Supply Professional December 2018

DECEMBER 2018

The King of Cool

Doug Harrison on VersaCold, supply chain & lifelong learning Optimizing the RFP process PM 43096012

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USMCA & the new normal Cannabis & business travel Executive rides for 2019

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VOL.60 No.6 DECEMBER 2018 SUPPLYPRO.CA COVERING CANADA’S SUPPLY CHAIN

@SupplyProMag facebook.com/supplyprofessional linkedin.com/company/supplyprofessional

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COVER: JOHN PACKMAN

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FEATURES 8 THE NEW NORMAL The impact of the USMCA deal on Canadian businesses.

11 CIFFA Highlights from the 70th-anniversary CIFFA conference.

36 BEST IN FLEET Highlights from ARI’s annual conference.

40 KEEPING IT COLD Doug Harrison on his career in supply chain.

42 SKY HIGH What do Canada’s new cannabis laws mean for business travellers?

28 TRUCK KING CHALLENGE Who is crowned king for 2019.

ALSO INSIDE 4 UP FRONT 5 BUSINESS FRONT 7 FINANCE CORNER 45 IN THE FIELD 46 THE LAW

34 SNEAKY AND SERENE The 2019 Toyota Camry.

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Fleet Managment

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UP FRONT

NEW YEAR, NEW BEGINNINGS Very few factors in life are as constant as change, and that’s as true of magazines as any other area. For those of you who visit our website, or follow us on Twitter, Facebook or LinkedIn, you have likely noticed some big changes. The first and most obvious change is to the name: as of this issue, PurchasingB2B has been renamed and re-launched as Supply Professional.

This isn’t the first time, as the magazine has gone through a handful of name changes in its 60 years of publishing. When it began in 1958, we were known as Modern Purchasing. We changed to PurchasingB2B at the beginning of the last millennium.

Each change reflects a change in the times, as well as in the focus and priorities for the magazine. For this most recent iteration as Supply Professional, we landed on the name after a good amount of soul searching. We considered options, discussed them internally and consulted our editorial advisory board. We also commissioned and completed a full redesign through an agency specializing in this type of redesign.

We intend the new name to reflect the direction we plan for the magazine—covering all aspects of the supply chain—as well as our desire to focus on the professionals who work in the field in Canada. Purchasing and procurement will be a big part of that, as it always has been. But we’re expanding our scope. We’ll also work to cover the changing nature of that supply chain, as AI, Industry 4.0, robotics and other developments change the nature of the field.

Each issue will feature one of you on the cover. This, we hope, allows you to share your expertise with one another, learn from other industry professionals and stay abreast of trends in the field.

But while much has changed, some things will stay the same. Supply Professional will still strive, as always, to provide the insights, tips and best practices that help you to do your jobs as best you can.

We’re keeping the same quality content, the same national circulation, but changed a few things to ensure we continue to capture the needs of our readers, industry partners, advertisers and other stakeholders.

On page 13, for example, under our “Thought Leadership” banner, you’ll find a roundtable discussion of the RFP process.

Our Fleet Management section begins on page 21, providing you with comprehensive coverage of the fleet management world.

For Supply Professional’s inaugural profile on page 40, we spoke with (now former) VersaCold president and CEO and SCMA fellow award winner for 2018 Doug Harrison, who shares insights into supply chain, professional development and other areas.

And we still rely on you, our readers and partners, to help us in providing you with the best possible content. As always, please let me know what you think about the issue at my (new!) email address: michael@supplypro.ca Happy reading!

PUBLISHER/ADVERTISING SALES DOROTHY JAKOVINA 416-441-2085 ext 111, dorothy@supplypro.ca EDITOR MICHAEL POWER 416-441-2085 ext 110, michael@supplypro.ca DESIGN Art Direction BARB BURROWS Design Consultation BLVD AGENCY CUSTOMER SERVICE/PRODUCTION LAURA MOFFATT 416-441-2085, ext 104, lmoffatt@iqbusinessmedia.com 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 Director, Procurement— Carbon, Samuel, Son & Co. iQ BUSINESS MEDIA INC. Vice President STEVE WILSON 416-441-2085 x105 swilson@iqbusinessmedia.com President ALEX PAPANOU

PUBLICATION MAIL AGREEMENT NO. 43096012 ISSN 1497-1569 (print); 1929-6479 (digital) CIRCULATION Mail: 302-101 Duncan Mill Road, Toronto, Ontario M3B 1Z3 SUBSCRIPTION RATES Published six times per year Canada: 1 Year $ 99.95 CDN Outside Canada: 1 Year $ 172.95 USD Opinions expressed in this magazine are not necessarily those of the editor or the publisher. No liability is assumed for errors or omissions. All advertising is subject to the publisher’s approval. Such approval does not imply any endorsement of the products or services advertised.

Publisher reserves the right to refuse advertising that does not meet the standards of the publication.

No part of the editorial content of this publication may be reprinted without the publisher’s written permission. © 2018 iQ Business Media Inc. All rights reserved. Printed in Canada.

MICHAEL POWER, Editor 4 DECEMBER 2018

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BUSINESS FRONT—BY MICHAEL HLINKA

MAKE NORTH AMERICA GREAT AGAIN! SOLVING MIDDLE-CLASS DISCONTENT I heard something really interesting a few weeks ago. Someone noted that the only people who can afford to have a large family these days (let’s define that as three children or more) are the very, very poor and the very, very wealthy. That hit me like a ton of bricks! I’m the father of a three-year old son and because of the relatively advanced ages of both my wife and me, we’re holding at one. If we were younger, we would certainly have another. But at that point we would call it a day, mostly for financial reasons.

This wasn’t the case when I was growing up in the 1960s. I lived in a very middle-class neighbourhood and the predominant family model was that the father worked and the mother stayed at home to raise the children. Most families on our street had at least two children, and numbers like three to five were reasonably ordinary. For a variety of reasons, North American economic society was organized to disproportionately benefit a broad group understood as the middle class—and that just isn’t the case now.

I think it explains to a great extent the election and even continued popularity of President Donald Trump. When he says “make America great again” what his critics hear is a clarion call to return to a world of racial segregation, a world where women were consciously discriminated against in the workplace, a world where gay men and women were forced to remain in the closet out of fear.

But I don’t think that this is what most of his supporters hear. I think that what most Trump voters want to return to is an America where everyone broadly enjoys economic progress, not just the select few on top.

Of course that begs the question, how do you make this happen? I’ve got a couple of ideas

that I’d like to run by you. And I’d like you to evaluate whether these measures would, by and large, benefit you and your friends and neighbours, because I suspect that the readers of this magazine truly are the backbone of any successful country.

By instinct, I’m a free trader.

Yet at the same time, I think that important revenues could be raised by intelligent and selective tariffs on all imported goods. There would be a three-tier scale. If the opposite country were open to importing Canadian goods and services with minimal penalties, the tariff would be a nominal five per cent. It would be fair to expect them to reciprocate with similar tariffs. It would provide domestic producers in both countries with a slight competitive advantage, but not one large enough to be decisive.

Countries that didn’t treat us perfectly fairly would be subject to 15 per cent tariffs and if a country was closed to us, it strikes me that 25 per cent tariffs would be fair.

The current income tax system is far too kind to passive income while it penalizes earned income—which makes absolutely no sense. If you’re a factory worker making $50,000 annually who picks up another $10,000 in overtime pay, you’re taxed as if you made $60,000. On the other hand, someone who inherited money and makes $60,000 in passive capital gains is taxed as if they made $30,000. This is ridiculous. A buck of income should be taxed as a buck of income and that’s that.

The income tax system should be simplified and streamlined.

Make the basic annual exemption $50,000 which means that if you make $50,000 or less, not only do you not pay any income tax, there’s no need to file a return. But then for every dollar you make above that, the federal and provincial

government take one-third, and you get two-thirds. This means that if you made $100,000, you’d take home $83,500 of it (or 83.5 per cent) while if you made $1,000,000, you’d take home $686,500 (or 68.7 per cent). Under this regime, no one would pay close to half of his or her income in tax and the working poor would be given an enormous break. Imagine the incentive to put in more hours if you knew that you would keep 100 per cent of it!

Finally, only a few products should be subject to sales taxes, and it should be limited to those whose consumption we want to discourage. Sin taxes on products like tobacco, alcohol and marijuana make sense and have broad public support. Taxes on gasoline raise revenue while encouraging more efficient use. It’s hard to be against that. But otherwise, stop stealing from me.

It strikes me that on both sides of the 49th parallel there is a great deal of discontent among the people who go to work early and come home late and play by the rules.

This isn’t right. It’s time to make North America great again!

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

“ Most Trump voters want to return to an America where everyone enjoys economic progress, not just the select few on top.”

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FINANCE CORNER—BY MATTHEW HARDIN

QUEST FOR ALIGNMENT PROCUREMENT AND FINANCE SEEK TO COORDINATE THEIR VALUES If you’ve ever driven down the road with wheels that aren’t aligned and taken your hand off the wheel for a moment, you’ll notice the vehicle drifts to one side. Travel too long without realigning, and you could end up with a far costlier problem. In the same way a vehicle’s alignment problem will worsen over time if not addressed, procurement must sync regularly with members of the finance team to ensure alignment on long-term vision and short-term goals. While the finance department may serve different functions at every company, their core is usually to manage money, remove risk and grow the company. The good news is those core functions are exactly what procurement professionals all around the world are focused on. How can procurement improve interactions with finance, and what steps can you take to settle on a value alignment?

ALIGN AND ELIMINATE I’ve been fortunate to work for many years building new procurement departments at rapidly growing companies. In each case, finance were the ones who recognized the need for the procurement function and hired me. The relationship is seen as important from different perspectives. If you are starting in a new role or seeking to transform the procurement position at your current company, step one is to align on purpose and eliminate misunderstandings. It’s never a bad time to sit down with a CFO, controller, AP leadership and other invested parties in finance to state clearly your purpose as a procurement practitioner. One of my early mistakes was being too fluid and accepting preconceived notions of what procurement was supposed to be based on someone’s past experience. You know what’s best for the company from pro-

curement’s perspective—drive that focuses as early as possible to set expectations.

EMPATHY IN PRACTICE Empathy is a misunderstood and underrepresented quality in both finance and procurement, which are often seen as strict gatekeepers.

Do you understand what your finance team cares about? Could you clearly communicate your finance team’s goals and vision to a stakeholder? Could they do the same for you? If no, your communication may be lacking. Empathy in practice means: Learning finance’s language. Take some time to learn key phrases and terms related to financial work.

Hard to fit in if you don’t speak the same language.

Communicate constantly, and faceto-face as often as possible. This should be communication with a purpose, if you take, expect to give back.

Prove how your work impacts and mirrors finance’s own work in progress. Finance cares about profit, procurement should be considered a profit centre, and will be, if you can report and redirect money saved.

MARKET YOURSELF TO FINANCE A study published by Redshift on behalf of WaxDigital in July 2015 found that 66 per cent of the 200 finance executives surveyed found procurement to be a hindrance to regular business processes. This is alarming, particularly because many procurement departments currently report through finance.

I believe there is a simple reason for this: lack of education. If you asked most stakeholders what the primary function of procurement is they would respond with “cost savings” and leave it at that. While this is true, there is so much more

that procurement can offer to finance in terms of risk mitigation, collaborative technology use (think source to pay, there is a clear transition there from procurement to AP), stakeholder management and process improvement.

Preach your value! Let finance in on your KPIs and tie your goals to theirs. If their goals aren’t linked directly to broader corporate goals—as yours should be—don’t be afraid to speak up. Take the initiative to educate upper finance management on your role. If you avoid this discussion you’ll find that the direction you’re headed may not be aligned with finance’s path. That same study found that 46 per cent of procurement professionals surveyed claimed to have a good relationship with finance, while only 22 per cent of finance said the same regarding procurement. That demands a shift in procurement’s efforts to focus more time on marketing their function and educating finance.

Matthew Hardin is indirect procurement manager for Flexport

“ It’s never a bad time to sit down with a CFO, controller, AP leadership and other invested parties in finance to state clearly your purpose as a procurement practitioner.”

BE PATIENT AND CREATIVE The reality of the modern procurement function is that it’s deeply varied across industries and companies, a constantly shifting role in terms of priorities and directives.

Procurement’s demands in terms of stakeholder management can be steep, but finance should be at the very core of the groups you seek to collaborate with. The value in aligning with finance is their broad, high-level understanding of the business and the impact that can have on your savings results. If finance is the brain of a company, you can be the hands carrying out business critical tasks. Alignment takes time, but the result is a seamless front of finance and procurement growing a business’s bottom line, improving process and policy and protecting against risk for a healthy and successful business.

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BY SYDNEY MARTIN

THE TRADE DEAL’S IMPACT DEPENDS ON THE INDUSTRY AND ROLE WITHIN TRADE When the Office of the United States Trade Representative announced in the late hours of September 30 that the U.S., Mexico and Canada had reached a handshake deal on a new free trade agreement (to replace the North American Free Trade Agreement, NAFTA) Canadians across a multitude of industries and sectors breathed a collective sigh of relief.

The uncertainty that overshadowed the trade environment and the overall climate of Canadian-American relations for 13 months had been replaced with cautious optimism that things would go back to normal. What exactly “normal” means depends greatly on one’s industry and role within the trade process. The United States-Mexico-Canada Agreement, or USMCA, the new moniker for free trade in North America, will create new provisions and processes that will affect supply chains, the individuals who manage them and the businesses they serve.

Before diving into the details, it’s worthwhile noting that the current text of the 8 DECEMBER 2018

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agreement is not final and that modifications to the text are likely, though there’s a low probability of major changes to key provisions in the agreement. However, Canadian media reports tensions between Canada and the US around text modifications related to wine sales and dairy access.

It’s also important to note that the USMCA is not a sealed deal. It requires ratification by all three parties and will undergo substantial debate and scrutiny in the respective legislative bodies.

As such, the agreement is unlikely to come into effect before the later part of 2019 or possibly in 2020.

PROCUREMENT One of the key gains sought by Ottawa over the course of the NAFTA negotiations was greater access to government procurement contracts.

The Canadian negotiating team had proposed making access to state-level contracts accessible to Canadian companies. The U.S., however, at one point, suggested a dollar-for-dollar

REGULATORY HARMONIZATION One of the key objectives for industry groups, particularly those that deal with products that are governed by stringent regulatory policies, was to reduce the level of red tape required to make goods accessible in another country.

In fact, the Canada-United States Regulatory Cooperation Council or RCC, an organization made up of government representatives and business interests from both sides of the border, has been actively studying mechanisms to reduce regulatory disparities since 2011.

To this end, the USMCA’s chapter on regulatory cooperation puts forward a series of policies and rules aimed at streamlining the regulatory approval process and reducing regulatory burden. This includes a requirement for each country to produce annual lists of proposed regulatory policies, but also an obligation to create an environment that reduces burden and complexity, which will serve as a boon to smaller businesses that typically have neither the capacity nor the wherewithal to navigate the complexities of the regulatory environment.

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ILLUSTRATION BY ANGELICA YIACOUPIS

USMCA AND CANADA’S SUPPLY CHAINS

procurement mechanism that would have put Canadian firms at a disadvantage relative to the provisions within NAFTA. In the end, the two countries reached a compromise whereby no dollar-for-dollar mechanism was set out, but neither was a procurement arrangement between Canada and the U.S. The procurement chapter within the USMCA was limited to trade between the U.S. and Mexico. The WTO Agreement on Government Procurement governs the procurement rules between the U.S. and Canada. This could make the procurement process more complicated for companies that do business across all of North America’s borders as it is unclear how the use of subcontractors in Mexico, for example, might impact the procurement review process. There’s also no guarantee the US won’t impose some form of Buy America provisions in the future.

Sydney Martin is director of Livingston International Inc.

Canadian businesses in the chemicals, pharmaceutical and cosmetics industries will be the beneficiaries of regulatory harmonization in the long term, as they’ll be able to bring product to market in a far simpler and more seamless manner.

ILLUSTRATION BY ANGELICA YIACOUPIS

AUTOMOTIVE RULES OF ORIGIN No issue permeated the NAFTA negotiations as did that of automotive rules of origin. These are the rules that govern the percentage of automobile content that must originate from within North America. The U.S. initially proposed to increase the regional value content from 62.5 per cent to 85 per cent, 50 per cent of which would come from within the U.S. That was deemed a non-starter by

The USMCA’s chapter on regulatory cooperation puts forward a series of policies and rules aimed at streamlining the regulatory approval process and reducing regulatory burden Canada and Mexico, but also by industry representatives who noted it would force costly reconfigurations of highly integrated continental supply chains.

In the end the regional value content was settled at 75 per cent, which was far more agreeable to all involved. However, there are a number of additional rules governing the North American content requirements for specific materials used in automotive production, including the establishment of three content classes, each with its own requirements. In addition, quotas were placed on the volume of Canadian and Mexican finished vehicles and auto parts that can be imported into the U.S.; however, those quotas are far above the current trade volumes. A USMCA qualified vehicle

must contain 70 per cent North American originating steel and aluminum content respectively. Lastly, the USMCA requires that 40 per cent of each vehicle must be produced using an average wage of $16 an hour. As a result, logistics managers in Canada’s auto sector could see volume increases as manufacturers look to shift more production to Canada where wages are higher.

DE MINIMIS Retailers in Canada will, to some extent, be affected by the changing de minims (Latin for “about minimal things”) landscape. The threshold by which goods can enter Canada without duties was increased from $20 to $150.

However, the new de minimis level applies only to express shipments (not those through Canada Post) and taxes are still applied on goods valued above $40. This provides American e-commerce retailers with greater access to the Canadian market and, in turn, greater pressure on any fulfillment centres they have located in Canada.

CERTIFICATION Under NAFTA, businesses were required to provide a NAFTA certificate that provided the information required to certify that the product being traded met the requirements for preferential duty rates. Under the USMCA, that certification is less formal in nature, allowing importers to use transactional documents such as invoices to certify goods. However, the degree to which this will simplify the trade process is questionable. Other trade agreements without a specified certificate have caused the arbitrary development of a multitude of certification formats deemed acceptable by one party but not another. The USMCA will maintain the traditional risks for noncompliance—which can result in significant penalties and retroactive payments—and this could encourage the unfortunate development of several certification formats.

In all, the USMCA offers some small gains with respect to market access, predominantly for the U.S., as well as improvements in streamlining how goods are moved across borders. The degree to which this will impact the logistics industry remains to be seen. With any luck, the USMCA will help increase the total volume of trade; the only question is, in which direction? SP

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BY MICHAEL POWER

Panelists for the opening plenary panel, from left: Arnaud Lambert, Champ Cargosystems; Deeraj Kohli, Unisys; Nicole Verkindt, OMX; Sumit Srivastava, eBay Canada; and Yuree Hong, S/He Blockchainers.

PHOTO: DOROTHY JAKOVINA

DIGITAL FUTURE TECHNOLOGY’S ROLE IN SUPPLY CHAIN TOOK CENTRE STAGE AT CIFFA CONFERENCE The evolving role of technology in the global supply chain was a central theme during the 70thanniversary Canadian Freight Forwarders Association (CIFFA) conference, held in October in Toronto. Technology trends such as drones, blockchain, artificial intelligence and the digitized supply chain took centre stage during the two-day event, held in partnership with The International Air Cargo Association’s (TIACA) Air Cargo Forum and Exhibition 2018.

The notion of digital transformation within supply chains and transportation ran through the conference, with the opening plenary discussion investigating the progress made in the cargo world towards embracing digital change and innovation.

But that transformation is not purely about technology, said panellist Arnaud Lambert, CEO of Champ Cargosystems. The attitude people adopt towards those new technologies must also change for a transformation to be successful. He recommended hiring young talent

to focus exclusively on enabling change. “That would be for me the best investment for your company, because you have a traditional business that needs to evolve and you also need to evolve your customer with it,” Arnaud said.

Fellow panellist Dheeraj Kohli, VP and global head of Unisys, noted that digital transformation involves removing the friction that can exist between people and processes within organizations.

Technology is an enabler for the removal of that friction. Kohli recommended breaking down the process of digital transformation into smaller pieces—anywhere there’s friction, something isn’t working optimally, he told the audience. First, look at what’s behind the desire to transform.

“If you use technology, wonderful.

And if it’s disruptive technology like blockchain, all the better,” he said. “That’s how I define a successful transformation— anything that enables things to become better.”

Nicole Verkindt, founder and CEO of technology company OMX, noted that while many stress the importance of adopting new technology, organizations must look where technology can add value rather than merely seeking what’s new. “Where are the areas where you can determine what the value is that you’re delivering to your customer and where can you get a leg up by implementing

“That’s how I define a successful transformation— anything that enables things to become better.”

technology?” she said. “There’s a way to look at the areas of your business that can be automated and where the value is and then look at those areas, as opposed to just adopting technologies because you see that they’re the new trendy thing.”

The panel also discussed whether the speed of digital transformation was a threat to security. Lambert noted that not only was speed a challenge, but so too was the quantity of information produced—what he called “the tsunami of data.” The process’s speed was noteworthy in air cargo, given the different transport modes involved, he said. At the same time, e-commerce is setting a different pace for air cargo that is set to accelerate.

Security is key, everyone wants transparency and organizations must ensure they have the right data and use it correctly, said Arnaud. “And still the weakest link there remains the human,” he said.

“You can have all the machines and technology on board, but still security breaches are, 100 per cent, pointing to a human. You can have the best investment in the world on the security side, but humans are still key.”

The panel also debated the merits of being an early technology adopter. Verkindt noted that blockchain technology replaces a ledger system—for example, for supplier performance and tracking goods—that organizations don’t want edited. “Those would be areas of the business where I’d look at blockchain—areas where you’re really trying to track information,” she said. “Supplier performance could be one area, but I think it’s going to take some more time. Ripping the Band Aid off of blockchain would be changing the way you’re tracking your activities.”

The first step in early adoption

involves learning, Lambert stressed. Organizations can try to adopt and, when a company finds the right technology for a specific purpose, can then use that technology to its advantage. “You need to try it,” he advised. “You can read all the books about how to swim, but unless you’ve been to a swimming pool you don’t know you’re ability.”

The choice to become an early adopter is ultimately a company’s choice, said panellist Yuree Hong, founder of S/He Blockchainers Asia. Hong’s question for the audience was: do you want to be an early adopter or engage with technology once it’s in the market?

Digitization will happen, Hong said, and the question is simply when and how. “It’s your choice if you want to be an early adopter,” she said.

SUPPLY CHAIN RISK Another conference session dealt with risk in the supply chain.

One of those risks involves protectionism, noted Jeff Fraser of Livingstone. As there are protectionist actions from different countries on various products, he advised making adjustments to products to either change tariff classifications or country of origin.

“However, we have to remember that has potential downstream ramifications on qualification for trade agreements and re-export,” Fraser told the audience.

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As well, the auditor general released a “damning” report last year on compliance in Canada, Fraser said. The report cites several areas needing rectification, including invoice information.

Overall, 74 per cent of descriptions on an invoice coming into the country do not meet the proper classification, Fraser said. That creates a second issue, which is an over 20-per cent error rate in classification. According to the report, the penalty structure in Canada is too lenient to drive compliance, and recommended increasing those penalties. As well, refund options are too importer friendly and the report advised against lowering duty rates for non-preferential trade agreements.

“These are some things that are driving customs behaviour as far as audits and changes to the process go,” he said.

The devil is in the details, Fraser noted. For example, the U.S. introduced tariffs on steel and aluminum, which grabbed headlines, but as a result Canada has seen surtaxes on items like

jam, pizza, and ketchup among others. “Retaliation is never completely equal,” he said. “It’s always different for each country.”

To help attendees gauge their risk and resilience levels, fellow speaker Kim Campbell, founder of MK Marin Trade Services, discussed transformational trends in supply chain. She touched on the secure corridor concept, an unmanned primary inspection line that CBSA began piloting last summer. The pilot involves having trusted trader carriers with RFID tags on their trucks that are used when the carrier approaches the booth at the border. Cameras take pictures of the driver’s face, the vehicle’s license plate and other details around the truck. “The officers will be monitoring this from a remote location,” Campbell said. “There will be voice communication, so if they want to ask a driver, they can do that from the booth.” The end goal was that potentially trucks would not have to stop at all.

Fellow speaker Gavin Magrath, barrister and solicitor with

Magrath International Legal Counsel, told the audience that dealing with change is something businesses have always done.

Facing technological change is not that different than in other areas of commerce, Magrath said.

“It just presents a specific lens for looking at change,” he said.

Regarding trade, a big change that has received little attention involves CETA—the CanadaEurope trade agreement. Through CETA, Canada has gone from having about 50 per cent of goods traded with Europe covered by tariffs to about two per cent.

“That really presents some really big opportunities for Canada and European trade and I don’t think that those have really been recognized yet,” Magrath said.

Martin Adabi, counsel, transportation, with Borden Ladner Gervais LLP, discussed the CTTPP trade deal—the new free trade deal with several Asia Pacific and South American countries. The deal, Adabi said, was a “tremendous opportunity” for Canada due to the size of the market covered. But the

strengths and weaknesses of the deal depend on the company, he added. In discussing threats, Adabi highlighted uncertainty regarding law, currency and the fact that things can simply take longer in Latin America. Technology there lags compared to Canada, and political uncertainty can mean policy changes.

Overall, the conference provided attendees with the information they’ll need to prepare them for the opportunities that technological transformation is providing the supply chain. SP

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THE OPTIMIZED RFP THE ‘TYPICAL’ REQUEST FOR PROPOSAL PROCESS AND HOW IT CAN BE ADVANCED.

BY MICHAEL POWER All Photos: Joel Robertson Photography

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Bonfire, a leading strategic sourcing and contract management platform, partnered with Supply Professional on a thought leadership roundtable on November 1. From simple bids to complex RFx events, Bonfire provides an easy-to-use yet powerful solution that empowers procurement and stakeholders to make better purchasing decisions. At Bonfire, we are passionate about procurement and the role of data in the way sourcing is managed.

That’s why we created the State of the RFP report—a window into how billions of dollars of purchasing decisions are made. It’s the most comprehensive RFP benchmarking study ever conducted, providing insight into the emerging trends of RFPs as they’re leveraged to make complex spending decisions. This roundtable, with Public and Private sector perspectives, was based on the findings of the State of the RFP report. Read the full report at www.gobonfire.com/2018-state-of-rfp.

Linda McDougall Indirect Purchasing Supervisor 3M

Corry Flatt CEO Bonfire

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Lori Letourneau Director CEA FRANCOachat

Brenda Lanteigne Director, Purchasing and Materials Management Grand River Hospital

S

Supply Professional recently convened a roundtable to discuss the results of the State of the RFP 2018 benchmarking report, produced by procurement software company Bonfire. The report leverages the company’s insight into purchasing decisions through anonymous first-party data from Bonfire’s platform, looking at benchmarks in the RFP process in 2017, then compared them with data sets from the previous two years.

Jennifer Smith Purchasing Manager Bruce County

Laura Case Purchasing/Finance Assistant Conestoga College

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The roundtable brought together Jennifer Smith, Purchasing Manager at Bruce County; Linda McDougall, Indirect Purchasing Supervisor at 3M; Laura Case, Purchasing/Finance Assistant with Conestoga College; Brenda Lanteigne, Director, Purchasing and Materials Management at Grand River Hospital; Lori Letourneau, Director at CEA FRANCOachat; and Corry Flatt, CEO of Bonfire. The group met at Bonfire’s headquarters in Kitchener, Ontario.

The RFP process

The discussion began with the typical RFP process. Smith said that for her, a client group usually approaches purchasing to discuss an RFP document. The sooner the client reaches out the better, with many clients looking to post the document as soon as possible. But it’s beneficial to have ample time to consider the process. “We like to work with them upfront and go through their document and make sure they have all the correct specifications,” she said.

McDougall also said clients should engage early, noting a preferred standard timeframe of at least three months. Clients are encouraged to focus on specifications—if those specs aren’t detailed enough, it’s hard to know whether you’re getting the right provider. For Lanteigne, a purchasing team member usually initiates the RFP kick-off meeting. The evaluation groups are multidisciplinary, she said, including physicians, clinicians and VPs. The group provides the specifications, purchasing writes the RFPs and there are standard RFP templates for goods, services and capital equipment. “We tend to kick that process off and get everybody at the table, and the development of that RFP is often where the most time gets spent,” Lanteigne said.

But there are challenges, participants noted.

Legislation such as Ontario’s Broader Public Sector Accountability Act must be considered, Letourneau said. She likened the process to bowling, telling clients that it’s as if the bumpers are raised to keep the ball out of the gutter. “I draw the analogy of, ‘I don’t want you to look at the template—I want you to give me your specifications and we will raise the bumpers and allow you to bowl as quickly as possible, applying in front of your specifications the appropriate template,’” Letourneau said.

Case said that, to streamline the process, her department recently produced a competitive tendering request form for clients that includes scope, currency, evaluation and so on.

The goal of the form is to reduce preliminary process time. “Then we can get our document out because we have all this backup and everything’s ready to go,” she said. “We’ve just launched that, but it’s reducing a lot of the challenges and back and forth.”

Despite challenges and an often-maligned reputation, the study’s main point is that RFPs

work, Flatt said. The process usually yields a supplier who scores high on criteria, and companies save compared to the average offered price. That’s impressive, given the challenges and massive amounts of data, he noted. “The fact that RFPs take a long time and are organizationally difficult, is sometimes used as an excuse—but it’s worth it,” he said, adding that automation is key as it reduces friction while retaining the outcome.

McDougall noted that many of the templates and requirements her organization used were similar to those in a public tender. The process involves evaluation criteria that are weighed based on what’s most important to stakeholders.

The decision doesn’t always go to the highest bidder—a characteristic reflected in the State of the RFP 2018 report. “We pick the supplier that’s the best fit for our needs, and that may not always be the lowest cost provider,” she said.

McDougall also noted that people think it’s a lengthy process. Some don’t want to take the time to write specifications, even with templates and other tools. That’s especially true if a current supplier is doing the job at a good price, she said.

Bruce County has changed its policy so departments don’t necessarily have to go to council for approval not to award to the lowest bidder, said Smith. “We’ve updated our purchasing policy, made it a bit more modern so that they don’t have to be lowest price and can

We have a very open discussion where there’s not a lot of bias because it’s typically purchasing and the business group at the table.

Linda McDougall

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We analyzed how those RFPs were structured initially, how the different participant groups interacted with those RFP.

CorryFlatt

be your highest ranked because that’s who your evaluators have picked,” Smith said.

The RFP is moving out of the low-bid tender model towards a more flexible, evaluated or negotiated model, Letourneau said. But suppliers must know about that shift since they sometimes believe that the lowest bid wins, that’s not always the case with a lower evaluation score.

While organizations want savings, that can’t accompany inferior suppliers, Flatt said. A balanced scorecard that doesn’t rely on price alone is necessary. “There are procurement vehicles that are just about price, for commodities and those kinds of things, so the weapon has to fit the fight,” he said.

Flatt described a university professor who was enamoured of a specific microscope. Such a product should be bought through the procurement process by asking what’s needed and what the specifications are, Flatt said, and the professor eventually understood that there are other players in the market. When the institution looked at similar vendors, it found a better fit.

“Having been forced to go through the process revealed a bunch of other options that they weren’t aware of,” he said.

Survey structure

Flatt also outlined the survey itself, which Bonfire updates annually. Since the company empowers agencies and companies to run RFPs online, bonfire has an “unprecedented view” of each stage of the process and the final decision, he said. The survey covers about $4.5 billion in spend, 25,000 vendors, and millions of pages of evaluated supplier data. The survey looks at pure RFPs, Flatt said, defined as decisions 16 DECEMBER 2018

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with qualitative and quantitative judgements.

“We analyzed how those RFPs were structured initially, how the different participant groups interacted with those RFP—whether internal evaluators or suppliers—then we look at, what were the outcomes? What was produced? What were the scores? What were cost savings?” he said. “Let’s look at what these things look like on an average basis so practitioners can learn and benchmark themselves.”

Much of the data in the survey aligned with her organization’s own information, said Smith, noting for example that evaluation work sometimes runs into weekends. “I’m not surprised by that, because when you talk to people they say, ‘I’ve got some time set out tonight, I’m going to work on that,” she said.

For her part, Lanteigne was surprised by how many people continue to submit late—during the final hours or even hour—before a large project. A bid arriving even seconds after the deadline gets disqualified, she said. “When everybody else has it in the day before, why are you doing that? Why are you starting your upload?” she said.

An advantage of online RFPs is that every action is logged, Flatt noted. If the user sits on the page for three seconds, for example, that action is recorded. “The audit trail is perfect and pristine,” he said.

Even within the private sector, McDougall noted that deadlines are respected. Automation allows an organization to see who opens a document versus who submits. Sometimes, when a bid closes, it’s surprising that a vendor thought likely to submit did not. “We thought for sure they’d be in the mix and they just chose not to submit,” she said. “Did they not get their request form or confirm? If we had an automated system we’d be able to see that.”

Evaluations

The group discussed RFP evaluations, including public- and private-sector differences. In the public sector, several people agreed, team members work on their evaluations separately then meet as a group to discuss the results and reach a consensus. Procurement organizations want the initial judgements to be free of influence from other team members, Flatt said. Of all the survey’s data, the lack of consensus would perhaps be the most concerning to suppliers. For 35 per cent of criteria, evaluators were more than three points off, according to the survey. “So someone was a 10 and someone was a six,” Flatt said. “That happens more than a third of the time and then that needs to be munched together in this big decision.”

McDougall noted that her team typically meets to talk about bids. The team also uses evaluation criteria and a weighted matrix. “We have a very open discussion where there’s not SUPPLY PROFESSIONAL

2018-12-21 12:36 PM

If I get the template, the scores will reflect the templates because sometimes that template’s just not going to align.

Lori Letourneau

It would sometimes be weeks and weeks and weeks from when an RFP closed until we could get the evaluation criteria to the end users, versus it closes and they can log in and start the next one.

Brenda Lanteigne

a lot of bias because it’s typically purchasing and the business group at the table,” she said.

“There’s a variety of opinions there and we talk about it.”

Lanteigne said her organization used to conduct a group score and reach consensus but had moved away from that. The practice now is to score individually since otherwise “the squeaky wheel influences the whole group.”

Depending on what’s being purchased there are several considerations. “Ongoing maintenance is

a big concern, interconnectivity with some other systems—the end user may not care about that but those are ongoing lifecycle (considerations),” she said. “How is this going to operate? Not just for the initial purchase but for an ongoing period of time.”

The survey found that the average number of evaluators on a team was 4.4, with roundtable participants citing the department requesting the service, or subject matter expert, included on the evaluator list. Case said that her organization SUPPLYPRO.CA 17

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We’ve updated our purchasing policy so that they don’t have to be lowest price and can be your highest ranked because that’s who your evaluators have picked.

Jennifer Smith

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would suggest, rather than push, for certain people to be among the evaluators. For example, if there’s a facilities project, perhaps someone from IT, student services or someone else should help rather than all facilities employees.

“We do try to help with that push, but that doesn’t always happen,” she said. “With us, purchasing is the only department that evaluates for financials. Everything else is fair game from the evaluation team.”

McDougall recommended involving purchasing and department managers for large, complex decisions. The business unit using the service typically has one or two evaluators participate.

For a recent new transportation carrier, the process included a representative from the distribution centre who would deal with the winning vendor. As well, Lanteigne noted that her organization pockets evaluators into subject matter experts and peripheral stakeholders who will use the service.

RFP advantages

The group also discussed the survey’s results surrounding RFP length—56 days is average for an RFP process, and that 90 per cent of projects finish within three months or less. Some roundtable participants said the process can sometimes take longer, with the BPS directive in Ontario, dollar amount, and other factors potentially stretching the time.

The RFP process is much longer using paper

and Excel spreadsheets than online, digital platforms, said Lanteigne. Paper-based processes involve several supplier boxes and binders. All that information must be made easy for end users to score. Even receiving bids on USB keys can cause difficulty. “It would sometimes be weeks and weeks and weeks from when an RFP closed until we could get the evaluation criteria to the end users, versus it closes and they can log in and start the next one,” Lanteigne said.

A digital process allows reporting, which allows the search for cost savings and taking advantage of the RFP process to shave off a few days, noted Smith. Municipalities may have buildings in multiple locations, causing difficulties if evaluators work at different locations.

“It could be two weeks before somebody could even start an evaluation,” she said.

Letourneau’s team is spread out in different offices across Ontario. But using technology lets her monitor and facilitate that staff and evaluators coming together. But the greater value in technology is enabling purchasing to be perceived as a strategic partner managing contracts. In the portal Letourneau employs, users can click their mouse and flip into contract management mode. That lets them plan before a contract expires, which is critical to multi-year strategic operations plans. It’s possible to pull up immediately every contractor that has a contract on the site. “It’s a reverse lookup now,” she said. “It’s not just about purchasing. It’s about knowing who your vendors are and where we’re working right now on the development of where we need to be in the future, is around the vendor performance of those contracts. That’s an endto-end purchasing vision that technology needs to enable.”

Case recalled receiving large binders of vendor information, stamping them with timestamps and organizing everything through spreadsheets. Having shifted to a digital process

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lets her retrieve information like a vendor’s name or contact information. “I have it all in one spot and that’s really helping because I can answer quick questions instead of saying ‘I’ll get back to you in a week when I go find that somewhere in the backroom,’” Case said. “I can now just have it—everything’s right there. I can help our evaluation team. I can talk with my manager better about who the vendors are that we’re using.”

One effect of technology is enabling all bids to be on time, said Flatt. In rural areas during winter, for example, suppliers can miss deadlines due to difficult weather if they’re hand-delivered. “We know that each additional submission that you get in, you increase competitiveness,” he said. “Everybody’s going to be on time because they can come in last minute, but they don’t have to deal with the weather now.”

Bonfire’s survey notes that RFPs have a significant impact on an organization’s financial and performance health. McDougall noted that she has always found RFP beneficial, for example by finding savings. Even with great suppliers, it’s beneficial to investigate options.

“Maybe three years ago somebody wasn’t in the market at that time, so I find there’s so many benefits to running them even when you don’t have to,” she said.

Especially in the public sector, few things touch average people’s lives more directly than optimized procurement decisions, Flatt said.

Roads, schools, medical equipment and so on all result from these decisions. When procurement teams improve even 20 per cent, applied over trillions of dollars in spending the results mean better services. “If you do procurement really well, those benefits compound and the world looks so different five years from now,” he said.

Case noted that the RFP process promotes due diligence while allowing procurement to get the best value on a tender. Procurement sees large and small companies and what they offer side by side, rather than larger organizations obscuring the smaller. A smaller company could then win with a better-suited service.

“By doing an RFP, you’re able to see that huge span,” she said.

Suppliers

While discussing RFP tips for suppliers, Flatt noted the study reveals 22 per cent of suppliers get disqualified—almost one in four. That, he said, should start the discussion regarding helping suppliers. But Lanteigne said that organizations can cause of some of that. “We’re driving vendors out because of mandatory requirements that we’ve put in, as opposed to rating criteria,” she said. “Those that are disqualified weren’t all because they were late.”

Letourneau encouraged suppliers to read documents carefully. If an organization asks for a specific document, make sure you don’t submit a different one. Answer the question that’s

being asked. Submitting proposals is costly and time consuming, so some suppliers reach for a template. “We attempt to simplify the process by using templates, the scores will reflect the data elements within the templates. If suppliers submit other documents, sometimes those documents are just not going to align,” she said.

“Simply answer the questions being asked, that gets you the points.”

The group agreed that suppliers should ask. Don’t assume a question is not valid, said McDougall. Seek clarification that a bid is accurate, because a bid may lose if it’s too low because the supplier didn’t understand the question. For her part, Case encouraged bidders to submit early. “We would suggest in our RFPs that you submit a day before,” she said.

Overall, the group agreed that while the RFP process had challenges it also offers benefits.

Any tool that helps to relieve the process’s pain points, and produces the best evaluation, was welcomed. Truly, organizations would do well to pursue whatever resources they can to improve that process. TL/SP

With us, purchasing is the only department that evaluates for financials.

Everything else is fair game from the evaluation team.

Laura Case

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Only

10%

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35%

of vendor submissions are received in the ďŹ nal hour before the deadline

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Fleet Management

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Driving In Style Automakers whip up fresh executive rides.

Sneaky and serene A look at the 2019 Toyota Camry.

Truck King Challenge Find out who’s crowned king of 2019.

Best In Fleet Highlights from ARI’s annual conference.

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

21 FEBRUARY 2019

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

ADVERTISING INQUIRIES: Dorothy Jakovina, 416.441.2085 x 111, dorothy@supplypro.ca

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Fleet Management

Subaru Canada announces its first PHEV

Canada gets new drunk driving laws As of December 18, Canada saw changes to its alcohol-impaired driving laws in the Criminal Code. The reforms will implement mandatory alcohol screening, which will allow police to demand a breath sample at the roadside from any driver that has been lawfully stopped, the federal government said.

The new law will repeal and replace the entire Criminal Code transportation regime. The new legal framework is designed to increase deterrence and the detection of impaired drivers and simplify the investigation and proof of the impaired driving offences resulting in shorter trials and reduced delays.

Part one of the former Bill C-46 came into force on June 21 and focused on drug-impaired driving.

Part two focuses on alcoholimpaired driving and came into force December 18.

Geotab wins Frost & Sullivan Company of the Year Award Geotab has won the 2018 North American Company of the Year Award at Frost & Sullivan’s annual Excellence in Best Practices Award gala.

The company serves end users across the spectrum—from very small operations to Fortune 500 companies—with provision of its platform. It focuses on engineering and minimizing solution development costs to price its products competitively. Geotab has also forged strong networks and links with its partners.

It reaches out to more than 22,000 customers through its Authorized Geotab Reseller network of over 200 partners.

Overall, Geotab has leveraged its data architecture and technology centricity to grow and position itself as a future-proof company, said Frost & Sullivan.

22 DECEMBER 2018

Will your battery last the winter?

Data from CAA South Central Ontario (SCO) shows recent extreme temperatures have taken a toll on car batteries. Since 2016, battery-related calls to CAA have gone up across South Central Ontario and have remained high. Last year, CAA saw 264,266 calls for battery service— a 25 per cent increase over the last three years. This year, the data show that calls are on track to match that number.

The organization is encouraging drivers to get their batteries tested before winter to avoid unexpected

Quebec signs Driving Change Together declaration The new Government of Quebec has signed the Driving Change Together— Katowice Partnership for e-mobility initiative, submitted by Poland as this year’s chair of the 24th Conference of the Parties to the United Nations Framework Convention on Climate Change.

Signatory governments acknowledge e-mobility as a key way of reaching Paris Agreement goals.

failure. Modern car entertainment and navigation systems have increased demands on car batteries and for those in areas with temperature extremes, the battery life may be shorter.

Motorists can avoid dead batteries through maintenance, CAA said.

Swap out an old battery, install a battery blanket, don’t start a vehicle with the heater and radio on and disconnect a battery if it will sit idle for long periods are among the advice the organization gives motorists.

They also commit to implementing measures to accelerate the transition to zero-emission vehicles (ZEV) in order to ensure the growth of the electric vehicle market and foster new technologies in this field.

The province intends to accelerate efforts to foster transportation electrification. Initiatives like a ZEV standard for automobile manufacturers, funding for home and office charging stations, developing a network of charging stations throughout Quebec and zero-emission vehicle benefits including toll-free bridge passage will continue to reduce the province’s environmental footprint.

Subaru Canada, Inc. has announced its first-ever plug-in hybrid vehicle, based on the 2020 Crosstrek. The new plug-in hybrid maintains all the capability of the traditional Subaru Crosstrek with increased fuel efficiency due to its plug-in hybrid powertrain, the company said. It can operate as a conventional hybrid vehicle, using electric and gas power to address range anxiety, or driven on pure electric power for local commuting.

“Our dealers and customers have asked for a vehicle like this and we listened,” said SCI president, chairman and CEO Yasushi Enami.

“We’re excited to expand our wellrounded lineup with an alternative powertrain vehicle that offers the benefits of electrification without the hassle of range anxiety.”

The Crosstrek-based plug-in hybrid is an eco-friendly version of the compact SUV that packs the capability of an SUV in a city-sized package, said Subaru. Arriving at dealers near the end of next year, the 2020 Crosstrek-based plug-in hybrid will feature unique styling, the company noted. Like the gaspowered Crosstrek, the plug-in hybrid version is built around the Subaru Global Platform that was designed to accommodate hybrid and electric powertrains.

The Subaru Cross Trek’s 2019 model.

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Fleet Management

By Lesley Wimbush

Lexus LS 500

Mercedes Benz E-Class Mercedes-Benz’s venerable E-Class, now in its 10th generation, introduces two new models and gains a new connectivity app allowing remote smartphone communication. The E-Class is still available in sedan, coupe, station wagon and convertible configurations. For 2019, the E 43 trim is replaced with a new E 53, featuring Mercedes’s first electric-assist drivetrain. The E 400 is also gone, in its place a new E 450 with a 3.0L turbo V6. New standard features include wireless smartphone charging and heated steering wheel.

Lexus’s flagship sedan eschews its former conservative gravitas for a fresh, modern design. An all-new 3.5L twin turbo V6 produces 416hp— 30 more horsepower than the V8 it replaces. The hybrid LS 500h uses a 3.5L V6 with two electric motors for a combined 354hp. Standard on every LS is Safety System+, which includes Pedestrian Detection, Intelligent High Beams, Lane Keep Assist and Dynamic Radar Cruise Control. Optional is Active Steering Assist, Front Traffic Alert, Road Sign Assist, and the semi-autonomous Lexus CoDrive combining Dynamic Radar Cruise with Lane Trace Assist. Interiors feature semi-aniline leather, genuine wood and brushed aluminum.

Alfa Romeo Stelvio

The Executive Touch Luxury sedans, SUVs and crossovers for 2019 As the year comes to a close, automakers are prepared for 2019 with a fresh crop of brand new sedans and SUVs. The new arrivals feature unprecedented levels of luxury and safety technology, in a variety of shapes and sizes.

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Now part of the Fiat Chrysler Automobile (FCA) group, Alfa Romeo introduced their first SUV in 2018.

For 2019, all-wheel-drive, previously standard, is now optional. Apple CarPlay and Android Auto, anodized brake callipers with red Alfa Romeo Script, and 20-inch, five-hole forged aluminum wheels are standard.

New options include: Imola Titanium Metallic Paint, heated rear seats and a premium alarm system. Three new appearance packages are available: Nero Edizione, Ti Sport Carbon and Exterior Carbon Fibre Package, with several exterior and interior trim upgrades. Power remains the same: 2.0L 280hp turbo charged fourcylinder, and 505hp V6.

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Toyota Avalon

Genesis G80 An all-new G80 is scheduled to arrive in 2020, but the current model will gain a few upgrades for next year. A new Sport Package is now available for the 3.8L V6 model, featuring more aggressive front and rear fascia, side sills, dual exhaust tips, 19-inch rims and dark chrome accents. While the rest of the lineup is rear-wheel-drive only, Sport models offer optional all-wheel drive.

Engine options remain the same—the base 3.8L V6, twin turbo 3.3L V6, and the range-topping 5.0L V8.

Toyota’s big luxury sedan is completely revised for 2019, with more dynamic styling on a brandnew platform. There are two powertrain choices: a new 3.5L V6 paired to an eight-speed automatic transmission, or optional hybrid model. The Avalon is now available in either luxury or sport trim, and Toyota now offers adaptive suspension. All models feature driver-selectable drive modes (Normal, Eco, Sport) and top trims add Sport+ and Custom.

Top trims feature leather, genuine wood and aluminum trims and Apple CarPlay is now standard on all models.

Subaru Ascent

Nissan Armada Nissan has made it easier to choose the Armada over its luxurious equivalent, the Infiniti QX80, thanks to a significant technology upgrade. Now standard is a host of driver assistance systems that were previously available only as expensive options. These include Intelligent Cruise Control and Forward Collision Warning, Automatic Emergency Braking, and Rear Door Alert System. Otherwise, the Armada is largely a carry over, with a single powertrain consisting of a 5.6L V8 connected to a sevenspeed automatic transmission.

Top trim levels feature two-tone leather interior, heated and cooled front seats, 27-inch rear seat entertainment displays, Intelligent Around View Monitor and Intelligent Rear View Mirror.

Subaru’s new three-row crossover helps the brand retain customers with growing families instead of having them look elsewhere.

The company’s biggest crossover is powered by 260hp turbo-charged four-cylinder—in a segment dominated by V6 power—but boasts a max tow rating of 5,000lbs and 10.2L/100km fuel consumption.

Subaru’s Eyesight Driver Assistance Package is standard on all models,

but navigation, Android Auto and Apple CarPlay come only on upper trims. A Wifi hotspot supports up to eight connected devices. Also standard is Subaru symmetrical fulltime all-wheel drive.

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Lincoln Continental 2019 brings an increase in safety tech for Lincoln’s luxurious full-size cruiser. All models now feature standard adaptive cruise control and Lincoln C-Pilot360, the brand’s safety technology suite including lane keep assist, emergency braking, rearview camera and blind-spot information. Reserve trim levels have standard Technology Package, featuring head-up display, 360-degree camera and park assist; and Climate Package including heated steering wheel, heated rear seats and windshield wiper de-icer.

Top-spec Black Label trims include the Tech package and 30-way power seats as standard. Engine choices remain the same: 335hp 2.7L turbo V6 or a 3.0L turbo V6 that puts out 400hp and 400lbs-ft of torque.

Ford Explorer For 2019 the Explorer gets some new trim packages, a power tailgate becomes standard on XLT trims and active safety technology is more available across the lineup. Front wheel drive is standard with allwheel-drive available on most trims.

There are three engine choices; a 290hp 3.5L V6, 280hp turbo-charged four-cylinder, and new Explorer ST will feature a 365hp, twin-turbo V6.

All choices come with a six-speed automatic transmission. Upper trim levels feature premium leather and real wood. The Explorer is short on standard features, but offers optional SYNC 3 touch screen infotainment with Apple CarPlay and Android Auto.

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Mitsubishi Eclipse Cross The Eclipse Cross is a brand-new vehicle introduced last year, with new gloss black window panels and roof rails the only changes for 2019.

The Eclipse Cross comes standard with front-wheel drive, but allwheel-drive is available as an option.

The single engine is a 1.5L turbocharged four-cylinder with 152hp, paired with a continuously variable transmission. Mid-range models feature standard Apple CarPlay and Android Auto, while top trims add surround view camera, head-up display, and offer panoramic sunroof, heated steering wheel, active driver safety systems and heated rear seats.

Mazda CX-9 For 2019, Mazda’s mid-size crossover returns with upgraded technology and a retuned suspension. Base models are surprisingly well-equipped with 7-inch display screen, Bluetooth, push-button start, LED head and taillights, blind spot monitoring, auto emergency braking and rear traffic alert. The top-spec Signature Model is a luxurious cruiser with Nappa leather upholstery, hand-stitched leather steering wheel, Santos Rosewood trim, LED accent lighting, TFT configurable gauge cluster display, heated and ventilated seatspower lift gate, 8-inch infotainment screen, Android Auto and Apple CarPlay, adaptive front Lane-keep Assist, radar cruise control and rain-sensing wipers. Suspension has been retuned for a smoother ride. The powertrain remains the same 2.5T turbo four-cylinder delivering 250hp, paired with a six-speed automatic transmission.

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ADD A FEW HARD WORKERS TO YOUR CREW.

Fleet Management

By Howard J Elmer

2019 Canadian Truck King Challenge Who competed this year and what they scored The 12th annual Canadian Truck King Challenge took place in the cold and rain of early October.

Frankly, that’s the norm for our event. And while it makes for nasty driving I always remind our judges that we are simply testing in the same conditions that Canadian truck owners encounter every day. Dealing with our climate is just one reason that we pride ourselves on doing real-world testing.

The other truth is that our judges are lifelong truck owners who come from all parts of the country where their regional experiences add to the depth of their opinions on the new iron we have a chance to test.

This year, five AJAC judges drove the new 1500-series pickup 28 DECEMBER 2018

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trucks around our Head River loop empty and then all over again with 1,000lbs of payload loaded in the beds. Finally, each truck towed a flatbed trailer, complete with concrete weights giving each a total tare weight of 7,000lbs.

This ritual of back-to-back driving over the same 20-km test loop is what makes the Truck King Challenge unique. This routine gives each judge a chance to feel the differences in each truck as they drive over the same course— again and again. Over two very long days we managed to drive over 2,000kms on this course.

The trucks we had a chance to test this year were substantially new—with the exception of the Toyota and Nissan. However, the

2019 Chevy Silverado and the 2019 GMC Sierra both brought generational updates to our event, as did the 2019 Ram 1500. The Ford F-150 was unique in that it was the only diesel powered truck to compete—and the fact that this was the first time we had a chance to test this newest member of the Power Stroke family—the 3.0L V6 turbo-diesel.

Below are the trucks that attended our IronWood test facility in the Kawartha Lakes this year.

2018 Ford F150

Body: Supercrew Trim: Lariat FX4 4x4 Engine: 3.0L Power Stroke V6

diesel

Transmission: electronic 10-speed

automatic

2019 RAM 1500

Body: Crew Cab Trim: Limited 4x4 Engine: 5.7L Hemi V8 w/

FuelSaver MDS

Transmission: eight-speed

automatic

2019 Toyota Tundra

Body: CrewMax Trim: SR5 TRD PRO 4x4 Engine: 5.7L i-Force V8 gas Transmission: six-speed automatic FM/SP SUPPLY PROFESSIONAL

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1.

2.

3.

2019 GMC Sierra 1500

Body: Crewcab Trim: Denali Ultimate PKG 4x4 Engine: 6.2L EcoTec3 V8 gas w/

Dynamic Fuel Management Transmission: electronic 10-speed automatic

2019 Chevrolet Silverado 1500 Body: Crewcab Trim: LTZ 4x4 Engine: 6.2L EcoTec3 V8 gas w/

Dynamic Fuel Management Transmission: electronic 10-speed automatic

2018 Nissan Titan 1500 Body: Crew Trim: PRO-4X 4x4 Engine: 5.6L V8 gas Transmission: seven-speed

automatic

What are the judges looking for while driving these loops over and over again? As you’ll see below it’s an extensive list that takes all the build, tech, handling and comfort

aspects of each truck into consideration.

Each judge awards a score using a “ten-scale” for each category.

These are then averaged over the completed score sheets—one from each judge on each truck. It’s these averaged scores that are then converted to a percentage so we can assign an “out of 100” score.

Also note that these scores are subjective. Each judge is familiar with the trucks they are driving in addition to having gone through the technical data and background that each manufacturer provides as part of its entry package. Still, what results form this is opinion.

That’s why each of our judges is a member of the Automobile Journalists Association of Canada (AJAC). They make a living writing about trucks, most of them for decades. In fact, this year our five judges, combined, boast over 110 years of experience in the field of automotive evaluation, and trucks in particular.

1. The 2019 Toyota Tundra, one of six trucks tested, has a six-speed automatic transmission.

2. The 2018 Ford F-150 placed fourth with an overall score of 73.3.

3. The 2019 Ram 1500, with an eight-speed automatic transmission, placed second.

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Here is the form our judges complete for each entry.

FOR EXAMPLE ONLY: Score from 0 to 10 Subjective:

Styling/ Appearance

Exterior Interior Quality

7.5 5 7

Occupant Environment

Driver Position/Ergo Visibility Room/Comfort/Access Con/Entment Features

6 7 5 4.5

Noise/Vibration/Harshness

5.5

Performance

Throttle Response Engine Transmission

7.5 8 6

Vehicle Dynamics

Ride Steering Handling Braking Feel

7.5 7.5 4 5

Personal Subjective Value

6

Main test Values:

Payload - Towing - Empty Off-Road

5.

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5 5.5 6 8.5

4.

Here are the final, adjusted scores as compiled by the Judges out of 100.

1. 2019 GMC Sierra 1500 Score – 80.0 2. 2019 RAM 1500 Score – 78.8 3. 2019 Chevrolet Silverado 1500 Score – 77.3 4. 2018 Ford F:150 Score – 73.3 5. 2018 Nissan Titan 1500 Score – 71.3 6. 2019 Toyota Tundra Score – 71.0

We congratulate GMC on its win with the newly redesigned Sierra. This truck is the next generation in a long line of GMC pickups—one that received a great deal of attention from its engineers and stylists for the 2019 update. A nice mix of new technology, design innovation, powertrain upgrades and appearance earned this halfton the top win at this year’s Truck King Challenge. FM/SP

4. The 2019 Nissan Titan makes its way through the test facility track in Kawartha Lakes, Ontario.

5. The 2019 GMC Sierra took home the top score at this year’s Truck King Challenge. The truck is a nice mix of new technology, design innovation, powertrain upgrades and appearance.

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2018-12-21 12:36 PM

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Fleet Management

By David Miller

Sneaky, serene goodness The 2019 Toyota Camry Scroll through the list of every mainstream mid-size sedan and there’s only one vehicle in Canada with positive year-over-year sales: the 2019 Toyota Camry. That steady climb has landed the Camry in the top spot of its segment as of September 2018 over its long-time rival, the Honda Accord.

A year after a major makeover focused on style and technology, the Camry is reaping the rewards of its transformation. The best part of its new look is the incorporation of modern tweaks, edges and sculpted beltlines without alienating its core customer base by offering two different front fascias throughout its six non-hybrid trim options. The look is split down the middle with SE versions receiving a sportier look while the LEs receive that 34 DECEMBER 2018

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more classic appearance.

For this test, I managed to wrangle a classic XLE sporting 18-inch aluminum alloy wheels, an 8-inch display screen and a premium Entune audio system with six speakers as part of the Navigation package ($2,740). A more powerful V-6 engine is available for $6,000 more, but after driving around with its 203hp, 2.5L four-cylinder, it’s clearly all you need for this smooth cruiser.

When constantly testing vehicles, it’s hard to be surprised, but I have to say I fell in love with the calm, peaceful and fluid nature of this ride. The combination of its seamless eight-speed direct shift automatic transmission and its delicate leather steering wheel did the trick, providing accurate handling for a

more confident ride. Perhaps, I was in a zen-like state throughout the week, or the car placed me in one, but that comfort is exactly what consumers strive for in a family sedan.

It glided over speed bumps and pot holes, while I relaxed to some tunes on Sirius/XM’s Classic Rewind in which a radio replay can be used not only for satellite radio, but for FM and AM as well. One of the few additions for 2019 is standard Apple CarPlay for all Camrys.

The power remains

Power delivery is not lost on the Camry with three drive modes: Eco, Normal and Sport. Sport will add more throttle at lower gears, however the drive doesn’t change substantially enough and you lose out on the peaceful serenity. A

Camry isn’t purchased for its quick agility and instantaneous aggression, but there’s always a time and place for acceleration. My favoured choice was Normal, which proves that you don’t have to tinker with the regular setup. As for fuel economy, the official ratings seem a touch high with a combined 7.4 L/100km, but I still managed a respectable 8.3 throughout the week that could have dipped lower in a more sluggish, yet not emotionless, Eco mode.

As good as the ride is, its insides seal the deal with a beautiful flow that feels both modern and premium. The cockpit is open and inviting thanks to its heated leather-trimmed seating, panoramic moonroof and clean dash featuring a faux wood trim and the aforementioned eight-inch touchscreen. The FM/SP SUPPLY PROFESSIONAL

2018-12-21 12:36 PM

1. The cockpit has heated leathertrimmed seating, a moonroof and clean dash with faux wood trim.

2. The Camry’s trunk boasts 15.1 cubic feet of space.

3. The vehicle’s inside has a beautiful flow that feels both modern and premium.

1.

2. screen is slightly pulled out for a crisp and optimal viewing, while all the knobs and buttons are in the right places making it easy to use and customize for all occupants.

The one notable exception to this whole love fest is its seating. This is probably an individual criticism, but for the life of me, I couldn’t find that ideal seating position. I settled on a more upright stance that just needed a slight release in the lower back for it to be perfect. It’s a small disappointment and one that I got used to over the week. In the rear, seating is snug with ample legroom.

Don’t worry about its sloping roofline unless you’re above the 6-foot, 2-inch mark.

Safety first

As a leader in safety, Toyota not only brings its annual IIHS Top

Safety Pick-plus to the table, but adds its icing on the cake through a standard suite of safety technology labelled Toyota Safety Sense P. Regardless of trim, each Camry includes a pre-collision system with pedestrian detection, lane departure alert with steering assist, automatic high beams and dynamic radar cruise control. For additional technological support, the XLE tester came with a very helpful wireless charging pad.

The Camry is meant to be that reliable, safe ride and that’s what Toyota brings to the table with some added flair to appeal to the masses who need a little more convincing that Toyota is beyond its banal past.

The two front fascia approach is definitely conservative, but that’s Toyota, which is trying to be something for everyone, a strategy that

3. seems to be succeeding with the Camry.

At a base price of $27,850 ($33,650 for the XLE), it’s hard to go wrong, especially with that soft, comfortable ride that creates a detachment from everyday life stresses. In no time, the 2019 Camry makes you eager to go out for that next errand. FM/SP

As Tested Price: starts at $27,850; tested at $36,645 Engine: 2.5-litre four-cylinder Power: 203 hp, 184 lb-ft of torque Transmission: 8-speed automatic Rated Fuel Economy (L/100 km): City 8.5/ Hwy 6.1 Observed Combined Fuel Economy (L/100 km): 8.3 FLEET MANAGEMENT SUPPLYPRO.CA 35

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BY MICHAEL POWER

THE FUTURE OF MOBILITY

ARI CONFERENCE LOOKS AT THE FLEET WORLD OF TOMORROW Getting around, especially by car, used to be simple. We had wide, open roads and ample space to park. And if transportation routes became congested, we simply built more roads and parking lots. For the most part, driving was easy and enjoyable.

That was the image painted by Lucas Neckermann, automotive expert with Neckermann Strategic Advisors, who spoke at ARI’s third-annual Best In Fleet Conference last November. The event saw over 200 people, including vendors and ARI clients, gather in Hollywood, Florida to network and hear about ARI’s future focus, as well as topics including telematics and the changing definition of mobility. Chris Conroy, president and CEO of ARI’s parent company Holman Enterprises, discussed the company’s guiding principles. Kevin O’Leary, former Shark Tank host, was also a keynote speaker during the event, discussing the show and sharing leadership strategies.

Neckermann, whose address was called The Mobility Revolution, told the audience that the historic push to cover North American cities in streets to accommodate vehicles means that today, 30 to 40 per cent of space in most western cities is covered in transportation infrastructure.

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“Good or bad, this is the world we live in and it’s the world we’ve created, and it’s because we love the car,” he said.

That’s a world in which the car is the default mode of transportation, Neckermann said.

For over 100 years, the car has represented freedom. But what does that freedom look like?

If roads are widened then they can fit more vehicles—but is that freedom? This situation can lead to “induced demand,” meaning that if society build more road infrastructure then, paradoxically, congestion increases due to the increased demand for road space. This has held true for the car’s 100-year reign as the king of mobility.

“It means that we’ve changed from this dream world where we have wide-open spaces and roads to a congested city environment,” he said. “It also means we’re losing a lot of time.”

This car-centric paradigm also negatively impacts individuals and the economy, Neckermann added. Lost time translates to economic loss while air quality worsens. These misaligned priorities also mean more parking lots but fewer parks and green spaces.

But there’s a new generation that now realizes the most powerful mobility tool today is the mobile phone. “That’s the fundamental

change that we’re all going through in our industry,” he said.

The mobile phone and accompanying apps now provide a range of choices for transportation so defaulting to the car is unnecessary, Neckermann said. Car sharing, ride hailing; bicycles and e-scooters are causing a shift in attitude that means traditional vehicle ownership is losing its appeal. “When you piece it all together, we’re moving to a world of driverless mobility on demand,” he said.

This shift is happening at different rates depending on the place, he noted. In rural communities, for example, personally owned cars a more important means of transportation. But in more urban areas change is afoot. Tech start-up company nuTonomy has operated a robo-taxi pilot project service in Singapore since 2016.

As well, the US-based company Waymo also offers a limited trial self-driving taxi service in Phoenix, Arizona.

These shifts are forcing companies to re-think what the vehicle of the future will look like, he noted. Even OEMs are re-thinking their business strategies, with several of them beginning to call themselves “mobility companies.” Toyota has taken it a step further, branding itself a “human mobility company.”

This makes sense, Neckermann said—the KPI of OEMs was once based on how many millions of cars are sold, the new metric revolves around selling a number of miles or trips travelled. This new metric will begin appearing in annual and investor reports and will form a basis by which management gets evaluated, Neckermann predicted.

FOUR-PART REVOLUTION The mobility revolution has four parts, Neckermann said, specifically autonomous, connected, electrified and shared. Connectivity gives the basis for change as it enables the other components. Fleet managers should expect that all new vehicles be equipped with “bi-directional data exchange.” Full FM/SP SUPPLY PROFESSIONAL

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My prediction is that all new vehicles will be electrified by 2025.

PHOTO: DOROTHY JAKOVINA

connectivity will include vehicle-to-vehicle (v-to-v) communication so that, for example, a vehicle can send data to cars behind it warning of upcoming jams so those cars can choose another route.

Ideally, these would be open interfaces rather than proprietary networks, Neckermann said. During recalls, many of those can be updated over the air, essentially making vehicles “self-healing.” Fleet managers should get the data from fleets, allowing them to make choices about the potential implications of autonomous vehicles in their organizations. The benefits of connected vehicles include: decreased downtime; reduced maintenance; lower insurance costs; increased utilization of vehicles; and realtime supply chain adjustments.

Regarding autonomy, Neckermann noted that there are different levels and the concept represents a range of technologies that lead up to

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fully self-driving. So-called level-two autonomy includes features like adaptive cruise control.

Meanwhile, with level three, vehicles are autonomous until they encounter a situation they can’t handle, at which point the driver takes over. But a challenge lies in the risk that the driver isn’t ready to assume control. Only at level three do we assume the human driver is better than the technology, and it may be better to leapfrog level three and go without a driver, at least in some cases, Neckermann said. The highest level is fully self-driving in all situations, in which the technology has full system control and the vehicles wouldn’t even have a steering wheel. Research suggests that as the industry progresses through those levels the accident rate Lucas Neckermann of Neckermann Strategic Advisors.

could fall by up to 95 per cent, Neckermann said. Currently, the industry is at level two and the technology still needs human drivers.

Neckermann addressed shared mobility, saying that one survey noted a third of people said they’d consider giving up their default vehicle to rely on mobility services. What would that look like? Neckermann described a situation in which people took the money they would otherwise spend on a car each month and put it towards a “subscription” for mobility services.

For example, a Finnish company called MaaS Global offers a flat rate for services including ride sharing, ride hailing, public transport, bikes and scooters. Whim, the company’s app, has been dubbed by some the “Netflix of mobility,” he said. This movement is also affecting the freight and logistics, with some German companies sharing fleets and fleet operators.

Lastly, Neckermann addressed electrification, noting the term covers various types of electricity-powered vehicles. Electrified means various types of vehicles, he noted—everything from the plugin hybrid to variations such as the range-extended hybrid, which is a variation that always drives on an electric motor and uses a combustion engine only to charge the battery.

Several van companies are choosing this model.

Neckermann also cited the “purebred” electric vehicle that runs exclusively on electricity, as well as fuel cell hydrogen vehicles. Fuel cell vehicles have seen interesting use cases, mostly in commercial, long-distance and heavy-weight applications. “I think personally, for passenger cars, the ship has sailed and we won’t see fuel cell becoming a significant factor,” he said.

Environmental advantages aside, the electrified vehicles make sense because, technically speaking, they’re the better solution, Neckermann said. For example, the cost of complying with emissions regulations with the conventional motor is increasing. As well, the combustion engine’s efficiency improves about one-to-three percent a year. The electric motor, however, is three times more efficient out of the gate and sees improvements to battery management of 15-to-20 per cent per year. “It doesn’t take rocket science to realize that there will be the inflection point very soon that says it will be the better thing.”

Currently, there’s a limited range of choice regarding electric vehicles, Neckermann said.

But this will soon broaden, he said, and across all vehicle categories the market will see over 200 new vehicles that are either electrified or fully electric. “My prediction is that all new vehicles will be electrified by 2025,” he said. SP FM/SP SUPPLY PROFESSIONAL

2018-12-21 12:36 PM

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Versatility

THE KING OF COOL DOUG HARRISON, VERSACOLD CEO FOR SIX-AND-A-HALF YEARS, SHARES INSIGHTS ON SUPPLY CHAIN, CAREER AND LIFELONG LEARNING In a way, Doug Harrison has been working in supply chain since he was a teenager. Growing up in Hamilton, Ont., the future president and CEO of VersaCold Logistics Services worked at the lumber and building material business his father and uncle ran. At its height, the operation had six lumber yards across the Niagara Peninsula and the 16-year-old Harrison engaged in nuts-and-bolts logistics like driving a truck, operating a lift truck and garnering exposure to box cars, flatbed trailers and tractor trailers. His father and uncle eventually sold the business, but supply chain has woven itself into Harrison’s career ever since.

“The more I grew on my summer jobs and my part-time, weekend jobs in our lumber yard, the more I came to appreciate that this is really what we call logistics and supply chain,” Harrison reminisces. “It was through that evolution that I managed to get into it. I’ve been in it and out of it, but really, it’s been the vast majority of my career.”

Harrison and Jodi, his wife of 32 years, have lived in Burlington, Ont. for the past 26 years. While his career has moved the family 40 DECEMBER 2018

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(they have a son Trevor, 26, and a 24-yearold daughter named Brooke) to the U.S. and Europe, their collective path has always led back to Southern Ontario.

And that career began in earnest after Harrison started at Ryder Integrated Logistics in 1986, working as vice-president and managing director for Canada and Europe. He became president of Acklands-Grainger in 1999, staying for eight years before joining Brookfield LaPage Johnson Controls, an outsourced real estate and building management firm. He then worked at Kalex for three years before joining Day & Ross Transportation Group as chief operating officer and president, then VersaCold in 2013.

Harrison sits chatting in the boardroom of VersaCold’s offices in Vaughan, northwest of Toronto. The company is Canada’s largest supply chain company focused just on temperature sensative products. VersaCold once had international operations but eventually split into two—the global arm became AmeriCold, while VersaCold remained Canada-focused.

It now has 32 warehousing facilities and its

Milton DC, Harrison notes, is the largest single facility owned by a provider in the country. VersaCold runs three assets-based transportation business units, a third-party logistics business unit, a food distributor business and a non-asset based 4PL. Its transportation assets cross the US border daily, while the 4PL is involved in international air and ocean freight.

Harrison notes that as a student he wasn’t “a big fan of learning”—it was after graduating that he realized its importance. He is a Certified Professional Accountant (CPA) and earned his MBA at Heriot-Watt University in Edinburgh, Scotland. He also graduated from the Institute of Corporate Directors (ICD) and earned a business diploma from Hamilton’s Mohawk College.

His designations include P.Log. certification (Professional Certification in Supply Chain Logistics) from the Logistics Institute and the CITT-Certified Logistics Professional (CCLP) from the Canadian Institute of Traffic and Transportation (CITT). In June he received fellowship with the Supply Chain Management Association (SCMA). Each year, SCMA recognizes those who have contributed to the field and the Awards of Distinction are presented at its national conference, held this year in St. John’s, NL. Harrison was one of three recipients. “That was a real honour and I was incredibly proud to accept it,” he said.

Harrison has also sat on numerous corporate boards, including Horizon Utilities Corporation, Hamilton Utilities Corporation, The Conference Board of Canada and Livingston International.

He chaired the board of governors at Mohawk College for six-and-a-half years, and still sits on the board of Superior Plus Corp. He is vice-chair of the board of directors for the TSSA (Technical Standards and Safety Authority) and recently joined the board of Canadian Commercial Corporation, a Crown corporation helping Canadian businesses export products when the contracting party is a foreign government.

SUPPLY PROFESSIONAL

2018-12-21 1:54 PM

PHOTO: JOHN PACKMAN

BY MICHAEL POWER

PHOTO: JOHN PACKMAN

“Be tougher on yourself than your manager will ever be and set a career path plan to grow.”

“I see it as an opportunity to give back,” he says. “Those boards allow me to have a different perspective about a business, the perspective of the shareholder and other stakeholders as opposed to my 70-to-80-hour week as the CEO of a company.”

That schedule may sound daunting, but for Harrison there’s plenty to love about it. Much of that love is the result of VersaCold’s “great” team, he says. Even when asked about career highlights, Harrison points to his interactions with people, those who have taught him and those he’s helped guide. He spends much of his time in the field with employees. Harrison has committed to visiting each VersaCold site, every year—that means 40-odd sites and plenty of time on the road. The CEO’s role is to build bridges across an organization, he says, and communication plays a pivotal role, whether it’s with VersaCold’s executive team, getting in front of customers or chatting with employees.

“I love to be on the floor with our people, answering their questions, thanking them,” he says. “We’re a service company at the end of the day and people are a critical differentiator to us. I spend a lot of time travelling to see customers. I spend a lot of time travelling to see our facilities and our employees and equally, learning things through our industry associations, key partners and stakeholders.”

When starting out, Harrison didn’t target the top of the corporate world. But mentors along the way saw potential and guided him

towards his eventual role as a CEO. Some of those people have been “incredible” guides who allowed him to grow professionally, even allowing him the freedom to make mistakes.

The process has afforded a front-row seat to supply chain’s evolving role. Canada is a logistics-challenged nation, he says, noting its low population density and large land mass, a recipe for an expensive supply chain.

Still, he says, Canadian businesses are realizing that—rather than just a cost centre— supply chain is a strategic, competitive weapon that helps get products to market, faster.

“That’s great, because as you’ve seen supply chain professionalize over the last 20 years, it means more supply chain conversations in the board room,” Harrison says. “That brings more capability to the table where you have CEOs now thinking about how to leverage supply chain. With the number of free trade agreements Canada will sign over the next several months, how do you leverage those free trade agreements to get into new markets that, in the past, you couldn’t get into because of the economic challenge of distance or tariffs?”

Harrison notes he’s been fortunate for opportunities to give back. VersaCold’s tagline is “Your Food Matters,” and rotting food is a major contributor to greenhouse gas emissions. There’s enough food available to feed the world, it’s simply in the wrong place and that, Harrison says, is a supply chain issue. Protecting food, ensuring it’s safety and working with customers and food banks lets the company give back.

Along with his commitment to career and family, Harrison keeps active during his spare time. Travel is a hobby, as are outdoor pursuits like fishing, hiking and cycling. An interest in wine and restaurants helps create another opportunity to communicate and learn. “Wine creates great conversations around a dining room table,” he says. “You get to experience something from another part of the world and end up talking about travels and experiences.”

In a career, there are always improvements to make and new territory to cover, he says. As Supply Professional went to press, Harrison had stepped down as VersaCold CEO to work as a fulltime coach and consultant, while focusing on the boards on which he sits. A well-rounded life, he stresses, balances family, hard work, fun and giving back, and corporate board work has always been rewarding and enlightening.

Perhaps most important, all his pursuits ensure opportunities to learn something new.

“The greatest piece of advice I’d have for people is: find a mentor, learn every day, ask your manager for help,” he says. “When you have your performance review be tougher on yourself than your manager will ever be and set a career path plan to grow.” SP SUPPLYPRO.CA 41

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2018-12-27 10:21 AM

BY ARIANNE BOUCHARD

WHAT BUSINESS TRAVELLERS NEED TO KNOW ABOUT BILL C-45 Since the entry into force of an act regarding cannabis and to amend the Controlled Drugs and Substances Act, the Criminal Code and other acts (Bill C-45), Canadians are now allowed to possess and use cannabis. But what does this mean for corporate travellers and their organizations? Here are the answers to a few of the questions that may have crossed your mind since this came into force on October 17.

Is it legal to travel from one province to another with cannabis?

Yes, even on planes. As confirmed by Transport Minister Marc Garneau, “As long as the flight is domestic, then people are allowed to bring up to a certain quantity for their personal use.”

However, you should note that most provinces have adopted specific legislation regarding cannabis that may be more stringent than Bill C-45. So you want to make sure to know the specifics of the law of the province you are travelling to.

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Is it legal to take medical or recreational cannabis across the border?

No. Cannabis legalization has not changed any country’s border rules, including Canada’s.

Taking cannabis—or any product containing cannabis—across Canada’s international borders is illegal, regardless of whether the product is for recreational or medical purposes. This rule applies whether you enter or exit Canada.

The only exception is if Health Canada has delivered an authorization allowing a person to travel with cannabis. Health Canada only delivers such authorization in very limited circumstances, for medical, scientific or industrial purposes. Therefore, unlike other medication, it is not enough to have a doctor’s prescription to be allowed to travel across international boarders with medical cannabis.

Is it legal to enter Canada with cannabis purchased from places where

Can a traveller be banned from travelling to the U.S. if they have used cannabis legally since October 17?

Under U.S. laws, border officers have the authority to ask any person who wants to enter the U.S. whether they have bought or used cannabis in the past, including since legalization. Officers do not routinely ask people about their cannabis use, but like before legalization, they do it randomly or, more likely, when something raises suspicion (behaviour, aroma, residue in a pocket).

While U.S. border officials say that officers will make a distinction between whether a Canadian’s past cannabis use was before or after legalization, an officer can still decide to issue a ban when a person admits having used cannabis since legalization, including, for example, if they believe the person may engage in the same activity while in the U.S. (even in states where it is legal).

Can a traveller be banned from travelling to the U.S. if they have purchased cannabis legally since October 17?

If a person has purchased cannabis with his or her credit card, then it’s possible. Most Canadians’ credit card data is stored on U.S.-based servers. Under the USA Patriot Act, U.S. authorities have the authority to scrutinize that data without first obtaining a warrant (they need reasonable grounds, but it is a very subjective notion). If, in doing so, U.S. authorities discover that a person has bought cannabis in Canada they may issue a ban against that person. As such, several experts recommend not using your credit card to buy cannabis products.

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ILLUSTRATION BY ANGELICA YIACOUPIS

CANNABIS AND CORPORATE TRAVEL

it’s also legal (Netherlands or some U.S. states)?

No. It is still illegal to cross Canada’s international borders with cannabis, even if the product originates from another jurisdiction where it is legal.

Arianne Bouchard is a lawyer in Dentons’ labour and employment group.

Can a person be banned from travelling to the U.S. because he or she works or has made investments in the legal cannabis industry?

According to the most recent information, the answer is no. However, if a cannabis industry worker tries to enter the U.S. for a work-related reason, it is very likely that he or she would be denied entry.

ILLUSTRATION BY ANGELICA YIACOUPIS

What should a person do when a customs officer asks them questions regarding cannabis use history?

If the borders officers of a country you want to enter, for example the U.S., ask questions

Taking cannabis—or any product containing cannabis—across Canada’s international borders is illegal, regardless of whether the product is for recreational or medical purposes

regarding past use of cannabis—and you have used cannabis in the past—you should decline to answer their questions. Obviously, they’ll deny your entry at that time. But they cannot issue a lifetime ban because you refuse to answer a question. However, admitting past use can lead to that result. So remember, it’s better to miss one meeting than never be able to go to a country again!

What obligations does my employer have toward me if I am arrested for cannabis possession at a destination?

Except if your company’s policy or employment contract provide otherwise, your employer does not have any obligation to assist in such cases. All employees are expected to abide by the law of their own country and of the countries they are travelling to for business purposes, and if they fail to do so, their employer does not have the obligation to assist them.

If the company, or anybody else, wants to provide assistance, the first step is to contact the Canadian consular services, which will be able to provide some help.

What specific cannabis-related advice should I remember when travelling abroad?

Do not take it in, do not take it out! Even in countries where cannabis is legal, the law generally prohibits entering or leaving the country while transporting cannabis. Always abide by the laws of the country to which you are travelling. If you are asked about your past use and have indeed already used cannabis, it’s always better not to answer the question. SP ARIANNE BOUCHARD WAS A SPEAKER AT THE ASSOCIATION OF CORPORATE TRAVEL EXECUTIVES’ (ACTE) GLOBAL SUMMIT & CORPORATE LODGING FORUM IN MONTREAL, NOVEMBER 18-20. THIS ARTICLE IS BASED ON HER PRESENTATION AT THE EVENT. VISIT THEM AT ACTE.ORG.

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SUPPLY PROFESSIONAL

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IN THE FIELD—BY TERRY VOLPEL

PREPARING FOR TOMORROW THE RIGHT SKILLS AND PERSPECTIVE TO CARRY YOU INTO THE FUTURE The other day I was sitting in my home office thinking about how my career in supply management has gone over the past 40 years. I started wondering to myself: If I was starting out today how should I plan it? What steps would best prepare me for the next 40 years?

I decided that while the world changes around us, there are fundamental things that anyone starting a career in any business field will need to know and understand from both a theoretical and practical perspective. These boil down to five elements.

The first one is to understand the difference between knowledge and wisdom. Knowing a fact and knowing how that fact integrates into the whole system seems basic but many people coming from colleges and universities are book smart but naïve. Many MBAs I have known get thrown into a higher-level management situation because of their credentials with little understanding of what they actually need to do to be successful. That includes knowing what “success” itself means, because it can be a fluid concept. Years ago, companies hired university graduates into a “management program” where they spent time in different departments learning how the business functions as a result of many elements integrating into a whole.

An old school master/apprentice rationale applied. By the time they were done they had a basic understanding of the business. This is also how lawyers and the medical profession operate. It seemed to work well.

LEARNING THE LINGO The second element is to learn and talk the language of business. This usually revolves around finance, legal and sometimes technical vernacular. When we talk about

cost savings and cost avoidance, what does that mean? We may think these are easy concepts, but I guarantee you if you check with 10 CFO’s each will have a slightly different perspective and measurement. What about contracts? Does your firm have standards around their risk tolerance for liability, indemnity or exclusivity? If not, how would you approach a negotiation? Do you know what a business case is? If not, how will you ever propose an idea for improvement and expect your boss to understand why it is important?

A third area involves listening to and learning from those that are doing the job day after day, year after year. The good ones understand why they are issuing purchase orders a certain way.

They have seen the old systems become the new systems, which become the standard systems. They can prevent you from making some stupid mistake because they may have made the same stupid mistake and learned from experience why it was the wrong thing to do.

The fourth element is to embrace change when it happens.

I personally resisted PCs and cell phones when they first came around (yes, yes, I’m old. Ha, ha, get over it…). It took a long time to see that those around me were quickly outpacing my career when they embraced technology and innovation. Those of us who remember the court battles over faxed purchase orders and electronic signatures on emails can attest to the difficulties around change. You either jump on the bus or get run over as it speeds into the future.

tioned earlier that success is a fluid concept. I have come to understand that the only career success that matters happens when my boss smiles. They define success for you. In time you will be part of the process to define success but until that day, your boss smiling is a sure indicator that you did OK. In school when we fail a test or task there is a penalty (a lower grade).

In business you need to know you will mess up. In hockey you get body checked into next week. We all mess up; you will mess up.

Your boss will give you the same look his puppy gets when they pee on the carpet. That is how puppies learn they shouldn’t pee on the carpet. Now, bosses can’t swat your nose with a rolled-up newspaper (anymore…) but those incidents are how you learn wisdom.

And wisdom combined with knowledge was successful 40 years ago, it is necessary today and it will lead to success 40 years from now. SP

Terry Volpel CPSM, CPM, SCMP LSSBB, is a supply chain management professional with over 40 years’ experience in various industries.

“ Wisdom combined with knowledge was successful 40 years ago, it is necessary today and it will lead to success 40 years from now.”

SUCCESS Finally, we are taught from an early age that success is the goal. It isn’t the goal. It is only one goal—one of many goals in our lives. I menSUPPLYPRO.CA 45

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THE LAW—BY SUSAN LAWSON

TOOLS IN THE TOOLBOX THE IMPORTANCE OF WIELDING CONTRACTS PROPERLY The life of a contract seems to be a difficult one. There is an initial struggle to get a contract in place, hopefully before companies start working together. No one enjoys this. Lawyers require certain terms, holding at bay their business and supply chain clients who often see contracts as obstacles to the work they need to get done and the relationship they need to build. There is a collective sigh of relief once it is agreed to and then that contract is shoved in a drawer, hopefully never to be seen again unless something goes awry and someone, somewhere decides to sue. That means a trip to the lawyers again.

It would seem that contracts only have a place in starting a business relationship or ending one. But what about during what is hopefully a long and fruitful relationship? Goods get delivered, or not. Services are provided, properly or not. Or maybe the wrong goods were ordered or the services were poorly described and so on.

Problems are solved and business relationships survive or die, all without the contract. “We would never sue” is the common disqualifier for the usefulness of a contract.

So maybe we can wrap this up by concluding that contracts are necessary because lawyers say they are but are otherwise irrelevant.

But why isn’t the contract used?

Perhaps it’s because it is seen only as a hammer wielded by lawyers.

Contracts are like a toolbox. In the contractual toolbox should be the things the parties agree to do if something goes wrong or things change. What happens if goods aren’t delivered when they are promised? Does that change if they are custom goods? What happens if the purchaser no longer wants the goods when they are delivered?

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properly? Supply chain professionals should be able to open up the contractual toolbox and find the tools they can use to keep the supplier relationship in good shape, maintain it, fix the things that go wrong and deal with changes. If the toolbox isn’t used, things are still fixed or changed but a new tool is crafted each time and thrown away after a single use, since that mistake won’t happen again because the supply relationship is too important. But we all know something will happen again, big or small.

How do you create your own contractual toolbox? How about a list of ten things you need to make your contracts into hard working, effective toolboxes that give you the clarity to do the work you want to do? But that’s the problem: there is no list or quick fix. The tools are similar but there is no one set that can be used for every contract.

If the same set is used for every supplier relationship then we end up with only a hammer. Slight changes to the tools can make big differences.

Carrying on with the example of goods, the tools that a company distributing goods will be able to provide purchasers will be different from the tools that would work for a manufacturer of custom goods. If the wrong goods are ordered from a distributor of off-the-shelf goods, the purchaser will want to return them and that should be fine with the distributor—maybe only if the purchaser pays for shipping. But if a purchaser orders the wrong custom-made good, returning it is not an option.

Crafting a contract that is a clean, organized toolbox where you can reach in and find what you need takes work, collaboration and trust. While no one likes talking about what will happen if things go wrong, if you can’t talk about it and

agree at the beginning of a business relationship you most certainly will not be able to do so if and when something goes wrong. We lawyers need to make sure the tools you tell us you need work properly and explain how the terms we say are necessary would work for changes or things that go wrong. If we can’t explain it, it will be difficult for anyone else to use it and it is likely only a hammer.

If the right tool is there, you can make the repair and move on, right through the rough patch without having awkward conversations when tensions are high, and hopefully without your lawyer.

Contracts are a corporation’s friend. Let’s figure out how to use them better. SP

Susan Lawson is a lawyer and owner of the law firm Supply Contracts Simplifed.

“ Contracts are a toolbox, something to be used. In the contractual toolbox should be the things that the parties agree to do if something goes wrong.”

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The EPIC Awards are an annual celebration to recognize and celebrate the most innovative, dynamic and accomplished procurement leaders. ProcureCon is pleased to once again partner with Supply Professional to bring the awards to Canada.

The 2019 EPIC Awards will include categories for innovation, rising stars, life time achievement, and supplier excellence. The winners of each category will be announced and showcased at the ProcureCon Canada conference in April.

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