Supply Professional February 2019 by IQ Business Media

FEBRUARY 2019

LIMITLESS POTENTIAL EY’s Lori Benson on technology, diversity and supply chain skills

Peering into supply chain’s future PM 43096012

Cybersecurity LA & Detroit auto shows Freight forwarding digitization Air travel innovation

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VOL.61 No.1 FEBRUARY 2019 SUPPLYPRO.CA COVERING CANADA’S SUPPLY CHAIN

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

COVER: JOEL ROBERTSON PHOTOGRAPHY

FEATURES 6 ETHICAL SOURCING How organizations benefit from responsible supply chains. 8 THE FUTURE OF SUPPLY CHAINS What you need to know about the field going forward. 12 SOURCING WITHOUT LIMITS EY’s Lori Benson on technology, diversity and supply chain skills.

16 MUSCLE UP! How you can boost your organization’s cybersecurity

ALSO INSIDE

18 INNOVATION AND THE 4IR Are you ready for the fourth industrial revolution?

5B USINESS FRONT

38 CATEGORY MANAGEMENT Strategically managing related groups of products.

46 THE LAW

4 UP FRONT

45 IN THE FIELD

40 FREIGHT TRANSFORMATION Technology and innovation in freight forwarding. 42 SKY’S THE LIMIT Tips for making the most of your air program.

Fleet Managment

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UP FRONT

POSITIVE PROGRESS I’ve never been one to want to rush time. It’s a bad habit, and at any rate, whatever lies around the corner tomorrow, next week or a year from now will present as many challenges as today does. Yet for some reason, a comment I’ve heard several times about 2018 from friends and the media alike, is how quickly they would like to forget it. It seems that all the geopolitical uncertainty and volatility during those 12 months made many eager to simply put last year in the rearview mirror. But depending on your point of view, you could argue that 2018 gave us cause to be optimistic. While the USCMA trade deal didn’t offer much that was new—rather, we ended up with a deal quite similar in many ways to the original NAFTA trade deal that preceded it—it avoided the worst, most disruptive of the potential outcomes of last year’s negotiations. As well, Canada’s economy performed well in 2018, with unemployment near a 40-year low for much of the year. Meanwhile, the Bank of Canada said that the country’s economy was “on a solid footing” as recently as last September But it seems that the economic and geopolitical storm clouds began forming almost before the New Years Eve party streamers and confetti were cleaned up. As always, supply chain professionals would do well to pay close attention to these trends and how they affect the field. Recent tension with China over the fate of Huawei CFO Meng Wanzhou, currently under house arrest in Vancouver and whom the US are looking to extradite as of our press time, increases the pressure on the technology industry, diplomatic relations between Canada and China as well as trade activities and supply chains. Tensions remain between Canada and the US as well, even with the USMCA inked and in place. A 25 per cent tariff remains on steel, as well as a 10 per cent tax on aluminum. The knock-on effects of these tariffs are being felt by businesses on both sides of the border. The UK’s exit from the European Union this year is also casting uncertainty on the kingdom’s trading relationship with Canada, not to mention other jurisdictions. This is sure to have an effect on supply chains and practitioners here are looking at ways to prepare. It’s against this geopolitical backdrop that we present our first issue of Supply Professional of the year. At the same time, while the world can often appear uncertain and full of risk, it’s refreshing to take a glasshalf-full look at supply chain. In this issue, our interview with long time supply chain practitioner Lori Benson, examines (among other things) how technology is shaping supply chain, as well as the benefits it offers. Our look at the future of supply chain on page 8 also looks at technology’s impact on supply chain, along with how Canada’s growing diversity is affecting the field, what skills supply chain professionals will need in the future and other areas. We also take a look at ethical supply chains on page 7 and how the ethical practices of some organizations are benefiting the communities they do business with. While it can be easy to focus on the uncertainty out there, there is positive progress is some areas as well. It’s always refreshing to keep an eye on the forward momentum.

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 FEBRUARY 2019

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BUSINESS FRONT—BY MICHAEL HLINKA

IMMIGRATION AND AI WILL TECHNOLOGICAL ADVANCES LEAD TO MORE CLOSED BORDERS? I’m going to start by making a confession. When I was a kid growing up in Toronto in the 1960s, I secretly wished that I had been born American. I was an avid history buff from an early age, and I saw America’s past as far more exciting and romantic than Canada’s. They fought a violent revolution to win their freedom. We just sort of drifted away. There was a bloody Civil War. Nothing similar happened here. But as I became older, I realized the wisdom of Charles Montesquieu’s famous quote: “Happy the nations whose annals of history are boring to read.” This comes to mind right now as I watch what is going on in the American body politic. As I write this column, the US government is partially shut down. There is no compromise solution in sight and it seems that with each passing day, the public is becoming increasingly angry and frustrated with both mainstream political parties. It feels very ugly and I believe that horrific and widespread violence is not beyond the realm of possibility. And at the root of tension is, ostensibly, the building of a border wall with Mexico. Except it’s really not about a wall. It’s really about immigration that is, how many people the US should admit and from where, and the terms and conditions under which they will be admitted. I think that before I go any further, I should make my own stance about immigration clear. I see it as one of Canada’s greatest strengths. And I reject it on the “diversity” argument. That’s mindless which is, of course, why stupid politicians make it. Our immigration system, based on points, is not at its core about “diversity.” It’s about merit. We have figured out how to cull some of the best and brightest from around the world, whether those people were originally born in India or China or Iran. And the irony is,

getting back to America, that as far as I can tell Donald Trump just wants to make US immigration policy similar to ours. I also think that before I go any further (because it’s key to what will follow), I should make my own stance about the welfare state clear. I see it as one of Canada’s greatest weaknesses, that is, as it has come to evolve in practice. It was originally advanced by people like Tommy Douglas as the idea that there would be public responsibility for people that were unable to take care of themselves. However, it has morphed to mean that there is public responsibility for people who are not willing to make the decisions needed in order to take care of themselves. We no longer have a social safety net; we have a hammock that is subject to gaming and abuse to Canada’s ultimate detriment. It sure looks like we are on the cusp of an economic revolution and that revolution will be spearheaded by artificial intelligence, or AI for short. There is a wide range of occupations that are threatened by AI, anything and everything from truck drivers to data entry clerks to computer support specialists. And as jobs are lost and people who were previously middle class see their futures slip away, there will be an increase in the discussion surrounding immigration policy. Why would Canada bring in more people when there isn’t enough work for those already here? It will be a very fair question. A serious discussion must be had about what our immigration policy should be in a world of AI. Now, it may be that as those truck drivers and data entry clerks and computer support specialists are thrown out of work, they will find equally satisfying other careers. This is something I would certainly hope, but it’s not what we’ve seen

as manufacturing jobs have been lost across North America. GM recently announced that it is closing its operations in Oshawa, Ontario and I would be very surprised if those workers will ever make as much. Therefore, assuming that AI does lead to large job losses, it might be that the best public policy would be to reduce immigration— or even declare a temporary moratorium. Understand that I am NOT suggesting that this is necessary right now. But it is something that we might have to consider in the future, because the combination of very open borders combined with the welfare state is a mixture that could lead to ruin for the people who are already here because of the new self-selection process that might drive immigration candidates in the future. These are difficult conversations to have. I really hope that we can reflect on the American experience, learn from their mistakes, and keep that difficult discussion as Canadian, and boring, as possible.

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

“ It sure looks like we are on the cusp of an economic revolution and that revolution will be spearheaded by artificial intelligence, or AI for short.”

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BY MONICA OSPINA

A SAVVY INVESTMENT THE BENEFITS OF RESPONSIBLE SUPPLY CHAINS Today, discussions about sourcing and procurement include the issues of ethical sourcing, human and labour rights, social impact, stakeholder engagement and supporting local communities. Why is there concern about responsible supply chains? Unfortunately, the world has become less peaceful in recent years, mostly due to social conflicts and failed states. Social conflict leads to risk in production, less safety in mobilizing workers and goods and withdrawal of investors. Studies from the World Bank show that conflict reduces global GDP growth by two per cent, per year. The Institute for Economics and Peace reports that violence cost the global economy $14.8 trillion in 2017. Buyers have started looking at social issues more closely than ever, using their purchasing power as an instrument to demand quality and improvement of the working and living conditions of people employed in supply chains. Companies in the consumer goods industry are at the front lines of public opinion because they are close to the final consumer that uses social media to expose wrong doing, risking companies’ 6 FEBRUARY 2019

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reputations. This proximity makes companies care about marketing, packaging, meeting environmental, health and safety specifications as well as supporting causes consumers care about. For example, the coffee and cocoa industries demonstrate how consumer power has been the force behind the success of the fairtrade movement in agriculture. The case is slightly different for industrial goods producers. Buyers will demand suppliers demonstrate good practices through quality assurance programs, environmental, health and safety certifications and the compliance with labour and human rights, among other certifications. But unlocking good practices in the entire supply chain—from raw materials to components—is a major task. It is here, where players are forced to trust each other, that there is risk. For example, consider heavy equipment and imagine how difficult it will be for buyers to verify good practices in the production process. They must enquire from the sources of the minerals and metals used, to the smelters in which those minerals and metals are processed, on through product design, manufacturing and assembly. Responsible sourcing is the result of an engagement process, in which companies assume responsibility as trusting partners. These companies build efficiencies and have an impact on communities, resulting in longterm sustainability solutions and improvements to their reputation. Here are five points to consider regarding responsible sourcing.

Responsible sourcing is the result of a complete engagement process, in which companies assume the responsibility of being a trusting partner.

UNLOCK THE SUPPLY CHAIN Companies that work on unlocking their supply chains display good management, because they are engaged in risk management and demonstrate a commitment to quality and sustainability. These companies assess the risks and capacities of suppliers. As a result, they source from reliable partners, ensuring non-disruption in production, best practices around human and labour rights, quality of materials and cost efficiencies. ENGAGE IN UNDERSTANDING YOUR SUPPLY CHAIN Your team’s diverse expertise will lead to a professional risk and opportunity analysis. This analysis should include country of origin, top efficiencies and opportunities for collaboration with partners. By bringing your team’s talent and knowledge, your company will be able to define the best approaches to responsible supply chain. STUDY THE RISKS Research threats or global trends in your sector and countries where you source products, services and raw materials. Don’t be surprised to find socio-political risks as well as restrictions on trade and environmental regulations. Consider how the risk of social conflict might impact your operation. Well-managed companies have mapped supply chain risks. They find sustainability solutions that improve production quality and bring benefits to the impacted communities. For example, Phillips’ approach to supply chain challenges demonstrates good practices. It is working on making its supply chain “conflict-free.” The company wants to avoid the use of conflict minerals, which are minerals mined in conditions where armed conflict and human rights abuses occur. Minerals such as tungsten, tantalum and tin (known as 3TG) are used in the production of electronic devices that Phillips manufactures and are mostly mined in the eastern region of the Democratic Republic of the Congo. In order to build responsible supply chains, Phillips is committed to

Monica Ospina is founder and director of O Trade.

purchasing only raw materials traded through official channels and offers the positive involvement of local communities. ENGAGE WITH YOUR PARTNERS Learn about their approach to social risk in their supply chain and join them if they are investing in best practices that support efforts to act responsibly. Don’t miss the opportunity to invest in improving the working and living conditions of people working in your supply chain. This builds efficiencies for the operation and contributes to the wellbeing of the families impacted. VISIT SUPPLIERS’ REGIONS Your firsthand observation will give you a real understanding of your purchasing power and will open avenues for collaboration with local partners. Your success in ensuring responsible supply chains depends on the engagement process that assesses and mitigates risks, maximizes capacities, builds efficiencies and contributes to social development. SP SUPPLY PROFESSIONAL

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WHAT’S YOUR NEXT MOVE?

STRATEGIES TO PREPARE FOR THE SUPPLY CHAINS OF THE FUTURE

Today’s supply chains are morphing at an unheard-of pace. While technology offers more efficient, transparent operations it also presents challenges that are new to many organizations. At the same time, many companies are realizing that their supply chain provides not just a way to move goods, but also a genuine business advantage. But what strategies must those organizations adopt in order to realize the benefits of supply chain as a more strategic partner? PROCUREMENT AS PARTNER The role of the procurement specialist is evolving, says Madeleine Baker, of TELUS. At the same time, many organizations are recognizing the value that the function brings. With this increasingly important role, procurement has more responsibility to think strategically, provide information as intelligence and act as an agent for change, Baker notes. Procurement must work to ensure they’re spending time on activities that drive the 8 FEBRUARY 2019

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most value within an organization—this often requires deselecting and enabling stakeholders to self-serve or be supported by other resources such as an offshore service desk. “However, we still need our strong negotiators in combination with our strategic thinkers, or as a function we will not be able to maintain or increase the value we can bring,” she says. “We are constantly being asked to deliver more in a shorter timeframe—you don’t drive benefit without strong execution.” At the same time, technology continues to shape the function, she says. The challenge lies in adopting some of the more cutting-edge applications—for example artificial intelligence (AI) to read contracts. To deal with this, Baker recommends having strong fundamentals, including spend analytics software, a sourcing platform and contract system. Don’t just focus on procurement technology, Baker recommends. Look to intranet sites as well to help stakeholders and procurement professionals do their jobs.

“Within TELUS we relaunched our intranet site with clearer buying guidance, and how-to guides to support frequently asked questions such as ‘how does my vendor get paid?’ or ‘which vendor should I be using?’ and included videos and branding that positions the function as a professional strategic partner,” Baker says. “We created a front door for support requests through a workflow tool, that already existed within the organization, which mandates information that we always need to get started, and automatically triages requests to the appropriate resource group depending on level of spend, risk and complexity.” As technology evolves, procurement professionals must understand how to apply tools such as robotic process automation (RPA) to automate and become more efficient, Baker adds. Look to more complex analytic tools to increase category intelligence, she recommends. “Within TELUS, we’ve created multiple RPAs which complete activities on our behalf from running regular reports to providing spend and reciprocity reports when you email a bot with a vendor ID,” Baker notes. Risk remains an important consideration when handling technology and looking towards the future. Yet risk management often happens in the background and without visibility, Baker says. At the same time, procurement is responsible for informing and influencing stakeholders with regards to risk. This includes running supplier financial evaluations, asking risk-focused questions as part of the RFP process and involving experts in contract discussions. “I have always been taught that procurement’s role in managing risk is the most important role we have,” Baker says. “If a vendor has an issue such as a supply shortage that affects company revenue, it doesn’t really matter how many budget impacting savings you delivered during the negotiation.” TELUS regularly reviews its risk management practices while updating contract templates as the breadth of risks to be considered SUPPLY PROFESSIONAL

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ILLUSTRATION: ANGELICA YIACOUPIS

BY MICHAEL POWER

Let’s take a step back, let’s ask the hard questions, let’s understand what the technology is able to offer before we jump in

ILLUSTRATION: ANGELICA YIACOUPIS

increases, she says. Last year, the company updated its supplier code of conduct with cross-functional collaboration, adding new sections related to supplier diversity, data ownership and AI. Sourcing and buying decisions must consider the vendor risks that could apply. Those risks may include buying software on a corporate credit card, agreeing to a clickthrough agreement or single sourcing using supply chains from places that may require incremental costs due to security complexities. As the role of procurement and supply chain changes, practitioners must be aware of how the field can help to create social value within the communities they work with, Baker says. She recommends developing a strong supplier code of conduct with social principles that all third parties must agree to. As well, develop a

supplier diversity program. “Within any supply base it is important that we encourage diversity,” she says. “It’s well known that a dollar spent with a local or minority business has a far stronger impact on a local community than a dollar spent with a multi-national organization headquartered outside of Canada.” TELUS runs a supplier diversity program and Baker sits on the board of directors for WBE Canada. The organization also supports CAMSC and CGLCC organizations, which advocate and accredit small, minority-owned Canadian businesses. She and and her colleague Ashifa Jumani also sit on the board for GroYourBiz, supporting female entrepreneurs. To deal with what the future has in store for the profession, Baker recommends considering

how an organization can continue to be of value. As well, seek out opportunities for professional growth in order to stay relevant. Procurement organizations should also work to deselect, Baker advises. Consider activities that take up time and get in the way of using a specialist skillset. Should a stakeholder be raising that PO? Can you put an RPA in place to run your reporting processes? Can an offshore resource support some of your low risk sourcing processes and activities? To keep relevant, offer information as intelligence to stakeholders. As well, let them know about risks, sourcing options and ideas that will create value so they increasingly see procurement’s importance while viewing the field as a trusted advisor. “Get at the forefront of the changing technology, educate yourself and your teams in order to provide the best thought partnership to the business and the organization,” Baker recommends. LEADERSHIP Beyond procurement, the roles that supply chain professionals occupy are also changing. But the reasons are largely the same—technology adoption and the increased prominence of supply management within organizations, says Christian Buhagiar, president and CEO of the Supply Chain Management Association (SCMA). Technology advances mean fewer repetitive tasks for employees and their work now calls for more analysis, innovation and collaboration, he says—a trend that will only grow as technology affects skill requirements. Leadership and strategic thinking skills are more important than ever, and supply chain professionals must now collaborate across business units and functions. “Effective supply chain management contributes to productivity and customer loyalty—it’s essential to a company’s success,” Buhagiar says. “It’s no surprise that supply chain management is now recognized as a key component of corporate strategy.” Technology is heightening supply chain professionals’ perceived value, he adds. For example, big data’s availability and the ability to analyze it provides real-time insights that enable the best-possible customer service, inventory control, forecasting, production and transportation planning, contract negotiation and monitoring and more. More often, technology lets practitioners demonstrate the value brought by supply chain operations on a

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company’s financial performance and customer relations, Buhagiar says. Risk management has always been critical for supply chain leaders, he adds. If it’s more important now, it’s because expectations have increased—everyone now expects fast, error-free service. If that service doesn’t come through, the ramifications can harm a company’s reputation, future sales and success, especially in the social media age. “The variety of supply chain-related risks a company faces can be extensive and complicated,” Buhagiar says. “Understanding those risks and developing avoidance and response strategies must certainly be a major focus of the supply chain leader.” To succeed in this environment, supply chain professionals need a comprehensive education in the field that includes continuous learning both in class and on the job, he adds. Some lateral career experience also helps to gain knowledge and skills in a range of supply chain functions. An understanding of areas like sourcing; procurement; contracts; forecasting; logistics; transportation; operations and IT is necessary. SCMA’s Supply Chain Management Professional (SCMP) designation program includes modules on all of these topics, he says, along with workshops meant to develop soft skills. Buhagiar cites a 2018 report called Humans Wanted, in which RBC noted that successful technology adoption needs not only skills and knowledge in science, technology, engineering and mathematics, but also soft skills: critical thinking, collaboration, social perceptiveness, active listening and complex problem solving. “These skills were indicated for technology adoption generally, but seem especially crucial to supply chain practitioners,” Buhagiar says. CHALLENGES AHEAD Despite a shifting landscape, many of the challenges that supply chains face have remained the same, says Nikos Papageorgiou, vice-president of customer success at Slync.io. End-to-end visibility has remained an important issue for supply chain professionals for the past three or four decades, for example. At the same time, other challenges have become more relevant, such as the need for tighter collaboration among entities like shippers, freight forwarders and other partners to solve problems. Supply chain has seen siloed problem solving and management, Papageorgiou notes, and there’s a need to close these barriers to work together towards common goals. “The operating model has been very 10 FEBRUARY 2019

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We are constantly being asked to deliver more in a shorter timeframe— you don’t drive benefit without strong execution

reactive,” he says. “There’s been a lack of visibility across the end-to-end supply chain, limited multi-party collaboration, and perhaps, the lack of prediction, we see as the key challenges across the supply chain.” When the topic of supply chain’s future arises, attention often focuses on tools like artificial intelligence (AI) and blockchain. But there’s a lot of value to be found in technology without immediately pushing into more exotic examples, Papageorgiou says—for example through digitization and automated workflows. At the same time, AI has already moved beyond merely hype, he adds. Supply chain professionals are now using the technology to predict exceptions. For example, when tracking shipments, the goal of freight forwarders is timeliness and customer experience, Papageorgiou notes. Within that process, AI can help predict delays. Previously, supply chain professionals would generate a model manually. But now, through harvesting supply chain data, AI can generate models that provide those predictions without the need for a human being to try to fine tune that model. “On one end, AI helps us get to those optimal models,” he says. “On the flipside it actually creates a much better digital user experience for the employees.” The challenges associated with adopting such technology are fewer and fewer as new, low-cost solutions emerge, Papageorgiou says. Organizations can begin by test driving such technologies without too much commitment. Many of the challenges are on the organizational side, for example the maturity of the company’s technology, as well as it’s appetite for technology—so don’t underestimate the importance of operational readiness. “When you give people these new technical capabilities they will not solve problems on their own,” he says. “You want to be ready to engage in terms of, in some cases, changing the operating model, changing to new processes and engaging with partners in new ways.” How can organizations gets started in adopting these technologies? One hurdle they

face is a lack of awareness, Papageorgiou says. Before jumping in, an organization’s leadership should work to understand these technologies, their business implications as well as how they can deliver value. If necessary, bring in experts to educate the organization about the possibilities, he advises. “Let’s take a step back, let’s ask the hard questions, let’s understand what the technology is able to offer before we jump in.” There seems to be a scarcity in skills needed to use these technologies, Papageorgiou says. At the same time, many people have recognized the value. Organizations must balance the risks of such technologies while also capitalizing on potential benefits. It’s therefore necessary to put together a cross-functional team that includes both supply chain professionals and those with technical expertise, either internally or through outside experts. It’s often best to start small, Papageorgiou recommends. The good news is, several lowcost solutions now exist that companies can try on a subscription basis—including cutting-edge technology options like AI and blockchain. This allows them to get their hands dirty by using the technologies for a while, perhaps through a short pilot, before committing fully to using any of them. At the same time, bold transformations have their place, Papageorgiou says. Organizations that are already mature with regards to technology can often benefit from diving into a larger-scale adoption. Whether to start small or large depends on various factors, he says. “Both plays can be part of the game.” Now more than ever, supply chain and procurement are undergoing an enormous transformation. Practitioners would do well to embrace these changes while maintaining the core skills that make the profession so valuable. SP

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LIMITLESS POTENTIAL

EY’S LORI BENSON ON TECHNOLOGY, DIVERSITY AND FINDING YOUR SUPPLY CHAIN PATH. As far back as the mid-1980s, Lori Benson knew that her company’s stockroom would eventually become obsolete. The supply chain veteran recalls informing her supervisor that, one day, there would be no need for such a room. Instead, as technology advanced, a small kiosk would sit in front of the space the stockroom occupied. Employees would send electronic requisitions from that kiosk for whatever supplies they wished to order. “She actually scoffed at that and said ‘no way,’” Benson recalls. “That put a fire under me to make it happen. I knew the reality: the computer age wasn’t going to turn off.” At the time, technology wasn’t what it is today. Back in the 1980s, the office that Benson then worked in had a handful of centrally located computers that employees could access rather than a PC at every desk. Most people still used typewriters. After her supervisor’s comment, Benson resolved that the stockroom 12 FEBRUARY 2019

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would become obsolete within two years. As computers became mainstream, Benson worked to bring in an electronic requisition that employees filled in when they needed something. Despite the initial disbelief she encountered, it eventually happened. “No more stockroom,” she now says, noting the process took three years rather than the two she first envisioned. “We still had inventory of some things but we were able to house it differently. We didn’t have to have that floor space.” Benson, SCMP, CPSM, sits chatting on the 40th floor of the Ernst and Young building in downtown Toronto, where she has worked since 2007. Headquartered in London, England, EY is a multinational professional services firm and one of the “Big Four” accounting firms. CAREER OR JOB Benson is procurement compliance, L&D, enablement and knowledge lead, and her

passion for supply chain in conversation is unmistakable. But if asked 10 years ago why she got into the field, the answer may have been quite different than it is today, she says. Benson has considered the question throughout her career, which began in retail—she once worked in a grocery store before landing a job at a gas bar. For her, the wording is important: she has always wanted a career and “not a job,” she notes. She eventually landed a position early on in a stockroom. And while she would later vow to say goodbye to that stockroom, she found her time there rewarding and exciting. “You’re meeting with a lot of different people,” she says of her time there. “I saw a lot of different business professionals and what they were doing in their careers. I started thinking, ‘what do I really love?’ I love working with people, I like working on solutions, I like thinking through complex problems and applying thought and a keep-at-it attitude.” The realization that supply chain could provide the career she craved drove Benson to learn more. She studied part time to earn her Supply Chain Management Professional (SCMP) designation in 1994 (it was then called the Certified Procurement Professional, or CPP) and the Certified Professional in Supply Management (CPSM) in 2011. But when she started in the field, professional services organizations weren’t as focused on their supply chains as they are today, she says. So, Benson worked on making her education as practical as possible for what she was doing each day. “I remember doing EOQ (economic order quantity) on the pens and pencils, which is kind of ridiculous when you think about it now,” she says. “But I had to apply that knowledge somehow within what I was doing to make it really clear and understanding what supply chain was.” Benson began meeting people from different areas in supply chain: manufacturing, banking, healthcare, aerospace, the military and, of course, professional services. In hindsight, she SUPPLY PROFESSIONAL

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©IMAGE: JOEL ROBERTSON PHOTOGRAPHY

BY MICHAEL POWER

We all need to make sure we don’t miss those opportunities, because it’s those minorities that are going to be building our future economy.

©IMAGE: JOEL ROBERTSON PHOTOGRAPHY

now realizes that, as she moved through her career, everything that took her away from supply chain felt wrong, like a bad fit. Opportunities arose to work in facilities management and other areas of the business. But each move away from supply chain compelled her to return. “I really wanted to be in supply chain,” she says. “I really grew passionate about making sure I stayed extremely focused on that aspect of my career.” Supply chain, Benson notes, has always let her scratch the itch she felt to solve problems and meet new people. While other fields also offered these opportunities, it often seemed to Benson as though the projects were finite, with a defined beginning and end. But supply chain never stops moving; it’s constantly evolving and innovating, compelling practitioners to take things in different directions. No day is ever the same, she says. “After being in this career for 37 years, it never stops being exciting to me,” she says. “It’s always evolving. That’s what’s exciting about supply chain, it’s constantly changing.” TECHNOLOGY Just as supply chain has evolved in recent decades, so too has technology and ultimately, the way business is done. As a profession, supply chain has always placed a premium on change and innovation. How to increase speed to market? How to add value to products and services? Benson says she’s always been attracted to that aspect of supply chain. Now, an added challenge is the speed at which supply chain professionals must react to evolving technologies and shifting global environments. Recent technological advances and the speed of change can sometimes appear pulled from science fiction, Benson says. But along with these changes comes a potential that can seem almost limitless. Benson recalls once searching through old computer equipment and coming across a camera used to clip onto a PC and connect to a USB port. The camera could then be used to see colleagues in other locations. Now, such technology is built into PCs and SUPPLYPRO.CA 13

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smart phones. “There isn’t really a need to restrict yourself,” she says. “If you’re looking for a best practice you really have the world to go and ask. Probably, somebody else has already done it. You can do those collaborations, bring those strong, practical solutions. You can tap into different countries that might have already done it. Or, maybe they can tap into you? You can use that collective teaming approach on supply chain issues and come out with some really fantastic solutions.” Benson speaks enthusiastically about a robot assistant that EY recently 3D-printed. A decade ago, she would have been skeptical such a development would be possible—but it’s here today and it’s real. And sure enough, she says, procurement likely was involved in buying the printer. Procurement would also have purchased software and other technologies that would all go into creating a little plastic robot that helps people and answers their questions. STRENGTH IN DIVERSITY Benson’s passion for supply chain extends to other issues within the field. Diversity is one of these interests, and she has been involved in organizations like CAMSC (the Canadian Aboriginal and Minority Supplier Council), the Canadian LGBT+ Chamber of Commerce and others. As a woman working in supply chain, Benson says she is sometimes well aware of her minority status. While women have worked in the field for a long time, the male-to-female ratio still skews towards men, Benson says. This presents challenges on multiple fronts. What’s the perception when minorities go into a negotiation? How can we draw the attention away from that minority status? Benson says she has always been surprised by how often she’s encountered this. For example, while studying for a designation, Benson noticed that textbook examples assumed that participants in situations like negotiations would be male. “I held up my hand and said, ‘that’s wrong.’ That doesn’t reflect me. How can we use these materials and continue to build on the diversity that we have, not only in our practice but also in our supply base? The biggest surprise is that it’s always been a factor and continues to be a factor today that we need to draw attention to.” The same applies to suppliers, Benson says. Whether those suppliers are of colour, from the LGBT community, women or others, the important factor is competence. And there’s still a long way to go in dismantling stereotypes and providing equal access to opportunities, she adds. “We all need to make sure we don’t 14 FEBRUARY 2019

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I saw a lot of different business professionals and what they were doing in their careers. I started thinking, ‘what do I really love?’ I love working with people, I like working on solutions, I like thinking through complex problems.

miss those opportunities, because it’s those minorities that are going to be building our future economy,” she says. “Those small, entrepreneurial suppliers are going to be building the more agile solutions. It’s not necessarily going to come from the giants.” Suppliers and peers have also noticed Benson’s dedication to diversity. In 2018, she won two industry awards for which she’s especially proud. The first was the CGLCC LGBT Supplier Diversity Ambassador of the Year 2018. Receiving the award surprised her, she says, and she was especially emotional during the ceremony. Sometimes, Benson says, she has trouble shaking the notion that she’s not doing enough. But somebody reminded her to look at everything she’s done so far. “Sometimes you don’t think, and you don’t look behind and see all the things that you did,” she says. “It was an incredibly humbling experience and it was so great. I was actually moved to tears.” The second award was the Supply Chain Management Association of Ontario’s (SCMAO) Professional of the Year 2018. While Benson says both awards are equally important to her, she was humbled by this award since the recognition came from her peers. Again, she was moved to tears. “It makes it feel like everything I’ve been doing for 37 years might be impacting,” she says. “It’s pretty gratifying. It’s pretty nice. I can’t say one or the other (are more important) because they were both a surprise.” While feeding her supply chain passion, Benson has worked for decades in Toronto’s downtown core. But a passion for nature takes her into the backwoods. She used to wrangle horses and led horse trail rides when she was younger. She enjoyed the adrenaline rush of riding and competing with peers and, while she still rides occasionally, it’s a tough passion to maintain. As an avid nature lover, Benson also

enjoys simply cutting trails through the brush. Benson has pursued additional education throughout her supply chain career, and at the same time, she mentions the fact that she dropped out of high school. She shares this fact for the sake of those new to supply chain or considering entering the field. Benson notes that avoiding a concrete path only postpones success—it doesn’t mean you won’t arrive, simply that the arrival is delayed. “If you can’t find your passion and you’re not sure, it doesn’t mean you stop,” she says. “You continue, you keep going, you keep trying different things until you find your passion. But if you’re passionate about supply chain, don’t delay. Find a way to build on your education, to build your skills, to get mentorship through other practitioners.” Whatever the route that practitioners take, Benson stresses the importance of staying focused on continuous learning and the ability to help businesses succeed. “To me, that’s the most important thing,” she says. As well, practitioners can now provide an ethical framework around procurement practices, Benson notes. Those with their designation can offer organizations that framework—this highlights the importance that practitioners earn their SCMP, as well as the importance of companies seeking to hire someone who has completed or is working on their designation. As technology advances, some pundits have ruminated on the potential end of supply chain as a career. Organizations won’t need supply chain, the argument goes, as its functions will be automated as technology advances. But no one wants to do the tasks that will be automated anyway, Benson says. She advises practitioners to think differently about their supply chain careers. Continue learning, be agile, focus on innovation, investigate areas like artificial intelligence (AI) and robotic process automation (RPA). In other words, boost confidence in your ability in the field. “Build that trust and credibility within your skills,” she says. “Supply chain will not go away because of technology—it will be enhanced.” SP

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STEPS TO BOOSTING YOUR SUPPLY CHAIN CYBER SECURITY Open your browser, type “data breach” into the search text area, and then click “News”. On any given morning, the search might yield more than eight million results with headlines like: “…failing to take security seriously”; “passport numbers stolen…”; “… breaches affected more than a billion people in 2018.” While headlines seem to get straight to the facts of a breach, the reality is often a bit more complicated. The details of what exactly happened or who caused the cyber incident are oftentimes challenging to uncover. Indeed, most organizations’ technology estates are a complicated, internetworked ecosystem of multiple technology service providers, partners, and suppliers, each adding their portion of product capability and service functionality. With each layer of additional functionality, opportunity is created for additional partners and suppliers to be added into the ever-growing technology connected ecosystem. It is estimated that as much as 50 per cent of a company’s IT operations and digital services are performed by third parties and delivered outside of the control of an organization’s technology team. In parallel, there has also been a significant growth in the number of cyberattacks. In the Symantec 2018 Internet Threat Security Report, researchers found some staggering results over the previous year: there was an 8,500 per cent increase in antivirus detections; a 40 per cent increase in ransomware infections, as well as an 16 FEBRUARY 2019

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88 per cent increase in overall malware variants. Moreover, researchers noted they are “seeing an increase in attackers injecting malware implants into the supply chain to infiltrate unsuspecting organizations, with a 200 percent increase in these attacks.” Given these trends, it’s imperative that organizations understand and manage the cyber risks within their organizations’ supply chain. YOUR SUPPLY CHAIN VULNERABILITIES ARE YOUR VULNERABILITIES In the world of specialization, businesses rely on their supply chains to gain leverage, optimize costs and expand into new markets. With that, there is oftentimes the need to give direct access to customer files, process flows and perhaps share other key data elements. Unfortunately, this also expands the footprint—or the attack surface—that an adversary may try to exploit to gain access to your data. The old adage that a chain is only as strong as its weakest link applies here. Your cyber capabilities are only as strong as your weakest supplier’s capabilities, and their cyber vulnerabilities are your vulnerabilities. A DEEPER DIVE INTO UNDERSTANDING SUPPLIER CYBER RISK Developing a deeper understanding of supplier cyber risk is critical to determining an organization’s overall cybersecurity risk. It may seem challenging to get started, but there are a few

steps that can make the effort reasonable. Ask the following questions: Do I have a complete inventory of suppliers and third parties with access to my data and systems? The first step to protecting your data and systems is knowing who has access to it and why. Identifying what information is being shared with suppliers and third parties and why they need that access enables you to understand how big, wide and deep your relationships go. How do I expect these organizations to handle and protect my data and systems? Once relationships have been identified, it’s essential to develop and communicate a policy that your suppliers must adhere to in order to access your systems and protect your data. Also, determine what cyber insurance policies your vendors have in place should an issue arise. How do I assure that my suppliers and third parties have the capabilities to protect my data and systems? After developing and communicating your expectations for data and systems protection, it is critical that your suppliers and third parties can demonstrate their cyber risk management capabilities. This needs to be more than a contractual exercise with a light technical questionnaire. It is important to aggressively test the supplier’s cyber risk management capabilities prior to allowing access to your systems and sensitive data. The adversary will be attacking aggressively, so understanding the supplier’s capabilities is extremely important. How am I monitoring vendors to ensure they are meeting expectations? Real-time monitoring tools can flag problems experienced by particular vendors, such as active malware or bots coming from their networks. A formal review and assessment program should be put in place for ongoing or even continuous monitoring. Although this can be done annually as part of a standard compliance assessment, it is prudent to conduct these checks more frequently. Vendors that deal with more sensitive data, or for whom a large part of that relationship is based on data management, should likely be assessed quarterly. SUPPLY PROFESSIONAL

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ILLUSTRATION: ANGELICA YIACOUPIS

BY KEVIN RICHARDS

Kevin Richards is a managing director and global lead of cyber risk consulting at Marsh Risk Consulting

Developing a deeper understanding of supplier cyber risk is critical to determining an organizationâ&#x20AC;&#x2122;s overall cybersecurity risk

ILLUSTRATION: ANGELICA YIACOUPIS

Should an issue be identified within the assurance or monitoring activities, there needs to be a clear and urgently defined recourse with the vendor. To make the point clearer, your organization may also consider empowering your cybersecurity leader (for example, a chief information security officer or chief information officer) with the authority to suspend or even terminate suppliers that are unable to demonstrate that they can adequately safeguard your organizationâ&#x20AC;&#x2122;s data and protect the larger supply

chain ecosystem. This may seem extreme, but it is critical to being able to deliver successful corporate operations. Supplier cyber risk management will be a growing investment and element of your organizationâ&#x20AC;&#x2122;s overall cyber risk management program as your supplier ecosystem continues to grow. And while it may be challenging at first while the program is being developed, done properly, it can help manage a significant cyber-risk exposure area and ultimately work to keep your organization from being one of the eight million data breach search results. This information is not intended to be taken as advice regarding any individual situation or as legal, tax, or accounting advice and should not be relied upon as such. You should contact your legal and other advisors regarding specific risk issues. The information contained in this publication is based on sources we believe reliable but we make no representation or warranty as to its accuracy. All insurance coverage is subject to the terms, conditions, and exclusions of the applicable individual policies. Marsh cannot provide any assurance that insurance can be obtained for any particular client or for any particular risk. Marsh makes no representations or warranties, expressed or implied, concerning the application of policy wordings or of the financial condition or solvency of insurers or reinsurers. SP

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BY SANJA CANCAR-TODOROVIC

SURVIVING THE 4IR ORGANIZATIONS MUST INNOVATE TO SUCCEED IN THE FOURTH INDUSTRIAL REVOLUTION Business processes that used to take days now take seconds to complete and communications and interactions have evolved well past traditional means. Information is available in an instant, at your fingertips. Customer expectations have changed, demanding convenience, speed, accuracy and instant gratification. Are you keeping up with all these changes? If not, you are falling behind. We’re in the midst of the fourth Industrial Revolution (4IR), where the only constant is change. And not just any change but change at lightning speed. The evolution of the global village has seen a major boost in the last decade. Powered by the new technologies of artificial intelligence (AI), cryptocurrency, the Internet of things (IoT), cloud, blockchain and so on. Organizations across the globe are challenged to keep up with the new ways of doing business. They 18 FEBRUARY 2019

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are further challenged to recruit, develop and retain their human capital, as well as evolving their corporate cultures to support the changing landscape. With no precedence, everyone is learning the new rules of the 4IR by trial and error. Some organizations are better at navigating through this than others that are reluctant to change and innovate. Think of Blackberry, Motorola or Blockbuster—just a few household names that Millennials have never heard of. So where do we start? How do we remain relevant, competitive and successful? And how do we foster the culture of innovation that seems to be the ingredient needed for survival in the 4IR? TRUST IS KEY The innovation process requires a considerable amount of trust. In the PwC 2017 CEO Survey, 58 per cent of CEOs globally are concerned about the lack of trust in business, and 69 per cent of them agree that it’s harder for businesses to gain and keep trust. These numbers have not improved today. This is a troubling concept considering that the 4IR is not stopping for breaks while the organizations figure things out. Building trust is the foundation of innovation, and it must come from the top. Since human capital is any organization’s most valuable asset, having trust in leadership, and leadership trusting employees, is crucial. Just like a solid foundation is the key to building a strong, sustainable structure, trust is the foundation of a winning corporate

While risk is not an appealing concept to anyone running an organization, it’s the only choice when considering the alternative.

culture. Peter Drucker coined the phrase that “culture eats strategy for breakfast”—something that every leader must understand, live and breathe. Without trust there’s no innovation. Without innovation, organizations are doomed to failure. Resisting change and complacency will speed that process. Innovation involves risk from everyone involved (organization, leadership, board, employees, customers, partners, suppliers and shareholders). While risk is not an appealing concept to anyone running an organization, it’s the only choice when considering the alternative. INNOVATION TIPS While there will always be some type of risk, the goal is not to try to eliminate it but to manage it through collaboration and engagement, transparency, open communications and agility: Organization/leadership/board must walk the walk. Change must come from the top. Empower employees at all levels, with the right tools, information, autonomy and freedom to try new things. Create a platform for ideation, where employees can share and try new ideas without the fear of failure or the need to ask permission first. Participate in ideation sessions and encourage other leaders to participate. Innovation must be a top priority and leadership participation is the way to demonstrate that. Give feedback and the support to bring the ideas to life. Trust your supply chain; vendors and suppliers are subject matter experts in their area of expertise. Empower them to share their observations of your business. Also, empower your supply chain to try new things. Eliminate the fear of Failure. Remember Elon Musk’s words: “if you are not failing, you are not innovating enough.” Celebrate failures as much as successes, as those failures often lead to bigger and more innovative ideas. Encourage innovative thinking and an agile approach to implemen-

Sanja Cancar-Todorovic is director—strategic relationships, global real estate asset management, at Manulife

tation; Fail small, fail fast, learn from it, improve and try again. Celebrate the successes no matter how big or small. Give credit where it’ s due. A culture of innovation and freedom to fail is a highway to innovation. Be the change you want to see. Trust and Innovation are the requirement for staying relevant, successful and in business during and after the 4IR. Once trust has been established, diversity must follow next. A diverse and inclusive workforce and supply chain are crucial to encouraging different perspectives and ideas that drive innovation. As Tim Berners-Lee stated, “We need diversity of thought in the world to face the new challenges.” A diverse and inclusive environment facilitates a broader exchange of perspectives and better reflects society’s true makeup. Diversity fosters creativity that is a key driver of innovation. These ideas seem very simple and obvious, yet so many organizations struggle with trust, innovation and diversity. Strong change champions with a bulletproof change management plan are great, but if senior leadership does not walk the walk, their efforts will be futile. Letting go of old ideas, habits, values, beliefs and ways of doing business seems harder for some than for others, but it’s survival of the fittest. Only those willing to embrace change will survive. SP SUPPLY PROFESSIONAL

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Bring on the cars Automakers bring their best to LA and Detroit shows.

New haulers The latest truck offerings from US auto shows.

Safety first What kind of safety training do your drivers need?

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The next level A first drive of the 2019 Mercedes Benz Sprinter.

Embracing telematics Telematics is useful in tracking fleet performance.

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

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Fleet Management

Canada’s Auto industry looks to the future

Utility edges out luxury for Canadian car shoppers

The Canadian Automotive Partnership Council (CAPC) met to discuss the ongoing transformation of the automotive industry, and the impact these changes will have on the growth and competitiveness of Canada’s automotive sector. Held at the North American International Auto Show (NIAS) in Detroit, CAPC members were joined by Navdeep Bains, Minister of Innovation, Science and Economic Development and the Todd Smith, Ontario’s Minister of Economic Development, Job Creation and Trade. Members highlighted the importance of the Canada-US-Mexico free trade agreement (USMCA) in bringing stability to the North American market while expressing the need to resolve the steel and aluminum tariffs. “The conclusion of the new trade agreement made the past year a particularly important one,” said CAPC Chair Don Walker. “I was particularly pleased with the way in which CAPC was able to engage with the Canadian and Ontario governments throughout the negotiations.” During the meeting, members heard from Michael Robinet, director at IHS Markit, who discussed global trends like connectivity, electrification, robotics and international trade and how these are influencing the future of Canada’s auto sector. The CAPC is an industryled organization with a mandate to address competitiveness issues that the Canadian automotive industry faces.

Canadians’ love affair with SUVs continues to grow, as their penchant for sedans and some luxury vehicles appear to wane, according to 2018 data released from autoTRADER.ca’s annual top 10 most searched vehicles list. autoTRADER.ca, an online automotive marketplace, mines and analyzes its site search data each year to capture the pulse of Canadian car buyers’ interests. “For the fourth year in a row, the perennial Ford F-150 has retained the number-one spot on the list, but this year, the Honda CR-V and Toyota Rav4 have climbed into top positions as Canadian favourites, claiming spot number seven and number 10 respectively,” said Michael Bettencourt, managing editor, autoTRADER.ca. “As a result, sedans appear to be taking a back seat in 2018’s top 10 list compared to previous years.” While luxury sedans, BMW 3 Series and Mercedes-Benz C-Class remained in the top 10, this year, the Honda Accord and the BMW M series both fell off the list. For the first time, every province saw the inclusion of at least one SUV model, reinforcing the category as a top choice among Canadians. autoTRADER.ca also observed an average 11 per cent yearover-year increase in new car SUV listings. Canadians also appear to still love sports cars, with favourites including the Ford Mustang, Porsche 911 and Chevrolet Corvette, ranking at number two, eight and nine respectively.

Quebec hosts connected vehicles event OmniAir Consortium and Propulsion Quebec are hosting a connected vehicle testing and policy conference near Montreal, May 6-10. The OmniAir Plugfest takes place at Transport Canada’s Motor Vehicle Test Centre in Blainville. For information, visit www.omniair.org.

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John Lindo, manager of public relations, Jaguar and Michael Kopke, director of marketing, Kia Canada with awards from the Automobile Journalists Association of Canada (AJAC).

Kia Stinger, Jaguar I-Pace win at CIAS The Kia Stinger has won the 2019 Canadian Car of the Year, while the Jaguar I-Pace took home the 2019 Canadian Utility Vehicle of the Year at the Canadian International Auto Show. The vehicles were selected by the Automobile Journalists Association of Canada (AJAC). “AJAC journalists are among the most objective and discerning automotive professionals in the country, and the fact that these two vehicles have risen to the top of our vigorous testing and voting protocol means that they’re truly among the best available to Canadian buyers,” said AJAC President Mark Richardson. The Jaguar I-Pace, which offers 377km range and 400hp, is the first fully electric vehicle chosen for an overall award by AJAC member journalists. “We’re very proud of this vehicle,” said John Lindo, manager of public relations, Jaguar, told a crowd of journalists. “When all of us had a chance to drive it, we all got out of the car saying, ‘this is one of the best things we’ve ever built.’”

For its part, the Stinger has a 3.3L twin-turbocharged V6 engine, 365hp and 376lbs-ft of torque. “This is really exciting for us,” said Michael Kopke, director of marketing, Kia Canada. “We’re celebrating 20 years in Canada. We’re really proud to be part of the Canadian landscape and to have the Stinger, the halo of our brand, to be recognized by the journalists here.” The vehicles were awarded at the opening ceremonies of the Canadian International AutoShow in Toronto on February 14. This followed months of testing and evaluation on roads and conditions across Canada by nearly 70 automotive journalists. The decision followed two rounds of voting scored anonymously on many different factors, including performance, features, technology, design, fuel consumption and value. These winners were selected from across 55 entries, including last year’s category winners and this year’s next-generation or significantly updated vehicles. Voting data was collected anonymously from more than 1,500 ballots.

For the fourth year in a row, the Ford F 150 has kept the number one spot on the list of autoTRADER.ca’s top ten most searched vehicle list.

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Connected and autonomous commercial vehicles face cyber threats Even as connected and autonomous vehicles approach real-world readiness, concerns still linger about the effectiveness of currently available automotive cybersecurity solutions. This is particularly challenging for commercial and public sector fleets, where threats are more complex and security breaches could have devastating consequences in terms of lost productivity, disrupted supply chains, and plummeting revenues. New analysis by Frost & Sullivan, called Automotive Cybersecurity Emerges as a Strategic Priority in an Era of Connected and Autonomous Commercial Vehicles, finds that automotive cybersecurity solutions are emerging as a strategic priority for automakers, many of whom are partnering with automotive cybersecurity specialists to ensure the safe and successful deployment of connected and autonomous commercial vehicles. “Hackers perceive commercial vehicles carrying high-value goods to be more lucrative than passenger vehicles,” said Sathya Kabirdas, research director – connected fleets at Frost & Sullivan. “Greater sophistication makes cyber threats harder to identify. At the same time,

CAA launches cannabis education campaign CAA South Central Ontario has launched an cannabis education campaign called #DontDriveHigh. The campaign is geared towards young drivers to remind them that even though cannabis is legal, it’s not harmless, especially in situations where reaction time, motor skills and judgment are critical, the organization said. “Just because you think you may be able to drive while high, doesn’t mean

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these threats are no longer universal; they are evolving to target specific industries and use cases.” Frost & Sullivan estimates that 55 per cent of trucks in North America and 43 per cent of trucks in Europe will be connected by 2025. This will highlight the need for robust cybersecurity solutions with active multi-layer protection that address the unique safety requirements of connected and autonomous commercial vehicles, the consulting company says. “Ideally, such solutions should also have future-proof technologies designed on the premise that the vehicle’s systems can be penetrated in ways that were not observed when the vehicle was designed,” noted Byron Messaris, senior mobility consultant at Frost & Sullivan. “Accordingly, they will employ compelling countermeasure-based technology in machine learning (ML) to ensure maximum protection.” Several new companies and partnerships are transforming the automotive cybersecurity space, the company says. SafeRide Technologies, for instance, has developed solutions that leverage AI and machine learning technologies to detect and prevent threats. Simultaneously, the addition of software capabilities to its vSentry solution, through a strategic partnership with Irdeto, highlights the cental role that comprehensive, advanced cybersecurity solutions will play in the future of connected and autonomous commercial vehicles.

you should,” said Teresa Di Felice, assistant vice-president, government relations, CAA SCO. “It’s important to remember that if you are going to consume alcohol or cannabis, find an alternative to driving so you can arrive where you’re going safely.” CAA and The Turn Lab agency created videos demonstrating cannabis’s impact on concentration, coordination, reaction time and decision making. CAA’s research shows a gap in awareness of the effects of using cannabis, specifically, in young men. Men aged 25 to 34 are the most likely to drive under the influence of cannabis.

Uber’s self-driving cars return to Toronto roads Uber Advanced Technologies Group (ATG) is returning to Toronto roadways with its self-driving cars in manual mode following the recent release of its self-driving Safety Report and summary of its top-to-bottom internal safety review. Self-driving vehicles will begin manual driving with someone behind the wheel controlling the vehicle on city roads and highways near the company’s self-driving research

and development hub in Toronto’s downtown. These vehicles will collect data and fuel AI technology, automated mapping and mapless driving research efforts, the company said. Uber said that manual-mode driving will allow it to collect data needed to understand the different driving conditions that a self-driving vehicle might encounter when operating, helping to ensure the company’s selfdriving systems can perform under various conditions. Self-driving systems require a detailed, high definition road map to operate safely.

LG and Microsoft partner on autonomous vehicle, infotainment system business

Kim Jin-Yong (left), president of LG’s Vehicle Component Solutions Company and Chris Capposela, Microsoft’s chief marketing officer. LG Electronics (LG) and Microsoft have agreed to work to enhance and grow LG’s autonomous vehicle and infotainment system business. Through the partnership, LG will work to transform its existing digital platform for the vehicle industry by leveraging Microsoft’s Azure cloud and artificial intelligence technologies along with LG’s future self-driving software. LG will apply Microsoft’s AI to its advanced driver assistance systems (ADAS), driver-status monitoring camera (DSM) and multi-purpose front camera products and incorporate Microsoft’s Virtual Assistant Solution Accelerator in LG’s infotainment systems. With Azure Data Box service, data captured on the road can be uploaded automatically to create a library that helps the self-driving

software grow smarter. LG also plans to build innovative digital development and testing grounds state-of-the-art technology, the company says. High performance computing (HPC) and graphics processing unit (GPU) supported by Microsoft Azure will reduce the time for LG AI self-driving software to learn and evolve. Road and traffic patterns in cities that would require more than a day for self-driving systems to comprehend would take minutes. In addition to its ability to train AI self-driving software, Azure also has a voice-enabled virtual assistant solution accelerator with its AI services. LG’s vehicle infotainment system will allow drivers to check traffic conditions, search for nearby restaurants, call up songs and more.

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fleet.toyota.ca 1 2018 Canadian Black Book Best Retained Value Award winner – (Sub-Compact Car, Compact Car, Mid-Size Car, Full-Size Car, Small Pick-Up, Full-Size Pick-up, Minivan, Mid-Size SUV, Overall Brand – Car, Overall Brand – Truck/Crossover/SUV) category. Based on value retained from original MSRP for 2014 model year vehicles as published by CBB, as of January 1, 2018. See CanadianBlackBook.com for complete details. 2Based on IHS Markit Vehicles in Operation as of June 30, 2018 for Model Years 1999 to 2019 vs Total New Registrations of those vehicles.

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Fleet Management By Lesley Wimbush

Mitsubishi Mitsubishi, one of first automakers to predict consumer’s switch from passenger cars to crossovers, debuted a new concept in Los Angeles that suggests their new focus is on electrification. The e-Evolution concept uses a trio of electric motors (one up front, two behind) to power the all-wheel drive system, and boasts a sophisticated level of artificial intelligence technology onboard.

Kia Billed as “the largest Kia ever” the Telluride unveiled in Detroit is a three-row, eight-passenger SUV. Powered by a 291hp V6 engine, it’s the first Kia designed specifically for the North American market.

Toyota

New Year, New Vehicles LA Mobility and NAIAS shines the spotlight on the latest vehicles and technology From LA to the Motor City, the auto show stages showcase the latest developments in new vehicles and technology. For the last 30 years, the circuit’s January kick-off has begun with the North American International Auto Show (NAIAS) in Detroit and ended in Los Angeles the week before Christmas. All that changes, of course in 2020, with the Detroit show moving to June. With the show season now underway, here are some of the highlights ushered in for the New Year.

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While LA natives may not find it as noteworthy, we in northern climes welcome Toyota’s debut of a Prius for all seasons. The very first to offer allwheel-drive, the new Prius AWD-e boasts a 5.6 L/100km efficiency rating. The Japanese company also chose the LA stage to unveil a new hybrid version of their compact Corolla—the bestselling car of all time– that will reportedly average 5.0L/100km. The first hybrid in its 52-year history promises to deliver the same interior space as the regular Corolla with all the standard safety features. The climate may have been more frigid, but the debuts were just as hot on the Detroit stages, with the hottest undoubtedly being the longawaited return of the Toyota Supra. Resurrecting a badge made famous by 80s tuner culture, the new twoseater coupe is a 355hp collaboration between Toyota and BMW.

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General Motors GM’s Cadillac luxury division introduced a new addition to their crossover portfolio in LA—the 2020 Cadillac XT6. The three-row, full-size crossover is powered by a 310hp V6, and is available in either front or all-wheel drive. It will compete in the same segment as the Lincoln Aviator and Lexus RX 350L. Chevy’s pony car showed off a brand-new face for 2019, featuring new headlights, hood, fascia and more variation between trim levels. Also new for 2019 is the first turbo-charged four-cylinder model. The 271hp Turbo iLE boasts retuned suspension, thicker sway bars, Brembo brakes and an available rear camera mirror.

Nissan Nissan’s sixth generation Altima returns with a brand-new option available: all-wheel-drive. Good news for Canadian buyers who might otherwise migrate into the crossover segment, AWD can be had on all models with the four-cylinder engine, and every Altima comes standard with Apple CarPlay, Android Auto, eight-way power driver seat and push-button start.

Hyundai When Hyundai revised the Santa Fe last fall they axed the XL extended version, in preparation for an all-new three-row crossover called the Palisade which debuted in Detroit. Available in seven or eight-passenger configuration, the full-size Palisade competes with the Honda Pilot, Nissan Pathfinder and Ford Explorer.

FCA Fiat Chrysler (FCA) brought the power to Detroit in the form of a 1,000hp Hellcat crate engine, and a 797hp Dodge Challenger SRT Hellcat Redeye. Rounding out their lineup on a more reasonable note was the Chrysler 300C—the range-topping model of the 300 lineup, featuring AWD, 363hp V8 Hemi, platinum chrome finish, 20-inch polished aluminum wheels, available two-tone interior.

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Mazda In sunny Los Angeles, Mazda swept the wraps off the new Mazda3—available for the first time with all-wheel-drive. The completely redesigned compact comes in hatchback or sedan, and also offers a six-speed manual, and a super-efficient diesel-style, high compression turbo engine for improved fuel economy. Mitsubishi, one of the first automakers to predict consumer’s switch from passenger

cars to crossovers, debuted a new concept in Los Angeles that suggests their new focus is on electrification. The e-Evolution concept uses a trio of electric motors (one up front, two behind) to power the all-wheel drive system and boasts a sophisticated level of artificial intelligence technology onboard.

Ford Ford swept the wraps off a new 700+ hp Shelby GT500 they claim is the fastest factory Mustang ever. The powerful car should sprint from 0-100km/hr in under four seconds, with handling courtesy of Ford’s magnetorheological active damping suspension system. The 2020 Aviator is a three-row crossover from Ford’s premium Lincoln division, and provides all the luxury of the fullsize Navigator in a more compact package. While the base engine is a 400hp V6, the Aviator offers a more fuel-efficient alternative in the form of a plug-in hybrid version.

Honda Honda chose Detroit to unveil the Passport, a new two-row, five-passenger mid-size SUV with 280hp, available all-wheel-drive and standard Honda Sensing suite of safety technology features. Competing with the Ford Edge and Nissan Murano, the Passport neatly slots between the compact Honda CRV and full-size Pilot.

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Fleet Management By Kate Vigneau

The cost of evasion

Can you afford not to invest in driver training? Driver training is important, yet it often gets pushed to the back burner because it takes drivers off the road and consumes valuable resources. It can be hard to justify the resources invested because, when an effective program is in place, nothing happens. This is why data is so important. Knowing your crash and incident rates pre- and post-implementation of a training initiative can make the case for continuing with it and help in designing a program to be delivered to the right people, in the right circumstances, at the right time. Who is the right target for driver training? The obvious pick is employees who drive work vehicles daily. While this is certainly true, consider training other groups such as those who drive occasionally for work, those who only operate personal vehicles and even spouses and dependants of employees. The fact is, a crash involving an employee’s spouse can be just as detrimental to your organization in terms of lost productivity as your employee takes time off to deal with the consequences.

Managing risk

Under what circumstances is driver training the best answer? To deal with this, we can consult the risk management grid that categorizes risks according to how often 28 FEBRUARY 2019

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Katherine Vigneau, CAFM is Director of Professional Development, NAFA— Fleet Management Association.

they occur and how damaging they are. The grid provides the ideal mitigation strategy for each quadrant. High – High risks should be avoided or reduced if that is not possible. High Severity, Low Frequency risks should be transferred (usually through insurance). Low-Low risks are retained and the High Frequency, Low Severity risks are also retained and reduced. Loss reduction strategies, of which driver training is one, should be applied to high frequency risks in both the high and low severity quadrants. Take backing crashes as an example. In many fleets they are a primary crash cause, in other words, high frequency. Yet, they rarely cause significant damage, and so are rated as low severity. They are an ideal candidate for loss reduction moves such as driver training to reduce the frequency and therefore the overall cost of these risks.

The most effective time for training is right after the driver is hired and before he or she is assigned to a vehicle. Subsequent refresher training usually consists of one or two days of classroom instruction in which initial training material is reviewed, or updated material is presented to familiarize drivers with new equipment, operating problems or regulations. Refresher trainings should take place annually, or as needed. Remedial training, in the case of a crash or other breach, should happen as soon as possible after an incident. Keep in mind, when measuring training benefits that they go beyond the obvious and may include the following: Reduction in crashes: The number of crashes and crash-related costs are greatly reduced. Trained drivers know how to act safely and what situations to avoid. Reduced maintenance costs: A driver who knows a vehicle’s mechanical limitations and respects the vehicle will develop good operating habits, take better care of the vehicle and cooperate more fully with the maintenance department. Reduced absenteeism and labour turnover: Training helps a driver develop a better understanding of both the job and fleet problems and increases the person’s job satisfaction. Reduced supervisory burden: Training establishes a standard of performance and a basis for effective corrective action by supervisors when needed. Welltrained drivers usually require less supervision because they understand these standards clearly and know how to meet them without continued reminders from a supervisor. Improved public relations: Drivers represent the organization in daily contacts with customers and other users of the highway. Good training reflects credit not only on drivers but also on the company. Once you establish the need for a driver training program, there are three main steps in its creation. FM/SP SUPPLY PROFESSIONAL

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STEP 1: skill evaluation

Organizations that employ drivers have a responsibility to ensure their employees are equipped with the highest level of skills and knowledge when it comes to all aspects of their job, including safe and sustainable vehicle operation. Best-in-class training programs use driver skill assessments to gather data about the driver’s strengths and weaknesses. These skill assessments can be conducted by supervisors in actual driving situations, or through a series of online tests.

STEP 2: gap assessment

Existing performance can be compared to organizational targets to see where gaps lie. Targets should be objective and attainable. A target of zero crashes in the next 12 months may be dismissed as unachievable while a target of a 20 per cent reduction in preventable crashes may be embraced.

STEP 3: training delivery

Training can range from familiarizing new drivers with the operation of equipment, to modifying the behavior of all drivers and can take place in many forms, three of which are described below.

Behind-the-wheel training

Behind-the-wheel training should address safe driving concepts such as defensive driving, driver reaction times and vehicle mechanics. Defensive driving means the driver must have both the desire and the ability to control crash-producing situations. Drivers accept responsibility for avoiding crashes rather than passively surrendering to an adverse situation. They have a positive attitude and expect to prevent crashes by taking the initiative. However, attitude alone is not enough. The defensive driver must also demonstrate alertness, foresight, knowledge, judgment and skill.

Commentary driving

Here, the supervisor rides with the driver and the driver describes what he or she sees in the traffic situation ahead and how to adjust to it. Commentary driving allows the supervisor to gauge how much a driver notices in any traffic situation. It also teaches the driver how to use eye movement more effectively and note all the elements that enter into any driving situation.

Equipment familiarization training

Drivers should be trained to avoid hazards and take appropriate preventive measures for the specific type of equipment they are using or service they need to perform. For example, the following should be part of a school bus driver’s training: Boarding procedure: Driver to motion child across street; bus to remain stationary until students are seated

De-boarding procedure: Driver to stop bus where it can be seen; driver to leave door closed until traffic stops Driver to inspect equipment: Emergency door function; push-out windows; emergency equipment Driver to train children in proper passenger procedures Driver to be trained to be assertive towards student control There is demonstrable value in driver training programs that are creatively assembled and selectively targeted. Check out our online story in which three use cases of value-added training are showcased. Ultimately, what these managers learned is that, if you think training is expensive, see how much it costs to avoid it. SP MATERIAL FOR THIS ARTICLE HAS BEEN DRAWN FROM NAFA FLEET MANAGEMENT ASSOCIATION’S RISK MANAGEMENT GUIDE.

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Fleet Management By David Miller

Next level van

The 2019 Mercedes-Benz Sprinter From a design standpoint, cargo vans may not be the most exciting four-wheelers on the road, but they’re big business—just ask Mercedes-Benz. It received a 20,000-unit order from Amazon for its new 2019 Sprinter. With the online world in a booming state, it’s no wonder the German luxury brand has put plenty of resources into remodelling its commercial van for a third-generation, and its first since 2006. For this test, I was provided an Arctic white 2019 Sprinter 2500 cargo van with the standard 144inch wheelbase (it can be had at 170-inch as well). There’s also a new edition to the roster, the 1500 base size to go along with the 3500 and 4500, available in cargo, crew, passenger and cab chassis form. Regardless of configuration, style doesn’t change much on the outside. 30 FEBRUARY 2019

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How much can really be done to a supersized box anyway? Nevertheless, the Sprinter’s grille and headlights take on a sleeker form that falls in line with the rest of its lineup. There’s also still something to be said for its three-pointed star logo, representing a status and level of commitment for that particular business.

A technological marvel

Inside, is where the transformation from a simple to sophisticated commercial mover takes place. Mercedes-Benz has taken technologies implemented in its top-shelf cars like the E-Class and S-Class, and placed them into this spacious cargo box at a starting price of $42,900. The most noticeable addition comes in the form of its all-new Mercedes-Benz User Experience

(MBUX), an infotainment unit that sits in the centre of its comfy three-seater front row featuring four cup holders. My tester came in the seven-inch variety under the Premium package ($1,640), which can be upgraded to a stunning 10.25-inch screen. The new system is a high-definition, intuitive and responsive operation that specializes in voice commands for climate control, radio, or navigation, simply by saying, “Hey Mercedes.” I asked to find the closest diesel station, and it provided a list of locations. After quickly choosing one, I instructed MBUX to direct me to it via its navigation system. By 2020, Canadians will receive the full suite of MBUX capabilities that will include Mercedes Pro Connect, a fleet management system with vehicle tracking capabilities that’s

also able to look at specifics such as tire pressure. An attention to safety is paramount within the aforementioned Premium package and Driver Convenience Package ($1,430). These packages provide: Blind Spot Assist, Attention Assist and Cruise Control for the latter, and Active Braking Assist, Active Lane Keep Assist, and a rearview camera in the infotainment display from the former. If you want to go full-on gadgetry, get the Premium Plus Package ($3,080) for that 10.25-inch screen, Traffic Sign Assist, Parking package with 360-degree camera, wireless charging, and a distance regulator Distronic plus.

Solid, smooth drive

Technology places the Sprinter at the forefront of van offerings but having various powertrain options FM/SP SUPPLY PROFESSIONAL

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1. An infotainment unit sits in the centre of a comfy three-seater front row that features four cup holders. 2. There is a 4x4 version for additional costs, but the writer’s vehicle was the 4x2 rear-wheel setup with a max payload of 1,870kg (4,123lbs). 3. With diesel and gas powertrain options, there is a total of 48 different base models to choose from, including high roofs and extended versions.

2. adds versatility to the mix. The 2500 was fitted with the top-tier 3.0L V6 turbo-diesel (a 2.0L four-cylinder gas engine is standard) rated at 188hp and 324lbs-ft of torque that’s mated to a seven-speed automatic transmission. There’s a 4x4 version for additional costs, but this one was the 4x2 rear-wheel setup with a max payload of 1,870kg (4,123lbs). Diesel doesn’t make for the quietest of drives, but the Sprinter is smooth compared to most cargo vans that have you bobbing in your seat. The Sprinter is anything but bumpy, creating a relaxing SUV ride feel even with cargo in the back. My week of testing landed in the middle of a snowstorm, and to my amazement, road and wind noise were simply faint sounds in the background. You may have to hold the

engine start button for a whole two seconds before it fires up, but once it does, the 66 lb-ft of extra torque in the diesel is felt off the line. It sends the large transporter off with some gusto and eventually into a nice groove at highway speeds. Cornering is puzzlingly precise with a smooth turning radius; just make sure to check all your mirrors to confirm full clearance. The one thing I could do without is its skinny gear shift lever. It may work on the C- or E-Class but doesn’t suit the bulk that is the Sprinter. It’s a bit of a disconnect, much like the old-style control panel next to the futuristic MBUX unit. Luckily, that control panel can be swapped out for a modern instrument cluster with colour display in the Premium Plus package. With diesel and gas powertrain options, a total of 48 different base

3. models to choose from including high roofs and extended versions, and 1700 configurations worldwide (there’s no number for Canada) that maximizes cargo volume at 15,000 litres—there’s clearly a 2019 Mercedes-Benz Sprinter for every need. The Sprinter also separates from the pack by being technologically

sound and more prepared for a connected and fleet efficient future. This is all achieved while getting you to your destination in a smooth and safe driving manner with ample payload and towing ratings. For a company’s peace of mind, all the above would seem to indicate, a winning formula. FM/SP

As Tested Price: starts at $47,400 ($42,900 with gas turbo four-cylinder); tested at $60,611 Engine: 3.0-litre V6 turbo-diesel Power: 188 hp, 324 lb-ft of torque Transmission: 7-speed automatic Rated Fuel Economy (L/100 km): N/A Observed Combined Fuel Economy (L/100 km): 14.8 FLEET MANAGEMENT SUPPLYPRO.CA 31

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Fleet Management By Howard J. Elmer

Rolling out the truck iron

The Ram’s standard 6.4L Hemi V8 will offer cylinder deactivation and Variable Cam Timing and 410hp and 429ft of torque.

The latest truck offerings from the LA and North American auto shows The big news coming out of the Detroit Auto Show this year had to do with the show itself. This was the last time the show would take place in January. After 30 years, the show organizers decided that June will be a more pleasant time of the year to show off new cars and trucks. But this didn’t stop the roll out of new truck iron—cold or not. The 2019 Ram Heavy Duty pick up showed off some new sheet metal; a beautifully updated interior (inherited from the 1500-series Ram rebooted just last year) and serious capacity updates. This Ram HD also fired a shot at crosstown rival Ford by announc32 FEBRUARY 2019

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ing that its 6.7L Cummins diesel engine would offer 1,000lbs-ft of torque. That is a never-before achieved benchmark. Other new 2019 Ram HD features and numbers of significance are: The highest capability numbers for any diesel or gas-powered HD pickup—35,100lbs max towing and 7,680lbs max payload. The standard 6.4L Hemi V8 will offer cylinder deactivation and Variable Cam Timing (VCT) and a class-leading 410hp and 429lbs-ft of torque. This engine is now coupled to the TorqueFlite eight-speed automatic transmission. The new frame uses 98.5 per cent

high-strength steel—reducing weight while providing the highest levels of torsional rigidity. Meanwhile, more lightweight materials in the frame, powertrain and body (like an aluminum hood) reduce overall weight by 143lbs. New 360-degree surround-view camera with trailer reverse guidance provides a single display-screen view of both sides of a trailer to assist drivers during towing and hookups. Uconnect 4C NAV will come with a 12-inch configurable screen while the new centre console has 12 different storage solutions. The truck will be arriving at dealers late this spring.

The new Ranger

The new Ford Ranger was also on hand bringing a midsize option back to the market after an absence of nine years. On the outside the 2019 Ranger evokes a muscular body with a high beltline that emphasizes strength, while a raked grille and windshield are said to give it an athletic appearance. From the rear, the Ranger identifies itself loudly with its name stamped into the tailgate. Inside, the Ranger blends comfort and functionality with room for up to five people, their gear and accessories. The center stack is home to an eight-inch touch screen for the available SYNC 3 system, while FM/SP SUPPLY PROFESSIONAL

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the instrument cluster features dual LCD screens for real-time vehicle, navigation and audio information. This new Ranger is built with a high-strength steel frame, fully boxed with six cross-members, modern parabolic leaf-spring rear suspension, front and rear steel bumpers, short overhangs for offroad clearance and a hitch platform that is through-welded to the frame. This Ranger has a 126.8-inch wheelbase with an overall length of 210.8-inches (compared to the fullsize F-150’s 157-inch wheelbase and length of 243-inches). The standard powertrain is a 2.3L EcoBoost engine and 10-speed automatic transmission. It features direct fuel injection, a twin-scroll turbocharger and a 16-valve design. This engine makes 270hp and 310lbs-ft of torque. It will also come standard with Auto Start-Stop. This chassis and powertrain combination offers best-in-class (gas) towing of 7,500lbs. Payload is a very respectable 1,860lbs. These trucks are arriving at dealerships across Canada now.

Jeep Gladiator

Jeep, one of the hottest brands selling today, is doubling down on its success by showing a brand-new midsize pickup truck for 2020. Called the Gladiator (a revived Jeep

truck name from the 1960s) it will look to score sales in the rebounding mid-size market as well as offering Jeep faithful another truck option within the brand family they already love. If you’re trying to remember the last time Jeep offered a pickup—well it’s been 28 years. Long enough that two entire generations have grown up thinking that Jeep only builds the Wrangler. However, prior to 1992 when the last Comanche pickup rolled off the line Jeep always had a truck as a companion to the original CJ, then the YJ and now the Wrangler. This new Gladiator’s body-on-

frame design offers four doors on a stretched frame 31-inches longer than the Wrangler four-door. The wheelbase on the truck is also 19.4-inches longer. This design provides for a five-foot cargo bed with a payload capacity of 1,600lbs. Inside the bed there are under-rail bed lights, integrated tie-downs, and an external AC power plug (400W). There is also an available spray-in bed liner, bed divider and tonneau cover. As for towing, the Gladiator is claiming a best-in-class rating (for mid-size trucks). It will tow up to 7,650lbs which along with its payload capacity and space for

4. The new Gladiator, the first pickup Jeep has offered in 25 years, has four doors on a frame that’s 31 inches longer than the Wrangler. 5. The 2019 Ford Ranger boasts a muscular body with a high beltline and a raked grille and windshield.

four adults makes the Gladiator a versatile recreational hauler. Standard powertrain on the Gladiator is the veteran 3.6L Pentastar V6 engine that makes 285hp and 260-lb.ft of torque. It comes with Engine stop/start standard. The engine is paired to a six-speed manual transmission standard—or an optional eight-speed automatic. A second powertrain will become available in 2020—a 3.0L EcoDiesel. This engine will be rated at 260hp and 442lbs-ft of torque. It will be available with only the eight-speed automatic transmission. Built in Toledo, Ohio, the allnew 2020 Jeep Gladiator arrives in showrooms in the second quarter of 2019.

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Fleet Management By Don Woods

Connected Tomorrow Uncovering the ROI of telematics The way you conduct business is changing. In today’s business environment, disruptions are creating new challenges, magnifying existing struggles and fundamentally altering the landscape of your industry. Change can be challenging, but complacency is often worse. You need to remain agile and do all that you can to stay ahead of your competition. Have you found yourself asking, what can I do today to prepare for the challenges of tomorrow? If so, you’re certainly not alone and in many ways, fleet is a microcosm of this evolving business dynamic. The vehicles in your fleet are a critical part of your business. Whether you’re using them to deliver goods, repair infrastructure or service customers, they’re more than just cars and trucks. They’re tools required to do a job. What’s the best way to review and maximize your fleet’s contribution to your business? As more organizations look to manage fleet as a strategic business asset, telematics is a popular method to uncover real-time optics into fleet performance.

Embracing telematics

Getting started with telematics can feel like a major undertaking, but it doesn’t have to be this way. It’s a common misconception that

Don Woods is vice-president, client information systems at ARI.

you have to roll out a complex telematics strategy to your entire fleet in order to achieve a measurable impact. However, the reality is that even a small pilot program can deliver significant value to your business. The first question we typically ask a customer who is considering a telematics solutions is simple: what’s the problem you’re trying to solve? For example, a company that was struggling to control its escalating spend on tire replacements turned to telematics. With the single goal of reducing tire costs, they set up this new telematics solution to initially measure just one key metric—tire pressure. Each morning, the company conducts a vehicle health check to measure tire pressure and if an issue is identified, they’re able to address it immediately instead of incurring more costly repairs. There are myriad business challenges that telematics can help solve. By focusing on one problem, or perhaps a particular segment of your fleet, rolling out telematics becomes a more manageable undertaking. Some typical use cases that serve as a great introduction to telematics include: Asset tracking Monitoring fuel economy Route optimization

Mileage reporting Monitoring preventive maintenance Compliance Regulatory compliance Identify a problem, see if data can help solve it and then expand from there. With telematics now in place, you’re ready to build upon your initial successes and begin tackling more complex challenges. But how do you harness the power of telematics to take the data it provides from merely insightful to actionable? This is precisely where fleet management companies (FMCs) such as ARI help change the conversation.

Fleet management company as change agent

In recent years, telematics technology and advanced analytics have changed how companies approach managing a fleet. With the increased transparency telematics provides, you know precisely how your fleet is performing in real-time. The potential for connected fleet management is immense and partnering with a fleet management company (FMC) such as ARI can help you maximize your telematics ROI. Every day, a typical fleet generates millions of data points—fuel transactions, maintenance records, licensing events, and more. Combine this information with telematics data and it is easy to see how even veteran fleet professionals can feel overwhelmed trying to process this volume of data at the speed at which it is generated. And simply processing the data isn’t enough; you need knowledge. Bringing all of this data together serves as the foundation of any successful telematics strategy and typically, your FMC plays a vital role in this process. They’re the data

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integrator, consolidating telematics data with your other fleet metrics to provide a holistic view of your fleet’s performance. This insight allows you to dig deeper into areas where costs seem to be rising or efficiency is declining, ultimately fueling better decision-making. In addition to being the data integrator, we’re also the solution provider. Your fleet management partner helps make the data actionable, allowing you to leverage it to create value for your organization. Together, we’ll leverage the data to uncover the “why” behind your fleet challenges and develop a strategy for improvement. With the tools, technology and people in place to make the telematics information valuable, you’re able to explore connected fleet management and begin solving more complex challenges to make the most of your telematics investment. Opportunities to leverage this increased connectivity typically include: Measuring downtime to help increase efficiency; Identify opportunities to right size your fleet based on utilization; Increased visibility to engine diagnostic data to help optimize preventive maintenance spend; Measure incidents such as harsh braking, hard cornering, and speeding to determine your drivers’ impact on TCO; and Monitoring productivity to help establish SLAs and notify/update customers in real-time; Receive immediate notification of an accident; leverage additional data to help with subrogation. Identify potential fuel fraud using fuel tank data and location information; This connectivity allows you to better monitor, and act upon, key fleet metrics, adding a new layer to the value proposition of your telematics strategy.

What’s on the horizon?

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By focusing on one problem, or perhaps a particular segment of your fleet, rolling out telematics becomes a more manageable undertaking.

in the technology with a growing number of organizations exploring opportunities to adopt telematics. At the end of 2018, approximately 30 per cent of all North American fleet vehicles had an active device. That number is expected to jump to nearly 50 per cent by 2022. Among the top factors behind this interest is the increased ability to drive quantifiable results. Companies are getting more ROI out of the technology, which is driving increased utilization. In terms of what’s next, OEMinstalled devices will likely propel adoption growth exponentially. Several manufacturers now offer factory-installed telematics units, eliminating one of the biggest challenges companies typically face when implementing a telematics program—device installation and the associated downtime. Factoryinstalled units can also provide enhanced vehicle commands such as remote start and remote lock/ unlock while also simplifying the process of beginning or canceling service for a particular vehicle. New technologies on the horizon will also continue to drive innovative solutions. In-cab cameras with telematics integration offer significant potential to improve safety by analyzing driver behavior and identifying instances of distracted driving. There’s also the opportunity to explore performance based insurance. Using telematics, your FMC and your insurance provider are able to interface to determine a more accurate risk profile, creating an opportunity to generate additional ROI in terms of reducing insurance premiums and liability. Finally, evolving analytics platforms will offer new ways to look at the data and uncover additional opportunities for improvement.

effort to improve safety, helping to ensure regulatory compliance, or monitoring downtime to maximize efficiency, telematics will benefit most companies across virtually all areas of operations. Embrace the opportunity and be open to the optics telematics can provide. From a tactical perspective, if you don’t currently have telematics in place, explore a pilot program. By introducing a telematics solution to a portion of your fleet, you can start experiencing the benefits that come with increased connectivity as you work toward a more connected future. It’s also important to remain flexible and adjust your strategy as technology continues to evolve. Don’t wait for the “perfect” solution and continue to miss out on the value telematics can provide, even on a small scale. But remember, telematics is only a tool. You can’t just flip-theswitch and expect changes to occur overnight. It’s vital you understand what the data is telling you and use it to determine how best to implement meaningful improvements. Success requires an organizational commitment and a culture ready to embrace behavioural change. It’s the action your business takes with the data that becomes the true solution. SP

Preparing for a connected tomorrow

The real-time optics that telematics delivers can transform a business’ performance. Whether it’s observing driver behaviour in an FM/SP SUPPLY PROFESSIONAL

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BY MARIETE F. PACHECO

A SOLID FOUNDATION APPLYING CATEGORY MANAGEMENT’S RIGOR TO PROCUREMENT Category management was once seen as solely a retail concept. It’s a phrase coined in the 1980s by Brian F. Harris, a former university professor at the University of Southern California. The idea found its way into the B2B world as part of many organizations’ supply chain management operations. Category management in retail is externally customer focused, in contrast to wholesale and service settings, which are internally focused. Category management’s foundation lies in strategically managing each related group of products as its own business unit rather than at the individual product level. It’s the analysis of the collective business unit’s performance, competitive market landscape and customer needs review (in wholesale the internal customer or end user) that builds the premise for category management. For example, how does new equipment and the replacement parts, repairs and preventative maintenance relate to each other and support a project? BUILDING THE FOUNDATION For category management to function well, three 38 FEBRUARY 2019

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criteria must be in place: solid data, customer or end users’ feedback and an environment receptive to change. A successful category management operation flourishes in a data-rich organization that offers accessible, current and accurate information. Including primary data as usage quantities to more complex information as seasonal demands, differing geographically or regional demands; in its essence clean data is critical. It is imperative to have a robust information system to access the necessary data points as it greatly assists in identifying patterns and gaps. Without sound data there is no benchmark when comparing alternatives; nor is there a method by which to measure historical performance. Building on the foundation of sound analytics, there is a requirement to collect the end user’s feedback, or “voice of the customer,” as it relates to their needs and pain points as well as the importance or trade-offs the customer/end user values. Incorporating the customer’s needs provides the ability to manage expectations better, while ensuring alignment between procurement and end users; which

ultimately can facilitate or hinder the rollout. Lastly, a key element is the organization’s ability to embrace and execute the solutions developed during the process. Culture plays a strong part in success. There may be process and procedure changes from deploying category management practices, like the formal RFX documentation or its inputs. An environment receptive to change is paramount, as success or failure depends on supporting and implementing category management strategies. Sometimes an organization’s resistance to change is beneficial regarding employee turnover in procurement. A tenured employee offers both stability and the ability to develop stronger long-term supplier relationships. Category management faces challenges. These trials are not new but have evolved over time to encompass several elements: the ebb and flow of an organization’s shifting procurement model between centralized and decentralized, conflicting organizational objectives, implementation and talent acquisition. Organizational structures occasionally change as an organization’s strategy changes. This is most often experienced during mergers and acquisitions or significant leadership changes. The decentralized procurement model can be converted to a centralized model to improve visibility, better manage inventory and maximize buying power. Conversely, for example, on a multi-site project, procurement may be decentralized to a just-in-time approach for supplies or to incorporate regional needs better (for example, building code variances, product shortages and so on). Navigating an organization’s environment can present hurdles related to conflicting organizational objectives. Some organizations are concerned solely with the direct savings quickly obtained by cost decreases through switching suppliers. This short-term perspective leaves little room for error if products are not identical. End users can pick up on minor differences in form, fit or function. An example is switching between liquid hand soap suppliers. SUPPLY PROFESSIONAL

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Mariete F. Pacheco, MBA is senior category manager at HD Supply Brafasco.

The incumbent provides an orange scented, quality product at 4L for $5 while the new supplier offers a similar orange scented, quality product 4L for $4.50. Both are orange and both clean, however they are not interchangeable to the end user due to noticeable differences that would not be apparent to procurement if looking solely at price per litre. The scent variations due to formulation differences may exacerbate or cause allergies. Bottle shape inconsistences make the second product more difficult to handle during refilling and prone to spillage. The end users’ experience has been negatively affected by the short-term need to save money. An organization focused on long-term sourcing as part of a holistic strategy may see the same cost savings opportunity as a method to ensure a positive work environment is fostered as part of talent retention. The organization takes action on purchasing in larger quantities to not only save money but also address employee feedback of running out of supplies. The alternative approach has a sustainable impact both to the organization as direct cost savings as well as indirect savings by not impacting the end user, especially if talent is scarce. Minor disturbances to a skilled labour force can be detrimental to operations during labour shortages, as can be recalled from the Alberta oil sands boom in the past decade. Implementing a new solution presents procurement with new barriers to the category management process. The stakeholder analysis must be completed at the outset of the sourcing project to not only level set expectations but to identify gaps and potential areas for resistance to change. It’s the procurement specialist’s role to engage cross-functional teams and lead collaboration amongst departments. This inclusive approach is critical in successful change management programs. Secondly, aligning expectations helps to track and manage implementation. This allows all parties, including suppliers, to be held accountable for the outcome. There is nothing

Category management’s foundation lies in strategically managing each related group of products as its own business unit rather than at the individual product level. worse than at the conclusion of the strategic sourcing project to identify thousands or millions of dollars in savings but never have it materialize due to non-compliance. DEVELOPING TALENT The shortage of procurement specialists is not new. The challenge is identifying and developing individuals who are more than sourcing specialists and are well-versed in category management and have change management and leadership skills. The dynamics within procurement have evolved from securing the lowest cost provider and pushing it through the organization to partnering with the optimal full-service solution supplier that adds value beyond product. Where is an organization to turn to address the talent shortage? Some organizations are looking at non-B2B and non-traditional areas for solutions such as attracting talent from retailers or consumer packaged goods companies. These professionals are accustomed to the demands of category management and understand the methodology, which can be transferred to the B2B industry by focusing on internal customer needs instead of their previous external customer focus. Technology can bridge the talent gap, with the sophistication of active talent recruitment applications that can stream through online profiles to identify candidates and encourage them to apply. A culture that encourages professional development can leverage technology through training software and online, interactive learning modules to cultivate young talent into more experienced procurement specialists while to helping those who see their organization investing in their career. Procurement professionals wanting to benefit from category management need the added soft skills of change management and cross functional leadership along with their core expertise in vendor and contract management. Best-in-class category management practitioners have honed their communication skills to help

guide their organizations through change. Procurement professionals must be able to articulate the vision, objectives and benefits of the outcome of their analysis. Change is difficult in any organization, and unfortunately people can be resistant to change. However, it’s the procurement professional’s responsibility to cultivate a plan with stakeholders to ensure program or supplier changes are accepted and implemented. The procurement practitioner is a curator of change and a quarterback of value creation. The work completed at the onset with data analysis, collecting customer feedback, building the RFX requirements and setting targets is vital. But it’s the implementation plan consisting of change management and communication that sets the stage for success. As part of a successful change management plan procurement professional should include both the benefits of the change as well as the consequences of a lack of change tailored to each functional team. Category management’s rigor suits B2B procurement by helping improve sourcing practices like developing a strategy, spend analysis, target setting, implementation and the post-mortem review. The tipping point for category management is here. Procurement specialists and suppliers must prepare to build a strategic partnership based on sound category management principles, not merely placing another order with the lowest cost provider. Category management is about creating sustainable value and building a strategic sourcing mindset. A successful procurement model can be accomplished by balancing the short- and long-term needs through total cost management analysis used in category management. SP

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BY STEVE WALKER

INNOVATION OR IRRELEVANCE? THE DIGITALIZATION DEBATE IS OVER AND DISRUPTERS ARE JUST COMPETITORS If you hadn’t noticed, your business environment has changed irrevocably, and forwarders face a simple choice: innovation or irrelevance. If there can be anyone left in the shipping and forwarding space who is skeptical of digitalization, the fact that the market leaders are evolving into digital businesses means that the path is clear for the rest to follow. The only question is, will you be quick enough to benefit from their efforts, or follow in the wake hoping for some scraps? Maersk have committed to be the first integrated provider of digital global containers logistics, while Kuehne & Nagel launched a half dozen digital platforms last year and expect to increase continuously their digital capabilities in the short term. These developments have pressured their nearest competitors to try and follow suit—and so the need to evolve cascades. FINDING THE VALUE In my opinion, the real challenge for forwarders and other operators is not whether to be digital, but to identify where the real innovation value and ROI is going forward. The point is, there’s 40 FEBRUARY 2019

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no value for most of us in technologies like blockchain, the Internet of Things (IoT), big data and artificial intelligence (AI). There’s questionable value in freight portals and other online markets. There are even questions surrounding the long-term profitability and viability of the most successful digital startups, including Flexport. Arguably, the most important element of any digital transformation is a digital shop front that will allow your customers to transact with you on any device. The rationale is that this digital capability dramatically reduces the cost to serve and gives your client a much better user experience. And with shipping tech already maturing, there are vendors out there that can give you ‘off-the-shelf’ digital shop fronts, so you don’t even have to build your own. But at what cost and where’s the ROI? While you should explore the potential of this technology for your business—if for no other reason than being able to talk about it, as a ‘proactive digital approach’—your focus really should be on the quick wins. And that

means leveraging your existing technology to provide more value to your existing customers, attract new customers and provide new revenue streams for your business. TRANSPORTATION MANAGEMENT SYSTEMS Your transport management system (TMS) deals with the planning, execution and optimization of the physical movements of your clients’ shipments. It’s a logistics platform that enables your team to manage and optimize the business’s daily operations. The rationale for buying your TMS is probably lost in time, but is likely to have included better customer service, tracking capability, business efficiency and seamless communication. Depending on the capability of your TMS, forwarding, origin, destination, intermediate vessel and flight requirements, brokerage, customs, invoicing and costing requirements can all be managed within that one environment. Which means your customers are receiving a higher level of service and can access the data and buyer-supplier information that is shared across your operation, minimizing delays and reducing the potential for errors—and they don’t even know it. What does all this mean? It means that the threat at the start of this piece to ‘innovate or be irrelevant’ should be hollow for most forwarders, who can leverage their TMS to provide ‘digital’ solutions today to be the next disrupter. The type of TMS you operate will typically be dictated by the relative size of your customers. The larger the shipper, the more volume and complexity there is to manage and the TMS is chosen to match the task. This complexity creates opacity in the supply chain, shrouding many transactions, interactions and outcomes, which hampers optimization. Bolt-on technology exists to supercharge your TMS, so that your customers can get more value out of their vendors and cut their supply SUPPLY PROFESSIONAL

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The real challenge for forwarders and other operators is not whether to be digital or not, but to identify where the real innovation value and ROI is.

Steve Walker is consultant and advisor with Steve Walker Global Ltd.

chain costs, while generating new and recurring revenue streams for you. With the right ‘off the shelf’ products, planning and implementation there is no reason why you cannot use your TMS as the foundation to develop your own e4PL solution, a unique product that will win new business and up-sell into your major accounts. Your objective is to configure your client’s e4PL platform, so that they (and you) can monitor the performance of all carriers and use

that insight to control rate discussions across all channels including parcel, road, air and ocean. Your e4PL solution can automate repetitive manual process to eradicate errors (which can average 25 per cent) and reduce cost, automate invoicing and reconciliation and provide evidence of performance, to negotiate reductions with service providers and vendors. This e4PL offer can be enhanced further with business intelligence tools that squeeze every bit of value from the data, so they can correct the past, master the present and predict the future. As technology transforms freight, the forwarders that thrive will be the ones that understand it is a new opportunity to get closer to their clients and create brand new revenue streams. SP

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BY MICHAEL POWER

FLYING THE CHANGING SKIES ACTE CONFERENCE SPOTLIGHTS INNOVATIONS IN AIR TRAVEL While corporate and business travel is multi-faceted, air travel often comprises a large part of any organization’s travel program. At the same time, air travel is changing fast—increasing passenger volume, technology and new processes are shaping what it means to fly for work. These changes were reflected in the agenda for the annual Association of Corporate Travel Executives (ACTE) Global Summit & Corporate Lodging Forum, held in Montreal late last year. Several education sessions focused on changes in the air travel industry and how those trends are affecting the business passenger. An example of this was a session called Improving the Experience: Innovations That Await Air Travellers. The moderated panel looked at innovations that are being discussed in some organizations, along with changes expected to roll out in the near future. The session took an end-to-end approach—using cutting-edge technologies and design elements, travellers will encounter the innovations from beginning when they enter the airport terminal, go through security, board the plane and exit the airport at their destination. The session, moderated by ACTE’s executive director Greeley Koch, looked at three main areas: 42 FEBRUARY 2019

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airports, the passenger perspective and what is coming in the future. Those involved in moving passengers through the air travel experience have an increasingly challenging job, the panel agreed. Passenger numbers and air travel in general are growing, said Nina Brooks, one of the panelists and director, security, facilitation and IT, Airports Council International (ACI) World. In fact, the organization expects passenger numbers to double by 2030, she told the audience. While one potential solution would be to build bigger airports, the industry must also get smarter about how it uses its available space. Improving efficiency and making the best use of technology must also be part of the solution. “There are a lot of things we can do,” Brooks said. “Some of it is about automation—you can put people faster through automated solutions than slow, manual processes.” THE TURKISH EXPERIENCE One airport facing the challenge of high passenger volumes is the recently-opened Istanbul New Airport. Officially inaugurated last October, the facility has set its sights on being the world’s largest airport, said fellow

panelist Tarique Anwar, regional corporate sales manager for Turkish Airlines. As a city, Istanbul represents an air travel hub, Anwar said. Within three hours, travellers can visit 122 countries, or 123 destinations. The airport also has architecture reflective of the host country. “It’s designed to ease each and every passenger,” Anwar said. The total capacity of the airport is around 90 million passengers per year, a number that could jump to 150 to 200 million a year once fully completed. Overall, the project cost US$12 billion. A trend at airports recently is the expansion of the range of goods and services that people can purchase, said Koch, asking the panel whether that expansion is designed to improve the traveller experience or increase airport revenue. Both play a factor, noted Brooks. “There’s definitely a demand for it,” she said. “It’s kind of a win-win—people really do want that.” TECHNOLOGY The panel also touched on the rise of technology in air travel. From the corporate traveller’s perspective, technology will help airport security while making the traveller experience smoother and easier, Brooks said. The issue of identity is a good example of what can be improved through technology. There are trials underway involving the use of digital ID and smartphones, for example by using a traveller’s fingerprint to help them get through an automatic border. “What we’re trying to do is join all of that up so it’s a seamless experience,” she said. Many of these advances bring advantages to executive travellers especially, she said. But as these processes improve, their value will touch other areas. For example, Brooks noted, the TSA Precheck is a great program that allows some travellers to get through customs and security faster—there’s no need to divest personal items at the security checkpoint. But as technology improves there may be no need to divest at all, that will make air travel better for everyone. The SUPPLY PROFESSIONAL

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There are a lot of things we can do. Some of it is about automation—you can put people faster through automated solutions than slow, manual processes

goal, she said, is to improve all security lines and minimize the boring, time consuming parts of the traveller’s experience of an airport. Sharing among and within governments is beginning to improve, Brooks said, pointing to a bilateral agreement for a trial program between Canada and the Netherlands. The trial will see the adoption of biometrics and facial recognition for travellers between the two countries. She also predicted the rise of “virtual passports,” although it will take time to put them into a multilateral framework. Artificial intelligence (AI) will also affect the traveller experience within airports in several ways, Brooks said. But it’s necessary to look at the business processes to which AI is applied. The technology is designed to use data better, with an obvious application involving an improved ability to predict the peaks and dips in certain airport functions. For example, Brooks said, AI can be used to predict where to put more security lines, or which gate number needs more staff. “It’s being able to predict that traffic better,” she said. “Having the data is everything these days. I think that’s where we will see it coming into its own.” Airports are also beginning to use AI in security operations to remove some of the

mundane tasks now performed by staff—to identify a set of keys in a tray, for example. UNVEILING THE NDC Meanwhile, another session entitled The Evolution of Air Distribution: Considerations for Your Travel Program, looked at recent ACTE research to help travel managers address cost visibility and the traveller experience. The organization released a whitepaper last month, said ACTE’s manager, global education, Jen Bankard, who moderated the session. While corporate booking processes have operated in essentially the same way for the past several years, business travellers now expect an experience similar to the consumer environment, Bankard said. With IATA close to unveiling its proposed new distribution capability (NDC), ACTE surveyed travel buyers around the world. The NDC is a program launched by IATA From left, Anwar Tarique of Turkish Airlines, Nina Brooks, Airports Council International (ACI) and Toru Hasegawa, International Civil Aviation Organization (ICAO), discuss the future of air travel with ACTE executive director Greeley Koch.

to adopt a new, XML-based data transmission standard. This new standard is designed to enhance communications between airlines and travel agents. Currently, the NDC remains largely conceptual, said panelist Brian Gervais, senior manager at CBC/Radio-Canada. He also hadn’t heard from his suppliers regarding the impact NDC would have. With the roll out now so close, it’s important for travel buyers to get up to speed on it, he advised. “Now it’s here, it’s going to hit us, and it’s going to hit us fast,” Gervais said. “We need to be ready and prepared.” The panel began by defining the NDC, which represents a method for the industry to standardize connections from airline infrastructures into whatever point of sale tool used, whether that’s an online booking tool, travel counsellor or something else, said fellow panelist Alexandra Coughlin, manager GSR, American Express Global Business Travel. The system will offer technology standardization for airlines to distribute their content. As Gervais added, NDC is similar to plumbing, with suppliers deciding what travels through the pipes. IATA has also introduced a program surrounding NDC that involves certifying airlines, IT providers, distributors or aggregators, as well we sellers, said Cindy Tonnessen, senior director, NDC, Sabre Corporation. IATA checks whether organizations are using NDC as intended and whether they’re following the standard. “I think that is a great first step and as you can see, there are a lot of us in the industry that are taking that first step and putting that plumbing in place so that we’ll be able to, as an industry, start bringing that value forward,” Tonnessen said. There are organizations that are already prepared for the new normal of NDC. For its part, Air Canada is ready to do business with any organization that can consume its content using the NDC, said the airline’s manager of commercial distribution and fellow panelist, Mark Kosikowski. With the advent of the NDC, the airline’s ability to share information back and forth and to use a common language will help it to work more closely with its partners. “We made that commitment,” he told the audience. “We’re willing to work with anyone in the supply chain that wants to work with us in this method—we’re open and ready to work with you guys.” Just like many industries, technology and new developments are changing how organizations do business. Travel managers and buyers would do well to keep abreast of these changes in order to reap maximum benefits. SP

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2019

Diversity Procurement Fair

• ONE-TO-ONE MEETINGS • NETWORKING RECEPTION • BEST PRACTICES WORKSHOPS • SUPPLIER BOOTCAMP

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Conseil canadien des fournisseurs autochtones et membres de minorités

April 16-17th, 2019 Beanfield Centre Toronto

Early Bird Discount until Feb 28th www.camsc.ca

EDUCATION & PROFESSIONAL DEVELOPMENT Visit SupplyPro.ca for information on these and other upcoming industry events.

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ISM2019 April 7-10 Houston, Texas

ProcureCon Canada April 9-10 Toronto, Ontario

NAFA Institute & Expo April 15-17 Louisville, Kentucky

SIAL Canada April 30-May 2 Toronto, Ontario

ProMat April 8-11 Chicago, Illinois

GBTA Conference April 15-17 Toronto, Ontario

CAMSC Diversity Procurement Fair April 16-17 Toronto, Ontario

SCMA National Conference May 29-31 Montreal, Quebec

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IN THE FIELD—BY EUGENE FERNANDEZ

DIGITAL AGE JOB HUNTING TIPS FOR DEALING WITH APPLICATION TRACKING SYSTEMS Applying for supply chain jobs has dramatically changed in the past few years. You have to be an expert in ATS—not just supply chain—to get a job. ATS means application tracking system, and ATS package solutions are large module systems that help reduce HR’s effort considerably. We will deal with the impact one module has on supply chain applicants searching for jobs. The ATS stands between you and HR in getting that first screening call. It scans your resume and cover letter and sends only the top few resumes to the HR recruiter. If you do not understand ATS you will be left wondering why you are not getting the 20-minute HR screening calls and waste months applying for jobs. Of course, if you use networking you can get your resume directly to HR. For contract jobs you are safer as agencies submit two to three resumes to HR directly and do not generally use ATS. However, if you want to apply for jobs through job boards or enter your resume on companies’ career websites you first need to understand ATS fully. A large multi-national organization receives over 1,000 applications for a supply chain manager or procurement/sourcing manager position, and over 200 for a director position. Over 98 per cent of Fortune 500 companies now use ATS packages like Taleo (Oracle), Workday, Success Factors (SAP), Brassing, iCIMS and so on. Even SMB companies with 50 to 100 employees can afford to use cheaper ATS like Jobscan.co, SmartRecruiters, Zoho Recruit, Jobvite, Greenhouse, Recruiter Box, Bullhorn and Jazz. SKILLS MATCHING An ATS will arrive at a total rating based on the points arrived at by matching your hard skills, soft

skills, and other skills in your resume against key words in the job description (JD). They may also give points for your resume word length (not too long), printing, margins, et cetera. Some allot a 10 per cent rating for a cover letter. Many ATS are sophisticated but some cannot even match tense or plurals of JD key words to a resume. Some ATS allot points by comparing the number of times the key words occur in the JD versus the number in your resume. For instance, if ‘leadership’ soft skill is in the JD 10 times and only five times in your resume, you would get only half the allotted points. More points are allotted for hard skills like bank, IT or retail experience compared to soft skills like leadership and team management and still fewer points for other skills. Hence, each resume has to be customized to the JD and could take up to six hours to edit repeatedly after scans to get the required 80 per cent rating. Jobscan.co offers five free scans a month for an applicant. One of the reasons you have to use an ATS package to get the 80 per cent rating is that you must match the key words in the resume to be exactly what are given in the JD. If the JD has key words— senior manager, Microsoft Excel, demand forecasting plan, artificial intelligence, et cetera—and your resume has senior manager or director, MSExcel or MS Excel, demand forecasting plans, AI and so on, you get zero points and would be rejected. Some ATS systems are more sophisticated—HR can use the questions in a company’s career website to allot rating points. HR can question years of experience and allot points of 1, 2, 3, 10, 0 for years of experience of 1, 2, 3, 4

to 6 or 7 years. So entering too many years of experience can get you a lower rating or even get you black balled. ATS may match only against your last five or 10 years of experience. Some ATS cannot read a resume in PDF, graphic, skills in a table format or anything in a header like your professional titles: MBA, SCMP and CSMP. ATS are designed to reduce HR’s time and effort, often at the expense of applicants’ time. Few or none of the ATS companies state the evaluation criteria for rating, which remains a black box to applicants. Public sector organizations state evaluation points in RFPs but do not disclose evaluation points for the ATS they use. Until Generation Z and Millennial applicants band together to educate each other, or demand it, we will have to live without knowing how ATS evaluates us. The time may come, in perhaps five years, when no one will have to apply for a job. People will go to a website—‘UBERJOBS’ for example. The site could match the applicants’ past experience (entered once and later periodically tracked and updated by AI through social media and blogs, against an organization’s JD advertisement/ need, organization type/ characteristics/culture, immediate manager’s culture and leadership style, to the applicant’s experience, culture and needs. It would then submit just one or two names to the manager. When a supply chain professional wants a new job, he or she simply updates the need in UBERJOBS, then goes on holiday. The job seeker simply returns and joins their next company. SP

Eugene Fernandez SCMP, CSMP, P.Log. PMP, is principal consultant at Eugene Fernandez & Associates Ltd.

“ If you do not understand ATS you will be left wondering why you are not getting 20-minute HR screening calls.”

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THE LAW—BY PAUL EMANUELLI

THE ART OF STRATEGIC EXECUTION HOW PROCUREMENT CAN BUILD REAL BUSINESS PROCESS CHANGE If they want to deliver procurement projects with speed and precision, public institutions need to take a procurement-centric approach to business process improvement. That process improvement should integrate strategic planning at the start of each project and apply proper project management practices to solicitation drafting, bid evaluations and contract award negotiations. This discussion explains how purchasing departments can overcome institutional misconceptions and technological assimilation and build real business process change that embeds strategic execution into the front end of the procurement cycle. ADVOCATING FOR STRATEGIC PROCUREMENT Strategic procurement advice should inform the business planning decisions that drive project scoping, pricing structures and contract development strategies. That advice should inform the procedural transparency standards that define defensible evaluation criteria and award procedures. Public procurement advisors need to integrate themselves into the start of the project to advise on initial strategic design planning. However, due to deeply engrained institutional misconceptions, procurement departments are typically not viewed as strategic partners in the planning process and this leads to significant lost opportunities. Project teams tend to cut procurement advisors out of strategic discussions, viewing procurement departments as, at best, tactical and operational service providers and, even worse, clerical cogs who create bureaucratic barriers to project success. After being cut out of strategic discussions, those same procurement advisors are then asked to execute on flawed strategies and are often blamed 46 FEBRUARY 2019

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when projects fail. This then re-enforces the decision to exclude them from the strategy table on the next project. Procurement departments need to stop this cycle of failure by advocating for the implementation of strategic procurement. AVOIDING ASSIMILATION In recent years, public institutions have drifted into the enterprisewide automation of their operations. These “end-to-end” initiatives do not end well for procurement, since generic business automation traps procurement advisors into their stereotypical roles as clerical cogs in an underperforming procurement machine. These generic automation exercises impede strategic execution since mass-produced software platforms aren’t designed to meet the unique challenges of public procurement. Public institutions that depend on external supply chains to deliver their broader public mandates make a strategic error when they assimilate procurement processes into generic software applications, since this reduces procurement to a clerical, non-strategic procedure. This is an exercise in futility. Since strategic procurement was never in the DNA of mass-produced business process software, no number of costly configurations and customizations will overcome the defects in the original source code. At best, these generic “business process improvement” exercises can placate procurement departments with minor and marginal improvements to the flawed standard business processes embedded in the applications. Rather than tinkering with these marginal improvements, procurement departments should resist this software assimilation and champion the change to strategic procurement. For public procurement,

real business process improvement means that outdated procurement processes need to be torn down, rebuilt and rebooted. This requires a top-down mandate that enables a new operating system powered by procurement-centric business process improvement priorities. Once the procurement process is redesigned to enable strategic execution, different smart procurement technologies can be leveraged along the critical project path. LEVERAGING PROJECT MANAGEMENT DISCIPLINES While project management principles may already be applied on some public sector projects at the post-contract award stage, by that point it is too late to make a strategic impact. To enable front-end strategic procurement, public institutions need to execute an institutional rapid action plan that redesigns internal business processes and embeds a culture of project management from the outset of a project. This means mandating strategic execution in the designing and drafting of solicitation documents, in the bid evaluation process, and in the negotiation of contract awards. These front-end stages can then be divided into separate sub-projects. Each sub-project should have a specific project manager that organizes each sub-stage and coordinates activities along the critical path, since someone needs to lead project teams through each stage and navigate any external factors that are blocking the road to contract award. This allows procurement advisors to be engaged from the start of a project so they can provide the strategic advice needed to accelerate downstream execution, while also adding enough float time to deal with unforeseen delays. Project leads can then manage the free float and make tactical

Paul Emanuelli is the general counsel of the Procurement Law Office.

“ Procurement departments are typically not viewed as strategic partners in the planning process and this leads to significant lost opportunities.” decisions on how to spend their extra buffer time during solicitation drafting, bid evaluations, and contract negotiations when delays are encountered. This strategic planning is critical to success, since starting a project with no strategic design plan and no float time sets a project up to fail before it even begins. By building winning conditions along proper business process paths, the science of time management enables project teams to practice strategic execution. With the right leadership, procurement departments can bring real business process improvement and embed the project management disciplines necessary to launch projects on a trajectory to successful contract performance. This article is extracted from Paul Emanuelli’s new book, The Art of Tendering: A Global Due Diligence Guide. SP SUPPLY PROFESSIONAL

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April 9 - 10, 2019 Hyatt Regency Toronto

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The Premier Celebration of Professional Achievement for Indirect Procurement The EPIC Awards are an annual celebration to recognize and celebrate the most innovative, dynamic, and accomplished procurement leaders. ProcureCon is pleased to announce that weâ&#x20AC;&#x2122;ve partnered with Supply Professional to bring the awards to Canada. The 2019 EPIC Awards categories are for individual and team innovation, rising star, lifetime achievement, and supplier excellence. The awards are a great opportunity to motivate your team and recognize their hard work, while also celebrating your sourcing success. The winners of each category will be announced and showcased at the ProcureCon Canada conference in April.

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SYNC UP SUCCESS Shell Fleet Solutions supports every vehicle, route, driver and budget to command a top-performing fleet. With a personal account manager, easy access to online card management and one of the largest fuel networks in Canada — you can trust that all of your moving pieces are in the right place.

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*Certain restrictions apply.10% Discount on the first $100 (before applicable taxes) worth of products and services on every visit at Jiffy Lube locations, including Jiffy Lube Signature Services Oil Changes and other preventative maintenance services. Valid for Jiffy Lube Signature Service® Oil Change services and additional preventative maintenance services which vary by location. Visit www.jiffylube.ca to locate a Jiffy Lube service center near you and view the services offered. Jiffy Lube® and Jiffy Lube Signature Service® are registered trademarks of Jiffy Lube® International, Inc. Jiffy Lube service centres are owned and operated by independent franchisees. ™ Trademark of Shell Brands International AG. Used under license. The Shell Fleet Navigator MasterCard Corporate Fleet Card® is issued by WEX Canada pursuant to a license by MasterCard International Incorporated. MasterCard and MasterCard Corporate Card are registered trademarks of MasterCard International Incorporated.

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