Supply Professional August 2021

AUGUST 2021

NEVER SHY AWAY

Eric Woollings rolls up his sleeves in logistics and operations Railway consolidation

E-product disposal Honda Accord Hybrid Health & safety Predicting risk

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IT CAN HAPPEN TO ANY FLEET’S SUPPLY CHAIN. AND IT’S PROBABLY HAPPENING TO YOURS. IT’S COSTING YOU TIME, EFFICIENCY, PEACE OF MIND AND, MOST OF ALL, MONEY. SEE IT BEFORE IT’S TOO LATE.

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VOL.63 No.4 AUGUST 2021 SUPPLYPRO.CA COVERING CANADA’S SUPPLY CHAIN

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COVER: MIKE FORD PHOTOGRAPHY

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FEATURES

ALSO INSIDE

7 COMING TOGETHER North American railway consolidation.

13 NON-SALARY BENEFITS Getting creative with employment offers.

8 RECYCLING OPTIONS Dealing with e-waste.

14 GAME CHANGER What 5G will mean for supply chains.

10 NEVER SHY AWAY Eric Woollings rolls up his sleeves.

16 IN GOOD HANDS Health and safety in the new normal.

4 UP FRONT 5 BUSINESS FRONT 6 IN THE FIELD 30 THE LAW

18 SMOOTH SAILING Predicting risk in post-pandemic supply chains.

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Fleet Management SUPPLYPRO.CA 3

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UP FRONT

CHIP SHORTAGE LESSONS Who knew something so small could cause such trouble?

While microchip supply should rebound later this year, the shortage that’s recenlty disrupted manufacturing will likely continue at least into next year and, some experts fear, into 2023.

The problem, cutting across multiple industries, shows how one issue can have knock-on effects for months, even years.

Microchips are used in a range of goods employed across industries and by private consumers. They’re essential in computers, smartphones, tablets and other technology: GPS tracking devices, televisions, identification cards, ATM machines, pacemakers and others.

They help to make vehicles more efficient, sustainable and connected.

The shortage has therefore hit the automotive industry hard, with US car production dipping 6.6 per cent in June.

There are multiple factors exacerbating the shortage. COVID-19 has slowed shipments of many goods globally. There was also an unforeseen jump in the demand for electronics during the pandemic. People and businesses alike began buying laptops, servers and other equipment to service remote work.

This has led to increased demand. According to the Semiconductor Industry Association, global semiconductor sales increased 6.5 per cent in 2020 alone.

But that’s not all. The blockage of the Suez Canal by the Ever Given, along with cold weather in Texas in February that forced Samsung Electronics, NXP Semiconductors, among others, to shut temporarily, have also contributed to the chip supply crisis.

So, what can supply chains learn going forward from the shortage?

The following points can apply not only to microchips but other goods.

One lesson might be to look at what an acceptable level of inventory is.

In recent years, many companies have relied on lower levels of inventory to stay nimble and efficient. But holding inventory at such low levels may mean shortages when a crisis hits.

There will also be a heightened emphasis on resilience and managing risk in supply chains. While risk has always scored high among supply chain practitioners, it has moved even more resolutely into the spotlight recently.

And while it’s challenging to predict risk accurately, as our story on the topic makes clear (see page 18), awareness of potential risks and working to manage them can lead to stronger supply chains. Cost will stay important but building resiliency can save money in the long run while contributing to business continuity.

A heavy reliance on goods manufactured overseas can also create challenges. Domestic manufacture of PPE, for example, may have meant a more readily available supply during the pandemic. The same could be true of microchips. The Biden administration in the US has proposed $52 billion to boost domestic chip research and production. Stronger domestic manufacturing of essential products could mean more resiliency in supply chains.

The microchip shortage may continue for some time. Although we’ll deal with the effects for a while, we can also use the situation to learn how to bolster supply chains going forward.

EDITOR MICHAEL POWER 416-441-2085 ext 110, michael@supplypro.ca PUBLISHER ALEX PAPANOU 416-441-2085 ext 101, alex@supplypro.ca DESIGN Art Direction ROY GAIOT Design Consultation BLVD AGENCY CUSTOMER SERVICE/PRODUCTION LAURA MOFFATT 416-441-2085, ext 104, lmoffatt@iqbusinessmedia.com ASSOCIATE PUBLISHER FARIA AHMED 416-441-2085 ext 106, faria@supplypro.ca 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. iQ BUSINESS MEDIA INC. Vice President STEVE WILSON 416-441-2085 x105 swilson@iqbusinessmedia.com President ALEX PAPANOU

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BUSINESS FRONT—BY MICHAEL HLINKA

THE RECOVERY BEGINS WILL THE END OF COVID-19 MEAN THE BEGINNING OF STAGFLATION? At the time of writing, more than 80 per cent of Canadians have received at least one dose of vaccine for COVID-19 and about half of us aged 12 or older are fully vaccinated. It seems to me – from my perspective in Toronto – that if someone hasn’t received a shot, it’s because they don’t want one.

I think that in the not-so-distant future we’ll see that vaccination is required before you can get on an airplane, and individual employers may mandate full vaccination in order to return to work.

For all intents and purposes, COVID-19 is behind us.

Almost all the developed countries of the world made the decision to greatly restrict individual liberty and economic activity to combat the pandemic. I believe that historians will conclude that there was a huge over-reaction.

Governments turned what should have been a temporary public health emergency (Does anyone else remember the phrase: flattening the curve?) into a severe economic downturn and I’m unsure about how long it will take for North America to fully recover.

Or whether the entire arc of economic history will be altered because of COVID-19.

This sounds, even to me, a bit hyperbolic. But let’s take a good, hard look at the public policy response in both the US and here in Canada. America is running a $3 trillion deficit for the second straight year. Canada’s deficit last fiscal year was $354 billion. That is more than $10,000 dollars of spending for every man, woman and child. In the year we’re in right now (fiscal 2022), it is still projected to be $155 billion. Looking out the

year after that, 2023’s deficit is estimated at $60 billion which is an amount never before seen preCOVID-19 in Canadian history.

That’s one part of the story. The second part is interest rate policy.

The bank rate currently stands at .25 per cent. But more important is the “quantitative easing” (QE) that the Bank of Canada is engaging in. QE means that the Bank of Canada is buying Government of Canada (GOC) bonds; however the bank claims that it is not “printing money” because it is showing an offsetting liability on its balance sheet. This is the type of double-talk that only the government or a quasi-government agency can get away with. The Bank of Canada argues that because eventually the bonds will mature, that it’s not like it’s printing money. Sure.

A WEALTH AFFECT This is where we are right now in Canada. The federal government has taken on enormous debt, even as the population ages and the public demands more and more services. The Bank of Canada has pushed interest rates almost down to zero by (let’s cut the nonsense) printing money which has greatly inflated asset prices. This has led to a “wealth effect” that has created artificial demand, at least among a significant segment of the population. Now let’s imagine that the federal government cuts back on its spending and that arm’s length investors decide that a return of 1.8 per cent on 10-year GOC bonds just doesn’t cut it. Then what?

Here’s what I’m guessing what the next few years will look like.

There has been a one-time bump in consumer demand as we “open

up.” But that is temporary and fuelled by the massive amount of government spending. I would not be surprised if future deficits are much higher than the current projections, but eventually this would be inflationary and this disproportionately negatively impacts a key electoral demographic and that is senior citizens. Sooner or later, spending and revenues will be brought in line and I see higher taxes on middle and upper-middle income Canadians.

The Bank of Canada will be keeping short-term interest rates at a very low level for an extended period. This will allow the federal government to roll over its debt inexpensively. It’s possible that it can extend its QE programs indefinitely and I would not be surprised if it does. But eventually this too will be inflationary and then the question will be whether it appears in the consumer price index (in which case it’s highly problematic politically) or will we continue to see the appreciation of asset prices, which is something that tends to benefit older Canadians at the expense of younger ones.

Everything I see suggests that over the next three to five years we will be entering what should be understood as an extended period of stagflation: stagnant growth combined with higher levels of inflation than the Bank of Canada’s two-per cent target. We’ve seen this occur before. The midto-late 1970s saw tepid growth coupled with high inflation. With 20-20 hindsight, we know that the technological revolution propelled us out of that economic funk.

Here’s to hoping that history repeats itself. SP

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

“The Bank of Canada argues that because eventually the bonds will mature, that it’s not like it’s printing money.

Sure.”

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IN THE FIELD—BY JOHN STROUD AND JEN SCHELLINK

IMAGINING POSSIBILITIES CREATING VALUE WITH ARTIFICIAL INTELLIGENCE How much money could you save your company if you really knew what was happening in your supply chain, and you had the time to act on that information? Another way of asking that is: What could you do if you had working artificial intelligence (AI)?

Why? At its most basic, AI is a computer system that can think and act like a human being. What’s key is that AI can review so much more than any person possibly could, so much faster. It can make connections between data points that no human ever would, and even behave like a virtual “robot” and automate processes.

That means companies can both learn supply chain insights at scale and have the capability to act on them. This is important because millions of dollars are at stake.

Purchasing departments, suppliers and partners produce massive quantities of data. This huge volume provides substantial opportunity for added value but, in general, the data is not analyzed in depth.

According to McKinsey, across 19 industries, there is $1.2 to $2 trillion of supply chain value to be created from AI. Only sales has the same massive opportunity as supply chain.

In an increasingly competitive marketplace, this problem needs to be fixed. Failing to act on AI will be damaging to the reputation of procurement teams, as they will continue to be seen as less strategic partners in the company.

Of course, it’s hard to be an innovator on artificial intelligence.

Not only is the subject matter complicated, most of the jargon-free information comes from vendors.

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Procurement advisors deserve independent, vendor-agnostic AI advice.

FRAMING THE TRENDS We get how challenging this is.

That’s why we’ve reviewed the most recent independent research on AI and summarized the biggest opportunities for you. We suggest that you frame the trends in AI and supply chains in three broad categories: tactical, operational and strategic.

Tactical – Automation: The most common way that procurement teams use AI is to automate and optimize processes, such as purchasing, contract management quality control and answering questions from contacts.

People currently carry out these tasks, but AI is capable of processing incomparably greater quantities of data than humans, with higher reliability at lower costs. This means the processes are easier to control and monitor, and that they save teams both time and money.

Operational – Forecasting: Suppose that you had a better sense of what was going to happen. Instead of working with the same forecast for a month, AI combines multiple sources, like the latest sales data, to be able to predict better what consumers will want, when and where.

With enhanced demand forecasting, there is better inventory management. That means there are fewer shortages, fewer over stocks and less waste of disposable items.

There is also more time to optimize the transportation of goods.

Strategic – Greater Resilience: More than ever, companies understand the importance of having the

right suppliers. AI can help with the selection process. Similar to a dating site, AI can review historical data, or be trained by teams to make recommendations on who the best suppliers are. Once suppliers are in place, maintaining good relations and becoming a privileged client is a priority for many firms, especially in a time of emergency, or for the most innovative projects. AI now allows for access to more sources of information on supplier opinions, which guides organizations on which relations to invest most heavily in.

WEIGHING THE RISKS However, it is best not to be naïve about AI. The enormous potential is balanced by risk. Sadly, most AI projects fail to deliver their promised value, and almost all projects end up being delayed.

Still, it is reasonable to look a year into the future and imagine your CEO being thrilled and amazed by the quality of your analysis of AI in procurement.

It is possible to take a topic that most people find complicated and simplify that topic into business terms that make sense to everyone, and for your environment. SP

John Stroud and Jen Schellink are the founders of AI Guides.

“We suggest that you frame the trends in AI and supply chains in three broad categories: tactical, operational and strategic.”

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BY CHRISTIAN SIVIÈRE

“One of the major supply chain issues facing North American manufacturers, distributors and retailers is increased logistics costs.”

COMING TOGETHER CONSOLIDATION IN THE NORTH AMERICAN RAILWAY INDUSTRY In the Kansas City Southern Railway Company (KCS) bid, who will get the prize, Canadian Pacific or Canadian National? CP moved first, then CN made a competing bid. Seen from a Canadian perspective, it’s all good, as it doesn’t happen every day that a Canadian company acquires a major player south of the border.

On the surface, it doesn’t matter which one wins: venerable CN was a crown corporation from its founding in 1919. It was then privatized in 1995. CP is a private company but is very much part of Canadian history, as it was created in 1881 to unify Canadians from coast to coast. Who hasn’t seen the picture of Lord Strathcona driving the last spike to complete the Canadian Pacific Railway on November 7, 1885?

CP’s bid represented an enterprise value of approximately US$29 billion, which included the assumption of $3.8 billion of debt.

The transaction valued KCS at

$275 per share, a 23 per cent premium based on the CP and KCS closing prices of March 19.

PENDING APPROVAL All this was subject to approval from the US Surface Transportation Board. Then CN made a competing offer on May 13, 2021, under which KCS shareholders would receive $325 per common share, implying an enterprise value of $33.6 billion, including the assumption of KCS debt.

On May 21, the KCS board accepted CN’s offer and it is now pending approval. The US regulator meantime launched a public consultation into the proposed transaction, accepting written submissions until June 28.

KCS is one of seven North American Class I railroads, the others being BNSF Railway Co, CSX Transportation, Grand Trunk Corporation (CN’s operation in the US), Norfolk Southern, Soo Line Corporation (CP’s operations in the US) and Union Pacific Railroad.

The KCS-CN merger would create an integrated north-south giant and would be beneficial to Canada: it would produce the only Canada-to-Mexico rail network in North America that could move Canadian crude exports to the US Gulf Coast and refined products to Mexico.

CN has rail routes from Alberta to the US Gulf and KCS to Mexico.

The deal seemed to have reasonable chances of going through until President Joe Biden issued an

executive order on competition on July 9 targeting agriculture, technology, health care, financial services and transportation, to promote competition and limit corporate dominance. Among its pro­visions, there are directives targeting railroads and ocean shipping in a push to confront consolidation and anticompetitive practices in the sector.

The order calls for the Federal Maritime Commission and the Surface Transportation Board to work together and act. It is true that the number of Class I freight railroads in the US shrank from 33 in 1980 to seven now, limiting options for shippers. The same has been happening in ocean freight, where 10 major container lines now control about 85 per cent of the market. And it’s a very similar situation in the trucking industry, where the big players are getting bigger, squeezing the little guys.

Christian Sivière is president at Solimpex.

The Biden administration’s executive order into anti-competition practices in transportation contains another twist: it wants to promote passenger trains and to encourage railroads to provide rights of way to passenger rail.

Today, freight railroads own the tracks and privilege their own traffic, making it harder for Amtrak passenger trains to have on-time service. Anyone who has travelled with Via Rail in the Quebec-Windsor corridor will no doubt have experienced that kind of delay.

As our federal government recently announced plans for new high-frequency passenger rail lines between Toronto and Québec city, it gives Canadians another reason to follow closely what is happening south of the border. SP

CANADIAN CONSOLIDATION We have a good example of this in Canada, with Transforce acquiring one competitor after another, the last one being UPS Freight in an $800-million deal in January. And one of the major supply chain issues facing North American manufacturers, distributors and retailers is increased logistics costs. While this is due to several factors, it is tempting to blame an industry where there has been so much consolidation and where customers seem to have fewer and fewer options.

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BY ERIN UNGER

A RESOURCE IN WASTE

Erin Unger is program manager for the Canadian Collaboration for Sustainable Procurement.

RECYCLING ELECTRONICS IN CANADA In our current linear, consumption-based economy we move on quickly from old products that were once shiny and new. Old being a relative term in IT, the average laptop only lasts for five years before it’s relegated to e-waste. E-waste is the informal term for electronic products (e-products) that have reached their “end-of-life.” Common e-waste products include computers, televisions, copiers, fax machines, cell phones and printers.

The United Nations Environment Programme (UNEP) estimates that about 50 million tonnes of e-waste are produced globally each year.

Of those 50 million tonnes, only 15 to 20 per cent is recycled; the rest ends up in landfills and incinerators.

The 80 to 85 per cent of unrecycled e-waste is both a liability and a resource as valuable materials can be extracted from products at their end-of-life. Unrecycled e-waste that is disposed of through landfills and incinerators can have serious impacts on the environment; toxic materials such as heavy metals, flame retardants, and other pollutants can leach into the soil, water and air and cause irreparable damage to the surrounding ecosystems.

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materials like palladium, gold, silver, copper, platinum and other recoverable materials was estimated at over $80 billion dollars in 2017.

RECYCLING CENTRES Of all e-products designated for recycling, it is estimated that 50 to 80 per cent of it is exported to nations such as China, India and the Philippines where health and safety standards may not be as strong and direct handling of toxic materials may take place. In some unregulated recycling centres, e-products are sorted and separated for their materials through chemical processes and incineration, which releases pollutants that are harmful to local communities and workers. There are safe, local methods for recovering these materials through certified recycling facilities that provide e-products with a second chance at life and minimize hazards for workers. In these regulated recycling centres, e-products are dismantled and sorted into plastics and metals. In most recycling processes a magnet can be used to recover valuable metals, and water separation technology can separate metals from plastics.

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raw materials to make new electronics. While it may seem a simple solution to recycle our e-products responsibly, the outcome is often decided during the design phase.

Recycling potential is affected by the quality of materials in the original product. In addition to the growing mountain of e-waste, the quality of e-products is declining, which means reuse of some materials is not feasible. For example, high-quality post-consumer plastics are in short supply, and it is cheaper for manufacturers to use virgin or lower quality plastics.

Thus, if you are in the market for a new e-product be sure to select electronic products that align with your values. Choosing ecolabel-certified products that take the total cost of ownership and the quality and repairability of a product into account will decide the future of your product’s lifecycle. The most sustainable IT companies according to Forbes are Apple, HP, FairPhone, Microsoft and Samsung, and you can find specific product rankings through EPEAT, TCO Certified and other ecolabels including the wellknown EnergyStar, China SEPA, Taiwan Green Mark, Korea Eco Label, and Blue Angel. By identifying companies that use these ecolabels and practice transparency in their supply chains, you can avoid vague, irrelevant, and misleading sustainability claims, otherwise known as “greenwashing.”

There are certain RFP specifications that will drive the market toward more sustainable production and ease your e-waste woes before they begin. Consider asking your suppliers to disclose the carbon footprint of their company, services and goods. Ask what amount of post-consumer recycled plastics are incorporated into their products, and whether they repair their products. Lastly, consider the barrier that data security poses to recycling e-products. An experienced IT vendor might offer a reuse program or data wiping services.

RETIRING PRODUCTS When it comes time to retire your cell phone, desktop or printer, the first step is to determine whether

“When we consider the options in place for recycling e-products, plastic and materials waste become an untapped resource rather than a threat.” someone else might find your product useful, or whether your product can be repaired. Several companies like Apple, Samsung, Lenovo, HP, and Dell provide services to extend the lifespan of their products such as free repairs, take-back programs, tax-receipts for donations of used e-products or credits for donated items and partnerships with large-scale donation centres.

The Electronic Products Recycling Association (ERPA) is a notfor-profit that operates regulated recycling programs across Canada and is a great resource if you choose to recycle your e-product.

There are nine provinces in Canada that currently host e-product recycling programs, which can be found through EPRA and have options for product donation and recycling.

Recycling your e-product responsibly could provide more high-quality, post-consumer recycled materials and give your e-product a second chance at the IT lifecycle.

When we consider the options in place for recycling e-products, plastic and materials waste become an untapped resource rather than a threat. Suppliers can access post-consumer recycled products and incorporate them into their products but currently the average amount of post-consumer recycled content used by electronics manufacturers is only two-to-three per cent. By purchasing from ecolabel certified manufacturers and recycling our unusable e-products responsibly, we can drive those numbers up. When it comes to the future of e-product disposal, you are in the driver’s seat. SP SUPPLYPRO.CA 9

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NEVER SHY AWAY ERIC WOOLLINGS ROLLS UP HIS SLEEVES IN LOGISTICS AND OPERATIONS Eric Woollings began his supply chain career pretty much when he started working. Even as a teenager, the Waterloo, Ontario resident’s resume already included positions like the warehouses of local department stores and similar jobs. That longstanding interest, combined with an entrepreneurial drive, has fuelled Woollings’s supply chain career ever since.

“The first paid job that I had was working at a Towers department store as a stock clerk,” says Woollings, now senior manager, operations and logistics at Emco Corporation. “There was lots of loading and unloading the trucks, identifying products, picking and putting, putting away and stocking shelves, that sort of thing.

Very hands on, very hands in.”

Woollings’s career direction, fuelled by a love of and interest in supply chain and logistics, stands in contrast to many in the field who fall into it from another speciality.

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work, you never work a day in your life?

Although I still feel like I’m working.”

While now a Waterloo resident for the past 23 years, Woollings grew up in York Region just north of Toronto. After his time at Towers, he worked at Eaton’s, spending time in several departments, including the receiving area and warehouse. The experience gave Woollings a respect for superiors who excelled at managing people. He recalls one store manager who, especially while preparing for the Christmas rush, would remove his jacket and tie and perform physical tasks like moving boxes.

It’s a lesson he has carried with him since when dealing with those on his own team.

“It gives me a real respect and a great amount of trust and rapport with a team, if you’re a leader who is willing to roll up your sleeves and jump in when the need is there,” he says. “I’ve adopted that throughout my career.”

Woollings spent four years at Eaton’s, working there first in high school and continuing while attending Seneca College, studying for

a business administration marketing diploma.

While a student at Seneca, Eaton’s management asked if Woollings was interested in joining the company’s management trainee program.

He accepted, at the same time halting his studies at the college. But Eaton’s cancelled the program before Woollings completed it, forcing him to continue his studies part time at Seneca College through distance learning and night school, while also working full time at Eaton’s.

Along with his time at Seneca College, Woollings has taken a number of additional educational courses to fill in some knowledge or skills gaps. He has completed a project management certification and the Six-Sigma Green Belt.

Woollings worked at a credit card manufacturer in Markham, Ontario after his stint at Eaton’s. The position was in shipping-receiving, where he did mostly clerical tasks along with some driving. Management quickly picked up on his interest in supply chain, giving him some responsibility for load planning and coordinating other areas of the business.

Woollings got married and the couple, who were the parents of twins by this point, began house hunting. High housing prices in the Toronto area drove the couple to search in Waterloo. His wife also had family in the area.

Woollings then took a job at Krug Manufacturing, an office furniture manufacturer in Kitchener. The position focused on operations, and again management there recognized his interest in supply chain. Soon he had graduated to load planning, booking trucks, coordinating routes and similar tasks.

He worked at Krug Manufacturing for over two years before hearing about an opportunity at a then up-and-coming company called Research In Motion.

“I had a brother-in-law that had started there as a software developer two months before and another friend that had just started there on the supply chain side about five weeks before me,” Woollings says. “I thought, if they’re hiring, I’m interested. I quickly jumped on board in February of 2000 and spent the next 17 years there.”

After his bid for employment was successful, Research In Motion initially hired him as a shipper. Within six months, the person that hired him moved to another role. Woollings at first hesitated to apply for the now-vacant postion, since so many others had been with the company longer. But a superior approached him about the position, urging him to apply.

“That gave me the encouragement that I needed, some sort of recognition at least,” Woollings says. “So, I threw my name in and became the manager of that group.”

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MIKE FORD PHOTOGRAPHY

BY MICHAEL POWER

MIKE FORD PHOTOGRAPHY

Research In Motion saw explosive growth over the next few years, Woollings says, with the company being profitable almost in spite of itself. Opportunities for on-the-ground, realtime learning were everywhere. For example, being a member of the team tasked with establishing the import of the company’s products into the EU offered challenges. Around the same time, he was involved in setting up the company’s first US distribution hub, which also meant on-the-job learning opportunities.

For six years Woollings worked as shipping manager at Research In Motion. In 2006 he left that role for an SAP BI analyst position. That position saw him building metrics and developing KPIs for two years before stepping back into a role managing people. Woollings was in that role until 2014, by which time the demand for the Blackberry phone had decreased.

The company had stopped being as profitable as it once was and layoffs within the supply chain organization increased. That time proved

both the most difficult but also rewarding, as he learned to function effectively and efficiently in a cost-controlled environment. Woollings was also forced to adopt new responsibilities as his peers within supply chain and logistics left either through layoff or retirement.

He eventually took a package and left the company. Woollings had always had an interest in entrepreneurship, and he also wanted a position offering a breadth of operational responsibilities. In 2018 he accepted a position as senior manager, operations and logistics at Emco Corporation, a plumbing wholesale company.

The position checked several of the boxes he was looking to fill, including ample responsibilities and the opportunity to work in new areas.

Now, any given day can see Woollings assuming roles like operating a forklift, then switching to answering customer calls and working with vendors and sales. The role involves a bit of several areas, helping to check off many of the boxes he had hoped to fill.

“I get my fingers into anything and everything regarding the business,” Woollings says.

“I’m constantly looking at P&L, reviewing the financial numbers on an ongoing basis, trying to control cost. I’m into the hiring and people management side of things, as well as being completely hands in on any given day.”

While the pandemic has upended everyday life and supply chains globally, the past year and a half has been both a busy and successful time at Emco, Woollings notes. While the company expected a 30 per cent drop in revenue, it ended up finishing last year just under its original target. Much of what the company sells was deemed essential. A lesson learned might be to remain more conservative regarding how bad a future downturn might be, Woollings says.

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“But we were pretty confident in the fact that we’re in the business of supplying the things that people require in order to get water in or out of their house,” he says. “As long as humans need water, we’re in a pretty good place for still being essential.”

Yet the pandemic has affected the company’s business from the supply side, Woollings adds, as it struggles to get the products it relies on.

That includes finished products manufactured overseas, along with products like plastic pipe made with resin, which became difficult to get after winter storms hit Texas in February, disrupting supply chains.

The company then had to decide how to allocate what product it had. To do so, Woollings and his team contacted other Emco outlets, offering to provide them with certain products in exchange for other goods.

Woollings describes the process: “We have more demand for this product, but we’ve all been given equal based on our historical use.

If you can give up some of this, we’ll give you some of this,” he says. “We’re doing a little bit of the sharing from a supply and procurement perspective.”

SHARING THE PRAISE During his time at Research In Motion, Wool­ lings’s performance received recognition, sometimes in the form of money or a small gift. That sort of recognition provided an opportunity to highlight his team’s contribution, he notes. Acknowledgments from higher ups provided opportunities to share that spotlight. In one instance, Woollings used a monetary bonus to hold a backyard barbeque party for his team.

“From my perspective, none of us is successful individually when we have teams,” he says.

“In one way or another you’re being supported.

If you’re the only one who was officially named on a project, if I was assigning more of my time to be on a project, I was likely delegating more work to someone else while I was doing that.”

Going forward, Woollings would still like to pursue something entrepreneurial, referring to such a pursuit as an itch he’d like to scratch.

At one point, he even followed an interest in opening the first local franchise of Chick-fil-A, a fast food chain based in the US. He got through the first three stages of the process before someone else interested in the franchise beat him out.

Beyond that, he hopes to continue to strive in the future for a large breadth of professional experiences. Regardless of what direction his career takes, Woollings wants to continue with the kind of hands-on, sleeves-rolled-up tasks he’s 12 AUGUST 2021

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“From my perspective, none of us is successful individually when we have teams. In one way or another you’re being supported.” done so far. “I’ve never been one that likes to just sit in the office all day long on a chair,” he says.

While he has no strong desire to spend the time or energy needed to pursue an advanced degree, Woollings continues to take courses related to the field. He recently completed an online supply chain management certificate program at the University of Waterloo. He also works within his network of peers to stay on top of issues affecting the field. During the Brexit debate, for example, Woollings participated in seminars on the subject, talking to seminar leaders about how the process would affect companies looking to use the EU as their entryway into the UK. “I try to keep up to speed on the knowledge even though I’m not living that experience on a day-to-day basis,” he says.

Although short on spare time, Woollings counts woodworking – either refinishing or building pieces from scratch – as an interest that he enjoys when not engaged at work.

He enjoys being busy with his hands, noting his interest in woodworking was inherited from both his grandfathers. He and his brother also inherited the chance to comb through their grandfathers’ workshops after they both passed away, keeping whatever items they thought they would use in the future.

His wife often requests that Woollings take on refurbishing projects. He even sells some of his creations. For example, a neighbour tore down a backyard shed that Woollings knew had been built using 100-year-old barn board from a farm. Since the neighbour planned to throw out the wood, Woollings took it and made several pieces from it, including furniture and picture frames, and ended up selling some of it. And while the pastime provides money, there are other reasons that motivate him to pursue his hobby.

“It keeps me busy,” Woollings says. “It checks off a little bit of the entrepreneurial interest as far as getting an opportunity to sell something.

My wife generally takes care of the sales side of it. I also don’t like the clutter around the house.

“That’s probably my main hobby outside of just time with friends, playing sports, going out golfing when I can. I’m a terrible golfer, I just

enjoy the sport. And just spending time at the cottage, spending time with family doing things.”

Woollings and his wife, Vonda, have three children: twins Mikayla and Brianna, both 24, and their 22-year-old sister Kendra. Kendra has been working with her father for the summer, organizing and getting familiar with the product at Emco. There’s plenty to do, as the company is currently adopting an ERP system. Part of the preparation is an inventory of everything in the building, including 9,000 SKUs that must be accounted for within the next few months.

WORDS OF ADVICE For those looking to start in supply chain or logistics, or already pursuing a career, Woollings stresses the importance of education. That’s especially true as technology morphs. It’s easier for companies to replace employees with machines if they lack the education that company wants, he says. The value of education is a message he’s worked to impress upon his own children.

Another message is to never shy away from work, regardless of the task. Woollings notes the example of the owner of a company he worked at who angrily marched an employee off the property after that employee refused to perform a task they thought beneath them.

While not necessarily agreeing with the employer’s response, the scene, and the lesson learned, has stuck with him: if a company employs you, anything they ask you to do is part of your job, regardless of whether it’s the role for which you were hired.

That lesson reminds Woollings of the store manager at Eaton’s who could have employed resources to deal with busy times but instead jumped in to help perform tasks outside of his job description, like unloading trucks.

“If you’re doing that well, no one should ever ask you to pick up the broom and sweep the floor. If you see something that needs to be done, do it. Never shy away,” he says. “Be available to wherever the need is.” SP

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2021-08-04 11:38 AM

BY TIM MOORE

NON-SALARY BENEFITS GETTING CREATIVE WITH EMPLOYMENT OFFERS The employment marketplace for supply chain professionals in Canada is heating up again, and increasingly employers must be more aggressive and creative to snare sharp candidates. As a nationwide recruiter for supply chain talent, clients and candidates ask about structuring employment offers, both in terms of salary and non-salaried benefits. Here’s a listing of 15 traditional and not-so-traditional non-salary terms and benefits to consider in today’s highly competitive hiring market.

Better title: Sometimes non-monetary benefits can translate into greater value than a raise. Offering a more senior title or office can be a perceived benefit to some.

Flexible hours: Flexible hours for family commitments, work-life balance, fitness classes, avoiding traffic and so on. This can take many forms.

Relocation expenses: One-time expenses for temporary lodging,

aid/time in searching for a new home, paying for the transfer of belongings are fairly standard.

Vacation day allotment (formal and non-formal): Clients may sometimes have a formalized structure saying “two weeks of vacation for new employees, no exceptions.” What if a senior employee already enjoys three, four or even five weeks of vacation and you’re trying to entice them to your company? The answer for some is an informal agreement – usually not in writing, acknowledging that two weeks is the mandated minimum, but because of their senior level, and depending on the role (and approval from their superior), they may add an additional week to 10 days, perhaps structuring it to accommodate longer weekends, or even one block of time.

Work from home: Quite normal now, but some firms cannot accommodate this, which can cause some staff to consider transitioning to a “safer” employer. Working from home could be full-time, part-time, or occasional.

Technology: With some staff working from home, you may wish to offset costs associated with a computer, laptop, tablet, modem or other devices. Some tasks involving phone calls may need a dedicated company long-distance line.

Professional development: Allowances for professional development and educational courses along with paid membership within a professional body – like Supply Chain Canada or APICS, are appreciated.

Commuting: For employers off the beaten track, consider offsetting costs from a long commute. A company vehicle, adding their car to the company’s insurance policy, sharing the costs of a leased vehicle or offsetting gas or kilometres travelled are options.

Health and wellness: Gym reimbursements, stress counselling, massage therapy and similar expenses not normally included in a standard insurance or com-

“Competition to acquire supply talent can be quite high and it’s not uncommon for some industries to offer a signing bonus.”

pany benefits package can fall into this category.

Parental leave: Paid maternity/ paternity leave policies can help younger employees.

Retirement savings matching: It’s a way for new employees to build long-term security. Pensions and retirement savings matching programs, based on an employee’s contributions, usually run between 50 and 100 per cent.

Stock options: Publicly traded organizations may consider stocks or a stock matching plan (giving candidates bonus stocks based on how much they invest into the company).

Signing bonus: Competition to acquire supply talent can be quite high and it’s not uncommon for some industries to offer a signing bonus. This can be done as a normal strategy or used in situations where there are strict (and perhaps published) salary bands, and employers are not able or willing to break them. A signing bonus is offered as a one-time incentive, to get the candidate into the total compensation level that they wanted initially, and then usually, by the time they pass probation or have a mid-year review, they would have been at that same targeted salary level if they got a standard increase at that time. In some firms, signing bonuses aren’t drawn from the regular salary accounts in the payroll department, so it may not raise

Tim Moore is president and owner of Tim Moore Associates, a search firm focused exclusively on supply chain professionals.

concerns about exceeding predetermined budgets.

Severance package guidelines: For some time, employers have been installing severance package terms written into employment contracts. These additional packages act like safety nets and would activate should the company be acquired by another firm, or the employee be laid off due to no fault of their own (such as an economic downturn or pandemic closures) and help ensure that they are financially compensated should things go awry.

This list is certainly not exhaustive, and new outside-the-box innovations in non-salary benefits are appearing all the time. If you’ve got some that you’d like to add, please share them with me at: tim@timmooreassociates.com. SP

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BY JACOB STOLLER

5G MOVES CLOSER TO REALITY AFTER A PANDEMICMANDATED HIATUS, THE ROLLOUT OF 5G IS BACK ON TRACK

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Recent government auctions of highfrequency transmission licenses suitable for fifth-generation (5G) cellular have attracted an unprecedented response by Canadian telcos. The high stakes reflect the strategic importance of a technology that promises blazingly fast mobile phone networks for consumers, but perhaps more important, game-changing wireless networking capabilities for businesses.

“The big play is in the enterprise business market where 5G will dovetail with a number of other technologies, including Internet of Things (IoT) and edgebased cloud computing,” says Lawrence Surtees, research vice-president, communications at IDC Canada. “It will enable not just data collection, but data analysis at the source of the data.”

And 5G will essentially become a lynchpin for the deployment of Industry 4.0-related technologies.

“5G will enable our customers to move more data at faster speeds to meet the demands of new supply chain applications such as drones for high-speed warehouse inventory and commercial deliveries,” says Paul Howarth, senior director advanced services, Rogers Communications.

HOW FAST? While the transmission speed of 5G is roughly 20 times faster than 4G, an even more compelling bene-

fit for manufacturing and logistics is its low latency. This means that 5G devices can receive and respond to messages in less than 1 millisecond, compared to 50 - 70 milliseconds for 4G, making it suitable for wireless automation in industry, and eventually, for safe operation of driverless vehicles.

For manufacturers and logistics operators, however, the advantages go deeper than that. 5G has been architected to have unprecedented compatibility with other leading edge networking standards, namely Software Defined Networks (SDN) and its companion Network Functions Virtualization (NFV). This means that 5G will serve as a basis for unprecedented interoperability between apps using IoT, edge computing, augmented reality, mobile robotics and other Industry 4.0 technologies in what Surtees refers to as “the most profound development to occur in telecom in our lifetime.”

“Now you have things deployed for both wired and wireless networks running on the same architecture and ultimately, the same software,” says Surtees. “So essentially, the whole becomes greater than the parts. It’s hard to imagine how powerful the benefits might be.”

ARE WE THERE YET? Progress on 5G was delayed by approximately a year by the pandemic. Canada is behind the US and Europe in deployment, as evidenced

by the lag in assignment of licences in the 5G frequency bands – auctions in the highest of these, the mmWave frequency band, won’t take place until early 2024.

“5G will remain in the nascent stage in Canada due to commercial 5G in Canada operating on non-standalone deployments through 2022,” wrote Surtees in the IDC report 5G Wireless Networks Status in Canada, 2021.

5G is also widely misunderstood. One technology commonly confused for it is the standard for 5GHZ wi-fi routers, which is coincidentally also called 5G. (This is being superseded by Wi-Fi 6, the latest Wi-Fi standard, which shares some architectural attributes with 5G). The second is non-standalone (NSA) 5G, which differs from true standalone (SA) 5G in that it operates in conjunction with existing 4G LTE networks. NSA 5G is not as fast and lacks some of the features of SA 5G. Unlike earlier releases, 5G is being implemented in stages that will continue to emerge over the next few years. This is partly because 5G’s architects are engaging in unprecedented consultation with other standards bodies. Addi­ tionally, 5G operates on three different frequency bands, some of which have yet to be assigned.

5G will also require enormous deployment of transmission infrastructure – because high frequency signals are subject to obstruction, the higher mmWave frequency many more transmitters than 4G. Rogers is currently making improvements to both its 5G SA and 5G NSA networks. In December the company announced that it is beginning its rollout of “Canada’s first 5G standalone (SA) core network” which will initially serve markets in Montreal, Ottawa, Toronto and Vancouver.

“Considered the brain of the network, our 5G SA core propels us forward on our path to bring the

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full potential of 5G to Canadians,” said Rogers CTO Jorge Fernandes in a press release last December.

In the same release, the company announced it is expanding its 5G non-standalone network to 26 new cities in Alberta, BC, Ontario, and Quebec.

The earliest signs of 5G will be compatibility with 5G smart phones, which will support much more efficient transmission of data.

Works in progress include fixed wireless access, which will deliver high-speed internet wirelessly to remote communities, and Massive IoT, which will enable wide-area IoT apps such as automated logistics through enhanced connectivity with the millions of sensors installed in industrial environments.

Rogers is engaging in pilot projects for some industrial applications, including a traffic analysis project at the City of Kelowna, BC, and automation projects with mining companies. “These are

B2B applications, and they will happen as each of the B2B verticals matures, and some variables will mature more quickly than others,” said Rogers CEO Joe Natale in an earnings call in January. Significant deployment of these technologies, Natale said, is still one to two years away.

Future functionality from the mmWave frequency will allow telcos to deliver high-bandwidth coverage in dense urban environments with millions of users, including operators of autonomous vehicles.

PREPARING FOR A 5G PLAYING FIELD By the time SA 5G is fully deploy­ed in Canada, 5G-enabled B2B apps will already be up and running in the US, Europe and the Far East.

To stay competitive, Canadian companies will need to ensure they have the skills and resources to meet the challenges of 5G.

“The greatest potential impact of 5G is to enable digital transformation of enterprises, which is key to Canada’s economic prosperity.”

For example, the higher frequency signals of both 5G and Wi-Fi 6 are much more easily obstructed than 3G and 4G, and some companies will need radio engineering expertise to design their private networks. IT departments will need to upgrade their wireless strategies, and ensure they have the training and resources to handle the upcoming fusion between wired and wireless apps.

What Canadian telcos are betting on is that 5G will trigger a boom in B2B wireless deployment as businesses move forward on their Industry 4.0 visions.

“The greatest potential impact of 5G is to enable digital transformation of enterprises, which is key to Canada’s economic prosperity,” says Surtees. “5G provides a critical market opportunity for Canadian wireless network providers to grow wireless enterprise revenue and reduce the disparity in customer segment revenue by closing the widening gap that has favoured wireless as a preponderant consumer phenomenon.” SP

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2021-08-04 11:38 AM

BY MARIETE F. PACHECO

A SAFE NEW NORMAL

Mariete F. Pacheco, MBA, PMP is managing director at FRW Services Ltd.

PROCUREMENT’S ROLE IN EMPLOYEE WELLBEING It has been an ever-evolving year and a half of increased focus on health and safety. The pandemic has severely impacted nearly all industries, leaving many companies scrambling not only to secure much needed personal protective equipment (PPE) but also to update internal policies and procedures regarding how to operate safely in the “new normal.” At the core of any business is the procurement team, and no greater attention has been paid to this group than in the recent past.

Procurement’s role in any organization is twofold: ensuring a favourable and fair cost position for any raw materials, services or equipment it purchases while also mitigating the organization’s risk during operations, including meeting health and safety standards for its employees.

Procurement as a key contributing factor in employee health and safety has become front and centre during the pandemic. Hopefully, with this increased attention, that greater emphasis on procurement will remain in place going forward.

Prioritizing health and safety as a key objective in procurement practices is critical to any business. The focus enables greater cost savings and improved productivity. When implemented correctly, putting health and safety first can also be a competitive advantage for any organization. A safety focused organization demonstrates to its employees its commitment to them and their communities, which in turn can result in greater employee retention; employees prefer to work in safe environments. A high retention rate can save organizations a great deal of money from not having to recruit and 16 AUGUST 2021

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onboard employees constantly. In addition, providing employees with regulated and approved tools eliminates the risk of penalties or fines for non-compliance. Operating in a health and safety focused procurement group aids in improving an organization’s productivity through reduced illness or injury claims when combined with an ergonomics program.

When investigating opportunities to incorporate health and safety practices into procurement, there are many considerations, including product compliance and after sales support. The need for product compliance was evident during the pandemic when countless counterfeit N95 respirators and non-Health Canada approved hand sanitizers flooded the market, potentially putting countless people at risk of being exposed to not only contracting COVID-19 but also being exposed to hazardous materials. This includes the more recent findings of graphene in masks, which allegedly caused lung impairment, as well as methanol in hand sanitizers allegedly causing eye and respiratory issues.

AFTER SALES SERVICE After sales service support is often a forgotten element of health and safety, as it can be seen as an additional cost which does not add value.

There is tremendous value in including a robust after sales service support component as a risk mitigation strategy. A strong supplier offers industry relevant or business-tailored product training to ensure products are used correctly and safely. This is especially important when onboarding new employees and when there are

new tools or equipment being implemented.

In addition, the right supplier should be knowledgeable about industry requirements and assist with ensuring an organization is updated on changes. This can include partnering with a supplier that offers auditing, regular testing or certification of equipment. For example, in Ontario, the Ministry of Labour requires fall protection equipment to be safety inspected annually and replaced when it no longer meets the Canadian Standards Association (CSA) requirements for self-retracting devices (CAN/ CSA Z259.2.2). Failure to abide by safety regulations could result in penalties, a fine or even employee injuries or deaths.

Best practices to consider when starting to incorporate health and safety objectives in procurement vary by industry. However, here are some commonalities across industries.

For starters, have a plan. Outlining roles and responsibilities of suppliers and the organization, including the standard of care, will go a long way to ensuring that employees and employer rights are protected. Start any procurement activity with a health and safety focus from the beginning stages. Early on in any process, including procurement, there is the greatest influence possible in the initial concept stages as business needs and objectives are being developed.

Once these objectives have been set or formally approved by senior management – such as during later stages of the process and during the design or implementation phase of the procurement process – it can be too costly.

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The cost can be too high both from a time and financial perspective for the organization to re-consider its position or to change essentially the direction of the process to become health and safety focused.

Evaluate health and safety risks from different perspectives, environments or working conditions and the activities employees perform.

This ensures role-specific risks are not missed.

For example, hand protection in the warehouse of a facility is vastly different than the hand protection needed by employees working in the food processing operation in the same facility.

Both require cut-resistant gloves, but quite different levels of protection are needed due to different work tasks and heightened safety risk from one role to another.

Monitor and assess the performance throughout the procurement process and after the implementation of changes. This will help to illustrate the benefits and the value that the new health and safety focus contributes to the organization. Instead of being seen as merely another expense, it is now viewed as a business investment with an ROI.

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“A safety focused organization demonstrates to its employees its commitment to them and their communities, which in turn can result in greater employee retention.”

EYE ON THE INDUSTRY Lastly, benchmark and learn from other organizations or industry associations. Are there industry specific criteria that need to be considered, such as the supplier’s liability insurance?

For example, how much protection should they have? This is especially critical in chemical processing or manufacturing industries or those that operate in remote locations such as in the energy sector. Are there industry relevant

licences or certifications which are required to be able to operate in compliance in a jurisdiction? For example, it’s necessary to consider a Medical Device Establishment Licence for medical device manufacturing in Canada or ISO 9001 quality standards across many manufacturing segments globally.

Applying a health and safety lens to procurement can provide a great deal of benefit and further drive procurement outcomes. These outcomes include short- and long-term financial gain in addition to improved productivity.

When starting on this journey, leveraging best practices can accelerate organizational adoption or enhancement, as well as overall productivity. Incorporating health and safety as an objective in procurement practices offers a holistic view of an organization’s operations and highlights room for improvement in addition to areas to reduce business risk.

Procurement specialists should educate themselves on local and federal product, industry and operation standards to avoid non-compliance fines and penalties, but also to avoid putting their employees in harm’s way. SP

2021-08-04 11:38 AM

BY MICHAEL POWER

SMOOTHER SAILING

RISK PREPARATION IS ESSENTIAL TO BUILDING RESILIENT SUPPLY CHAINS

Recent global events like the COVID-19 pandemic, the Suez Canal blockage and unexpectedly cold February weather in Texas have shone a spotlight not only on the need for resilience in supply chains but also the importance of risk management. With global business again ramping up in many regions, supply chain leaders must look to build that resilience while scanning the horizon for potential risk.

“When we’re looking at risk within the supply chain, first we’re looking at our products that are raw materials and if there are constraints,” says Maria Greaves-Cacevski, senior category sourcing lead at Chemtrade Logistics Inc. “Secondly, we’re looking at our service. How can we do things faster and more efficiently?

This usually means optimizing technologies.

Either inputting a new system, such as a procure-to-pay, P2P, or looking to optimize our internal system – creating more KPIs or reports or metrics across the system.”

When dealing with goods, the risks are not just within your supply chain with regards to resources, people and access, she says.

It therefore pays to scrutinize your suppliers’ suppliers for potential risks. Partnering with a supplier can now mean partnering with their network of suppliers, distributers and manufacturers as well.

If you’re looking to use a raw material and that material’s supplier is constrained, that can in turn constrain your system.

At the same time, the pandemic has impacted the service supply chain due to social distancing and constraints on direct contact among people, Greaves-Cacevski notes. Adapting to that reality is necessary for long-term success.

Many companies are now performing supplier risk assessments to determine who their key suppliers’ suppliers and are determining if they’re single or dual sourced.

Some firms are using technology to deal with constraints to the procurement of services.

For example, a procure-to-pay software system can help to reduce costs by reducing nonvalue-added tasks.

“A lot of the administration, a lot of the additional tasks are being taken over by efficiencies, by technology,” she says. “‘Can we use a catalogue to order our common materials? Can we have repeat purchases that are systematically, or at least set up, so we just have to order on a monthly basis?’ Trying to reduce human error is another non-value-added task within the supply chain.

“Risk mitigation is a two-pronged approach.

It’s us trying to figure out what we can do inside as well as working with our partners outside.”

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Many companies are working to consolidate their supplier base, says Greaves-Cacevski.

An organization with 250 suppliers may narrow that to 60 to mitigate risk, while trying to make those relationships more like partnerships. Still, single-source partnerships aren’t necessarily better than a diversified network. Group purchasing organizations or consortiums can help to offset that risk.

“There are four different types of responses for risk – you can share it; you can mitigate it; you can transfer it or you can accept it,” she says. “Right now, a lot of the strategies are going to risk sharing with the supply base – especially if commodities are single sourced or there’s a very small network. We really want to try to have that sharing of the risk between the two parties versus us accepting all of the risk or us putting all the control into our suppliers and we not having the visibility.”

Large organizations can use technology, like a risk management system, to deal with potential exposure in the supply chain, Greaves-Cacevski says. Companies that can’t afford such systems can use procurement fun-

“Risk mitigation is a two-pronged approach.

It’s us trying to figure out what we can do inside as well as working with our partners outside.” damentals, like putting risk into contracts.

For example, make terms and conditions more robust by preventing spot buys, or avoid paying market price if commodity prices rise.

Risks facing supply chains can be divided between near-term risks and systemic ones, says Madhav Durbha, vice-president, supply chain strategy, at Coupa, a software company.

In the near term, challenges include volatile demand patterns; uncertainty surrounding the Delta variant of COVID-19; transportation constraints like congestion at logistics ports; and misaligned inventories resulting in write offs, Durbha says. Systemic challenges include sin-

gle-source risks; regulatory issues; and brand risks associated with environmental, social and corporate governance.

The pandemic has resulted in a rise in scenario planning and simulation, Durbha notes. Forecasts have become less reliable due to demand volatility, leading organizations to pressure test their supply chains through forecasting. Meanwhile, advances in AI, machine learning and natural language processing also allow for better predictive power.

“Building a supply chain digital twin with the representation of the extended supply chain, including supplier and customer locations, is a reality now,” Durbha says. “New generation platforms allow for processing anonymized community data that can be leveraged to spot risks.

Advances in cloud computing and multi-tenant SaaS platforms allow for this. Technology has definitely made the risk prediction process easier.”

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A NEW PERSPECTIVE For organizations that have risk management plans, the impact of COVID-19 has changed the way they view those plans, says Jon Trask, CEO and found of Dimitra Ag Tech. The pandemic has changed the status quo, Trask says.

Previously, most risks were manageable. Even with something like the Suez Canal blockage, organizations would have managed to ship their products by air or find an alternative transport method. The automotive industry, among others, has been adept at diversifying its supply base to deal with such risks.

At the same time, supply chains have become globalized over the years, with many reducing the amount they buy domestically, Trask says. The pandemic amplified the shortcomings of that trend, making it harder for companies to restock the shelves in their warehouses or retail stores. To offset that, many organizations are regionalizing their supply chains and changing the mix of their supply bases.

“Their risk management plans said, ‘let’s have a supplier in China and a supplier in Korea or India. If one fails the other one is going to support us,’” Trask says. “Now they’re saying, ‘the pandemic prevented China and India from shipping anything to us. We need to go back and start supplementing North American-based or regional based suppliers.’”

Previously, risk management models would assume a drop in supply to 95 per cent, then 85 per cent, then perhaps 75 per cent to discover where the system might break, Trask says.

Models didn’t look at a failure rate of 100 per cent. But the pandemic has caused organizations that were reluctant to hold inventory to become far less averse to the idea.

This has changed the demand on technology, he notes. Commodity based supply chains like agriculture benefit from including factors like weather in risk forecasting. They may also look to technology to keep abreast of developments in the greater market, as well as creating financial models in the event of unexpected storms and their effects on prices and costs.

Tying those sorts of factors together through technology requires the ability to analyse a lot of data and access multiple data points, Trask says. Customizing that information can be tricky. The complexity has increased the demand for machine learning capabilities.

To get a handle on risk management and forecasting, Trask advises discussing the topic with a consulting company or audit firm.

Such companies have done the research and are redesigning their risk models based on current conditions, he notes. Next, look at the case for using technology to mitigate risks.

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“When you’re managing risk, you bring your suppliers into it, because their risks have to go into that equation.”

pany. From there, look at what smaller applications may be available in your company’s niche.

Finally, organizations must determine which steps to take, whether that involves investing internally in risk management and planning teams, deciding to hold more inventory or something else.

Finally, think of risk management as a team sport, Trask advises. There needs to be someone who will build the plan based on consultations with the key players.

“I see risk management happen in some companies in silos,” Trask says. “If the finance group doesn’t understand the complexity of the supply chain, or you’re only looking at your immediate suppliers and not their suppliers, it’s not a team sport. When you’re managing risk, you bring your suppliers into it, because their risks have to go into that equation.

So, broaden the spectrum.”

THE RISK LANDSCAPE Marc Gilbert, managing director and senior partner at Boston Consulting Group (BCG), based in Montreal, highlights seven supply chain risks the organization watches. These include cybersecurity, for example the shutdown in May of the Colonial Pipeline in the US. Geopolitics and global trade represent another risk, which includes terrorism, intellectual property issues, new trade agreements and others. Sourcing concentration is a third risk, Gilbert notes. For example, billions of dollars in wheels, automotive bodies and breaks come from Hubei, the Chinese province in which COVID-19 was first discovered. Logistics holdups such as the Suez Canal blockage represent another risk, as does inflation, although BCG’s view is that inflation will pass. Climate change is a risk of rising importance among supply chain leaders; finally, a labour shortage – particularly on the shop floor – is a risk accentuated by the pandemic.

Companies have refined supply chains that emphasize low costs and high efficiency, Gil-

bert says. This has led to brittleness within those supply chains. The pandemic has highlighted the importance of building resilience.

The C-suite is turning to supply chain practitioners to help build that resilience and buffer in some costs to manage risk.

“If anything, COVID-19 has accelerated the emergence of the crack in the armour of a highly brittle chain,” Gilbert says. “It’s made it incredibly evident that one needs to move the index now to manage for risk and resilience a little bit more than purely for efficiency and getting every nickel out of your supply chain.”

Predicting risk is very difficult, Gilbert adds.

But to manage risk, organizations can set up milestones that signal when certain risks are moving up in probability, then adjust accordingly.

From there, planning divides into the two buckets of absorbing the risk and risk recovery. The absorb stage involves the ability to withstand a shock, such as a tsunami that takes out a port or manufacturing facility. The ability to absorb a shock involves a structural approach, Gilbert says, including increasing inventory, boosting the number of supply sources, bringing manufacturing in-house or adopting flexible contracts.

The recovery stage involves the ability to adapt quickly following a shock. To do so, end-to-end data visibility through tools like advanced analytics is key, Gilbert says.

“The absorb side is structural and usually requires quite a bit of capital. The recover and adapting side is far more about advanced analytics, data, digital, visibility, linking with your supplier and their suppliers and your customer,” he says. “And when you bring all that data together you can do some amazing things because you can predict, and you can sense rapidly and adjust which moves you want to make.”

The pandemic highlights how vulnerable supply chains have become. And while predicting risk may be difficult, working to mitigate it can help to create the resilience that modern supply chains need. SP SUPPLY PROFESSIONAL

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Fueling your fleet Building a fuel consumption scoreboard.

Fleet Management is a special section of Supply Professional magazine. It is an important resource for Canadian supply professionals who recommend, select and manage fleet vendors and service providers.

26

Road test Driving the 2021 Honda Accord Hybrid.

EDITORIAL INQUIRIES: Michael Power, 416-441-2085 x110, michael@supplypro.ca

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Green transition Integrating EVs into your fleet.

ADVERTISING INQUIRIES: Alex Papanou, 416-441-2085 x101, apapanou@iqbusinessmedia.com

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2021-08-04 11:38 AM

Fleet Management

By Howard J. Elmer

Honda Ridgeline

A heavy duty haul

A roundup of 2021 pickup Trucks 2021 has been a very turbulent year for truck sales. After an unprecedented plunge in sales last spring, the market has roared back – just in time to experience the full pain of plant shutdowns, limited parts supply and a worldwide micro-processor shortage. Still, the end of the pandemic seems to be in sight and that alone has buoyed the market and brightened the outlook for buyers.

A new compact market is emerging with Hyundai showing its Santa Cruz pickup and Ford revealing the small Maverick pickup – both due out next year.

Sadly, for 2021 Nissan is no longer selling its Titan or Titan XD pickups in Canada.

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That said, here’s a rundown of what’s new in pickup trucks this year.

2021 Ford Super Duty F-250 to F-450

This year is a carryover year for the Super Duty. It introduced the new 7.3L gas engine last year and upgraded 6.7L Power Stroke diesel.

These are now matched to a new 10-speed TorqShift automatic transmission. The payload is 7,850lbs and it’s maximum towing capacity is 37,000lbs (F450-5th wheel).

The Ford F-150 boasts several updates this year, and they’re electrifying.

The F-150 now has a fully hybrid engine based on the 3.5L

EcoBoost, called PowerBoost.

Ford says it will have at least 12,000lbs of towing capacity and approximately 1,100km on a single tank of gas.

A huge leap forward this year is Pro Power Onboard. This integrated generator will push out enough power to run 28 average refrigerators. Another innovation is Onboard Scales, which estimate cargo weight in real time as you are loading the truck. Also, the all-electric version of the F-150, called the Lightning, is coming next year and boasts 480km of range. On another note, the 3.0L EcoDiesel engine has been quietly dropped from the lineup after just three years. The F-150’s

maximum payload is 3,270lbs and its maximum towing capacity is 13,200lbs.

For 2021, the Ranger is adding off-road packages to its base truck.

The Ranger Tremor is a suspension and tires setup meant to compete with Chevy’s ZR2 and the Toyota TRD Pro. Powered by a 2.3L EcoBoost engine it is mated to a 10-speed transmission. The maximum payload is 1,860lbs and its maximum towing capacity is 7,500lbs.

2021 Ram Truck HD 2500 and 3500

For 2021 the HD Ram is a carryover. However, this year it’s Cummins 6.7L turbo-diesel has been boosted to 400hp and 1,075lbs-ft of torque, a new high. In addition, special edition packages will roll out over the model year. There’s a maximum payload of 7,680lbs and maximum towing capacity of 37,1000lbs (gooseneck).

As well, 2021 is a carryover year for the Ram 1500. However, they work to keep that momentum going with new trim packages again this year. For 2021, the Ram is also available as the TRX – this special desert racer features a 700hp engine and unmatched suspension travel.

FM/SP SUPPLY PROFESSIONAL

2021-08-04 11:38 AM

Toyota Tacoma

The max towing capacity for the 3L EcoDiesel is 12,560lbs, (3.6L V6): 7,450lbs for the 3.6L V6 and 5.7L for the 12,750lbs.

The 2021 Gladiator is now also available with either the 3.6L V6 or the 3.0L EcoDiesel with an eight-speed transmission. Gladiator offers the same trim packages and off-road capability as the Wrangler. There’s a maximum payload of 1,600lbs and max towing capacity of 7,650lbs.

2021 Toyota Tacoma

The base Tacoma changes little for 2021. However, Toyota is increasing the number of available Tacoma versions (16 models across three body configurations), such as the off-road TRD-Pro. There’s a maximum payload of 1,500lbs and max towing capacity of 6,700lbs. This year will also be the last year for the Tundra in its current form, which started in 2014. Toyota has officially announced the next generation – saying the arrival of 2022 Tundra will be late this year – however details at this point are few. The maximum payload is 1,710lbs and towing capacity is 10,000lbs.

This year is also a carry-over year for the Silverado HD. Recent

changes are to the powertrain and driver-assist electronics. GM’s camera system now has 15 aroundtruck views. There is an all-new 6.6L gasoline engine with direct injection mated to a six-speed transmission. The Silverado HD has a max payload of 7,374lbs and towing capacity of 36,000lbs.

The 2021 Chevy Silverado 1500 is also seeing a carry-over year, though there is a rumour that the interiors may get a mid-generation update later this year.

What’s new are trailer mirrors, adaptive cruise control and engine choices available across all trim packages. The new 10-speed transmission is also being added to the 5.3L V8. The maximum payload is 2,250lbs and towing capacity is 13,400lbs. As for the 2021 Canyon and Colorado, the twins are due for an update soon – however at this time there is no news. They have a max payload of 1,620lbs and max towing capacity of 7,700lbs (with diesel).

2021 Honda Ridgeline

For 2021, the Ridgeline is new.

It features all-new styling from the roof pillars forward; a new hood with sculpted styling; a new squared off nose and upright grille.

Ram 1500

Ford F150

What does not change is the powertrain. The interior has been updated nicely, as well. This truck continues to appeal to a select group with its car-like features and all-wheel drive. There’s a max payload of 1,600lbs and towing capacity of 3,500lbs. FM/SP

The end of the pandemic seems to be in sight and that alone has buoyed the market and brightened the outlook for buyers.

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2021-08-04 11:38 AM

Fleet Management

By Roger Constantin

Saving on fuels Building a fuel scoreboard for your fleet1.

By managing your fuels, you can save a bundle and you will help to reduce greenhouse gas (GHG) emissions. In this article, I will focus on traditional fuels and in a future article, I will cover all alternative fuels.

And all of these suggestions are possible without major investments.

Act on your fuels

Even if we are in a major shift in the world of fuels for fleets, everything is not quite ready right now and it will not be for years to come. Considering this, you can act right now to make sure that your fuel consumption is under control, or at least, you should get control over it and have a view on one of the major components of your expenses.

A high-level look is the first step that you should take to measure the annual quantity of fuels your organization uses. You should focus on quantity, not on the cost. As you know, prices at the pump vary. The best method is to compare your consumption year to year.

Normally, you can do it today by checking the number of litres on your credit card transactions, on your tickets of delivery or any other kind of support you use to capture your costs. Depending on the detail of your information, it might be possible to produce a report by vehicle. With that, you can produce a vehicle-by-vehicle performance picture over the years. If you operate on multiple sites, you can compare the performance of each site and inform your operations depart24 AUGUST 2021

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ment of the results and make an analysis. You might find some differences that you will be able to explain and inform your drivers of so they can adjust their driving.

All this can be done without any special technology, such as telemetry. It just needs some effort on your part. To make it jazzier, you can present it using graphics and have some visibility in your organization.

Speed

Reducing driver speed is one way to save and reduce your fuel consumption without investing a lot of money. A reduction of just over 15 per cent is possible if you apply simple rules. With a speed of 100km/h instead of 120km/h, you will reduce consumption by 20 per cent. For typical fleets, you’ll save over 40,000 litres, or $52,000.

One simple way to apply that rule is to modify your fleet policies by telling you drivers to respect the speed limit. Generally, most of your employees will respect the rules so you can realize savings.

This will also help you reduce GHG. One litre of fuel is a savings of about 2.2kg of equivalent tonnes of CO2. With the previous example, it is a reduction of 88,000kg.

2.

Payload

Another way to act on your fleet consumption without special technology is the payload of your vehicles. This action is especially useful for vehicles, like public ser-

vice vehicles, that transport equipment or merchandise.

Natural Resources Canada estimates that a reduction of 100kg will help you save approximately $1,300 by truck. For that study, done by Massachusetts Institute of Technology (MIT), the price was set at $1.30/litre. If you convert that to litres, you have a reduction of 1,000 litres. If you multiply that by 10 vehicles, you have a savings of 10,000 litres.

Gradually accelerate and decelerate

If you ask your drivers to act on fast acceleration and hard braking, you might save up to 33 per cent on the highway and 50 per cent in the city.

Even more, you will be able to save on maintenance.

To do this, you might need to invest in driver education, and you might also save on collision repairs, reduce employee injuries and you will contribute to safer roads for all.

You can also ask your drivers to use their cruise control when the weather allows. There’s a savings there without major cost, simply by including it in your fleet policies.

Surveys

If you need to learn more about your drivers’ behavior, you can do a short survey that will explore how they act on the road. Here are some examples of questions: Are you driving above the speed limit in residential areas?

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

Reducing driver speed is one way to save and reduce your fuel consumption without investing a lot of money.

Are you driving above the speed limit on the highway?

Are you ensuring the accurate payload capacity of the truck?

Do you check the tire pressure of your truck before leaving?

To do your survey, you can use some apps that will give you fast answers. With that information, you will be able to adjust your strategy on education so it will reflect your employees’ statements.

Finally, as you read the results of your survey, it’s possible to produce a scoreboard for your vehicles at no major cost. Just communicating it will help in your quest to control your costs and, most important, to help create safer roads for all. FM/SP FM/SP SUPPLY PROFESSIONAL

2021-08-04 11:38 AM

Jim Pattison Lease is powered by our robust proactive and predictive data analytics which helps you analyze and implement the transition to zero-emission vehicles. We offer support on all aspects of electric vehicle adoption, including operational feasibility, vehicle selection, lifecycle cost analysis - all the way through to charger installation and electric vehicle program management. For all your fleet sustainability plans, Jim Pattison Lease has you covered.

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2021-08-04 11:38 AM

Fleet Management

By Stephanie Wallcraft

Join the club

The 2021 Honda Accord Hybrid offers a fun and engaging drive There’s so much emphasis on the SUV and truck markets these days that it’s easy to overlook the benefits that come with mid-size sedans. Their low and wide stance makes for great handling and aerodynamics, even if it does mean giving up some seating height and ground clearance.

Hybrid sedans, then, make a lot of sense. People who choose sedans are already prioritizing drive feel and fuel efficiency, so electrified powertrains just give sedan buyers more of what they want.

The 2021 Honda Accord Hybrid is an excellent example of a midsize sedan made better with an electric motor. The power figures 26 AUGUST 2021

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on the gas engine alone don’t come close to telling the full story: the 2.0L, four-cylinder’s 143hp and 129lbs-ft of torque come across as unimpressive on paper. But add the 181hp, 232lbs-ft electric motor into the mix – the torque from the latter being fully available from a stop thanks to the electric motor’s instant power delivery – and the system’s combined output of 212hp makes it one of the more satisfying cars to drive in this price bracket.

On top of that, this powertrain likes to spend a lot of time in EV mode, even when cruising along the highway, and there’s an EV Mode button that can force the powertrain to run off the battery alone for brief

periods. This makes the Accord Hybrid impressively efficient: our test unit finished its week at 6.0L/100km. This is a full litre higher than the official rating of 5.0L/100km combined from Natural Resources Canada, but we’ll admit to indulging in a little more right pedal than an efficiency motivated driver might.

Handling

The Accord Hybrid also handles even better than a lower-priced mid-size sedan thanks to its included adaptive damping system, which gives the car a relaxed yet stable drive feel through curves and undulations without becoming

bouncy or overly forgiving. However, the 19-inch wheels, while visually appealing, do permit some road noise to filter into the cabin.

All hybrid Accords come with heated front seats, second-row console-mounted air vents, a heated steering wheel, keyless entry and remote start. New for 2021, wireless Apple CarPlay and Android Auto functionality are included, which are features that match nicely with the hybrid’s standard wireless phone charging pad. However, to get SiriusXM satellite radio, you’ll need to pay for the Touring grade. This higher grade is the one tested here, which includes heated and ventilated front seats FM/SP SUPPLY PROFESSIONAL

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1. Hybrid Accords have heated front seats, a heated steering wheel, and wireless Apple CarPlay and Android Auto functionality.

2. The 2021 Accord Hybrid includes heated outboard rear seats and second-row console-mounted air vents.

1.

The Accord Hybrid also handles even better than a lower-priced midsize sedan thanks to its included adaptive damping system.

2. with memory for the driver and power adjustments for both. Heated outboard rear seats, rain-sensing wipers, on-board navigation, a head-up display, and a subscription-based in-car Wi-Fi hotspot are also incorporated.

The moonroof is of the smaller, single-pane type typically found in mid-size sedans, but it’s a far cry from the Hyundai Sonata Hybrid’s solar-panel glass roof feature. But the Accord Hybrid beats both of its major competitors on trunk space with 473L, as opposed to the 428L found in the Toyota Camry Hybrid and the 453L in the Sonata Hybrid.

To that end, there are two ways to consider the value proposition of

the Honda Accord Hybrid: how it stacks up versus a standard Accord, and what it offers versus these direct competitors. At an as-tested price of $46,457 including fees, this Touring grade falls on the high side relative to any mid-size sedan. It would take some time before the hybrid’s fuel savings would make up the added cost over a gas-only Accord, but the real value here is in the improved driving experience.

Styling

Relative to the Camry or Sonata hybrids, power figures and feature content are similar. The Accord Hybrid’s styling is the most under-

stated of the three, and its selection of exterior colours and interior material quality and design aren’t quite as high as on the Camry and Sonata. However, Honda’s adaptive damping system is unique among these vehicles and makes enough of a difference in drive quality to make the Accord Hybrid worthy of consideration on its own.

This is one of those cars that flies under the radar. It doesn’t necessarily catch anyone’s eye while it goes past, but its excellent powertrain and handling make it more fun and engaging to drive than most onlookers would suspect. It’s like being part of a secret club: if you know, you know. FM/SP

As Tested Price (incl. freight and PDI): Starts at $37,936; tested at $46,457 Engine: 2.0L four-cylinder plus electric motor Power: Total system output 212hp; 129lbs-ft (engine), 232lbs-ft (motor) Transmission: eCVT Rated Fuel Economy (L/100km): 5.0/5.0/5.0 Observed Combined Fuel Economy (L/100km): 6.0 FLEET MANAGEMENT SUPPLYPRO.CA 27

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Fleet Management

By Joe Korn

Green transition

Joe Korn is an alternative fuel specialist, business intelligence & analytics, at ARI.

1.

Integrating EVs into your fleet As corporate social responsibility remains top-of-mind for many organizations, we continue to see a growing number of businesses exploring a variety of sustainability initiatives. For fleet operators, this often means evaluating the feasibility of electric vehicles (EVs), hybrids and other alternative fuel options to align with your organization’s overall sustainability strategy. These vehicles continue to generate significant interest across the industry and as more OEMs begin to produce electric/hybrid versions of popular truck and van models, it’s safe to say it’s no longer a question of if EVs will play a role in fleet operations but more so, the speed at which it happens.

With that in mind, determining the best way to integrate EVs into your fleet can be a challenge for even the most seasoned fleet professional. With a variety of vehicles now available as EV/hybrid models as well as several charging options – at-home charging, centralized charging depots, public infrastructure, et cetera – determining the best solution for your fleet and developing a “best practice” strategy can certainly feel overwhelming. But it doesn’t have to be.

To get started, it is often helpful to determine if your fleet is more of a retail/sales fleet where your vehicles are used simply for trans28 AUGUST 2021

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portation or if your fleet plays a vocational role for your business with the vehicles serving as tools of the trade.

Vocational fleets

In a typical vocational fleet, vehicles (class 3-8 GVW) often return to a centralized “hub” at the conclusion of the workday. In these applications most organizations can benefit greatly by investing in or building an onsite charging depot to ensure vehicles are able to fully charge after a day’s use and be ready to hit the road the next morning.

In a centralized charging depot, the most efficient – and most economical – way to recharge these units is with a level two charger.

Level two provides the most control over how the vehicle’s battery is charged, helping to prolong battery life, provide the longest range possible, and minimize charging costs. However, it is important to keep in mind that if your fleet’s duty cycle does not allow much downtime for charging (for example, terminal tractors or drayage vehicles), you may want to consider a level three charger (DC fast charger). Level three chargers repower vehicles very quickly but typically are most costly and over time, if not used properly, can negatively impact battery life.

In some cases, public charging may be an option for your fleet (depending on the infrastructure in the region(s) in which your fleet operates) but there are some important drawbacks that need to be considered. Most often, the use of public charging is likely for emergency use only and the availability of public charging cannot be guaranteed (it may already be in use or not operational). Additionally, public chargers will likely cost more per kWh (up to three times the cost of level two), hamper productivity due to the downtime while charging, and often vocational trucks/vans may not fit within the parking spots for these chargers.

Sales and retail fleets

If your fleet includes many passenger vehicles (cars, SUVs, crossovers, and so on), in all likelihood, your drivers are taking the units home with them at the end of the day rather than returning to a central hub. In this scenario, at-home charging is typically going to be your best option.

An at-home charging solution will be the most efficient and cost-effective method for charging your vehicles. In terms of the charging device itself, there is a wide range of options available, and most are sufficient to charge your typical passenger vehicle.

However, from a fleet operator’s perspective, it is important to think of the big picture, which shines a spotlight on data collection.

For fleet operators, it’s helpful to view the electricity needed to charge your EV/hybrid vehicles just as you would the gasoline or diesel fuel used in your traditional internal combustion engine (ICE) vehicles. You need visibility to this fuel spend to monitor accurately and measure your fleet’s operating costs and overall total cost of ownership (TCO).

With that in mind, I recommend utilizing “smart chargers” that capture charge times and report this information back to a centralized data warehouse for reporting and integration with the rest of your fleet data. Not only is this information vital to determining your TCO calculations, but it will also streamline the process of reimbursing your employees for the cost of at-home charging.

Telematics is also a viable solution and can often complement a smart charger’s capability.

It is also important to keep in mind that at-home charging is not without its share of challenges.

Two of the most common challenges are that not all employees will have access to off-street parking and not all employees own their home. In both cases, installing an FM/SP SUPPLY PROFESSIONAL

2021-08-04 11:38 AM

The good news is that you don’t need to wait to start your transition to electric vehicles.

at-home charger may not be feasible. If that’s the case, these drivers may need to rely on public charging infrastructure, and it may be more costly and present a slight inconvenience to the driver.

One final consideration – and this applies to both vocational and passenger fleets – is that you’ll also want to implement some type of charge management software. Most of these platforms will help to optimize charging efficiency and avoid

expensive electricity demand charges which can quickly add up if not properly controlled.

Ready to embrace EVs

While the transition to electric vehicles won’t happen overnight and we’re likely still years away from EVs being a substantial portion of a fleet’s mix, it’s clear that many businesses are ready now to embrace EVs. Today, this transition is a bit easier and more benefi-

cial for fleets with mostly passenger vehicles but with many OEMs poised to introduce electric versions of popular truck and van models, the transition for complex commercial fleets will become much easier in the years ahead.

The good news is that you don’t need to wait to start your transition to electric vehicles. You can begin with an initial pilot program or perhaps a small portion of your fleet. You can then build on this

initial success, gain some momentum, and make the overall transition much easier.

And as always, remember, you don’t have to navigate this road alone; we’re here to help you make the integration of EVs into your daily operations as seamless as possible. FM/S

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2021-08-04 11:38 AM

THE LAW—BY PAUL EMANUELLI

STAYING ON TRACK AUDITS CALL FOR BETTER PLANNING AND TRAINING Recent procurement audits have put the spotlight on the need for improv-­ ed planning and training to support government operations and avoid cost overruns and delays.

Cost overruns and delays are two risk areas identified in recent audits.

For example, in its December 2020 audit entitled Value-for-Money Audit: Metrolinx Operations and Governance, Ontario’s Auditor General found that Metrolinx, a provincial mass transportation agency, expanded its Presto fare card program by awarding a series of solesource contract extensions to the incumbent, which added $1.7 billion in untendered work to the original $232 million contract. The audit underscored the importance of better planning for full lifecycle requirements when scoping and awarding long-term contracts.

Similarly, in its 2021 report entitled Report 2: National Shipbuilding Strategy, Canada’s Auditor General raised new concerns over ongoing production delays in the federal government’s multi-billion-dollar shipbuilding program.

The Auditor General warned that “further delays could result in several vessels being retired before new vessels are operational.” The report concluded that “interim capabilities are limited and cannot be extended indefinitely.” This audit provided another example of how protracted procurement delays can undermine government operations.

In fact, procurement delays are often caused by systemically weak planning. For example, in its 2020 report entitled Securing Personal Protective Equipment and Medical Devices, the Auditor General of Canada found that Canada’s 30 AUGUST 2021

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federal government was forced to play catch-up in securing personal protective equipment due to the long-standing and well-known deficiencies in its emergency stockpiling program. The Auditor General noted that the government “did not have a process to establish how much of an inventory of this equipment should be stockpiled to help meet provincial and territorial needs during a public health emergency.” The audit also found that these systemic issues were known to the government for at least 10 years prior to the COVID-19 crisis.

The pandemic further revealed long-standing systemic weakness in the planning practices of government institutions at all levels.

For example, the Ontario Auditor General’s November 2020 report entitled COVID -19 Preparedness and Management Special Report on Emergency Management in Ontario—Pandemic Response documented long-standing deficiencies in Ontario’s emergency planning portfolio. As the Auditor General detailed, these emergency planning gaps were documented in its prior 2017 report, where it concluded that government did not have agreements in place to secure critical goods and services that could be required in an emergency. That 2017 report made a series of emergency readiness recommendations to address these planning weaknesses.

However, many of those recommendations were not acted on. This resulted in price gouging by suppliers during the COVID-19 crisis as public institutions competed against each other for limited supplies.

These failures underscore the need for better training in support

of better planning. The Ontario Auditor General’s December 2020 report entitled Business Case Development in the Ontario Public Service identified the need to enhance staff training in connection with the development of business cases for procurement project approvals. The audit found that the government’s central approvals board was “not consistently provided with complete business case information” and noted that 45 per cent of the surveyed staff agreed “that they did not have access to the necessary training and resources to carry out their duties.” The report recommended the government provide training, coaching and mentorship opportunities to staff responsible for preparing business cases in support of government procurement projects.

The federal government’s adoption of agile procurement is a recent example of how public institutions can improve procurement outcomes through advanced training and innovation. In its 2021 report entitled Procuring Complex Information Technology Solutions, Canada’s Auditor General noted that Canada’s federal government adopted agile procurement as a means of modernizing its aging information technology portfolio.

As the report stated, “while the traditional procurement process is linear and awards a single large contract, the agile procurement process is iterative and awards multiple smaller ones.” While the audit found that the Canadian government “made good progress toward adopting agile procurement practices for large IT systems,” the Auditor General found that the government rolled out its agile pro-

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

“The federal government’s adoption of agile procurement is a recent example of how public institutions can improve procurement outcomes through advanced training and innovation.”

curement program with insufficient staff training. The report concluded the government needed to better “assess what skills or competency training was needed to support the move to agile procurement.”

As these recent audits illustrate, planning and ensuring project teams are staffed with trained personnel are key for enabling innovation and increasing the success of major procurement projects. Public institutions should prioritize these measures to support government operations and service delivery. SP SUPPLY PROFESSIONAL

2021-08-04 11:38 AM

30519

We recognize the challenge faced by fleets to lower emissions, and alongside our solutions designed to avoid or reduce emissions, we now offer you the opportunity to offset your fleet’s unavoidable carbon emissions and drive carbon neutral. It’s easy; sign-up and offset, simply by using your Shell Fleet card.

MAKING A DIFFERENCE WITH CARBON OFFSETTING Shell works with nature-based projects around the world that help reduce greenhouse gas emissions while improving the livelihoods of local communities and preserving biodiversity and wildlife. These projects generate carbon credits which are used to compensate for your fl eet’s emissions.

WHY OFFSET WITH SHELL? 

Demonstrate corporate leadership.



Champion sustainable business practices.



Meet increasing demands from stakeholders on environmental performances.

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Confidence in the quality and integrity of nature-based carbon credits.

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Receive an annual verified carbon reduction certificate.



All projects have a positive impact on local communities, biodiversity and habitats.

HOW IT WORKS

Opt-in and your drivers use the Shell card to refuel at Shell service stations as usual

Shell tracks your fleet’s overall fuel consumption and calculates the associated CO2 emissions

Shell will purchase carbon credits equivalent to the amount of your fleet’s emissions in order to offset them through Shell’s global portfolio of nature-based projects

Shell will issue an annual verified carbon reduction certificate confirming that the fuel has been offset

Shell automatically calculates your lifecycle emissions and offsets them using a global portfolio of nature-based projects.

You will be invoiced for the carbon offset charges based on your fuel purchases at Shell locations only (excludes Shell Flying J).

For more information, please visit shell.ca/co2neutralfleet.

‘Carbon neutral’ indicates that the carbon dioxide equivalent (CO2e) lifecycle emissions of a product have been offset with verified nature-based carbon credits. This means that Shell has engaged in a transaction where an amount of CO2e that is associated with the raw material extraction, transport, production, distribution and usage of the product has been removed from the atmosphere through a nature-based process or emissions saved through avoided degradation of natural ecosystems. CO2e means CO2, CH4, N2O greenhouse gases. CO2e and CO2emissions may be used interchangeably.

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2021-07-28 7:57 AM 2021-08-04 11:38 AM

2021 IMPREZA

2021 CROSSTREK

On models with EyeSight® and specific headlights

On models with EyeSight® and specific headlights

IIHS TOP SAFETY PICK

IIHS TOP SAFETY PICK

2021 LEGACY

AJAC

Voted Best Small Utility Vehicle in Canada for 2021

IIHS TOP SAFETY PICK+

J.D. Power Best Residual Value among Subcompact Utility Vehicles

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Full-time all-wheel drive for full-time confidence in motion. Superior drivability, outstanding control and handling you can count on.

Innovative advance warning safety system that helps you avoid potential danger on the road.

Subaru’s eye on safety.

Like your company, we at Subaru are all about going the distance. Which is why we’ve got safety and durability covered like no other, giving you the peace of mind that comes with knowing your drivers are well protected when they’re on the road. Factor in high resale value, great fuel efficiency and low total cost of ownership, and it’s easy to see that selecting Subaru for your fleet just makes good common sense.

On-board technology system connecting your Subaru to the world. 24/7 safety and convenience wherever you go.2

3

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Visit us at subarufleet.ca

1. Awards based on the J.D. Power ALG residual value forecast for the 2021 model year. For J.D. Power 2021 award information, visit jdpower.com/awards.

2. SUBARU STARLINK® Connected Services are offered on an initial three-year free subscription on select trim levels. Customers are required to enroll in the SUBARU STARLINK® Connected Services program. To operate as intended, SUBARU STARLINK® Connected Services require a sufficiently strong cellular network signal and connection. See your local Subaru dealer for complete details.

3. Safety ratings are awarded by the Insurance Institute for Highway Safety (IIHS). Please visit www.iihs.org for testing methods.

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