However, it is still digitization – and you have seen its success rate in the past. So let’s revisit the Commonwealth of Virginia’s success, where the state used the people-process-technology framework, or agent-based model, to digitalize (not digitize) their procurement practice.

A CULTURAL IMPERATIVE

In a 2007 interview, the director of the eProcurement Bureau for the Commonwealth of Virginia, Bob Sievert – who has since become CIO for the National Association of State Procurement Officials (NASPO) – got my attention when he said, “that government is not just a “single business,” but is actually comprised of many different lines of business.”

He also expanded on his “single business” comment. According to Bob, the recognition on the part of Virginia that government goes beyond an org chart that includes higher education, K-12, corrections, public safety, transportation, health, social services and construction and so on, meant that they understood the “special needs, special rules and special challenges” associated with the procurement practice of each entity, both individually and collectively.

What this meant is that eVA didn’t fall into the cost justification trap of becoming an enterprise “software” or digitization project. Its success came from understanding the unique requirements (or

operating attributes) at the departmental or people level. They made eVA a cultural versus technology imperative.

I’d like to discuss clean data in the context of digitalization. Rob Handfield is the Bank of America University distinguished professor of supply chain management at the North Carolina State University Poole College of Management and executive director and founder of the Supply Chain Resource Cooperative based in Poole College.

In the conversations I’ve had with Rob, there’s a common theme: the digital transformation, for example, digitalization of procurement, is impossible without “clean data.”

Here is the tie-in to culture and digitalization versus digitization; regarding clean data, 95 per cent of executives identify “organizational and process challenges as the primary obstacles impeding the adoption of big data and AI initiatives.”

So the problem with “accessing and using quality data to its full potential is a people and process issue,” not a technology issue.

According to the May 2021 article Getting beyond the Twilight Zone of data uncertainty, creating a data (and digital) culture “is an essential cornerstone for laying a solid data (and procurement) practice foundation.” Based on the above, are you digitizing or digitalizing your organization’s procurement practice? SP

DIGITIZATION VERSUS DIGITALIZATION WHY PROCUREMENT MUST STOP FOCUSING ON THE DIGITIZATION DREAM.

Jon Hansen is the editor and lead writer for the Procurement Insights Blog and was host of the PI Window on The World Show on Blog Talk Radio.

BY DR. NAVEED AHMED KHAN

TRUCKING IN THE LONG HAUL REMEDIES FOR THE TRUCKER SHORTAGE

Prospective employees are avoiding the trucking industry. Not only that, but it’s estimated that in addition to around 7,200 retiring truck drivers, 27,000 truckers will quit the occupation annually.

The question is why?

Truckers in the Canadian road transportation sector can be classified into two groups: owner-operators and company drivers. Both have their own challenges, needs, and motivations. The latter group is the largest and most significant to the Canadian economy. The road transportation sector accounts for 40 per cent of the merchandise import and export to Canada.

The road transportation sector is a fundamental component of multi-modal and last-mile shipments, transporting goods right from raw materials sources to processing plants and retail stores. In 2018, the trucking industry generated nearly $39.55 billion from almost 63.7 million shipments.

More precisely, this industry carries an estimated $550 billion worth of goods purchased by Canadians and more than $300 billion worth of Canadian goods destined to export markets. Yet, for years North American logistics companies in general and Canadian companies such as TFI International, Day & Ross, Mullen group and many more are facing a serious driver shortage.

Companies are worried about retaining their employees and managing their workload. A recent survey revealed that about 62 per cent of organizations are merely “somewhat pre-

pared” to handle the workload with their current workforce, and only 32 per cent of them are “highly prepared.” About 6 per cent reported that they are “not prepared” to deal with the shortage.

Canada’s trucking industry is comprised of about 320,000 fulltime and active drivers. It’s a male-dominated industry, having merely 3.5 per cent female truckers. Whereas in the US, female truckers are around eight per cent of commercial drivers.

STRESSES ON THE PROFESSION

Putting COVID-19 restrictions and the resulting impacts aside, poor working conditions, an aging population, low wages, and poorly skilled employees led to the labor shortage in the logistics sector, especially in the longhaul trucking industry.

According to the Ontario Chamber of Commerce, around 66 per cent of industries are facing labor shortages. Another source reported that around 18,000 truck driver vacancies were open in the second quarter of 2021. Statistics Canada anticipated that in 2023, the country may need another 25,000 truck drivers. In the US, this shortage is around 60,000 and estimated to hit 160,000 by 2028 if not addressed.

The truck driver shortage is catastrophic for the Canadian economy. In 2019, it was estimated that the shortage caused roughly $3.1 billion in lost revenues.

The reasons behind the shortage of truck drivers is multifaceted, in both the short to long term. The short-term reason revolves around COVID -19 and its implications. North American long-haul truck drivers travel nearly 200 billion miles per year, interacting with workers in the transportation, warehousing, retail, and manufacturing sectors, putting them at risk of contracting and transmitting viruses.

The subsequent closure of businesses, including those serving food to truckers in transit; and government regulations mandating vaccination to certain professionals including those in commercial transportation, caused frustration and anger among overstrained truck drivers, the majority of whom objected to the mandatory vaccination policy and temporarily stopped working.

Long-term reasons include a monotonous routine, poor diet, stress, and a lack of physical exercise and resulting health issues. In addition, the majority of the truckers complain that they receive low wages despite working in a physically demanding industry. The average pay for truck drivers in Canada is $23 per hour, while some companies compensate drivers for mileage.

Long working hours are another issue. In Canada, truckers are permitted to drive 13 hours per day, two hours more than their US counterparts. They also spend approximately an hour a day searching for parking and dock locations.

Another factor is an aging population. One study shows the largest age group of truck drivers employed in Canada is 55-64, which is older compared to other professions. A reason for the shortage of younger drivers is the high training cost for prospective truck drivers and the reluctance of employers to hire long-haul drivers who lack sufficient experience (commonly two to three years). However, due to the increasing shortage, 50 per cent of trucking companies plan to recruit comparatively young drivers.

POSSIBLE SOLUTIONS

The Ontario Chamber of Commerce has highlighted the need to attract and retain skilled labour in high-demand sectors. Several organizations are now working to resolve this issue. To boost workforce retention, approximately 66 per cent of employers will increase hourly wages for both truckers and warehouse workers.

As well, 52 per cent of employers have increased bonuses, and 39 per cent hope to offer overtime pay. Consequently, according to a study by a Canadian trucking association, 12 per cent of the respondents said they would consider joining the trucking industry.

From a technology perspective, autonomous trucks seem to have a promising future in the wake of the driver shortage. Following the successful implementation of AGVs and AS/RS systems, autonomous trucks may have taken a leap towards a fully automated supply chain concept. Automation in the trucking industry is in progress. According to a McKinsey & Company report, autonomous trucks will likely roll out in phases. In a platooning phase a trucker will lead another driverless truck on interstate highways. In the next phase, a constrained autonomy phase, a lead driver drops off a platoon of trucks on a dedicated stop around an interstate highway from where autonomous trucks will operate in a platoon of driverless trucks. In the final stage, estimated to be functional by or after 2026, full autonomy will mean driverless trucks operating with precision from point of origin to point of destination without constraint in cities or highways.

Alberta-based Suncor Energy has begun using autonomous trucks (ATs) for its site operations. After successful tests, the organization has added over 40 units of ATs into its fleet. This initiative proved cost efficient and helped Suncor save $10 million in annual operational costs.

Remember that truckers do more than drive. They are involved in loading and unloading, shipment verification, documentation and so on. All these processes will take time to automate. Orga-

nizations such as Embark, Locomation and Tesla have already increased their AT research and testing. Uber tested its self-driving truck loaded with shipments on a Western US highway under the supervision of a driver in the back seat. Starsky Robotics, which closed its operations in 2020 due to issues including the recession and technological challenges, had successfully driven a first fully unmanned truck on a highway in 2019.

Embark, an automotive-grade, self-driving software company, is also working with truck manufacturers to integrate self-driving and auto-pilot technology into their fleet operations. San Diego-based TuSimple is addressing industry issues such as driver shortages, operational transportation costs, improving safety on roads and environmentally friendly road trips, and has also operated a fully autonomous semitruck on open public roads in regular traffic, and without a driver on board.

To address the driver shortage issue, Locomation, an autonomous trucking solutions company using human-guided technology and artificial intelligence (AI), has a more dependable strategy for organizations before they achieve full autonomy. Locomation’s technology will enable a convoy of two trucks and two drivers –a leader and a follower truck. When on a highway, one trucker controls the lead truck, while the following truck will work in an autonomous mode and follows the lead truck, with the second driver taking a break before taking his or her turn. This will help meet government regulations on work-hour limits but also improve capability to carry more load in a shorter time and with a smaller carbon footprint.

While these and other organizations are progressing towards more autonomy, they may face challenges. These include but are not limited to public and property safety issues in unpredictable scenarios, insurance claims, and related legal requirements. Software-run autonomous trucks are also at risk of cyberattacks and hijacking. Though seemingly implausible given the driver shortage, large-scale AT adoption will also jeopardize future trucker employability.

Another possible challenge is related to harsh weather and its impact on seamless AT operation. Although TuSimple ran a test operation in the harsh weather of Arizona and Texas, increasingly extreme weather remains a challenge.

The road transportation sector will change in the coming years. Younger drivers and more female drivers in long-haul road transportation on subsidized insurance can provide some relief. Yet while self-driving trucks need investment, regulatory approvals, and face infrastructure challenges, they will further ease the driver shortage.

For a full list of references, please see this article online at https://bit.ly/3U2LqIM. SP

“To boost workforce retention, approximately 66 per cent of employers will increase hourly wages for both truckers and warehouse workers.”

Dr. Naveed Ahmed Khan is professor (adjunct), Business Schools of Centennial College and George Brown College, in Toronto.

BY MICHAEL POWER

working to predict trends and align an organization’s strategy as it works to avoid either overor under-reacting, she says.

THE FUTUREPROOFED SUPPLY CHAIN

This helps supply chain leaders think proactively, rather than reactively. Many roads can lead to a supply chain that’s more future proof. Transforming work culture and values to attract and retain forward-thinking staff, for example, or setting sustainability targets aimed at renewable energy and eco-friendly sourcing can help guard against future troubles, Greaves-Cacevski says. Both digitization and technology more broadly can help to safeguard supply chains going forward.

“The advantage of digitization is that it increases transparency between the process steps between internal and external partners along the supply chain,” Greaves-Cacevski says. “A digital platform reduces wait-time between steps. This time saved in waiting for responses, feedback, or product is converted to time spent on activities that produce a higher value, such as finding alternative sourcing and transportation strategies, automating the procure-to-pay system, reducing production scrap volume, or validating Kanban board.”

FUTURE INSTABILITY

With the speed of recent innovation and technological advancement, the future seems to be arriving faster than ever. Artificial intelligence (AI), the Internet of Things (IoT), cloud technology and other developments appear set to transform not only supply chains but how business is conducted more generally. At the same time, between events like the war in Ukraine and the COVID -19 pandemic, disruptions and geopolitical circumstances appear more common and far-reaching.

What this means for supply chain professionals is that they must not only prepare for those challenges, but deal with them as they arise. The ability to do so involves adequate staff training, proper technology adoption, and so on. So, what might the future hold, and how can supply chain professionals ‘future proof’ their operations to meet those challenges?

Disruptions can be divided into two groups: innovation or market-led, says Maria A. Greaves-Cacevski, senior category sourcing lead, indirect, at Chemtrade Logistics. For instance, innovation in technology can

lead to faster transactions, which can then cause bottlenecks when there’s a gap in data transparency. Or, market disruptions such as policies, legislation, trade laws and similar factors that can cause access barriers leading to long process times or supply interruptions. Disruptions that are hard to predict include economic, environmental, or humanitarian crises.

Yet, these various disruptions and challenges are different from each other, Greaves-Cacevski notes. And while disruptions are usually negative, they can sometimes be controlled and therefore have a positive outcome.

“A challenge is the situational outcome stemming from instability within the business environment,” she says. “The opportunity for a business is to convert these obstacles into constructive new processes or best practices; that’s the silver lining behind understanding the difference between a disruption and a challenge within the supply chain process.”

Future proofing a supply chain – developing resilience and the agility to react – involves

Supply chains will likely remain unstable, at least in the short term, says Douglas Kent, executive vice-president of strategy and alliances at the Association for Supply Chain Management (ASCM). The organization’s Supply Chain Stability Index shows that supply chains are two times as vulnerable as they were pre-pandemic, Kent says. Disruptions are no longer tied mainly to the pandemic, and now arise from various sources, including geopolitical unrest, the labour shortage, climate change and so on.

Optimizing the supply chain network design can help build in resiliency and protect against future shocks, Kent says. But there are still questions surrounding what should change within those networks, whether nearshoring or reshoring are necessary, and so on, Kent notes. That view across the supply chain gets more complex when suppliers are included, he says. It’s important to be able to rethink and build scenarios around network design considerations and having the agility to shift across the network to mitigate risk.

As supply chains rethink their networks, they must also reconsider their inventory strategy, Kent notes. Organizations should think about, for instance, what state they

PREPARING FOR UNCERTAINTY IS MORE IMPORTANT THAN EVER

should hold their inventory in, whether raw, semi-finished, or finished goods, and therefore where those products should reside to be as agile as possible.

“Just building up inventory blindly without a thoughtful approach to that inventory, that higher level inventory strategy, doesn’t work. We know that,” Kent says. “But how do I get better and how do I increase the speed of my sales and operations planning process to replan and take advantage of the inventory and the network that has been established?”

A third area of focus to build resiliency involves attracting supply chain labour, Kent says. A better strategy is needed to bring in entry-level workers while also deciding what are the skills that organizations need in the future. Appealing to and retaining that talent is necessary to make the most of technology options.

“We might have made the investments in the technology, but if our talent isn’t growing enough to be able to fully utilize that, then some of those investments may go underutilized,” Kent says.

MITIGATE AND REACT

Future proofing is made more difficult by the unpredictability of international and geopolitical events, like the global shutdown during the COVID-19 pandemic and the war in Ukraine, says Chris Sawchuk, principal and global procurement advisory practice leader at The Hackett Group.

And while it’s difficult to foresee such largescale disruptions, organizations must still plan to deal with potential challenges. Before the pandemic, many organizations had become complacent to potential risks inherent in a global supply chain.

“The question is, if I know that, what can I do now to start protecting myself,” Sawchuk says. “You have to determine as an organization, ‘what level of risk am I comfortable with?’ What we’ve experienced over the last couple of years is that the events that we went through expose vulnerabilities.”

Sawchuk recommends that organizations look at strategies for mitigating those risks while also creating a playbook that outlines how to react when unexpected events arise. That process can involve looking at inventory, considering dual sourcing, or other strategies.

Some organizations are also considering shortening their supply chains to deal with potential Black Swan events, Sawchuk says. Some companies are looking to decouple their supply chains from China or thinking about a “China-plus-one” strategy that involves sourcing from other locations.

“A piece of agility and a more proactive standpoint is having foresight in terms of what could happen,” Sawchuk says. “If you have predictive capability, that can give you more agility as an organization. Those are two components that you have to look at.”

While it’s impossible to predict the future, organizations can still strive to prepare. With technology changes and uncertainty still ahead, that preparation is more important than ever. SP

“We might have made the investments in the technology, but if our talent isn’t growing enough to be able to fully utilize that, then some of those investments may go underutilized.”

BY JACOB STOLLER

SUSTAINABLE WAREHOUSING MAKING AN OPERATION SUSTAINABLE INCLUDES MAKING PROCESSES MORE EFFICIENT

A growing number of warehouses and distribution centres are posting signs showing compliance with the LEED building standard. As Supply Professional reported in October 2022 [Smart facilities, p. 14], energy-efficient facilities are helping companies make significant gains in their quest to improve efficiency and minimize energy use.

A highly efficient facility, however, doesn’t guarantee that a warehousing operation is sustainable –there are countless ways in which warehousing practices can undo the advantages of a well-planned facility. The challenge is that every operation faces different pitfalls, and there are no magic bullets.

“When it comes to brand new buildings, we have the LEED standard, which is great,” says John McKenna, CEO of Mississauga-based 3PL McKenna Logistics Centres. “But when it comes to environmental sustainability in a broader sense, there are no standards that we can follow. So, it’s going to be incremental – there are no home runs. To be successful, you’re going to need a lot of base hits.”

Opportunities for making incremental improvements can be found everywhere in the busi-

ness. Sometimes they’re not difficult to identify. “I just got two books that I ordered from Amazon, and what surprised me was the size of the box,” says McKenna. “The books only took up a third of the cubic volume. So, you’ve got to ask – if they stuck to just the size that they needed, how many more items could they get

in a truck? And how much would that reduce the cost or the carbon footprint per unit that they’re shipping? You can be sure that it would be significantly lower.”

Unused volume in an entire facility is also wasteful. “If you have a lot of inventory in a building, you don’t need as much energy to heat it or keep it cool,” says McKenna,

“whereas a big empty building needs a lot of energy to heat it up. So, by using our density better, we can reduce how much energy we have to put into keeping it warm.”

The key to being on a sustainable path, says McKenna, is to avoid the temptation to be “everything to everybody” and adopt a focused business model where the needs of the customer are clearly defined. “We’re a local 3PL, and we’re very focused on the needs of our customers in the Toronto area,” says McKenna. “We stand out because we offer very high quality for the particular type of client that we have.”

Maintaining that quality often involves questioning prescribed approaches. “We discontinued our ISO 9001 certification after six years because it was distracting us from customer issues,” says McKenna. “Now we can respond to problems dynamically rather than worry about testing and approvals, and our quality has gone up. If something’s not working, we get right to the problem, test our solutions, and then adjust our processes.”

Some of the most successful interventions are equally surprising. “We had a person checking every order that went out the door, but mistakes were still getting through,”

says McKenna. “So, we did the exact opposite of what people would expect – we eliminated the checker. And guess what? The errors decreased significantly. That’s because people were no longer relying on the checker to catch things, so they were more careful. Before, if a mistake went out the door, it was nobody’s fault. Now we have accountability.”

Employee awareness is central to the incremental improvements that ultimately make an operation sustainable. “Employee suggestions are where the best ideas truly come from,” says McKenna. “For example, employees know when they can re-use boxes instead of throwing them away. That means we can buy fewer boxes and we don’t have to put as many into recycling.”

The company is currently exploring ways to encourage employees to come forward with their ideas on a regular basis. “A lot of these things might seem like they’re too small to worry about but they add up,” says McKenna, “and people look back and say, look how far we’ve come.”

INNOVATIVE TECHNOLOGY

Automation is another strategy for making operations more sustainable. One of the keys is to target processes that consume significant time and energy.

“Cycle counting is traditionally a very slow process,” says McKenna, “so what people are doing now is flying drones among the racks and determining if there is any change in the count. This means you only have to send people there if things look different.”

Pittsburgh-based Gather AI (www.gather.ai) is one provider for such solutions. “We are solv-

ing the problem of misplaced inventory,” says Gather AI CEO & co-founder, Sankalp Arora, “and providing real time visibility on what is sitting on the floor through the use of commercially available off-the-shelf drones.”

Gather AI’s software guides the drone through the racks, collecting photos from which barcodes and other data are extracted. That information is then compared with data in the company’s warehouse management system, and differences are reported.

The savings in time and energy with this approach are obvious –the company reports that the system can scan in eight minutes what would take two hours manually. The system also provides visual information that allows managers to utilize warehouse space more efficiently.

“A distributor using our solution told us that their forklifts are driving around the warehouse less because they now know exactly where to put pallets,” says Arora.

Perhaps the biggest advantage is that the low cost of doing drone scans enables companies, particularly those committed to SLAs, to conduct physical inventory far more frequently.

“We have customers that used to do inventory every three months, and now do it every three days,” says Arora. “That way anybody in the organization has visibility of what the levels are. So, if one facility is not doing well, they can find that out immediately instead of waiting three months, and everybody across the organization has access to that information.”

McKenna predicts that detailed information about operations will have a growing role in making warehouses more sustainable. “Overall, I think that the information we have in our warehouse management systems can have an incredible benefit to sustainability,” says McKenna. “That might include information about inventory, packaging, the effort and energy for forklifts, or anything that goes into a task.” SP

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“If you have a lot of inventory in a building, you don’t need as much energy to heat it or keep it cool.”

MITIGATING DIGITAL RISK PROCUREMENT’S ROLE IN PROMOTING CYBERSECURITY

The World Economic Forum’s Global Cybersecurity Outlook report indicates that cyberattacks increased 125 per cent globally in 2021, with the uptick expected to continue. And while cybersecurity related issues are not new, what has changed in recent years is that there has been a massive move to utilizing the Cloud, IoT, e-commerce, remote accesses, and overall digital transformations, that ultimately led procurement teams to rethink their skills and their approach to their vendors.

Every day we are witnessing more and more cyberattacks, data-breaches and privacy concerns. The rising access of AI-powered technology that enables the development of malware, scripting, and other tools, provides hackers with the ability to manufacture near

perfect ways to execute on their plans, and with very little effort. The ultimate goal of these hackers is highly lucrative ransom. With our reliance on technology, the ransomware industry has grown into a multi-billion-dollar global criminal industry. There are no indications that industry is slowing down.

TOTAL VALUE OF OWNERSHIP

So, what role does procurement play in mitigating this risk? The answer is in a robust due diligence process, and third-party risk management (TPRM). This is potentially the biggest change that will transform this profession, as we completely shift the procurement conversation from cost savings and cost avoidance to the total value of ownership with a heavy weight placed on business continuity, information security, financial stability, and vendor concentration. The elevated due diligence and TPRM process begins at the vendor evaluation phase and onboarding stage and is managed through a structured, well-defined vendor governance process and continuous risk monitoring.

Arguably, among all of the TPRM components, information security requires the most attention, as it is the biggest threat to any organization. Your organization’s information security is only as good as your weakest vendor.

Fortunately, there are many InfoSec tools available to monitor vendor risk profiles continuously, based on data breaches and/or cyberattacks. However, by the time an organization is made aware of them, it might already be too late. The best defense remains a comprehensive vendor due diligence process, including reviews of the independent InfoSec audits and vendor SOC reports, at different stages of the engagement, starting with the evaluation and onboarding phase, and then annually throughout the lifecycle of the relationship.

Procurement should be partnering with IT, in performing due dili-

gence, and the ongoing monitoring of all critical vendors with the low or fluctuating risk profiles, to gain a better understanding of the trends, and what to look for when evaluating vendors. Some vendors risk profile may be impacted by things such as IaaS shared responsibility models they have with other customers, or even the nature of their business (e.g. ISP). And while the InfoSec tools will show this as risk, a detailed internal review can segment it out, focusing the conversation on the actual threats that should be managed.

As the first line of defence, procurement has a huge role in protecting the organization. By further broadening their scope, the procurement function is moving from an enablement to a strategic function, further forging the way for collaboration between the organizations and their most important vendors. By understanding and sharing vendor risk profiles with vendors, procurement teams can ensure that both organizations are working together to address any gaps and investing in stronger security. This further creates an opportunity to exchange best practices, new ideas and lessons learned between both parties. It is time well spent, and ensures strong strategic partnerships between the two companies.

Nevertheless, even if all the due diligence checks out, all organiza-

tions, in partnership with their procurement teams, should have a well-established and documented exit strategy for each of their critical vendors. This practice will force the organization to think about their relationship with their vendors, avoid concentrating massive scope on one vendor, and remove sole-sourcing practices all together.

A MATTER OF TIME

The question is not if an attack happens, but rather when. Depending on the nature of the attack and the information that is compromised, organizations might not only have their customer base impacted, resulting in financial loss and a tarnished reputation, but can also be subject to regulatory fines and penalties.

As cyberattacks become more sophisticated, our defence also needs to become more sophisticated, forcing procurement to act as the first line of defence, to evolve from the traditional roles that it once played. This will require investing in people with elevated skills, processes, and technologies, all focused on a first-line-of-defence mandate, and less on pricing. Failing to plan is planning to fail, and with an ever-increasing reliance on IT, procurement teams must be prepared. SP

Sanja Cancar-Todorovic is head of Enterprise Procurement, Outsourcing & Third-Party Risk Management at Home Capital Group Inc.

“As cyberattacks become more sophisticated, our defence also needs to become more sophisticated, forcing procurement to act as the first line of defence.”

Eric Attias named Holman’s Canadian VP of sales

Automotive services company Holman has named Eric Attias vice-president of sales for the organization’s Canadian fleet and mobility division.

Purolator orders 55 electric trucks from Motiv Power Systems

Purolator has announced it is ordering 55 electric delivery vehicles from Motiv Power Systems, a producer of EV trucks and buses. The order comes following the rollout of five Motiv-powered electric trucks in 2021. The additional vehicles will be deployed this year in London, Ontario, Vancouver, British Columbia, and Quebec City, Quebec.

“Expanding our partnership with Motiv Power Systems represents Purolator’s growing EV deployment and leadership across Canada,’’ said Chris Henry, director of national fleet

at Purolator. “After a successful experience with our first order, we’re excited to partner together on this next phase that will help us execute on our commitment to reaching netzero emissions by 2050.’’

Since converting five of its stepvans to Motiv Power Systems electric vehicles in 2021, Purolator has reduced 47 tonnes of C02 over the 45,000 miles travelled, with an uptime of 97 per cent. Purolator won the Advanced Clean Transportation (ACT) Expo Fleet Award in the leading carrier category in 2021.

Goodyear introduces EV tire for regional fleets

The Goodyear Tire & Rubber Company has introduced RangeMax RSD, its first electric vehicle-ready tire compatible with EV and gas- or diesel-powered regional work vehicles.

The RangeMax RSD is Goodyear’s best regional drive tire for energy efficiency, the company said. Equipped for higher load capacities of EVs, RangeMax RSD was engineered to deliver lower rolling resistance than comparable tires for improved efficiency to fleets regardless of drivetrain.

Engineered with Treadlock Technology to promote even wear and longer miles to removal, RangeMax RSD is the first regional drive tire embossed with Goodyear’s “Electric

Drive Ready” designation. Available now in size 295/75R22.5, the RangeMax RSD include:

Three-Peak Mountain Snowflake and Mud and Snow designations, key performance assurances in winter driving conditions.

Premium casing construction. Enhanced tread pattern designed for high-torque applications and an optimized footprint shape for even treadwear.

RangeMax RSD is the latest addition to Goodyear’s EV tire portfolio. Last year, Goodyear introduced its first commercial truck tire with “Electric Drive Ready” designation, Endurance RSA ULT.

Attias is tasked with sustaining Holman’s growth in the Canadian market and throughout North America. He will also provide strategic oversight for a team of Canadian sales managers responsible for aligning the company’s fleet management solutions with customer needs.

“Eric’s extensive leadership experience and operational fleet expertise combined with his profound understanding of the Canadian market will be invaluable to our clients and our entire organization,” said Craig Pierce, senior VP, fleet & mobility sales, Holman.

Attias joins Holman from Toromont Cat, where he most recently served as head of underground mining operations. Before that, he held several senior leadership roles in sales, business development, strategic planning, and product development with Petro-Canada.

Attias holds an MBA from York University’s Schulich School of Business and is fluent in English, French, and Spanish. He will be based in Holman’s Canadian headquarters in Mississauga.

Blackhawk Tire wins vendor of the year

Blackhawk Tire has won Vendor of the Year Award from OK Tire, a Canadian independent tire and auto service retailer. Blackhawk Tire received the award during the annual OK Tire AGM in Cancun, Mexico.

“The entire Blackhawk Tire team would like to thank OK Tire Canada for presenting us with the coveted Vendor Of The Year award,” said James McIntyre, Blackhawk’s VP of sales.“It was a tremendous honour to be recognized in such a significant way, and we are deeply appreciative of the continued support and recognition.”

The Blackhawk Tire brand shares many of OK Tire’s company values, making the partnership a natural fit, the company said, enhancing the mid-range tire offering at OK Tire and furthering the commitment to providing customers with great tire options at every price point.

Blackhawk’s line-up provides affordable options for almost any vehicle, from high-performance tires to everyday drivers. Blackhawk offers a commercial product assortment of commercial truck tires to get any fleet across the country safely and efficiently.

By Michael Power

Mobility reimagined

CIAS returns with recordbreaking attendance

It wasn’t the biggest auto show in Toronto’s history in terms of the number of cars or companies represented, but the first in-person Canadian International Auto Show (CIAS) since 2020 was still a record-breaker in terms of attendance.

The show – on hiatus in 2021 and 2022 due to the COVID-19 pandemic – saw about 350,000 attendees over 10 days in February. While some companies, such as the German brands, along with Ford, Mazda, and Honda, were absent this year, the show still featured 20 brands, a global debut, a North American debut, and a total of nine Canadian debuts.

Electric vehicles dominated the show, with over 75 all-electric vehicles and a 70,000sq-ft indoor EV test track and 19 vehicles for attendees to choose from.

“Despite three difficult years that have dramatically altered the

automotive landscape, turned supply chains on their heads, and made new cars a hard commodity to find, I’m proud to say we’re back with a full-scale show with both new products, new technologies and a full-on, full-engagement experience for our show-going public for our 50th anniversary auto show,” said Michael Eatson, president of the Canadian International Auto Show, during opening remarks at a media day preceding the show’s opening. ‘Mobility reimagined’ is the theme of the 2023 show, and I think it’s fair to say that we’ve reimagined how the show looks and feels this year.”

The show featured new products and concept cars from OEMs, and the first live run for Camp Jeep in Canada, a 4x4 test track. There was also the Cobble Beach Classics presentation of 75 years of Porsche. The exhibit included a 16-vehicle showcase.

The media day also highlighted Project Arrow, which debuted at the Consumer Electronics Show (CES) in Las Vegas in January. The made-in-Canada concept car hit the Canadian stage for the first time at CIAS. The zero-emissions prototype is the first all-Canadian electric vehicle, and the 550hp prototype will go 500km before needing a charge.

Project Arrow is a level-3 autonomous vehicle and features an intelligent cockpit and seven layers of cybersecurity, said Automotive Parts Manufacturers’ Association president Flavio Volpe, while presenting the vehicle.

“Safety, both of the occupant and the pedestrians, and of the data, is one of the things we designed right from the beginning,” Volpe said. “If nothing else, we raised the flag for Canada to say, ‘we can do this whole thing for you.’”

And the winners are...

Also at the media day, the Automobile Journalists Association of Canada (AJAC) presented their picks for the Car of the Year and Utility Vehicle of the Year.

“The Canadian Car of the Year program had to adapt to many challenges over the past five years,” said Stephen Elmer, who presented the winners along with fellow AJAC journalist, Mathieu Thomassin. “But we stand here today, proud to be able to crown a winner after another year of comprehensive testing taking place across Canada.”

The winning vehicle for the 2023 Canadian Car of the Year was the BMW i4, beating out runners up Mazda3 and the Hyundai Elantra N. The BMW i4 is an all-electric grand coup, which scored high in both its steering feel and its value. It was also named the best premium EV in Canada.

As for the Hyundai Elantra N, AJAC had named it the best sports performance car in Canada, and AJAC journalists pointed specifically to the passenger environment and the engine as two areas in which the car shines.

The Mazda3 was named Best Small Car in Canada for 2023, and AJAC journalists continue to rate it high in both styling and quality.

As well, the Hyundai Ioniq 5 won 2023 Canadian Utility Vehicle of the Year, with the Kia Telluride and Mitsubishi Outlander the runners up. FM/SP

Automotive Parts Manufacturers’ Association president Flavio Volpe discusses the Project Arrow, a made-in-Canada concept car.

This year’s auto show saw about 350,000 attendees over 10 days.

By Roger Constantin

Equipment as a Service Pros and cons for fleets of the EaaS model

The main objective for equipment as a service (EaaS) is to change the mindset regarding the commercial relationship between the manufacturer and the customer. Instead of buying actual equipment, the customer will buy services, based on his utilization. We might compare it to software in the cloud.

This approach is not new for equipment. One of the best examples is Rolls Royce and their airplane engines. Instead of selling engines, they are selling hours of utilization. In this business model, Rolls Royce needs to produce the best engines possible to reduce the impacts on the customer. The service level agreement, included in the contractual documents, is to provide the engines when the customer needs them.

Real-time data play a major role in this model. They can act during the trip and plan their interventions ahead at the arrival of the plane.

The EaaS model is an ecosystem allowing synergy with four specific groups within the framework of a business model. The main objective is to offer the customer service for a product, the monetization of which is based on the utilization. The main change is that the manu-

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facturer will not only offer equipment but will also provide a variety of services to the customers. In the case of vehicles, the services could include maintenance, repairs, service roads, plans and specifications assistance, and so on. Some providers will even offer fuel or energy.

Finally, we need to identify the base of utilization for which the customer will be billed. For vehicles, the kilometres driven, or the engine hours might be examples. In some industries there may be other ways to establish the base of utilization. This approach represents the major difference with pure leasing.

Stakeholders

In the EaaS ecosystem, four stakeholders are needed. The first one is the manufacturer of the equipment, the second is the customer, the third is the financial institutions involved, while the last one is the data integrators.

As the manufacturer, the producer of the equipment plays a crucial role in the model. The main goal is to produce equipment that will perform to meet customer expectations. Except for maintenance, the equipment should

always be available for the customer. The manufacturer should be the one aiming to eliminate the downtime. This situation will mean more robust equipment. If not, the manufacturer should be held accountable.

The other stakeholder is the customer. In the model, the customer just utilizes the equipment. He doesn’t need to assume responsibility for the maintenance and repairs. In exchange for the amount based on utilization, he will have use of the equipment to achieve the goals of his operations. This means he will be free to focus on his core business.

The third stakeholders are the financial institutions. They provide the financial support that the manufacturer and the customer must obtain for the model to work. In both cases, the management of the financial risk will pass through this stakeholder.

When you have synergy between these four stakeholders, you are in a pure EaaS model. With the ongoing energy transition, some new players have invited themselves into the model. They are not manufacturers but offer a variety of electric vehicles and all the services required for the transition.

Finally, the data integrators represent the equipment manufacturers or other manufacturers of technological solutions, which allows them to obtain the data utilization of the equipment. This is of great value in the model because the pricing will be based on that data.

Transitioning to the EaaS model

The transition towards the EaaS model needs to be prepared for and understand by the stakeholders. A strategic plan should be prepared to make the transition. The plan will be helpful for the top management, for the financial institutions, and for the investors, but also for the employees. A change management process should also be put in place. For equipment manufacturers, studies indicate that the transition could be profitable. It’s important to remember that the EaaS model includes not only the sale of equipment but also services. This is the major mindset change that’s needed to make the jump to this model. We should add that scientific studies prove the concept based on statistical analysis.

Roger Constantin is a fleet management expert. Reach him at roger.constantin@ conseilsrc.com.

Profitability will be obtained more easily at the beginning of the transition due to low requirements regarding expenses. Then there will be a kind of plateau. At this stage, new expenses will arise. For example, more employees in service sales, there will be a need for more visits to the customers, growth in operating cost, new information technology systems, and so on. When those expenses are met, the increase in profitability will restart.

Pros and cons

For the manufacturer, the advantages of this model include a growth in revenue, as well as a predictable revenue stream. The customer can expect to benefit from the ability to focus on the core business, the elimination of the CAPEX, and a reduction in OPEX (which will also become more predictable).

At the same time, the challenges to the manufacturer include having to draft a strategic plan, potentially change management and leadership,

the stress of the transition into a contractual agreement, and the need to manage risk. Challenges to the customer include the need for leadership, plus having to demonstrate the economic advantages of the model.

The future of EaaS for vehicles

It seems that Europe is ahead of North America with utilizing the EaaS model for vehicles. Some manufacturers already offer this business model to customers.

Those manufacturers are participating in the transition to more sustainable energy systems, so they offer electric vehicles, the billing for which is based on kilometres. The package includes all services, and they even offer logistics within their warehouse.

In North America, there are some projects underway with major vehicle manufacturers, large organizations that manage thousands of vehicles, or financial institutions. Hopefully the results will be available soon. There are also start-ups that are pushing the EaaS model fully or in part.

In conclusion, EaaS might be a new way for a fleet to provide vehicles for their operation needed to serve their customers. Currently, there is a lot of excitement with the model, particularly in Europe. It is worth exploring. FM/S

For the manufacturer, the advantages of this model include a growth in revenue, as well as a predictable revenue stream.

By Stephanie Wallcraft

Subaru Crosstrek

Like the Kona, the Subaru Crosstrek subcompact SUV has a new generation on the way for 2024. This one’s an early arrival with dealerships expected to receive their first units in the spring. The new Crosstrek comes with interior and exterior redesigns, an updated version of the brand’s standard full-time AWD, and a choice between two engines with four horizontally opposed cylinders: a 152hp, 145lbs-ft 2.0L or a 182hp, 176lbs-ft 2.5L (Combined fuel ratings have not yet been published). With 22cm of ground clearance and Subaru’s EyeSight safety suite, this is a natural choice for those who need a small but rugged SUV. Pricing for the 2024 model starts at $27,352 including fees.

Ford Maverick

Since Ford announced its plans to drop its entire car line-up back in 2018, the Blue Oval has unapologetically been a truck brand. This has allowed room for the Ford Maverick, one of only two truly compact pick-ups on the Canadian market. The standard powertrain is a FWD 2.5L, four-cylinder engine

Small ride, big value Compact vehicles for every fleet

What makes a vehicle ideal for a fleet? An affordable price up front is a key factor, of course, but it’s not the only one. Fuel consumption, safety, and overall usability can be just as important, depending on the application. With these attributes in mind, we’ve compiled a list of eight small vehicles available in Canada today that fleet managers should consider. We’ve provided a mix of compact and subcompact cars and crossovers, from gaspowered to hybrid and electric vehicles—and we even snuck in a truck—to provide options that meet a variety of needs and purposes.

with a hybrid system, averaging 6.4 L/100km combined. Need more capability? Each of the three available trims can be optioned with a 2.0L, four-cylinder EcoBoost engine and AWD—and there are FX4 and Tremor off-road packages available, too. Pricing starts at $33,295 with delivery. The hardest part of this decision is finding one: demand is through the roof, so this tiny truck is consistently out of stock.

Nissan Versa

Very few subcompact cars are left in Canada, so if a cheap and cheerful small sedan is what you’re looking for, start here. Available exclusively with a 1.6L, four-cylinder engine making 122hp and 114lbs-ft of torque, the Versa isn’t exactly a powerhouse. But it’s efficient with a combined average of 6.7L/100km combined if you opt for a model with a continuously variable transmission, and a five-speed manual remains available. With a starting price of $20,048 and a maximum pre-accessories price of $24,888 including delivery charges, this is about the closest to frugal a new vehicle gets in 2023.

Honda Civic

While the Honda Civic is no longer Canada’s best-selling car—that honour went to the Toyota Corolla for 2022 amid supply chain disruptions— it held that crown for nearly a quarter century. Honda’s asking price of $28,749 with fees just to get in the door on an 11th-generation Civic stings a little, too. But it remains popular for good reason: it has a reputation for reliability, and it’s built right here at home. Two engines are available: a 2.0L, four-cylinder making 158hp and 138lbs-ft of torque, and a 1.5L turbo four-cylinder producing 180hp and 177lbs-ft. Both average 6.9L/100km combined in the sedan unless you opt for the Sport trim, where that figure goes up to 7.1; hatchback models come with slightly higher figures.

Mazda3

Mazda has some interesting stuff happening at the top of its line-up, but don’t forget the humble Mazda3: with two body styles, three engine options, available AWD, and an interior that edges toward premium without dragging the price along, there’s a lot to appreciate here. For the most efficient option, pick the sedan with either the base 155hp, 150lbs-ft 2.0L engine

or the 191hp, 186lbs-ft 2.5L, both of which average 7.6L/100km combined with FWD. For the best performance, choose the 250hp, 320lbs-ft 2.5L turbocharged four-cylinder engine. Pricing starts at $23,829 including delivery fees for the sedan and $24,829 for the hatch.

Buick Encore GX

Toyota Prius

This may seem like a predictable suggestion, but we’re not talking about the same Prius you’ve been buying for years. Toyota’s headline hybrid enters a new generation for 2023, and with it comes edgier styling, an updated powertrain, standard electric all-wheel drive, and more enthusiastic performance: 196 horsepower from a 2.0L, four-cylinder engine and electric motors,

to be precise, a significant improvement over the previous model. And even with these improvements, the Prius averages 4.8L per 100km combined, according to data from Natural Resources Canada. Two models are available, XLE and Limited, with retail pricing starting at $39,864 including delivery charges and dealer fees.

Buick is a brand that doesn’t get enough attention: it offers mid-premium appointments and classy styling at reasonable price points. The Buick Encore GX is now the brand’s smallest vehicle with the even tinier Encore being discontinued. It’s available with front- or all-wheel drive, a Sport Touring model and a new Avenir premium trim arriving for 2024, and two different engines. Though with the choices being a 137hp, 162lbs-ft 1.2L, three-cylinder or a 155hp, 174lbs-ft, 1.3L, three-cylinder, neither option is especially powerful—but fuel consumption is good with both averaging less than 8L/100km combined with FWD. The larger engine with AWD averages 8.6L/100km combined. Pricing starts at $29,542 including fees and crests at $35,000 for upper trims before options.

Hyundai Kona

We’re recommending the Kona, Hyundai’s smallest crossover, with an asterisk: a new generation is coming for 2024 with funky new styling and updated powertrains. In the meantime, the current-generation Kona continues to be a solid subcompact thanks to its diverse powertrain options. There’s the standard Kona with its 147hp, 132lbsft 2.0L, four-cylinder averaging 7.4L/100km combined or 7.9 with AWD; the slightly souped-up N Line and the properly performancetuned Kona N; and the Kona Electric, which makes 201hp and 290lbs-ft for up to 415km while burning no fuel at all. With such a wide variety of powertrains to choose from, pricing is just as diverse, starting at $25,306 including fees and climbing to $47,252 for the EV, though the latter qualifies for the federal iZEV rebate as well as provincial rebates where they exist.

By Stephanie Wallcraft

A performance all-rounder

The Ram 2500 Rebel offers an entirely new trim for 2023

Back in 2015, Ram introduced the Ram 1500 Rebel, a half-ton pick-up that strikes a balance between off-road prowess and towing and payload capacity. Since its launch, the Ram 1500 Rebel has been one of that nameplate’s best-selling models.

Now, the heavy duty joins the game. The Ram 2500 Rebel is an entirely new trim for 2023. Like the smaller Rebel, it strikes a sweet spot by offering more off-road capability than the entry level trims but more towing and payload capacity than the Power Wagon all-terrain beast. More important, the Rebel is available not only with a gas V8 but also with a turbodiesel, marking the first time Ram has offered an

off-road capable heavy-duty truck with a diesel powerplant.

The Ram 2500 Rebel comes with a respectable level of off-roading equipment, including a rear locker and rear electronic limited-slip differential (but unlike the Power Wagon, the front suspension here is a solid axle). It also includes skid plates for the fuel tank and transfer case, tow hooks, hill descent control, and a Mopar sport performance hood. A 12,000lbs WARN winch is optional with the gas engine.

Regardless of engine, the Rebel comes with a standard rear five-link coil suspension and four-corner Bilstein shocks. Either 18- or 20-inch wheels come wrapped in Goodyear

DuraTrac 33-inch off-roading tires straight from the factory. Opt for the available rear air suspension, and the rear shocks are replaced with airbag dampers that adapt either automatically or manually to a variety of loads and conditions, including a bed-lowering mode for easy hook-up of heavier trailers.

Horsepower

The 410HP, 429lbs-ft gas-powered 6.4L Hemi V8 is matched with an eight-speed automatic transmission, and cylinder deactivation helps improve its fuel efficiency in lower load situations such as highway cruising. The 6.7L, inline-six turbodiesel equips 370hp and a whopping 850lbs-ft of torque and is

matched with a six-speed automatic. A Borg Warner electronic shift-on-the-fly two-speed transfer case is standard with 2 Hi, 4 Hi, or 4 Lo modes, plus neutral mode for flat towing.

Part of the engine selection process involves weighing your needs against the towing and payload numbers. The gas engine is lighter, which provides higher maximum figures of 16,870lbs for towing and 3,140lbs for payload. The diesel engine’s weight means slightly lower figures of 14,920lbs for towing and 1,980lbs for payload. Still, when viewed alongside the Power Wagon—10,570lbs of towing and 1,610lbs of payload—we see the benefit of giving up some

1. An 8-inch screen is standard, while a large 12-inch portrait-oriented screen is also available.

2. The 410HP, 429lbs-ft gas-powered 6.4L Hemi V8 is matched with an eight-speed automatic transmission, and cylinder deactivation helps improve its fuel efficiency in lower load situations.

outright off-road capability for better load performance.

A healthy amount of towing equipment is standard on the Rebel, including a Class V trailer hitch, a factory-installed trailer brake controller, trailer blind spot monitoring that works with no special setup required, and trailer tire pressure monitoring. In some configurations, a trailer steering assist function is available.

Both powertrains handle themselves well in every scenario we tested, from on-road cruising to climbing snow and ice-covered hill trails with water fording. Even among today’s more refined diesel engines, this one is notably quiet and smooth in its operation, at least

from inside the cab. It does make for a heavier truck that takes more throttle effort to get going, but that’s par for the course.

Technology

All HD Rebels include Ram’s latest Uconnect 5 infotainment system with wireless Apple CarPlay and Android Auto, and built-in Wi-Fi functionality (subscription required). An eight-inch screen is standard, while a large 12-inch portrait-oriented screen is available, as are a 17-speaker Harman Kardon audio system and additional exterior cameras. The interior can be upholstered with cloth, a leather that’s available with either a front bench or bucket seats, or a premium

leather that comes with buckets only. With the buckets, a large centre console is added that includes 12 different organizing modes.

Pricing starts at $78,045 for the gas engine (including a $2,095 destination charge) and $87,495 for the diesel. Expect to pay a fair bit more, though: some key safety features as not standard, and other options are hard to pass up. Regardless, the Ram 2500 Rebel is competitively priced against competitors like the Ford F-250 Tremor or GMC Sierra AT4. Fleet managers who need go-anywhere, do-anything trucks will want to consider the Rebel for its appealing balance as a true performance all-rounder. FM/SP

As Tested

Price (incl. freight and PDI): $78,045 (gas); $87,495 (diesel)

Engine:6.4L Hemi V8 (gas); 6.7L turbodiesel I6

Power: 410hp, 429lbs-ft of torque (gas); 370hp, 850lbs-ft (diesel)

Transmission: eight-speed auto (gas); six-speed auto (diesel)

Rated Fuel Economy (L/100km): Not rated*

Observed Combined Fuel Economy (L/100km): Not rated*

* NRCan does not supply fuel consumption ratings for heavy-duty trucks. Our test drive was a single-day first drive that did not produce statistically relevant fuel economy figures.

The Ram 2500 Rebel comes with a respectable level of off-roading equipment, including a rear locker and rear electronic limited-slip differential

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GETTING E-TENDERING RIGHT CANADA’S FEDERAL TRIBUNAL REJECTS ELECTRONIC BID BOND

In its May 2022 determination in Gregory Kerr Ltd. v. Canada (Department of Public Works and Government Services), the Canadian International Trade Tribunal rejected the complaint of a disqualified low bidder after finding that the bidder failed to submit a valid electronic bid bond. The dispute dealt with an invitation to tender issued by the Department of Public Works and Government Services on behalf of the Department of Fisheries and Oceans for repairs to a wharf structure located in Sambro, Nova Scotia.

The government rejected the low bid after it was unable to verify that bidder’s electronic bid bond. The low bidder challenged that rejection, asserting that it had submitted a valid bond. However, the government confirmed that it was unable to verify the validity of the bid bond since the digital links contained in the electronic document did not work. Further, the government’s subsequent attempts to verify the bond on the bonding company’s website returned a “non-verified” result. As the tribunal noted, the bidder was not allowed to resubmit its bid bond in a valid format after the bid deadline since that would have amounted to improper bid repair. The bonding company’s post-deadline confirmation of the bid bond’s validity was rejected by the government for the same reason.

TECHNICAL ISSUES

While the complainant claimed that the technical issues surrounding the bid bond’s validity were caused by the government’s electronic tendering system, the tribu-

nal noted that none of the other bidders had any issues with the submission of their electronic bid bonds into the government’s tendering system. The tribunal concluded that the problem arose when the complainant, contrary to instructions provided by Trisura, its bonding company, merged the original electronic bid bond with its other bid documents and then submitted a single combined electronic file into the government’s tendering system. As the tribunal concluded, this had the effect of stripping away the electronic links in the original bid bond and rendering the bid bond non-verifiable: “On the basis of the record, the tribunal is left to conclude that the exercise of “dragging and dropping” the bond “into” other bid documents served to combine the bond with other PDF documents, which Trisura explicitly cautioned would void the bond. In “dragging and dropping”, it is likely that the software on the computer used by GKL created a copy of the bond without replicating the embedded digital certificates. The composite file containing this copy was sent to PWGSC, while the original bond, as received from Trisura, was retained by GKL’s computer.”

The tribunal also rejected the complainant’s assertions that the government’s invitation to tender (ITT) contained ambiguous instructions regarding the submission of electronic bid bonds, finding that the ITT instructions were clear and that any confusion on the part of the bidder could be attributed to the technical instructions provided by its own bonding company, rather than on the government’s bid submission instructions:

“In summary, although GKL had obtained a verifiable bond from Trisura, that bond was not transmitted, in either original or verifiable form, to PWGSC. This is not attributable to any ambiguity in the language used by the ITT. To the extent that there was any confusion or ambiguity concerning the process of bond verification, it may have arisen from the instructions or process provided by Trisura, but the Tribunal makes no finding in this regard. The sole issue before the Tribunal is whether the tender document contains a latent ambiguity. It does not.”

STRICT RULES

As this case illustrates, the failure to submit a valid bid bond can prove fatal to bid compliance. Case law imposes strict rules on the acceptance of bid bonds and requires that those bonds be submitted in a valid form since defects cannot be cured after the bid submission deadline. As purchasing institutions expand their use of electronic tendering systems to allow for the acceptance of electronic bid bonds, they should ensure that their bid submission instructions clearly state that electronic bid bonds need to be submitted in a verifiable format.

Electronic bid bonds that are missing the digital links necessary to authenticate their validity do not meet the legal standards needed to ensure the compliance of a bid. For their part, when submitting electronic bid bonds, bidders should ensure that they carefully follow the technical instructions provided by their bonding company to ensure that the verifiability

“Case law imposes strict rules on the acceptance of bid bonds and requires that those bonds be submitted in a valid form since defects cannot be cured after the bid submission deadline.”

of their digital bond is not compro mised before it is submitted into the purchasing institution’s electronic tendering system. SP

Paul Emanuelli is the general counsel of The Procurement Office and can be reached at paul.emanuelli@ procurementoffice. com.