Supply Professional December 2020

DECEMBER 2020

SUPPLY CHAIN PLANET

Katya Vladykina on the value of a global supply chain perspective Social procurement

Trucking challenges

Supplier risk The Chevrolet Bolt LT Sustainable manufacturing

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VOL.62 No.6 DECEMBER 2020 SUPPLYPRO.CA COVERING CANADA’S SUPPLY CHAIN

@SupplyProMag

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COVER: ERICH SAIDE PHOTOGRAPHY

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FEATURES 7 THE ROAD AHEAD Challenges in the trucking industry.

8 GOOD DEALS THAT DO GOOD The benefits of social procurement.

10 GLOBAL CONNECTIONS Katya Vladykina’s supply chain journey in Russia, China and Canada.

13 SUSTAINABLE PUBLIC PROCUREMENT Investing in public sector resilience.

ALSO INSIDE 14 GREENING YOUR MRO SPEND The competitive advantage of sustainable MRO buying.

4 UP FRONT

20 SUPPLIER RISK How to limit risk in an uncertain world.

6 IN THE FIELD

22 SUSTAINABLE MANUFACTURING Raising the bottom line with a smaller environmental footprint.

5 BUSINESS FRONT

30 THE LAW

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UP FRONT

A BRIGHT NEW YEAR

It’s been a crazy year. Understandably, the COVID-19 pandemic has dominated headlines, policy and our consciousness for nine months. It has also been the primary challenge supply chain professionals have faced.

There have been other challenges this year, including railway strikes in February and blockades related to the construction of the Coastal GasLink Pipeline through Wet’suwet’en First Nation territory in British Columbia.

Other international events have driven uncertainty. A Ukraine International Airlines plane was tragically shot down on January 8 in Iran – killing 176 people on board including 55 Canadians and 30 permanent residents – stoking uncertainty about wider conflict.

It’s easy to look forward to 2020 ending. Hopefully, 2021 will be brighter.

With that in mind, I’ve given some thought to potential trends we may see in 2021. Below are a few optimistic predictions for the New Year.

Several safe and effective vaccines appear on the way. That will help put the COVID-19 era behind us and hopefully the vast majority of Can­ adians are vaccinated by September 2021. The rollout will also provide an interesting case study in logistics and supply chain management.

Continental free trade has been finalized with the Canada-United States-Mexico Agreement (CUSMA) put into force on July 1. This, along with US president-elect Joe Biden’s inauguration next January 20, will offer more predictable trade relationships into the New Year. A new trade deal inked between Canada and Britain is also welcome news and will hopefully provide even more stability.

While risk can never be eliminated, preparation remains important.

Risk management will take a more prominent role in managin supply chains. Hopefully, we’ve learned enough from the past several months that organizations will spend time and resources ensuring that risks are adequately dealt with.

Technology will continue to lend a hand in ensuring that supply chains run smoothly. While supply chain professionals will remain vital to run­ ning the show, advances in technology can offer opportunities to limit risk, provide valuable data and insights as well as take care of mundane tasks. This will continue to free up supply chain professionals to take on more strategic tasks.

Finally, supply chain will continue to claim its rightful place at the executive table. If 2020 has taught us anything, it’s that supply chains play a vital role in how the world operates and keeping it running smoothly. Getting PPE and other vital goods to their destinations has been front and centre this year. Supply chain professionals will remain crucial to rolling out COVID-19 vaccines in 2021. Never in peacetime has the field taken such a central, visible role in our health and ensuring a return to normal lives.

These are just some of the more optimistic trends that I see for 2021.

Let’s make the most of it. Wishing everyone Happy Holidays and a Happy New Year!

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, Corporate Social Responsibility—RBC Global Procurement JEFF RUSSELL Purchasing Manager, ABS Machining 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 POST-COVID-19 ECONOMY LONG TERM, THE VIRUS MAY CHANGE HOW WE WORK My guess is that when you’re reading this, there will be greater visibility around how the COVID19 vaccine will be allocated in Canada. We’re incapable of producing it. The majority of the manufacture will take place in the US, Great Britain and Germany.

It makes sense, to me at least, that citizens of those countries would be first in line.

A legitimate question is whether everyone in those countries who wants the vaccine should be taken care of before anyone in other countries get any. I’m not sure how this should or will play out.

That being said, I think it’s reasonably safe to conjecture that six months from now, at least the majority of those in high-risk cohorts in the developed countries will have been vaccinated.

Everything else being equal, this is a good thing. However, we don’t know how effective the vaccine will be. I was shocked to learn that the flu vaccine works approximately 50 per cent of the time. That means it’s basically useless for half the population. What if this is true of the COVID-19 vaccines as well?

POLICY RESPONSE Let’s do a little bit of arithmetic together. As of late November, there have been about 12,000 COVID deaths in Canada. What if there had been 6,000 deaths instead? Would this have changed the public policy response? I’m not sure it would have. We would still have had the same shutdowns and limitations on our ability to lawfully and peacefully assemble.

Now let’s imagine that the vaccine will be 75 per cent effective.

This would result in 3,000 deaths.

And my guess is that the public

policy response would still have been the same. Simplistic cries like “one death is too many!” have seized what is perceived to be the moral high ground.

What this suggests to me is that even after the vaccine becomes wide-spread mid-2021, life will not return to “normal.” There will be a new normal, and here’s what it might look like.

First, the way we’ll be looking at international travel will be fundamentally different for a very long time. There are countries and regions of the world that have done a very good job of stopping the spread of the virus. I think of a country like South Korea. Doesn’t it stand to reason that the country would continue to restrict travel both to and from the country?

Doesn’t it similarly make sense that there will be new rules about entry into Canada, assuming that we get COVID-19 under control?

It seems logical to me. Bottom line: those regions and countries which rely on international travel will continue to suffer.

EDUCATION I think frequently of the education business. And it is definitely a business! The reasons why it’s so important for children to be in-class educated is to help in their social development and it allows their parent(s) to make a living at the same time. I have a five-year old son in senior kindergarten who loves going to school every morning.

Meanwhile, I teach college and university courses online, and the model works very well in delivering similar learning outcomes compared to the in-class experience. Student satisfaction seems

quite similar, as far as I can tell.

There is discussion in the US about eliminating student debt. However, the better solution is to reduce the cost of education, and online achieves that. The in-class option should be available, but those who exercise that choice should be made to pay for it. Post-secondary education will never be the same.

A huge number of “white-collar” occupations have had to work from home during the pandemic.

Some people think that once the vaccine is developed, most will be returning to the workplace. I’m not so sure. I believe that at least in the short run workers will be given the choice. But over time, employers will increasingly mandate that most of the hours and work will be done out of the home. This will transfer much of the cost of doing business to the employee, while at the same time, the employee will enjoy both explicit and implicit benefits. An example of an explicit benefit is now you’re spending less money travelling to and from work.

An implicit benefit is the time that is being saved. Ultimately, this will lead to greater efficiencies in the system which in the long run benefits all of us.

There are two core strengths of any market economy. The first is its ability to allocate resources in an economically efficient manner. The second is that it allows us, individually, to determine what is most valuable to each of us. And as long as we don’t lose sight of these facts, the post COVID-19 economy will in the largest sense be remarkably similar to the pre-COVID-19 economy. SP

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

“Some people think that once the vaccine is developed, most will be returning to the workplace.

I’m not so sure.”

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IN THE FIELD—BY BRAEDON WOROBETZ

THE SAVINGS PARADOX THE IMPORTANCE OF DOCUMENTING SUCCESS. Have you ever run out of gas while driving? I have, multiple times.

Like vehicles, businesses generally run as long as sales revenues, profitability and cash flows don’t dry up. As a result, departments such as procurement rarely take centre stage except for when negative issues arise or specific measures, such as cost control, need to be implemented.

Even well-executed cost reduction strategies and projects may not be viewed as positive.

Periodically, procurement is tasked with the reduction of input costs over and above established targets. This is especially true during tough economic times.

The thought is that if you cannot increase the dollars coming in, you need to decrease the dollars going out. Simple, right?

Putting aside the numerous challenges that exist including available resources, active contracts or current market conditions, one underlying problem will likely remain: the savings paradox.

Normally, one would expect that as savings and/or overall benefits increase, the appreciation for these actions would increase at roughly the same rate. Even if no further savings or benefits were achieved, it could be argued that procurement must have been doing its job to ensure the company’s competitiveness.

After all, one of procurement’s main objectives is to continually look at ways of lowering the total cost of ownership for all products and services procured.

Unfortunately, procurement will likely come under fire regardless of the outcome. Why is that so?

There is often a gap that exists between the expected responses 6 DECEMBER 2020

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and the actual opinions that are formed by other departments – this includes the executive leadership. If we look at the three most common outcomes, the disconnect becomes apparent. o cost reductions – “ProcureN ment did not do their job”; Partial cost reductions – “Procurement did not try hard enough”; and Cost reduction targets achieved – “Procurement was obviously not doing their job in the first place.”

Although deflating, there are two specific actions that can be implemented to tackle this issue – these are documenting and elevating.

What happens in the procurement department daily is not as apparent to individuals and leadership outside of the department.

Documenting the department’s accomplishments on a regular basis serves as one of the most important ways to bridge this gap. Some individuals will not see the value of documenting their successes as they falsely believe that when required, they will be able to recall how they contributed to the organization’s success.

When the time comes, they are often left struggling to remember what happened last week let alone years ago. Without proper documentation, the benefits that procurement realizes through competitive processes, negotiating favorable contract conditions, or optimizing inventory levels will continue to be overshadowed by perception and opinion rather than by fact.

Once proper documentation practices are in place, the focus

should turn to elevating procurement’s perceived value within the organization. This can be accomplished by consistently reporting high-level results to the executive team through a supply chain leader or an executive sponsor. If no such leader or sponsor exists, the finance team may be able to provide the necessary help or direction given that many of procurement’s activities directly or indirectly affect the company’s bottom line.

As procurement’s organizational journey continues to evolve, so do perceptions. Through concerted efforts to highlight procurement’s successes and increase understanding from the top-down, positive impacts will soon outweigh any minor issues or setbacks resulting in a fundamental shift of opinion. SP

Braedon Worobetz, MBA, SCMP, is a supply chain professional based in Edmonton.

“One of procurement’s main objectives is to continually look at ways of lowering the total cost of ownership for all products and services procured.”

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BY CHRISTIAN SIVIÈRE

be more acute for long-haul drivers and transborder moves, and less acute for short-hauls and ‘’last-mile deliveries’’ as they are now called, as some of the latter activity is handled by the gig economy. Worklife balance and pay have been the main issues, with health and safety now logically coming to the forefront.

IN FOR THE LONG HAUL CHALLENGES AND TRENDS IN THE TRUCKING INDUSTRY While the pandemic has put the economy on its head and created new challenges for the trucking industry, one that had been around for some time – and isn’t going away – is the issue of driver shortages and the aging workforce.

Whether transporting raw materials, components, parts, finished products, industrial or consumer goods, long-haul drivers carrying full loads or short-haul drivers delivering e-commerce parcels, trucks play a vital role in Canada’s supply chain.

There are approximately 300,000 truck drivers in Canada* and as older drivers leave for retirement, the industry is having a hard time recruiting young people.

This has been exacerbated by the pandemic, as it puts drivers in the front line, delivering goods to potential hot spots, often interacting with customers and the public.

There are also difficulties on international moves: given the current situation south of the border, who would want to venture across the US to haul a load there at this time?

It is logical that the driver shortage

THE RISE OF E-COMMERCE Some say that automation and autonomous vehicles will solve these issues, but that remains to be seen. Solutions to attract young people in the meantime will likely revolve around training, promotion, better working conditions and better pay. For drivers to earn more money though, their employers will need to charge higher rates and to achieve this will require raising the public awareness of the importance of this activity. Unfortunately, the public’s perception may be going in the other direction thanks to the relentless rise of e-commerce fuelled by “free shipping’’ and “free returns.’’ Free shipping is economic and environmental nonsense: it encourages over-consumption, creating a lot of waste and pollution in the process. Shipping shouldn’t be free, and everything has a price: equipment, permits, fuel, insurance, financing, driver compensation, benefits and so forth.

Will mandatory entry-level training (MELT) be part of the

“There are approximately 300,000 truck drivers in Canada and as older drivers leave for retirement, the industry is having a hard time recruiting young people.“ solution? First introduced in Ontario in mid-2017 and followed

by Alberta last year, MELT aims to standardize training and ensure the highest levels of professionalism and safety in the trucking industry. In addition to improving safety, it is hoped that this will attract more young people to a trucking career. Better training has benefits for both the employer and the employee, but it has a cost.

Normally, such short-term costs pay off in the long term.

ELECTRONIC LOGGING DEVICE And what about the Canadian electronic logging device (ELD) mandate coming into effect next year? An ELD is an electronic device used in commercial vehicles to automatically record driving time and hours of service. It

Christian Sivière is president at Solimpex.

also captures data on the vehicle’s engine, movements and kilometres driven. In the US, the ELD rule became law in February 2016. It was implemented in three phases and the last one, the full compliance phase, occurred on December 16, 2019. The ELD introduction in Canada has been gradual and the current timeline for full implementation is June 21, 2021. There is no doubt that the ELD will improve safety, communication, tracking, efficiencies and asset utilization, normally resulting in better customer service and lower costs.

But it will change things for drivers: they’ll have to be trained and be keen on using a technology that will, in effect, spy on their every move. And while ELD makes a lot of sense on paper, how will drivers feel about losing some of their daily operational control, common sense decisions and initiatives? In the end, a real question about ELD is whether it will help the chronic driver shortage or make it worse.

In the meantime, we need to keep goods moving, as the economy comes out of the pandemic and we could see trucking rates firm up as a result, by the simple law of supply and demand. And after all, in spite of what Jeff Bezos and the likes want us to believe, shipping is not free! SP *SOURCE: CONFERENCE BOARD OF CANADA

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BY LARRY BERGLUND

GOOD DEALS THAT DO GOOD MORE PROGRESSIVE ORGANIZATIONS ARE ADOPTING SOCIAL PROCUREMENT When buying goods and services, equipment for businesses or government, and on any construction and infrastructure projects, a social procurement approach is one that considers the interests of the community stakeholders. This approach includes social, ecological, environmental and economic development.

Best value is achieved when we balance value-based interests along with pricing concerns.

When tendering a project with social procurement values, whether with a domestic or foreign contractor, it creates positive competitive tension in the market. Social procurement values ensure social impact in communities once the project begins. Social impact is a measurable change on social issues or outcomes through procurement.

Social procurement is the transition from making goods deals, to making deals that do good.

Social procurement values have been around for a couple of decades 8 DECEMBER 2020

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but are receiving more attention due to their success. Every organization consumes goods and services and these transactions are the everyday means of commerce.

Social procurement is a strategy to realize local economic benefits when contracting.

Labour is important in social impact outcomes. Individuals facing barriers, as one example, are often overlooked as a first choice for employment with for-profit organizations. This is understandable where peak efficiency is required to sustain profits. The result is many people facing employment barriers, such as individuals having disabilities, rely more on social services paid for by taxpayers.

Would your organization hire an ex-convict? However, Purpose Construction out of Winnipeg, does. As a social enterprise, Purpose Construction trains barriered individuals to qualify for construction work, pays them living wage rates, and helps them to return to full-time work – often in the private sector.

BUSINESS WITH A PURPOSE Social enterprises are social purpose businesses that generate value by providing goods and services, generally as a not-for-profit operation. Social enterprises provide work for people facing

employment barriers. This can include skills development to prepare for a return to the workforce.

Social enterprises work with government, private sector companies and with other social enterprises.

Social enterprises are operated by business entrepreneurs.

The Purpose Construction example builds social capital. Buy Social Canada defines social capital as the “relationships and networks within and among community members.”

With a shortage of skilled trades, Purpose Construction can build a pool of workers to meet demand without government subsidies.

An early and continuing success story in the social enterprise sector, is CleanStart Hoarding & Junk Removal CCC Inc. In the Vancouver lower mainland, Clean­Start, in 2015, paid $233,000 in wages to its barriered employees. This resulted in a social return on investment (SROI) of $1 million per year in the local economy. In 2020, CleanStart will contribute $1.4 million. The SROI is based on a study by E&Y with Atira Property Manage­ment which shows that for every dollar paid to target employees, the return is more than $4 in social and economic development. When was the last time you got a four-to-one return on an investment?

The empirical study on the SROI demonstrated reduced reliance on

Larry Berglund is prin­ cipal at Presentations Plus Training & Consulting Inc.

social subsidies; reduced shelter costs; reduced criminal activities; taxes being paid back into community; increased local spending; increased employability; increased self-esteem; improved health and quality of life. Individuals move from dependency on social services to independent taxpayers.

Another company that uses social procurement as a business strategy is Chandos Construction.

They are the first and largest B Corp certified commercial builder.

Chandos is a Canadian, employee-owned construction company operating in several Canadian cities. Their social procurement strategy embraces local employment; diversity; poverty reduction; eliminating social isolation; local purchasing; skills training; first source hiring and fair wages to underrepresented individuals. Chandos responds to tenders for major infrastructure projects, a very competitive sector. Their commitment to social procurement is another example of building social capital. Chandos hired several workers facing barriers fulltime and enrolled them in the Red Seal training program for trades.

Purpose Construction, CleanStart and Chandos are great examples of social procurement in Canada. It takes the spending power of buyers to make this happen. Buyers must look beyond the lowest out-of-pocket cost and redefine the value proposition.

As we move into the post-Covid era, it’s even more important to ensure social enterprises and small- and SUPPLY PROFESSIONAL

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medium-sized businesses can participate in government contracts.

Government contracts are taxpayer paid. While we are engaged in a global economy, we concurrently need local economic diversity.

This implies not simply putting the bids on e-bidding platforms but using strategies to increase the number of bidders. One tool is the unbundling of large contracts. The theory has been to buy the most from least to get the lowest unit cost. This will always favour multi-national corporations with deeper pockets. Unbundling could take a percentage of the requirements and ensure local participation, for example by targeting women-owned businesses or Indigenous contractors. The balance of the requirements goes to the lowest bidder.

GREAT PRICING, NO SUPPLY We are dealing with oligopolistic markets where the largest suppliers

tend to control the pricing and availability. When we reflect on the PPE shortage, we can attribute this in part to bundling the demand.

Great pricing but no supply.

Trade agreements, international and domestic, provide for exceptions, exemptions and exclusions when dealing with social enterprises by federal, providincial and municipal governments. Further regional trade agreements provide for derogations for economic development strategies.

Community benefit agreements (CBA) are an extension of social procurement. A CBA is between community, government and developers and ensures development projects enhance local social, environmental and economic opportunities. The Parq Casino in Vancouver is an example.

For the past two years, through Presentations Plus, I have been the procurement advisor on the Coastal Communities Social

Procurement Initiative (CCSPI) on Vancouver Island. Along with Buy Social Canada, Scale Collaborative and the Vancouver Island Construction Association, we inform public officials, train public buyers and small businesses and social enterprises on social procurement strategies. This includes drafting bid document templates with social value language, focusing on increasing local opportunities and drafting policies.

CCSPI began with six cities and

towns and now has over 20 communities participating. It’s exciting to see the commitment from so many parties to common goal. The below table shows where procurement has focused and the transition to social procurement values.

It’s early for social procurement, but more and more progressive organizations are adopting this strategy because of the compelling business case it creates.

It’s about being vocal when making local the focal! SP

Traditional focus

Social focus

Short-term costs

Long-term costs

Inputs

Outcomes

Fiscal interests

Community interests

Consumption of resources

Conservation of resources

Make good deals

Make deals that do good

Follow

Lead

Ethic of Justice

Ethic of Care

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BY MICHAEL POWER

KATYA VLADYKINA’S SUPPLY CHAIN JOURNEY HAS TAKEN HER FROM RUSSIA TO CHINA AND, MOST RECENTLY, VANCOUVER If the planet and human activity were a living body, supply chains would represent the blood vessels that shuttle value to different areas.

“That’s how I see it,” says purchasing manager Katya Vladykina. “That’s why supply chain can’t be isolated. It can’t just be supportive or clerical. It’s a part of the entire picture of business strategy.”

Yet like many, Vladykina, who now works for Vancouver-based Varsteel Ltd., got her start in the field rather by accident. As a student attending Irkutsk State University, close to the Mongolian border in her native Russia, she hadn’t yet considered a career in supply chain or procurement. As recently as 10 years ago, supply chain wasn’t yet widely viewed as the potential career path it has since become, Vladykina says. That’s part of the reason why so many enter supply chain having worked in other professions first.

“Whereas nowadays I see it’s changing,” she says. “We now have professional associations and institutes that teach supply chain as a pro­fession. Many young professionals come with this educational background.”

But if the world is similar to a living body, Vladykina has always been intrigued by how 10 DECEMBER 2020

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that body works. That interest led her to study political science and international affairs, a field in which she eventually earned a master’s degree. Despite her interest, Vladykina was unsure early on what career path to take. But in her third year of university, she had an opportunity to travel to China for a month during the summer. Her study speciality was Russian-Chinese relations and she had long been interested in Asia.

“Plus, geographically I come from a city which is very close to the Russian-Mongolian border and just a three-hours flight from Beijing,” she says. “Geographically the two countries always had a very strong connection in terms of international students and other types of business, like trade.”

The trip also helped her to realize that while she had gained theoretical knowledge at school, there were still gaps in what she knew that she wanted to fill. After graduation she travelled again to China and studied for another year.

In 2011 she began working at a Chinese company called ESH Corporation as an e-commerce specialist. While the position was unrelated to her educational speciality, it nonetheless provided a great opportunity to practice Chinese.

SUPPLY CHAIN FIRST STEPS While still working at ESH Corporation and contemplating what career to choose, a European businessman in China offered Vladykina a job with a small but international trading company called STEEL emotion, specializing in metal distribution. Headquartered in London, UK, the company was looking for young, enthusiastic employees to help grow its business in China. Vladykina gradually gathered more and more responsibility within the organization’s China operation. The company employed between three and five staff in the country, and the work was tough with long hours. But Vladykina was able to gain responsibility in several aspects of the business.

“That’s why it was a terrific opportunity, it shaped me as a professional,” she says.

“It polished my skills and gave me a solid understanding of how international trade works.”

Working in metal distribution, Vladykina could travel around China and visit steel and aluminum mills while working with Chinese engineers. That gave her the opportunity to learn about steel making and gain a solid technical knowledge of the process. She also had opportunities to learn how other areas of the supply chain worked.

“I went to many ocean ports, I saw how it all works, how the transportation system works, how different modes of transportation work,” she says. “I learned customs, exports, imports, financial transactions and different methods of payments and how it affects the business.”

Vladykina also spoke with customers in Europe and the US, trying to understand their SUPPLY PROFESSIONAL

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PHOTO: ERICH SAIDE PHOTOGRAPHY

GLOBAL CITIZEN

“I became very fluent in written and spoken Mandarin, which is the official language,” Vladykina says. “Because it was a Chinese company it gave me a great understanding of the culture, of Chinese business culture, how they communicate, how colleagues and management communicate with each other, which is very different in each culture and very different here in Canada.”

Vladykina lived and worked in China for six years. While she still held a deep appreciation for the culture, she had come to realize that China – and Asia more generally – was not where she ultimately wanted to live. As she thought about where that might be, Vladykina began meeting Canadians who were in China for business or other reasons. Among those were Canadians from British Columbia who told her about Van­ couver. She began researching the city on her own.

“That’s how I ended up applying for Canadian permanent residency from China,”

she says. “Once I got my paperwork settled, I just moved to Canada.”

Vladykina now lives in Vancouver, which she chose in part because of its large Chinese community. As of 2011, Vancouver was home to 450,000 people of Chinese origin – living in such a city seemed a good way to keep up her Chinese language skills.

“I always had this type of thinking. I have no regrets. It’s a beautiful city, though I don’t need my Mandarin much,” she says with a laugh.

JOB HUNTING Vladykina moved to Canada in 2016 with no job offer lined up. Doing business in North America is quite different from Asia, so she invested a lot of time in researching, talking to people, networking and trying to understand how things work here. The search didn’t take long, and within three months of applying she landed a position as a procurement manager with Varsteel, a metal distributor. After two years she took another purchasing manager position, this time at Ebco Industries, a custom manufacturing company providing heavy metal fabrication, heavy machining and other services.

“I’ve never worked for a huge corporation or company – I’ve always worked for smallor medium-sized companies,” she says.

“This is probably my strength now, that I can build supply chain-procurement strategy for small- to mid-sized businesses.”

At Ebco she now works with a wide variety of goods and services within steel manufacturing, she says, and her daily routine covers areas including supply chain, procurement and project management. She works with the sales team, as well as the production and engineering departments to determine what’s required to complete each project and to optimize costs.

Vladykina also works with the logistics team to get products to the company’s facility and, ultimately, to the customer.

With no two days the same, time management and planning are crucial, she says. Vladykina tries to manage a dynamic environment by planning out each day in advance. Much of the

PHOTO: ERICH SAIDE PHOTOGRAPHY

needs and what they were looking for, what they could buy locally. She worked for STEELemotion for three years. Her tenure there helped her realize that while she had little interest in a sales career, she enjoyed working with suppliers. She became interested not just in the procurement aspect of the field, but the entire supply chain – from manufacturing to delivering to the customer. She also gained an appreciation of supply chain’s international, global aspects.

This appreciation is what led her to decide on supply chain as her chosen field.

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day is spent on paperwork, replying to emails and making calls. She also spends time on the shop floor monitoring progress, finding out what’s needed as well as what, if any, problems there are and trying to solve them. Quality control is also a large part of her daily work, as is monitoring global trends and news such as exchange rates.

Vladykina particularly enjoys the hands-on nature of her profession. She has learned much by visiting ports, boarding cargo vessels and talking to their captains and crews and seeing how different types of cargo are transported.

“It’s not directly connected to my job but this experience is something I’m proud of, talking to different people in other fields,” she says.

Visiting steel mills has also been a highlight of her career, Vladykina says. Watching liquid iron ore pour into the furnace and oxygen being removed, learning what is needed for certain steel alloys has been a fascinating experience for her.

“It’s huge, it’s hot, it’s dirty and dusty, but this is such a terrific, beautiful experience,” Vladykina says. “I’m very proud to work with my team of engineers who are very smart people. They explain to you why this little screw is so important for this project and how many certifications are required. You’d think, ‘who cares? You’re paying just five bucks for a bolt, let’s say. Who cares about all the certificates?’ But it’s very important how this bolt becomes part of a vessel or part of a gate for a local dam for hydro power. I value every day of my professional life.”

Vladykina was also included in Supply Chain Canada’s list of Immigrants Impacting Supply Chain, released earlier this year. Her current employer nominated her for the initiative, which is designed to recognize immigrants who “demonstrate pioneering spirit, relentless drive and visionary leadership” in the field.

“It’s an honour. I’m very proud of that,” she says. “It’s brought so many other people into my life – great, talented professionals. We are now talking and learning from each other and sharing experiences and ideas.”

Yet, immigrants must use more effort to achieve the same professional results as Canadians born here, she says. Immigrants go through more work and stress when learning about the country and culture, for instance.

She recommends new Canadians do some homework before arriving, although she warns that their actual experiences here may differ from what they expect.

“It’s work to become part of society and it’s work to be of value,” Vladykina says. “We want 12 DECEMBER 2020

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“It’s work to become part of society and it’s work to be of value. We want to be of value to our communities, to the country where we live.”

to be of value to our communities, to the country where we live. It’s great to be recognized for that.”

PANDEMIC CHANGES The COVID-19 pandemic has affected practically every aspect of our professional and private lives – a situation which Vladykina notes Canadian supply chains were simply not prepared for. Yet, the pandemic can help them to change and become stronger. The importance of those supply chains is now more evident than ever.

Vladykina also recalls the railway strikes that began in late February, which highlighted the gaps in the Canadian supply chain between the country’s East and West Coasts. It’s cur­rently less expensive to ship from Asia via ocean than to do so from Canada’s East Coast, she notes. Hopefully, the pandemic shows the importance of a strong transportation system across the country.

“COVID-19 will probably help us to improve those weaknesses and gaps we have in supply chain as a profession,” she says.

The pandemic has also highlighted the importance of agility for supply chain professionals, Vladykina notes. The ability to react quickly to changing circumstances is probably the most important trait to nurture as supply chain seeks to establish itself as a strategic partner in business.

“Life is changing, and many jobs are becoming obsolete,” she says. “We talk more and more about automation and technology these days. I don’t think we’re going back to life as it was before COVID. We’re going to have something new. It’s stressful for all of us and many people were hit harder by COVID than others. But this is a part of life, I believe.

This is how progress and innovation comes.

It can be painful sometimes.”

Vladykina describes herself as someone “very hungry for life,” curious and always looking to learn. She supports lifelong learning,

a message she consistently passes along to her younger brother and sister. This means not only academic learning – any type of knowledge, gained anywhere, can be helpful.

She is also a very outdoorsy person, enjoying hiking, camping, boating and, during non-pandemic times, road trips and travel.

At the same time, she describes herself as an introvert. While she must be extroverted in her job, for example during negotiations, she also enjoys time spent at home with a book on the weekends.

Along with being adaptable, skill in negotiations is important for supply chain professionals to develop, Vladykina says. This makes her education relevant to her profession in ways that might not be obvious at first. Her first lessons in negotiation came during university while studying international relations. Supply chain is often a global pursuit, and negotiations require acceptance and understanding of the other party.

“This is what I’m always trying to do with our vendors,” she says. “I try to learn their business – the problems they face, the challenges they face, how they operate. It gives me a chance to adapt, to adjust my work and to find ways to prepare us to do better, to optimize our costs and so on. I believe my education helps me a lot in my profession now, even if it’s not that obvious.”

For those considering supply chain as a profession, Vladykina shares three words: go for it. Supply chain has few limits, and a career in the field can be much broader than one might think. Looking at the bigger picture can help.

At the same time, stay vigilant against getting lost if your goal is too big and too broad. Always be focused on what’s important. And while certain practical skills are necessary, networking is an important component to success in the field. For her part, Vladykina is always willing to offer guidance to those who reach out to her with questions.

“I’m always happy to share my vision,” she says. “I’ll never say that my opinion is always the best or the right opinion. But as we share, we can probably find a good solution to certain issues and problems together.” SP

SUPPLY PROFESSIONAL

2020-12-07 4:06 PM

BY TIM REEVE

RISK AND RESILIENCE SUSTAINABLE PROCUREMENT IN 2020 While COVID-19 has plunged us into a new reality, with new stresses and risks within supply chains, it has also highlighted how sustainable procurement offers solutions that can save money, deliver environmental benefits and encourage spending public dollars for the public good. It can be hard to think about opportunity in the midst of so much uncertainty. But as more organizations formalize their green and social purchasing efforts, its clear, investments in sustainable procurement are investments in resilience.

The Canadian Collaboration for Sustainable Procurement (CCSP), formerly the Municipal Collaboration for Sustainable Procurement, is a network of 30 leading Canadian public sector organizations that share best practices and co-develop tools to advance sustainable public procurement in Canada. Recent CCSP member activity shows that large institutional buyers are levelling up their commitments to green, social, ethical and Indigenous purchasing.

For example, the Halifax Regional Municipality approved new social procurement policies in September, the City of Whitehorse

updated their procurement policy to include sustainability, the City of Victoria updated its bylaws to include new social procurement and living wage requirements, and the BC Lottery Corporation created sustainable procurement implementation plans to guide the development of a high impact program over the next three years.

Nine months into adapting to the pandemic, organizations are now shifting focus to the long game. Their examples show how looking at the strategic risks and opportunities within high impact procurement can cut carbon emissions, reduce waste and material use, stimulate small- and medium-size businesses and build more inclusive communities. Buying Back Better doesn’t come without some effort, but it delivers meaningful results. Below are some examples of win-win-win for buyers, suppliers, and communities.

CUT COSTS AND CARBON Consider turning the focus on cost control towards energy conservation. The pandemic underscores the cost of disruption and the urgency of becoming more resilient in the face of climate change. Yet while challenges to revenue streams may require budget cuts, you can reduce costs and achieve low-carbon commitments at the same time.

Mississauga issued an RFP to electrify their fleet and offered the contract to ZAMBONI, who will deliver the first four units in spring 2020. By 2022, Mississauga will break even and start realizing savings. By year 10, the City expects to save $628,190. Over the 20-year lifecycle of these units, it expects to save $1,711,160. With this procurement, the City will reduce its greenhouse gas (GHG) emissions by 832 tonnes (eCO2) as per Natural Resource Canada’s Office of Energy Efficiency statistics – the equivalent of taking 255 cars off the road.

RE-USE ASSETS AND REDUCE WASTE Organizations may also need to defer new procurements and repur-

pose existing assets and resources.

In 2018, Thompson Rivers Univer­ sity (TRU) procurement manager Eric Vandermeulen tackled furniture waste by developing a Kijiji or Craigslist-style online marketplace for staff to claim furniture sent to the warehouse for disposal.

“For years, we had a bunch of furniture stored in our warehouse without any way of letting people on campus know it was there. We had been selling or disposing of items off campus and simply buying new when client departments requested furniture,” he recalls.

“I knew that the number one sustainability rule is to see if you can reuse items within your organization, and I thought TRU-ReUse was a way we could do that.”

The online shop has been a hit.

As of last winter, there were 400 unique visitors on average per month to the site. The program has delivered 390 individual items, estimated at $75,000 in value, across all three campuses since 2018.

USE PURCHASING CARD SPEND Social distancing requirements and supply chain disruptions have put stress on small and local businesses. Many remain open while facing plummeting sales. Your purchasing card spend can make your dollars count for small businesses.

In 2019, a Working Group of CCSP members created a short training for purchasing card and credit card holders that introduces the goals of social procurement, how and when to consider social value when making a purchase, and highlights four recent success stories.

DOMESTIC & COMMUNITY SUPPLIERS In many regions, small businesses and social enterprises proved agile in shifting their production lines and providing a quality product.

The Cities of Regina and Victoria worked with local distilleries on a waste-to-resource approach to producing hand sanitizer.

Social enterprises do double duty in the community by providing employment opportunities

Tim Reeve is president at Reeve Consulting.

and skills training for those with barriers who are more vulnerable in times of crisis. In BC, Simon Fraser University (SFU) used its purchasing power to pair social and Indigenous caterers with a prime contractor to deliver food services to its Vancouver Campus.

ADVERTISE TO DIVERSE SUPPLIERS Economic crises have a compounding impact on businesses that already face barriers, including suppliers that identify as diverse. There is evidence for the value of entrepreneurship in reducing poverty and fostering resilient community networks. The City of Toronto has paved the way for a dynamic supplier diversity program that is making a major difference to the City’s economically disadvantaged communities.

The key lesson is to reach out to non-profit supplier certification organizations, which can advertise opportunities to their members.

They need to know that public organizations are still buying, and that they are encouraged to bid. Key supplier organizations include the Canadian Council for Aboriginal Business, CAMSC, Women Business Enterprise Canada, Canadian Gay and Lesbian Chamber of Commerce, and the Inclusive Workplace Supply Council of Canada.

Check out the CCSP Annual Report on the State of Sustainable Procurement in Canada for a roadmap to using your buying power to respond, recover and become more resilient. SP SUPPLYPRO.CA 13

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other tender’s criteria such as quality, service Incorporating sustainabilityProcurement metrics into monplace in many organizations in terms of how MRO contracts should be implemented early and pricing. Other sustainability attributes to an organization presents itself on the corporate include in the tender include use reduction and on in the process when a contract goes out to stage and to its customers as an environmental the lifecycle of products: tender. A variety of metrics can be included in ally. There are largescale initiatives that are the tender, such as: percentage of recycled conCASE STUDY visible in the mainstream media, in part due to tent (eg: paper, oil, plastics); type of recycled Use reduction – reducing the consumption ONLINE CORPORATE WITH OF CANADA’S STORE CHAINS retailers becoming vocal in TRAINING their demands for ONE content used (eg: BIGGEST consumer DISCOUNT versus industrial); of a product by using one product over reduced packaging and shifting fleets to greener ability of the product to be recycled or re-used another. For example, the case of single-use alternatives such as electric and hybrid vehicles. at end-of-life; not compromised of hazardous plastic bags as opposed to using metal conLuckily, sustainability is possible across many materials (such as tainers for disposal or storage of goods.

VOC in paints, CFC s Client: industries in their core operations such as manuin aerosols); type of disposal needed (special Product lifecycle – covers the full process facturing, construction and others. MRO (mainhazardous goods disposal or standard disposal from “cradle-to-grave” of sourcing of raw methods); country of origin (for example, local, tenance, repair and operations) purchasing is a materials (virgin versus recycled), packaging, What Our Client Is Saying: domestic or global); type of energy used during prime area of opportunity for an organization to manufacturing, distribution, servicing, mainof goods (for example, coal, of roles implement its sustainability practices. taining disposal at end-of-life.

For exam“In 2019,or aimprove few cross functional areas ofmanufacturing Giant Tiger underwent a realignment and and responsibilities to improve Sustainability as a strategy can offer itself as oil, electric, solar, wind); shipment methods ple, hydraulic fluid made of virgin base oil overall business and increase efficiency.

As finally, part ofhaving this effort committed to ensuring teamrequires (rail, truck or air) and the sup-we were a competitive advantageperformance to customers, employand shipped across the globe, which provide theirmandates, own sustainability initiatives eesmembers and shareholders.

Customers and employees extensive multi-layer due to excess had the right skills to succeedplier in their new and the SMT – Logistics course waspackaging the perfect such as waste reduction, emissions reduction, alike see the positive brand story a sustainable transportation and generating a large carbon common foundation for all members onsupporting the Replenishment team. The weekly agenda allowed each participant to environmental and conversation organization offers, which can help attract and footprint as compared to hydraulic fluid made work their pace but they each causes andeach so on.other in rich conversations throughout, retain bothatnew andown existing customers andalso leveraged of recycled drawing base oil andfrom shipped from a local employees.

Employees value the opportunity to manufacturer with a minimal carbon footprint. other’s unique experience and perspectives.”

SHOWING COMMITMENT work for an organization that believes and lives A key element is to engage suppliers by commufor -a JESSICA larger cause of sustainability. Investors GODIN, P.ENG, SVP, nicating the organization’s strategy and expecand shareholders directly benefit from cost savSUPPLY CHAIN, GIANT TIGER STORES LIMITED tations but also sharing its own best practices ings driven from sustainability initiatives such PAGE 19 and targets to illustrate its commitment to susas reduced consumption of hazardous goods tainability. Items for consideration include inteand reduced disposal or handling costs; as well grating a scoring system with respect to offering as a risk mitigation strategy for maintaining sustainable products and solutions similar to the a positive brand reputation.

To learn more about the best fit for your organization, contact: 14Kim DECEMBER Sforza,2020 Director, Member and Corporate Engagement at ksforza@supplychaincanada.com or +1 416.977.7566 x2134 SUPPLY PROFESSIONAL

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Cost savings through MAKING THE SHIFT Best practices for making MRO purchasing environmental MRO choices more sustainable include all stakeholdSUPPLY CHAIN CANADA, ONTARIO INSTITUTE INVITES YOU TOensuring THE ers are aware of the strategy and are involved in is possible when approaching both the decision-making process as well as in the initial input of the strategy as part of a strong sustainable procurement change management process. To ensure success when shifting to sustainable procurement, it from a whole-of-life is best to start small with simple changes such as switching to greener alternatives on high perspective, as compared to consumption products like personal protection, cleaning products, lubricants and cutting tools. just the invoice price.”

For example, Watson Gloves offers the “Green

Cost savings through environmental MRO choices is possible when approaching sustainable procurement from a whole-of-life perspective, as compared to just the invoice price.

Balancing the long- and short-term costs is what drives the savings for an organization. The initial investment in new equipment or tools may seem like a huge cost, however when amortized over the duration of the life of the equipment the TITLE PARTNERS: annual cost is reduced. For example, through installing LED lighting or reduced water plumbing fixtures, the average energy and water consumption reduction helps to offset the higher initial investment. In addition to the longer lifespan of the equipment there is less servicing and replacement required.

By sourcing environmentally friendlier Canadian and North American certifications include: Forest Stewardship Council (paper MRO supplies, organizations can also save a LEADERSHIPSERIES 2.0 products); CSA Sustainable Forest Management great deal in disposal and handling fees. For example, when using harsh chemicals to clean (paper products); CSA Energy Efficiency equipment, an organization needs to invest in Mark (gas appliances, HVAC); ECOLOGO by the proper PPE (personal protective equipment) Underwriters Laboratories (paint, sealants, disinfectants, hand cleaners); for employees to ensure their safety. As well, GREENGUARD by SESSION PARTNER the disposal of spent cleaning chemicals needs Underwriters Laboratories (adhesives, sealants); to be processed a hazardous service.Platform Energy Star (lighting, HVAC); US EPA (cleanJanuaryby28, 2021 waste I Zoom This can be both costly as compared to using ers, plumbing fixtures) and USDA Biopreferred gentler chemicals which may not require PPE (lubricants, building materials).

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SUPPLYPRO.CA 19

2020-12-07 4:06 PM

BY MICHAEL POWER

BALANCING ACT MANAGING SUPPLIER RISK IN THE COVID-19 ERA If nothing else, the COVID-19 pandemic has highlighted how much risk already existed in supply chains. The global nature of modern trade shows how much exposure is tied up in suppliers, many of which are located around the world. But the economic and health crisis brought about by the coronavirus isn’t the only danger organizations face in dealing with suppliers. How should organizations prepare as we move into a post-pandemic world?

One thing the pandemic has done is to expose weaknesses in supply chains that were already there, says Patrick Etokudo, general manager at Sherritt International Corporation.

For example, while offshoring has been an effective strategy for many organizations, the practice’s weaknesses have been illuminated by the coronavirus crisis.

Many organizations have also struggled with supply capacity, lacking enough product to deal effectively with the current crisis. Single sourcing and a lack of contingency have been problems for many, and organizations that thought they had great relationships with suppliers suddenly found those relationship strained in recent months.

Over the years, companies have offshored in an attempt to boost efficiency. Organizations should now move in the opposite direction and look to either nearshore or onshore, Etokudo says, with each company and industry having to decide what the optimum mix should be.

With pressure on liquidity, some suppliers have buckled from the lack of access to cash, he notes. Natural disasters, diversity of suppli20 DECEMBER 2020

SP Dec 2020.indd 20

ers, cybersecurity and geopolitical tensions have also affected supplier risk, he notes.

“We need to keep getting closer to our suppliers and practically manage these relationships,” Etokudo says. “Those of us who were not trying in the past need to start it now. It’s high time we understood our suppliers.”

To improve visibility, advanced industries and organizations should invest in joint improve­ ments with suppliers while auditing their performance continuously, he says. Recent news about vaccine efficacy means that the beginning of the end of the pandemic may be months from now, rather than years. That makes for a perfect opportunity to get a line of sight into supplier distress, where in the supply chain inventory has been sitting as a result of the pandemic as well as what alternatives there are in dealing with those inventories.

ASSESS THE SITUATION Supplier risk assessment has been an important tool throughout the pandemic, says Maria A. Greaves-Cacevski, strategic sourcing manager with Thermo Fisher Scientific. Customer focus, data quality, change management, continuous improvement and communication are the five key areas to manage when looking to determine that risk assessment for suppliers, she notes.

Thermo Fisher Scientific is a contract pharmaceutical manufacturer, and the company has been just as busy – if not busier – than it was before the pandemic, Greaves-Cacevski says.

But the crisis has affected the organization’s ability to meet standard lead times, affected

logistics and increased transportation costs, primarily due to increased use of air freight. Some of the company’s suppliers have also shut down sites and reduced work shifts.

“Even though we got back up to a level, our suppliers aren’t at the same level,” she says. “A supplier risk assessment asks those questions. How many shifts are you operating with? What’s your workload? What happens if you have contamination of your water supply?

What happens with your tier suppliers and your raw materials? Some of our trends have been impacted because our own suppliers can’t keep up to their regular operations. We’ve had an increase in lead times, in transportation costs.”

Going forward, the company will look at dual sourcing rather than single sourcing, GreavesCacevski says. Another option is to amalgamate requirements across its North American sites, bringing it into centralized warehouses, then ordering from those warehouses rather than direct from the vendor. That option supports cost efficiencies by volume procurement while reducing the logistics involved when vendors deliver to one spot at a higher volume.

“Our sites individually are then ordering internally and managing from our centralized warehouse to our DCs or to our sites,” GreavesCacevski says.

While organizations may think they need a formal or robust supplier risk assessment that’s not necessarily the case, she adds. Some organizations may not have the resources for that. Those companies can simply take the knowledge they already have and put it into a template format.

“You don’t need to have a separate department. You don’t need to have a robust legal document. I think you just need to have a list of questions that you use for every single vendor and try to have it as specific as you can to your material as well as to your business,” she says.

“That way you cover a lot of what-if scenarios long-term.”

Regardless of the challenge, partnerships with suppliers that are a win for both sides matter more than ever, says Jon Rosemberg, senior vice-president, merchant operations & program enablement for Indigo Books & Music. For example, when the pandemic hit, the company had to manage cash flow as efficiently and effectively as possible, he says. There were many conversations with vendors and those able to extend longer paySUPPLY PROFESSIONAL

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ment terms. The company worked with smaller enterprises that were more constrained in order to figure out a deal with them.

“It was this idea of, we’re all in this together because we were all getting hit hard. Everybody was feeling the pain,” Rosemberg says. “It was about trying to figure out how we created sustainable deals and this sustainable way of working with our partners.”

Agile communication with vendors, while always important, has been highlighted during the pandemic, Rosemberg says. That kind of communication can pay off. For example, when Manitoba shuttered much of its economy in November, Indigo already had procedures ready to deal with the situation. The company’s vendors were told to suspend shipments to stores, a move Rosemberg says shows the importance of reacting quickly as soon as new information arises.

“We need to keep getting closer to our suppliers and practically manage these relationships.

Those of us who were not trying in the past need to start.”

The pandemic has also highlighted the importance of looking at supplier relations on a spectrum, Rosemberg says. On one side of that spectrum are transactional relationships in which what is bought, the price and other factors remain constant. On the spectrum’s other side are genuine partnerships in which an organization and its vendors discuss how to optimize the relationship for both sides to create value.

“The best way to react to unpredictability is when you can work together with your supplier base to understand what their concerns might be, what their challenges might be and

they can understand what yours are,” he says.

“If that communication is happening you find a lot of synergy that you might not otherwise find. Seeing your supplier base as stakeholders in your business – not as just somebody selling you widgets – is the key change in approach that needs to happen.”

VISIBILITY INTO LAYERS Visibility into not only the supply base but also the multiple tiers of supply chains is important, says Chris Sawchuk, principal and global procurement advisory practice leader at The Hackett Group. During the pandemic, organizations have struggled for access to supply even with great visibility and connections with their suppliers, Sawchuk says. But they’ve still been unable to see past their first tier.

Many organizations are looking to gain deeper visibility into the supply chain than before.

Sawchuk sees two aspects to agility, with the first being reactive capability. If something happens, how should an organization react?

The second aspect is predictive – or getting ahead of issues before they occur.

For example, in January many with supply chains in China could see the COVID-19 crisis unfolding, especially if they had employees on the ground in that country. What many organizations neglected to do was ask whether the crisis could spread beyond China. Sawchuk cites a nutraceutical company that bought forward on some products in order to avoid interruption to the supply chain.

“They were able to create a competitive advantage because their competitors didn’t do that,” Sawchuk says. “When they were starting to buy more stuff, it got locked down. Their customers weren’t getting product from their competitors. This company was able to fill in those holes and gain market share, gain more revenue all through this period of time.”

Companies need to ask what risks they’re actually trying to protect themselves against, Sawchuk says. The answer could be revenue, margins, people, intellectual property or brand, depending on the organization. Companies must then prioritize those risks while deciding what level of risk is acceptable.

“The question is where are we going to focus, and the company has to let supply chain know,” he says. SP SUPPLYPRO.CA 21

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BY JACOB STOLLER

PROFITING FROM SUSTAINABLE MANUFACTURING MANUFACTURERS CAN IMPROVE THEIR ENVIRONMENTAL FOOTPRINT AND BOTTOM LINE BY REDUCING COSTLY WASTE In 2016, Southbrook Winery, located in Ontario’s Niagara region, received the results of a conservation assessment advising that its electricity and natural gas consumption could be reduced by 40 per cent.

This was notable given that Southbrook was already a recognized leader in sustainable production, was operating in a LEED gold certified facility, and was planning a solar panel installation to offset its electricity consumption. Furthermore, an earlier energy study commissioned by Niagara-on-the-Lake Hydro had identified potential savings of only five per cent.

The news was no surprise to Bruce Taylor, president of Elmira, Ontario-based EnviroStewards, which conducted the second study.

Taylor’s approach, which has won his company numerous awards, is to comprehensively assess all potential sources of waste, including losses of energy, heat, materials, toxic substances and in many cases the final product.

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The challenge is that environmental losses are not usually caused by large and easy-toidentify deficiencies, but by dozens or even hundreds of incremental problems which may be inter-related. Rooting them out takes time and effort, but it’s worth it. Enviro-Stewards’ customers achieve on average a one-year payback, including Maple Leaf Foods, which is saving $12 million per year across its 33 plants, and is now the first major food producer to be carbon neutral.

By implementing Enviro-Stewards’ recommendations, Southbrook was able to reduce the footprint of its solar panel installation, saving land to grow more grapes which now produce an additional 200 cases of wine per year.

Payback was four months. The project also won a national Clean50 award.

Some of the best opportunities are found by looking across engineering disciplines. EnviroStewards was recently called into a solvent recycling plant where management was concerned

about the costs of running a huge exhaust fan to remove toxic fumes from a distilling process.

“They had a fan blowing air out through the wall,” says Taylor. “If we only looked at electricity, we would get them a better fan motor.

If we also looked at thermal, we’d get them a heat exchanger to get 60 per cent of that heat back. But if we look at toxics, we ask why they even have the fan.”

It turns out that the toxic fumes were emitting from a single tank. Having sealed the tank, the company now vents the fumes through a condenser, producing additional solvent that is now being sold. “Now it’s not in the air, and we didn’t even need the fan,” says Taylor. “So you save more energy by doing a toxic study than you could save by doing an energy study.”

Most companies miss such opportunities because they only scratch the surface of their environmental deficiencies, often under pressure to comply with government regulations.

Accordingly, companies typically commission environmental audits based on the lowest bid price, which rules out a comprehensive approach. “The procurement person assumes that the best audit is the least expensive one,” says Taylor.

The issue Taylor finds most disturbing is food waste, which he claims is getting little attention. “All the emphasis is on destroying that food more efficiently and keeping it out of landfill where it would turn into methane,” he says.

Even when the food is disposed of correctly, he notes, 90 per cent of the environmental footprint for producing it – cultivating, fertilizing, harvesting, transporting – goes to waste. “Reducing food loss in the first place recovers its economic, environmental, and social value,” he says.

Enviro-Stewards’ assessment of 50 food and beverage processors across Canada found an average of $230,000 savings per year at each facility. “Food loss is the third largest greenhouse emitter in the world,” says Taylor. “If food loss was a country, it would be the third largest greenhouse emitter in the world.”

LEAN AND GREEN Profiting from waste reduction is a central tenet of Lean manufacturing, the approach pioneered by Toyota, which engages the entire workforce in finding and eradicating wasteful expenditures and efforts.

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“What the technology can give you is a high level of assurance that the claims suppliers are making weren’t just fabricated.”

“Lean is inherently green, because you’re constantly looking for ways to maintain output while consuming less resources,” says Larry Coté, president of Ottawa-based Lean Advisors.

Improving workflows by revising the plant layout is often an early target. “If we shorten the distance a forklift has to travel from 500 to 100 yards, we’re saving time and energy,” says Coté, “and that might add up to not having to buy another forklift.”

Other examples include eliminating unnecessary run time of machinery or reducing excess inventory of materials, works in process, and finished product. The improvements add up – companies that take the Lean approach seriously routinely reduce space requirements by 50 per cent, improving their environmental footprint as a by-product.

“When you fly into Pearson Airport, those flat-topped buildings you see are all inventory,” says Coté, “and a lot of them don’t have to be there. If you reduce their required footprint, your energy and overall operational costs go down, and you’re not creating as much pollution.”

SUSTAINABLE PROCUREMENT A product is only as sustainable as the components that comprise it, so many manufacturers

depend on their suppliers, who might be located anywhere in the world, to align with their sustainability practices. Validating supplier claims, however, can be difficult.

New information technology may alleviate this concern. A number of companies, including Toronto-based start-up Convergence Technologies, are providing blockchain-based verification solutions for supply chain consortiums. A blockchain, in a nutshell, can provide an unbreakable record of a product’s lifecycle, including certificates of origin and proof of compliance with standards.

For example, working with the United Nations Development Programme (UNDP), Convergence developed a solution that allows Mongolian farmers to certify their wool as genuine cashmere, assuring farmers the necessary margins to maintain sustainable practices, and giving clothing brands and their customers the assurance that they are getting what they are paying a premium for.

“What the technology can give you is a high level of assurance that the claims suppliers are

making weren’t just fabricated, but were actually issued by a certification body,” says Erik Zvaigzne, vice-president of product innovation at Convergence, “so there’s a lot of integrity to the claim piece.”

In many industries, Zvaigzne says, companies have been reluctant to share the data that reveals their sustainability practices. Blockchain technology addresses this by allowing a finer degree of control over what is shared and what is kept private.

“People don’t want to give up their trade secrets,” says Zvaigzne. “What the newer technology provides is a degree of transparency that doesn’t have to be 100 per cent.”

The technology also shows promise in multitier supply chains with many players. “In the more complex supply chains, you’re often passing on or forwarding claims,” says Zvaigzne, “so that’s where traceability comes in. If there’s a quality issue, you can trace the product all the way back.”

MOVING FORWARD The bottom line is that a reactive approach to sustainability - meeting only minimum regulatory requirements – tends to incur costs with little or no benefit. Boldly going the distance, as many companies have found, can be a winning proposition.

“Sustainable companies tend to be more profitable than the rest,” says Taylor. “Otherwise, you’re spending all your time and money on compliance.”

Embracing sustainability also gives manufacturers the edge in meeting what is arguably their toughest challenge – hiring the best talent from the next generation of workers.

“Employers that understand the positive impacts of sustainable practices don’t always appreciate the excitement that comes from employees knowing that they actually are doing something to help the next generation,” says Coté. “I think that’s a huge motivator for a lot of people. We all want to leave this world better than the way we took it on.”. SP

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Fleet Management

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First drive Test driving the Chevrolet Bolt LT.

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New truck hauls for 2021 A roundup of pickups for the New Year.

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.

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Green rides Sustainable options for your fleet.

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

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

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Fleet Management

By Stephanie Wallcraft

The Chevrolet Bolt LT Compact EV makes an excellent fleet option The case is getting stronger for electric vehicles in fleet applications as the adoption barriers fall.

Take range as an example. Earlier EVs could barely make it 200km without charging, which made them useful only in select applications.

Today, many mainstream EVs get close to or exceed 400km on one charge, which means they can complete a full day’s work before the driver needs to seek out a plug.

And charging options have become significantly more plentiful over the past five years. Level 3 chargers are found on multiple networks through mobile apps, and these fast chargers usually bring an EV up to 80 per cent of its battery’s capacity over a lunch break.

The final major barrier to adoption is up-front price, and that’s falling in some ways, too.

Consider for example that Uber

recently entered an arrangement employee pricing on 2020 Bolt EVs and 20 per cent off associated accessories, including at-home charging equipment. Plus, electric cars save money over the life of the vehicle through lower maintenance costs since they have fewer fluids and components than internal combustion engines.

Add on government purchase incentives extended to corporate fleets in some markets – including the federal government’s iZEV rebate, which lets businesses claim $5,000 off up to 10 EVs per calendar year and to write off 100 percent of additional zero-emission vehicle purchases under $55,000 – and there’s a growing list of reasons to consider going electric.

That Uber and GM partnership came to fruition for good reason: the 2020 Chevrolet Bolt is an

excellent and relatively affordable EV for many general-purpose fleet applications. With a starting MSRP below $45,000, the Bolt qualifies for the iZEV program and for provincial incentives where they exist. This entry-level LT model is $49,243 with freight and PDI and before incentive payouts, with most extra cost going to adding on safety features like blind spot monitoring, automatic emergency braking, intelligent high beams and others.

For 2020, the Bolt benefits from adjusted battery chemistry to gain 34kms on its overall estimated range, which crosses that all-important 400km threshold for a total of 417km. It’s easy to track where that energy is going through the Bolt’s digital displays. While it takes some time to learn to read the data, the gauge cluster simultaneously displays how much power

is used or recovered at any given moment, a real-time range estimate with projected minimums and maximums in case of battery use changes, and a bar rating how efficiently the car is performing based on the driver’s habits and external environmental factors.

While the Bolt has a slightly smaller electric motor than some competitors at 150kW (200hp), it posts a respectable torque rating of 266lbs-ft. Perhaps a more significant factor is that its 55kW charge rate, while accessible at all Level 3 charging stations, falls short of the faster rate other EVs achieve. For example, the Nissan Leaf Plus can charge at 100kW at capable Level 3 fast chargers, nearly double the Bolt’s rate.

The Bolt has been criticized for the quality of its interior, though using lighter materials is understandable in an EV where weight boosts efficiency, and the appearance is well-executed.

The comfort of the seats is another criticism, and this is fairer. Longer torsos may find the headrests push the spine into an unnatural alignment that gets uncomfortable.

The upside is the infotainment is laid out on a 10.2-inch display with Apple CarPlay and Android Auto integration and added features for power output and analysis displays.

The 2020 Chevrolet Bolt LT may not have some of comforts of similarly priced internal combustion engine alternatives, but it covers the important bases and its benefits largely outweigh drawbacks. If the small hatch suits the application, it could be a welcome addition to a fleet line-up. FM/SP

As Tested Price (incl. freight and PDI): Starts at $46,898; tested at $49,243 Engine: 150kW electric drive unit Power: 200hp; 266lbs-ft Transmission: single-speed Rated Fuel Economy (L/100km): 1.9/2.2/2.0 / 16.5/19.5/17.8 Observed Combined Fuel Economy (L/100km): 10.9 (after significant effort) FLEET MANAGEMENT SUPPLYPRO.CA 25

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Fleet Management

By Howard J. Elmer

Ford F-150

Jeep Gladiator

Hauling into the New Year

Pickup Truck roundup for 2021 The year 2021 will offer new electric truck models, though we haven’t seen them yet. Still, Rivian, Fisker, Bollinger, Altis and Tesla say we will. What we have seen are more versions of traditional pickups with an emphasis on off-road capability, across all auto manufacturers. This trend has been growing for years and seems to be more important than ever to the market.

Also new for the coming year: e get a new Ford F-150 and W Super Duty; Ram has just released its TRX – a serious off-road truck; Toyota is increasing the number of TRD-Pro models; and The Nissan Titan, in Canada, is discontinued.

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The 2021 Ford Super Duty was launched in January 2020, just before the COVID-19 shutdown.

The big news is a new 7.3L gas engine which offers best-in-class 430hp and best-in-class 475ft-lbs of torque. The optional 6.7L Power Stroke diesel is also updated and gets a new 10-speed TorqShift automatic transmission (also used with the 7.3L) These are available now. The F450 has a maximum payload of 7,850lbs and a maximum towing capacity of 37,000.

The 2021 Ford F150 is the first major update since the all-aluminum body debuted in 2015. A new hybrid engine, based on the 3.5L EcoBoost, is on offer. It’s 47hp electric motor has been integrated into the 10-speed transmission to create a new powertrain – called

the PowerBoost. They claim this engine will have a range of approx­imately 1,100km on a single tank of gas. Another new, unique feature is called Pro Power Onboard.

This generator (with plug-in outlets in the bed) will push enough power (as much as 7.2KW) to run 28 average refrigerators, says Ford.

Tech upgrades include a new generation of SYNC (4) that includes over-the-air updates. The new centerpiece is a 12-inch screen that is the heart of the infotainment system. An interesting new feature is fold-flat front seats. More than just a full recline – the seat folds back and the bottom lifts up to form a flat bed. This new PowerBoost drivetrain is rated at 12,000lbs max towing. Other powertrains are still available. The maximum pay-

load is 3,270lbs and the towing capacity is 13,200lbs.

Meanwhile, the 2021 Ford Ranger is selling well and remains unchanged for the 2021 model year with a maximum payload of 1,860lbs and maximum towing capacity of 7,500lbs.

The 2021 Ram 1500 is a carry-over year for the 1500. However, the Ram 3L diesel, in its third incarnation, is now available in any version of its 1500-series truck – not the case with all brands. The maximum payload is 2,300lbs and towing capacity is 12,700lbs.

Also new to trucks is the Ram 1500 TRX. This serious off-roader challenges the Ford Raptor. Powered by the 702hp supercharged 6.2L Hemi V8 engine, it delivers a top speed of 190km/h, making it the quickest, most powerful mass-produced half-ton pickup truck in the world.

The TRX differs from the standard Ram 1500 by being eight inches wider and taller to accommodate the new 18-inch wheels supporting the 35-inch Wrangler Territory All-Terrain tires from Goodyear. This combination, paired with an all-new custom suspension, produces even more capability on the street or in the desert. Its payload is 1,310lbs and towing capacity is 8,100lbs.

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Ram 1500

Nissan Titan

This is also a carry-over year for the Ram Truck HD 2500 and 3500 as 2019 was the update. Its interior is still one of the best with a seven-camera surround-view system broadcast on the 12-inch centre stack screen. Its payload is 7,680lbs and the towing capacity is 35,000lbs.

The 2021 Jeep Gladiator is powered by the Pentastar 3.6L V6 and can be ordered with a manual six-speed. For 2021 it is also available with an optional diesel as well as a 1,600lbs payload and 7,650lbs towing capacity.

This is a carryover year for the Toyota Tacoma. For 2021 more features are offered in the Pro editions along with limited annual colours.

There is also a new base SR package that combines entry-level price with all the up-to-date infotainment options. Payload is 1,500lbs and towing capacity is 6,500lbs.

A generational update to the Toyota Tundra should arrive in 2021. The last one occurred in 2014, and Toyota tends to stick to the seven-year update cycle. The big

rumour is that the 5.7L V8 will be dropped in favour of a six-cylinder turbo. Payload is 1,710lbs and the towing capacity is 10,000lbs.

This is a carry-over year for the Chevrolet Silverado HD 2500 &3500 (GMC HD Sierra). A major update came last year along with upgraded 6.6L diesel engine, a new 10-speed transmission and a new gas engine as a base – a 6.6L V8. Payload is 7,374lbs and towing capacity is 35,500lbs.

This is a carryover year, however the GM 2021 Chevrolet Silverado 1500 3.0L diesel with the 10-speed automatic is now fully available. Of note: A new Chevy Tahoe was released in November with an all-new interior – I expect it to move into the pickup, although the question is, when? The payload is 2,250lbs and the maximum towing capacity is 13,400lbs.

The 2021 GMC Sierra is also in a carry-over year. Along with the Tahoe came a new GMC Yukon. Its interior is also

updated, however for the first time ever the Denali version got its own unique, exclusive design.

This should also move into the Sierra Denali pickup. The maximum payload is 2,250lbs and the towing capacity is 13,400lbs.

The mid-size twins are in another carryover year. Sales remain strong for the 2021 Canyon and Colorado.

In particular, the Chevy ZR2 offroad version featuring front- and rear-electronic locking differentials, DSSVTM damper technology, a lifted frame and 31-inch Goodyear Duratrac off-road tires. Payload is 1,620lbs and the 2.8L I-4 diesel’s towing capacity is 7,700lbs.

The 2021 Honda Ridgeline offers some ‘editions’ – new, mild appearance packages while its mechanicals remain the same.

It continues to serve its limited market well with a maximum payload of 1,600lbs and towing capacity of 3,500lbs.

On a sour note, Nissan has announced that 2020 is the last year the Titan pickup will be available in Canada. It continues in the US however no promises have been made past the 2021 model year. The Frontier, on the other hand, remains and is very overdue for a generational update, which should be in 2021 – probably as a 2022 model. FM/SP

The 2021 Ford Ranger is selling well and remains unchanged for the 2021 model year with a maximum payload of 1,860lbs.

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Fleet Management

By Lesley Wimbush

FCA Jeep Wrangler

Subaru Evoltis Subaru has announced a new vehicle platform for 2021 that will accommodate gasoline, hybrid, plug-in hybrid or all electric configurations.

Until now, the Crosstrek plug-in hybrid was Subaru’s only electrified option, and was available only in limited numbers. An all-electric crossover called the Evoltis developed jointly with Toyota is scheduled to arrive in late 2021. Although no performance or range information has been confirmed, it is expected to be approximately the size of a RAV4 and could therefore feature the same BEV technology as the new all-electric RAV4 Prime.

The first plug-in hybrid in the Jeep’s history was named Green SUV of the Year by the Green Car Journal.

The 2021 Jeep Wrangler 4x4 plug-in hybrid has a combined output of 375hp and 470lbs-ft of torque and a range of up to 600kms. Fuel consumption average is estimated to be 4.7L/100km. The Wrangler 4xe can deliver up to 40km of zero emission, electric-only travel. The fully capable, Trail Rated SUV features solid front and rear axles, full-time 4x4, two-speed transfer case and fully articulated suspension

Green roads ahead Sustainable fleet rides for 2021 As the year draws to a close, many automakers are already rolling out their new models for 2021. Fuel economy and environmental impact have become key factors influencing consumer choices, and with this in mind most OEMs now feature some form of electrification in their model lineup – including hybrids, plug-in hybrids and pure battery EV.

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Toyota Prius Toyota helped pioneer hybrid technology with the introduction of the Prius back in 1997. Electrification now runs through most of their portfolio, with several models available only with a hybrid powertrain. For 2021, the Toyota Sienna returns as the only hybridonly AWD minivan on the market.

Fuel consumption improves by a whopping 43 per cent over the outgoing Sienna, with an official rating of 6.5L/100km combined for front-wheel-drive models, and 6.7L for AWD. Each Sienna comes with Toyota Safety Sense 2.0, power sliding doors, heated steering wheel, 10 airbags, and a nine-inch touchscreen with Apple CarPlay and Android Auto.

Hyundai Kona Electric Hyundai has made the ambitious claim of having 10 electrified models in its lineup by the end of 2022, including hybrid and plug-in versions of its most popular mainstream sedans and crossovers. Hyundai also plans to develop an electric-only lineup under the Ioniq sub-brand.

Demand for their Kona Electric subcompact crossover has exceeded demand, and it returns unchanged for 2021. The front-wheel-drive only Kona produces 201hp and travels up to 415km on a single charge.

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Ford Mach-E Ford borrowed the name of their iconic pony car to generate interest in their all-new electric crossover.

Although the Mustang Mach-E shares a few styling cues with its namesake, they’re otherwise unrelated. Avail­able in rear- or all-wheel-drive, the standard Mach-E is capable of 355km

or 325km with AWD, and up to 475km with the extended-range battery. With 332hp and 417lbs-ft of torque, the Mach-E is targeting such premium performance crossovers as the Porsche Macan. A GT, and GT Performance Edition with 459hp and 612lbs-ft of torque, will arrive later.

Nissan Ariya Nissan’s adding an all-electric crossover to its lineup with the new Ariya, scheduled to arrive in 2021.

With up to 480km of travel on a single charge, it beats out the Leaf’s extended range of 363km. Roughly the size of the Rogue, the Ariya has a lower, wide stance, futuristic styling and offers a host of technologies such as torque-splitting all-wheeldrive, driver’s assistance systems, connectivity and a peppy zero-to100km time of under 5.0 seconds.

Mercedes-Benz EQC Mercedes-Benz recently unveiled plans to introduce a lineup of six electric vehicles in 2021, under a new “EQ” badge that should correspond to their existing nomenclature pairing sedans and coupes with crossovers sharing the same trim level. The first

of these will be the EQC, an allelectric version of the GLC compact crossover. With 402hp and 561lbs-ft of torque, the EQC is estimated to have up to 449km of range and will feature Mercedes’s latest in driving assistance technology.

Mitsubishi Outlander Back in 2014, Mitsubishi’s Outlander PHEV was the world’s first plug-in hybrid SUV. It returns in 2021 with a new twist: the addition of two-way or bi-directional charging. The 13.8kWh battery will deliver the same 54km all-electric range as before, but it can now store or discharge energy to and from the grid – essentially becoming a “battery on wheels”. The Outlander PHEV is fully charged in seven hours on a home plug, or 25 minutes on a level 3 fast charger.

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THE LAW—BY PAUL EMANUELLI

COVID-19 PROCUREMENT PERILS SOLE SOURCING DURING EMERGENCIES Given the ongoing pandemic, many are asking whether Canadian health sector institutions can freely engage in emergency sole-sourcing or limit the purchase of pandemic-related supplies to local Canadian suppliers. The short answer is no.

COVID PURCHASING UNDER THE SPOTLIGHT Notwithstanding the ongoing global pandemic, and the assertions of many elected officials, purchasing institutions are not at liberty to use the COVID-19 crisis as cover for widescale sole sourcing and local preference purchasing. As the pandemic crisis has dragged on, the mounting newsreel scandals and public audit reports have already proven beyond a reasonable doubt that purchasing operations are under a spotlight and that using COVID-19 as cover for shady procurement practices will come with future reputational, audit and potentially legal consequences.

TURNING OFF THE SOLE-SOURCING TAP When it comes sole sourcing, while public institutions can directly award contracts in situations of extreme unforeseen urgency, especially where the contract is required for health and safety reasons, that emergency exception does not apply to a self-created crisis. Even if the urgency exception could have been relied on in the early stages of the COVID-19 pandemic to bypass open procurement rules, public institutions are in an increasingly precarious position in trying to justify ongoing exceptions to their open procurement obligations beyond the original crisis period.

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Engaging in temporary solesourcing from a local supplier for the short-term stockpiling of supplies required to deal with the pandemic may have been justified as an emergency measure in March, but using the ongoing COVID-19 crisis as an opportunity to solesource contract awards for general non-pandemic medical supplies months later, especially if they result in long-term contracts, is a self-evident overreach that contravenes the open procurement rules.

LOCAL PREFERENCE AND THE BURDEN OF PROOF With respect to applying preferences for local Canadian suppliers, imposing unnecessary restrictions to competition is a breach of the procurement rules, particularly where those restrictions are not directly connected to the contract needs. When restrictive requirements are applied, the procurement rules require the public institution to prove that the restriction is a “legitimate operational requirement.”

For example, case law shows that strict recent experience evaluation criteria were valid for airplane de-icing services and for handling related de-icing chemicals due to health and safety concerns and regulatory requirements. That case also upheld the narrowly defined specifications for the size of the de-icing equipment since that equipment had to be compatible with the size of airplanes.

However, defending restrictive specifications requires evidence to prove the operational need.

For example, while it may appear self-evident that aluminium framed golf carts are lighter and therefore create less wear and tear on a golf course than steel-framed

golf carts, aluminum golf cart specifications were struck down in a legal challenge when the purchasing institution was unable to provide evidence to prove that the weight difference in the golf carts had an actual material impact on golf course conditions. From a practical perspective, this burden of proof significantly restricts the ability to rely defensibly on restrictive requirements in public purchasing.

In applying these principles to future pandemic planning, while health sector institutions may be justified in seeking domestic suppliers or distributors to source and stockpile supplies to ensure ready access during a pandemic, they would first need to engage in a proactive planning process to: (i) establish their inventory of pandemic-related supplies; and (ii) document their supply chain analysis to show that using Canadian suppliers for those emergency goods would enhance the reliability of supply when compared to sourcing those same supplies globally.

When engaging in the above-noted due diligence exercise, Canadian health sector institutions should ensure that their future arrangements are proportionate to their anticipated future pandemic needs. Stated otherwise, future pandemic planning should not be used as cover for engaging in non-compliant procurement for the acquisition of generally required goods and services, or for over purchasing supplies beyond the reasonable needs of a pandemic. To better ensure compliance with the procurement rules, public institutions that are serious about securing reliable domestic supply chains to deal

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

“Future pandemic planning should not be used as cover for engaging in non-compliant procurement for the acquisition of generally required goods and services.”

with pandemic risks should be seeking situation-specific advice to better ensure the defensibility of their purchasing decisions. SP THIS ARTICLE IS BASED ON RESEARCH COMMISSIONED BY HEALTHPRO PROCUREMENT SERVICES

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