FEBRUARY 2020
BUILDING BRIDGES Sheri Spinks on leadership and listening
E-procurement
Manitoba’s storm recovery PPE guide MRO buying LA Auto Show
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VOL.62 No.1 FEBRUARY 2020
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SUPPLYPRO.CA COVERING CANADA’S SUPPLY CHAIN
@SupplyProMag facebook.com/supplyprofessional linkedin.com/company/supplyprofessional
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COVER: JOHN PACKMAN PHOTOGRAPHY
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FEATURES
ALSO INSIDE
8 THE CASE FOR E-PROCUREMENT Making e-procurement work for you.
24 A STRATEGY FOR CHANGE Continuous improvement in MRO.
10 BUILDING RELATIONSHIPS Sheri Spinks on the value of listening to customers and colleagues.
26 CUTTING EDGE SAFETY The latest in personal protection equipment.
22 POWERED UP Manitoba Hydro’s supply chain deals with a storm’s aftermath.
28 TAMING THE 3PL SEARCH Considerations when selecting third-party logistics providers.
4 UP FRONT 5 BUSINESS FRONT 6 IN THE FIELD 30 THE LAW
13
Fleet Management
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UP FRONT
RISK AND RESILIENCE What a year it’s been so far for the business world. We can start with the UK, Canada’s largest trading partner in Europe, which left the European Union on January 31. We have yet to ratify the new Canada-United States-Mexico Agreement (CUSMA) on trade, the only signatory not to do so. Demonstrators have effectively shut down rail lines in solidarity with protesters who oppose a pipeline crossing traditional territory of the Wet’suwet’en First Nation. No one can say that supply chain is dull. Yet, perhaps the most pressing global supply chain issue remains the coronavirus, a flu-like illness apparently originating in Wuhan, a central Chinese city of 11 million, also a manufacturing and transportation hub. As a result, certain commodity prices have tumbled, mail service has been delayed and flights cancelled. Factories have closed, logistical bottlenecks abound and much of the country effectively shut down. What affects China’s production capacity affects us all. The country has the world’s largest manufacturing workforce. It makes 80 per cent of the world’s smartphones and notebooks and accounts for about a quarter of the globe’s automotive production. Risk is an inextricable element of supply chain management and there are plenty of uncontrollable elements. Simply pulling out of China altogether is, for many companies, not feasible. So what to do? Josh Nelson, supply chain principal at the Hackett Group’s Strategy and Business Transformation Practice, offers a few tips in an overview document the organization has released. Get to know your supply chain risks and develop mitigation tactics for potential risks, Nelson advises. Get as much visibility into your supply chains as possible. Nelson notes that companies or key suppliers that carry limited raw material inventory and rely heavily on Asian supply sources remain at risk of disruption. Along with knowing your supply chain risks, Nelson notes it may be helpful to consider increasing the levels of buffer inventory. “As in other areas of business, those companies who identify specific supply risks and actively manage it, will find solutions or at least mitigate the impact,” Nelson says. “Those that don’t are at the mercy of the virus and the public response.”
MICHAEL POWER, Editor
EDITOR MICHAEL POWER 416-441-2085 ext 110, michael@supplypro.ca PUBLISHER ALEX PAPANOU 416-441-2085 ext 101, alex@supplypro.ca DESIGN Art Direction BARB BURROWS Design Consultation BLVD AGENCY CUSTOMER SERVICE/PRODUCTION LAURA MOFFATT 416-441-2085, ext 104, lmoffatt@iqbusinessmedia.com SALES REPRESENTATIVE FARIA AHMED 416-441-2085 ext 106, faria@supplypro.ca EDITORIAL ADVISORY BOARD LORI BENSON Procurement Compliance, L&D, Engagement and Knowledge Lead | Business Enablement, Ernst & Young LLP THOMAS HUDEL Manager, Purchasing and AP, Esri Canada Ltd. WAEL SAFWAT Procurement Director, Black & McDonald SHERRY MARSHALL Senior Manager, Meetings, Travel & Card Service, PwC Management Services KIRUBA SANKAR Director, Corporate Social Responsibility—RBC Global Procurement JEFF RUSSELL Purchasing Manager, ABS Machining iQ BUSINESS MEDIA INC. Vice President STEVE WILSON 416-441-2085 x105 swilson@iqbusinessmedia.com President ALEX PAPANOU
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. © 2020 iQ Business Media Inc. All rights reserved. Printed in Canada.
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BUSINESS FRONT—BY MICHAEL HLINKA
ALL SYSTEMS GO WHY IS THE US ECONOMY SO ‘PERFECT’? As I’m writing this column, the impeachment trial of Donald Trump has just concluded. I’m submitting this as the final verdict is being rendered, and as expected he was found “not guilty”. And it has almost nothing to do with what he may or may not have done. The reason why Trump was found “not guilty” is because of the state of the American economy. The Republican Party stayed loyal to him because of that. If the economy were weak, they’d be joining the Dems and plunging daggers in his back. Donald Trump famously described his telephone call to Ukrainian President Volodymyr Zelensky as “perfect.” I’m not going to comment on that. I’ll leave that to the professionals on CNN and Fox News. But what I do feel comfortable offering my opinion on is that the United States economy is as close to “perfect” as can be imagined. When I was attending university in the late 1970s, there was a metric known as The Misery Index. You took the unemployment rate and added the inflation rate and voila – there’s the Misery Index! Back then, any number less than double digits was almost unimaginable. Based on current numbers, with unemployment at 3.5 per cent and inflation running at 2.1 per cent, the Misery Index for 2019 was 5.6 per cent. Let me hearken back to 1978: Inflation was running at nine per cent and unemployment was six per cent. Like Casey Stengel used to say: “You could look it up!” This president is a polarizing figure. And what the media is missing, it seems to me, is a proper discussion about why the economy today is as truly spectacular as it is. Because on top of everything else, the stock market is hitting
record levels, day after day, which is a vote on the future. As good as things are right now, people are voting with their wallets that things will be even better in the future. MULTIPLE FACTORS A modern economy is complex. However, when I look at the current Trump presidency, it seems to me that in about this order, here are the reasons why the US economy is hitting on all cylinders: Oil and gas development and energy self-sufficiency; Deficit spending combined with low tax rates; Rollback of the regulatory state; and Stricter rules on immigration. I’ll take these one by one. The Trump administration looks at oil and gas much differently than the previous administration. In November 2017, the US produced 9.7 million barrels of oil per day. Move forward two years, and now it’s 11.7 million barrels. Let’s do a bit of arithmetic together. A pretty good approximation for the price of oil is $60 per barrel. If we multiply 2,000,000 extra barrels times the price of $60 times 365 days in the year, and then divide this evenly among the estimated 325 million Americans, this is about $135 per man, woman and child. Then there is one more factor: Given that the US now produces more than it consumes, it is essentially energy self-sufficient, which provides a greater level of certainty for all domestic economic actors. In 2017, the first true year of the Trump presidency, the federal deficit was $665 billion. For 2019, it is projected to be $1.092 trillion, an increase of $427 billion. Again, time for a bit of arithmetic. You take that change, divide by the number of citizens, and it’s about $1,300 per man, woman and child. There will be a day of reckoning,
sooner or later, but it’s hard to see when that day will be. Quantifying the rollback of regulations is more difficult. That being said: Anyone who has tried to get a business off the ground (and here I speak from personal experience) knows that there are myriad hoops that you have to jump through, and at some point people say: “Enough is enough!” Regulations are stultifying to small business in particular and frequently provide an unfair competitive advantage to larger entities … entities that frequently donate “generously” around election time. CONTROVERSY Immigration and, in particular, illegal immigration, is one of the most controversial parts of the Trump administration. But you would have to be willfully ignorant not to note that there has been a direct connection between the crackdown on the border and the positive employment impact for lower-skilled workers. Because lower-skilled workers are disproportionately visible minorities, there is a very good argument to be made that Donald Trump is the best president for minorities in my lifetime and, in fact, much better than his predecessor, as much as Trump’s detractors hate to hear it. It would be wonderful if the Fifth Estate would spend even a fraction of the time figuring out why the American economy is currently hitting on all cylinders, with the intention of understanding which economic policies lead to steady, non-inflationary growth … something that everybody on both sides of the political aisle has to appreciate. SP
Toronto-based Michael Hlinka provides business commentary to CBC Radio One and a column syndicated across the CBC network.
“ What the media is missing, it seems to me, is a proper discussion about why the economy today is as truly spectacular as it is.”
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IN THE FIELD—BY AMIR R. MIRSHAHI
RULES OF THE GAME ETHICS AND MORALITY IN PROCUREMENT PRACTICES What role do ethics and morality play in procurement? Why even ask the question? In politics, just after the October 21 federal election last year, newly re-elected Prime Minister Justin Trudeau met with Green Party leader Elizabeth May to build consensus even though the Greens don’t hold official party status. Trudeau met with May just to be morally and ethically sensible in matters that are important to Canadians or, at least, to the millionplus Canadians who voted Green. Yet we see that business leaders and other officials often suffer from a crisis of conscience, usually after they get caught or have the whistle blown on them - all under pressure to be socially and morally good while living up to society’s standards. Maybe we can’t do much with politicians. But perhaps we can inject more ethical practices into our day-to-day business lives. CODE OF CONDUCT In business, ethics refers to implementing the essence of a business code of conduct to policies and practices. It also becomes essential to the survival and growth of the workplace. This outlook is perhaps most important within procurement governance and polices. Business codes of conduct, as good as the paper that they are written on, outline rules of engagement but are broad, vague, lack specifics and often are too inclusive and encompassing. The codes promote actions and are symptoms of good public relations, but the real custodians are often procurement professionals. Take, for example, the Ethics in Procurement section of the original United Nations’ Procurement Practitioner’s Handbook. The fact that the UN has written the rules for procurement in the 6 FEBRUARY 2020
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global marketplace reiterates the importance of those rules in business and is evidence of the gravity of the endeavor. Morality in procurement practices sets a much higher bar than just principles from a corporate code of conduct policy. The aim is for a higher watermark for procurement professionals. It’s almost like an unwritten set of rules. One of the main reasons is that there are more opportunities these days for procurement professionals to be tempted and stray from core principles. Hence the invisible line that the code of ethics draws. Procurement is much more visible than other professions. Issues that come up in ethics discussions include corporate governance, insider trading, bribery, discrimination, social responsibility, fiduciary responsibilities and others. The law usually sets the tone for business ethics, providing basic guidelines to follow in order to gain public approval and create a positive reputation. MORALS VERSUS ETHICS The risks to a business’s bottom line and reputation could be mitigated by vocational training on moral standards. Moral standards involve rules of good conduct in the business. They guide employees toward permissible and lawful behaviour with basic values. Ethics, however, derive from personal values and arise as the benefits of the highest actions. Although it is morally correct to follow certain actions, those actions could be ethically questionable. For instance, procurement is involved in supplier selection, evaluations, negotiations, contracts sign offs and awarding business to suppliers. When interacting with suppliers, procurement should treat them in a fair and unbiased manner.
Procurement professionals therefore must conduct their business practices in the most ethical way possible. Failing to abide by ethical practices can lead to immoral and illegal actions such as bribery, favouritism, illegal sourcing and so on. The immediate reaction to the idea of unsatisfactory procurement ethics is that they will be damaging for public relations if they go public. Procurement professionals have to make sure that proper ethical guidelines are followed, as this can only contribute to business success. I also must emphasize the importance of ethical actions versus simply in established policies. The reputation of a business is not separate from the actions of its procurement professionals or leadership. Rather, they enhance an organization’s standing. In closing, it’s true that procurement represents its organization and is responsible for awarding business to suppliers. Unethical behaviour will have a negative impact on an organization’s brand. Procurement professionals experience enormous pressure to act in unethical ways as they usually control large sums of money. Ethical behaviour helps establish a long-term relationship and goodwill with suppliers. An ethical person is also respected in the business community. Once a buyer earns a reputation within an industry, it is difficult to change. A professional reputation is something a buyer carries throughout their career. Therefore, as trained professionals with high expectations, we must ensure that ethics remain part of our daily activities and tasks. SP
Amir R. Mirshahi, CSMP, CPM, is a supply chain practitioner based in Toronto.
“ Morality in procurement practices sets a much higher bar than just principles from a corporate code of conduct policy - the aim is for a higher watermark for procurement professionals.”
T a c
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4 - 5 May, 2020
Marriott Toronto at CF Eaton Centre, ON
The
EPIC AWARDS are back for 2020! 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 and Supply Professional are pleased to welcome you to celebrate the greatest achievements in procurement success! The 2020 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, recognize their hard work, and celebrate your department’s sourcing success! The winners of each category will be announced and showcased at the ProcureCon Canada conference in May.
The call for nominations is now open! Visit procureconca.wbresearch.com/epic-awards for more information and nomination forms.
The EPIC Awards are brought to you by
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BY JON HANSEN
A CLEAR PATH
Jon Hansen is editor and lead writer for the Procurement Insights Blog and was host of the PI Window on The World Show on Blog Talk Radio.
E-PROCUREMENT SUCCESS AND THE ROAD LESS TRAVELLED
THE STARTING POINT When it comes to e-procurement - which from this point onwards we will refer to as digital procurement—the journey for many of you has 8 FEBRUARY 2020
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yet to begin. According to a McKinsey survey of 1,650 global organizations, only 20 per cent have an overall digital transformation strategy. Of those, a paltry two per cent involve the supply chain. Given that so many executives appear to be in a holding pattern regarding digital transformation in general, digital procurement ROI and impact doesn’t exist. There is nothing to calculate as nothing is happening with most organizations. Instead of debating the merits of digital procurement, the starting point is to figure out why your organization isn’t moving forward with a digital plan. RESOURCE LIMITATIONS You would be hard-pressed to find anyone who disputes the potential of the digital era from the standpoint of having a positive impact on business, including procurement. The challenge, however, has little to do with the recognition of the benefits or even an intent to move forward. A major issue is one of “limited” resources. As it stands, most digital initiatives will still flow through the IT department. In short, even though CIOs may not be making the decisions regarding an organization’s digital technology, they are still ultimately responsible for its implementation and integration within the existing infrastructure. Unfortunately, and despite the obvious
need for digital transformation, 87 per cent of respondents to the 2019 State of the CIO survey said they are still juggling standard IT operational tasks (see below CIO graph). BIGGEST ISSUES CIOS FACE TODAY Which activities best characterize your focus and how you spend your time in your current role?
60 54%
50 40
50% 49%
38% 37%
36% 33%
30
28%
20 10 0 Source: CIO.com’s 2018 State of the CIO Survey (738 heads of IT responding).
Much like the challenges with integrating disparate legacy technologies following an M&A, introducing a new digital mandate and corresponding implementation of technology can appear to be a daunting task for an already overburdened IT department. In moving forward with a digital strategy, your plan must identify ways to “load balance” responsibilities across multiple stakeholder SUPPLY PROFESSIONAL
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©123RF.COM/ RAMCREATIVE
On receiving the assignment to write about e-procurement trends and what was driving the move towards more organizations going digital, the usual areas for discussion immediately came to mind. Specifically, those issues are the impact on both the enterprise and procurement profession, the ROI and what it all means going forward. In short, a broad perspective. Of course, one could easily fall into the trap of a familiar and somewhat perfunctory dialogue in which an article such as this takes the reader down an old and familiar road. You probably know all too well to what I am referring. To start, we would talk about exciting developments and how the new digital tech built on artificial intelligence (AI), robotic process automation and the advent of smart chatbots will rock and reshape the procurement world. All of this is very true. There is a great deal about which we can all get excited. However, the road from digital promise to the realization of that promise is not yet on the map for many organizations. Therefore, the purpose of this article is to show you the way, or at least point you in the direction towards the right, albeit less travelled, road leading to digital success.
According to a McKinsey survey of 1,650 global organizations, only 20 per cent have an overall digital transformation strategy. Of those, a paltry two per cent involve the supply chain. departments so that each has a manageable role within their area of responsibilities and practice expertise. The fact that many digital procurement technology providers can facilitate implementation with minimal disruption through a non-intrusive pilot program is also worth noting. RESULTS SPEAK Forget about everything that you have read before this point. Imagine that you have never heard the words digital procurement, AI or robotic process automation. Now answer this question: with no knowledge or understanding whatsoever of what digital is and what it can do, would you buy it? If you said yes, I have a bridge in Brooklyn that is for sale. Kidding aside, the results of a Deloitte survey
MOST COMPANIES COMPANIES THAT HAVE FULLY MOST THAT HAVE FULLY IMPLEMENTED DIGITAL TECHNOLOGIES IMPLEMENTED DIGITAL TECHNOLOGIES ARE NOT SATISFIED WITH THE RESULTS. ARE NOTof SATISFIED WITH THE RESULTS. Percentage firms who’ve completely implemented digital Percentage firms implemented technologiesofthat arewho’ve not thatcompletely satisfied with the results digital technologies that are not that satisfied with the results
100
100 80
80 60
81%
81%
71%
71%
64%
64%
62% 58%
62%
60 40
40 20
20
0 Source: Deloitte Global CPO Survey, 2019
0 Source: Deloitte Global CPO Survey, 2019
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56%
58%
54%
56%
53%
54%
53%
of Global CPOs that was published this past December could potentially have the same effect on an organization’s willingness to buy into a digital strategy. According to Deloitte’s survey, the majority of CPOs who have implemented a digital strategy are not satisfied with the results. Think about this revelation for a moment. If you sent an expedition party out on a certain route and they failed to return, or worse, you knew that they came to an untimely demise, would you take the same route? Let’s reframe the question. If you are considering bringing a digital procurement strategy to your senior management team, what impact will the results from this recent survey of CPOs have on your willingness to proceed? For this reason, it is important to understand the following two things: 1 Like the majority of the companies that jumped to the cloud without a clear understanding of what that meant and are now repatriating their data and processes back to either a private cloud or an on-the-ground facility, going digital without a clear plan is a bad idea; and 2 Introducing and implementing any initiative requires a cultural shift as much as it does a change in technology, starting with effective stakeholder collaboration leading to the recognition of the need for clean data and moving away from the use of spreadsheets. The important takeaway from the Deloitte findings is not the results but the reason for the results. POOR PLANNING Unlike years past with limiting ERP-based e-procurement functionality derailing most procurement automation initiatives, today’s digital procurement technology is sound, intuitive and therefore infinitely easier to use. It is also considerably more cost-effective. In short, the problem is no longer with the technology, but the plan. In this context, the old saying “if you fail to plan, you plan to fail” has never been truer than it is with regards to digital procurement. Going forward, you must facilitate enterprise-wide collaboration in creating a strategy with clear and measurable objectives, and load balancing responsibilities regarding implementation and ongoing management. While this less travelled road may require more work initially, the destination is well worth your time and effort. SP
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BUILDING BRIDGES
SHERI SPINKS ON LEADERSHIP AND COACHING AN INTERNATIONAL TEAM Long gone are the days when procurement acted largely as the process police. Yet, however unfairly, some still view the department with apprehension, fearing that engaging it may slow business processes rather than facilitate them, says Sheri Spinks, the director, global supply chain, NPS at Husky Injection Molding Systems. But she’s on a mission to change that. And for Spinks, engagement beats governance any day. Championing procurement’s image is also tied to her campaign to present the department as it really is, a strategic business partner that helps to boost the bottom line and mitigates risk to the organization. “The best way for us to get people following a process is to show them the value they get,” she says. “Let’s get away from being so processdriven and look at how we truly engage with our customers so that they enjoy the experience, get value and then tell their friends and business partners about it. If we can keep repeating that, we’re going to see that governance and adherence to policy organically.” While excited to see so many young professionals choosing a career in supply chain, Spinks took a rather different path than that, although one familiar to many in the profession: she sort of fell into it. She earned a degree in
Psychology from the University of Western Ontario while, at the same time, bartending to earn money for her education. Similar to psychology, bartending offered insights into human behaviour and thought patterns—a subject of particular interest to Spinks. “I’ve always had a fascination with people— how they think, how they behave, how they perceive things and how they communicate,” she says. GETTING STARTED After graduating, Spinks worked briefly in human resources at a global freight forwarding organization, which she says she considers her introduction to supply chain and logistics. But the mundane nature of the position meant she only stayed six months. Her next gig came through a woman for whom Spinks babysat as a teenager. The woman was a purchaser at a global manufacturer of industrial electronics and automation called Phoenix Contact, based in Germany, who recommended Spinks to the company. That, Spinks now says, was her first actual supply chain role. “When I joined, they had just finished implementing an ERP, so they had boxes and boxes of files. I think I filed every day for a
month or two,” Spinks says. “I went to my most senior manager at the time, who was the director of finance and operations, and said ‘look, I have a university degree. I’ve got a lot of great ideas. Please give me an opportunity to do something else.’” The company obliged, giving Spinks not only an opportunity to get involved in procurement and purchasing but suggesting she get her Certified Purchasing Professional (CPP) designation through the Purchasing Managers’ Association of Canada (PMAC)—now the Supply Chain Management Professional (SCMP) designation offered by Supply Chain Canada. Spinks leapt at the opportunity, working fulltime and completing the certification on a fast-tracked schedule in just under a year and a half. By that time, she had been promoted to purchasing manager. She worked at Phoenix Contact for 12-and-a-half years, eventually rising to logistics manager. Because the operation was small—30 people at the Canadian headquarters—she wore virtually every hat on the operations side of the business. “When I left, I was managing purchasing, order entry, logistics, inventory control, we had a small value-added production department, warehousing,” Spinks says. “I had a team of about 15 people.” Her next position, in 2011, was in the print, marketing and business communications field at a company called Data Communications Management (now DCM), where she started as director of strategic sourcing for the Eastern region, focusing mostly on indirect categories. Within a year she became national director, taking on organization-wide responsibility for procurement. After seven-and-a-half years there she joined Husky Injection Molding Systems in June 2019 as director, NPS, global supply chain. NPS, or non-production services, is equivalent to indirect global procurement, with responsibility for areas including IT, professional services, consulting, HR, travel, tooling and supplies, marketing and others. The role is a global one, and Spinks manages
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JOHN PACKMAN PHOTOGRAPHY
BY MICHAEL POWER
It’s a large team and they really needed somebody to come in and implement some strategy, give them some vision and help tie what they do every day to how they contribute to the overall organizational goals and objectives.
JOHN PACKMAN PHOTOGRAPHY
a growing team of 11 sourcing procurement professionals around the world including in Shanghai, Luxembourg, the US and at the company’s headquarter in Bolton, Ontario. The team is expanding and looking to add new members in Luxembourg and Bolton. Spinks spent much of her first six months listening to her new team, trying to figure out what worked well, what needed attention
and what team members’ career goals and aspirations were. Since it’s a procurement department the team also has aggressive costsaving goals. “A lot of what I do, and what really needed the most attention, was coaching the team,” Spinks says. “It’s a large team and they really needed somebody to come in and implement some strategy, give them some vision and
help tie what they do every day to how they contribute to the overall organizational goals and objectives.” Another goal during the first six months was to meet all of her team members face to face, she adds. Those meetings are important to help build working relationships and Spinks has so far travelled to Husky facilities in Milton (Vermont), Luxembourg (twice) and plans to visit the company’s facilities in Shanghai soon. During those discussions, Spinks makes a point of asking frank questions about not only what’s working well, but what team members would like to see change for the better. “The most critical element of having those conversations is understanding what’s of value to them,” she says. “What does success look like? What are their needs?” No two days are the same in her current role, Spinks says. Supply chain can be chaotic, and priorities can change fast. The flow of her day depends heavily on, and is related to, the flow of the business and what’s critical at any given time, she says. Even half a year into the position, Spinks still carves out time to meet one on one with team members and stakeholders. “I have formal, weekly one on ones with my team, but I still spend a good chunk of my day dealing with questions that the team has,” she says. “I spend time building out our strategy, making sure it’s in alignment with the goals as those continue to change.” Spinks considers every step or transition she’s made in her career as gifts that allows her to embrace a new challenge and experience, all of which have helped to propel her to her current position. Her role at Husky is a step that Spinks considers a career highlight, as she is now surrounded by “high-calibre” supply chain professionals. Previous positions have seen her report into finance or operations, while she now reports to an experienced vice-president of global supply chain. She’s quick to describe her “awesome team” as talented, engaged and willing to embrace change. “I have opened the door to them saying, ‘What do you want to do? What do you want to develop? How can I help you grow?’ I have a lot of them going, ‘I want to do more. I want to learn,’” she says. “It’s both inspiring and encouraging.” A string of supportive, empowering leaders has also guided her in her career, listening to her and recognizing her potential, Spinks notes. For example, when she graduated in 2002 in the top
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three from her certification program, leaders and mentors at the time were quick to recognize the achievement. They held a dinner to celebrate, plaque-mounted an announcement about the graduation and gave her gifts to celebrate the milestone. VOLUNTEERING Her career has earned her plenty of accolades since those early days. In 2015 she was named one of the Top 10 Influential Women in Diversity and HR by Diversity Canada Magazine. Last year, Supply Chain Canada also named her one of the Top 100 Women in Supply Chain and Women To Watch in Canadian Supply Chain. Spinks has also realized the importance of giving back to the profession to which she’s devoted her career. She has sat on the board of directors at WBE Canada (Women Business Enterprises Canada Council) and served on its certification and business development committees. In 2018 she joined the Global Council for the Advancement of Women in Procurement; she is now an executive director of the recently revamped organization, now called Global Women Procurement Professionals (globalwpp.com). “I find it really, really rewarding,” Spinks says of her volunteer activities. “There’s an inexcusable, undeniable, large gap that still exists—not just within supply chain but beyond as well—when looking at men and women. I aim to empower women and coach them that they have to use their voice and have to put up their hand. They have to speak openly about this gap, take action and close it.” Spinks coaches women in supply chain to become more confident in negotiating, especially for their own salaries. Female supply chain professionals, skilled and confident in negotiating millions in savings on behalf of their organizations, can still hesitate to negotiate on their own behalf. She is a strategic contributor at Tidal Equality (www.tidalequality.com), an equality-focused strategy firm. Spinks is part of the organization’s ‘collaborative group’- professionals working to advance equity and justice through their areas of expertise. Spinks has also joined the board of directors of Supply Chain Canada as an advisor and, last summer, joined the ISM (Institute of Supply Management) Strategic Sourcing and Supplier Diversity Committee. Spinks notes her “deep respect” for the hustle of entrepreneurship and for those who choose to start their own businesses. She devotes the largest portion of her volunteer time to
Use LinkedIn. Use your network. It’s absolutely critical to surround yourself with the type of people that you’re aspiring to be. supporting women who work as entrepreneurs and supply chain professionals. But the career highlight she’s most proud and humbled by is the words of recognition she’s received from her team, colleagues and customers during her brief time at Husky, Spinks says. She’s received positive feedback, for example, on her ability to listen and ask questions, with a team member and direct report nominating her for “Outstanding Woman of the Year” with WINiT, a division of the Global Business Travel Association (GBTA). FINDING BALANCE Spinks is working to counter the frequently chaotic nature of supply chain by adding structure to her personal life. She has recently begun waking up an hour early and spending the extra time on activities like the gym. She also tries to fit in a few yoga classes each week and has started journaling. “I’m trying to focus on being intentional intentional about my day, about my goals, about my week, my month, my career and my life,” Spinks says. “I have to have flexibility in my day to be able to respond to customers. At work, customer needs come up, emergencies come up and fires come up that need to be fought. Then the schedule goes out the window. I’m working hard to have things that are non-negotiable, which is hard for a supply chain professional.” At the same time, her family remains her top priority, Spinks says. For the past 14-anda-half years, she has lived in Mulmur, a small community about two hours northwest of Toronto and a 45-minute commute to her office in Bolton, Ontario. Born and raised in Brampton, Spinks and her husband decided to leave that city before the birth of their first daughter. Spinks describes herself as the “uberproud” mom of two girls, Kaia, age five, and 14-year-old Zoë. “They’re both bold, kind, curious, and very active girls - they keep me busy,” she says. Along with yoga and the gym, Spinks is a fan of spending time by the water, which she describes as her “happy place.” She enjoys stand-up paddle boarding (SUP) and loves the sound of the paddle in the water when all around her is quiet. Much time during the summer is spent at the beach with her family.
Spinks cites herself as an example of the notion that there are many ways to get started in supply chain. Now more than ever, organizations realize they need diversity, not only of culture and gender, but of skills. As supply chain organizations continue to specialize, they must also find subject matter experts to serve their customers as effectively as possible, Spinks notes. Many supply chain organizations are therefore looking for people with experience in fields like marketing, IT, HR and the like. “I would encourage those that might already be in a profession, maybe in one of those areas, that are thinking of making a jump, supply chain is an awesome place to start,” she says. Supply chain is more fun and interesting than those outside of the field may realize, Spinks says. The department is a hub, she notes, the one place within an organization that touches on virtually all areas of a business. And the effects of the savings that supply chain generates has a sizeable impact on the bottom line. Aligning with the goals and objectives of an organization, then tracking, measuring and reporting on that value, can frame supply chain in a favourable light. For those starting in the field, Spinks recommends enlisting mentors. But finding those mentors is different than it was in the past, she notes. Coaches need not come from within an organization or even someone with whom the mentee directly interacts. Ideas and guidance can be gleaned from books, podcasts or involvement with associations and other areas. “Use LinkedIn. Use your network. It’s absolutely critical to surround yourself with the type of people that you’re aspiring to be,” she says. “Just create a funnel of information for yourself in those topics and areas in which you’d like to learn and develop.” As well, pay attention to potential opportunities, Spinks says. When they arise, pursue them. And finally, never underestimate the value of the voice of the customer (VOC) - especially within procurement. It’s the most beneficial information available since one size doesn’t fit all when it comes to customers. A common misperception among procurement and supply chain professionals is that a single service model can fit all situations. But what’s valuable to a finance partner will be very different to what an operations partner might deem important. “What do they value? Treasure it, take care of it. Because if you lose that you’re flying blind,” Spinks says. SP
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Fleet Management
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The Road Ahead Highlights from the 2019 LA Auto Show.
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The Budget Crossover Behind the wheel of the 2020 Hyundai Venue.
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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Safety first How to handle vehicle recalls.
EDITORIAL INQUIRIES: Michael Power, 416-441-2085 x110, michael@supplypro.ca
ADVERTISING INQUIRIES: Alex Papanou, 416-441-2085 x101, apapanou@iqbusinessmedia.com
2020-02-14 1:34 PM
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FLEET.FORD.CA Driver-assist features are supplemental and do not replace the driver’s attention, judgment and need to control the vehicle. ©2020 Ford Motor Company of Canada, Limited. All rights reserved.
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Fleet Management By Lesley Wimbush
Buick Encore GX
Fiat 500X Sport Fiat injects a little pizazz into the lineup with a new 500x Sport. The new model, which slots in above the Trekking, features a unique front-end treatment, LED headlights, body-colour side mouldings, revised rear fascia with twin chrome exhaust tips and standard 18-inch or optional 19-inch wheels. The interior also receives the Sport treatment with unique racing style seats with suede inserts, extra bolstering and contrasting red stitching—which is also repeated on the sporty flatbottomed steering wheel and sporty aluminum pedals.
The road ahead Highlights from the 2019 LA Auto Show Chronologically, it’s at the tail end of the auto show roster, but the Los Angeles Auto Show—also known as AutoMobility LA—is a preview of the year to come. Some of the most important new concept cars, technologies and design make their debuts on the Los Angeles stage. The show was from November 22 to December 1 2019, and overall there were more than 1,000 vehicles on display. We’ve highlighted just a few that stood out for their impressive technology or market significance.
Buick’s strategy of producing a crossover to fit every customer’s need must be paying off as they’ve just added a brand-new vehicle to the lineup. The Encore GX slots in between the tiny, subcompact Encore and the medium Envision. Although it shares a name with the Encore, the GX is built on an entirely new platform. A foot shorter than the Envision, but three inches longer than the Encore, the GX finds the sweet spot for those who think one is too big and the other too small. There are two engine choices: a 1.2-litre, and 1.3-litre turbocharged three-cylinder paired to a continuously variable, or nine-speed automatic transmission. A suite of advanced safety features is standard, including lane-keeping assist, lane-departure warning, forward-collision warning and automatic emergency braking with pedestrian detection. Options include all-wheel-drive, adaptive cruise control, rear-parking obstruction warning, head-up display, rearview video mirror and rear-cross traffic warning.
Ford Mustang Mach-E One of the most talked-about debuts of the show, Ford’s Mustang Mach-E combines retro elements of its iconic pony car with futuristic technology to produce a new all-electric crossover. The new Mach-E has a range of up to 400km with the larger of two available battery sizes and offers rear or all-wheel-drive. The standard Mach-E has an output of up to 332hp and 417lbs-ft of torque—which increases to 459hp/612lbs-ft with the Mach-E GT. The five-passenger crossover is available with a massive 15.5-inch touchscreen and Ford claims Autopilot-like technology should arrive soon.
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T:18" S:17"
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TITAN®
Nissan Sentra
Honda CR-V Hybrid At last, Honda’s popular CR-V crossover is adding a hybrid to its lineup. The powertrain, derived from the Accord hybrid, uses a fourcylinder gas engine and two electric motors producing a combined 212hp. Honda claims a 50-per cent increase in fuel-efficiency over the non-hybrid model. Standard is all-wheel drive, seven-inch touchscreen with Apple CarPlay and Android Auto, Sirius XM satellite radio and Honda Sensing Suite of driver’s safety aids, including adaptive cruise control, collision mitigation braking, road-departure mitigation, lane-keeping assist and traffic sign recognition.
The only thing the new Sentra shares with the previous model is its name. For 2020, Nissan has overhauled its compact sedan with a brand-new platform and an upscale design that resembles the Altima and Maxima. The new Sentra is two-inches longer, rides 2.2-inches lower and has a more powerful, two-litre engine. The interior goes uptown with optional leather and available “Zero Gravity” seats. Standard is Nissan’s Safety Shield 360 suite of drivers aids, including blindspot monitoring, automatic emergency braking with pedestrian detection, lane departure warning, high-beam assist, rear cross-traffic alert and automatic rear braking.
Mazda CX 30
One of the world’s best-selling cars, the Toyota Camry gets even better with all-wheel drive for 2020. The optional technology gives the Camry an advantage over competitors. Three engines are offered: a fuelefficient four-cylinder, powerful V6 and an eco-friendly hybrid option. Standard is Toyota Safety Sense 2.0, including pre-collision system with pedestrian detection, lane-departure alert with steering assist, automatic high beams and dynamic radar cruise control. A performance-oriented Camry TRD has retuned suspension, anti-roll bars, larger brakes, tuned exhaust system, aerodynamic body kit and red interior.
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PHOTO: STEPHANIE WALLCRAFT
Toyota Camry AWD
Mazda’s latest crossover targets the customer who loves the wildly popular Mazda3, but just wishes it rode a little higher. They’re based on the same platform, but the new CX 30 fits into the crossover lineup above the tiny CX-3 and the compact CX-5. Available with front or allwheel drive, the CX 30 is powered by a 186hp engine with a six-speed automatic transmission. The CX 30 boasts Mazda’s G-Vectoring Control Plus technology to produce the sort of nimble, sure-footed handling to please the driving enthusiast. Standard are adaptive cruise control, lane-keeping assist, 8.8-inch colour screen and Apple CarPlay and Android auto on all but the base model.
FM/SP SUPPLY PROFESSIONAL
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Fleet Management By Stephanie Wallcraft
The 2020 Hyundai Venue
PHOTO: STEPHANIE WALLCRAFT
New offering for the small, budget crossover market A new segment is emerging in the automotive market: tiny, frontwheel drive budget crossovers. Sedan sales continue to fall at a precipitous rate—74 per cent of all vehicles sold in Canada were light trucks in 2019, meaning SUVs and pick-ups—and that trend is expected to deepen over the coming months and years. This has led some automakers such as Ford and General Motors to drop most of their car line-ups entirely. Several other brands are taking different approaches, though, including Hyundai. While small cars remain in the Korean marque’s line-up, the all-new Hyundai Venue addresses these shifting market preferences by offering a budgetfriendly crossover alternative to the compact sedan. This is about as frugal as a crossover is going to get, and at the moment the Venue sits in a pleasant niche without a lot of
direct competition. Still, its pricing does tend to lean a little higher: the subcompact hatchback Hyundai Accent with which the Venue shares a platform starts at $16,585 with freight and PDI, while the Venue starts at $19,036—and both of those prices are with a manual transmission. Add in the optional CVT, and those entry points go up to $19,335 and $20,336 respectively. This means that the functional difference for most applications is roughly $1,000, which isn’t quite as far apart as the base prices but is certainly more than zero. Where style is any sort of concern, though, the crossover is the way to go these days.
Under the hood
All grades are fitted with the same engine, a 1.6-litre naturally aspirated four-cylinder that produces 121hp and 113lbs-ft of
torque at 4,500rpm. These numbers look low on paper, but in practice the Venue’s maximum curb weight of approximately 1,250kg keeps it feeling relatively energetic in spite of its engine. Getting going from a stop is where the lower power comes across the most, and drivers who prefer a bit of kick might be inclined to stomp on the throttle to encourage things along, which can come with a sacrifice in fuel economy. Since kick has come up, it’s worth noting that the Nissan Kicks, the Venue’s most direct competition, has a lower curb weight (max 1,215kg), better fuel economy (7.7/6.6), equivalent power figures (122hp, 114lbs-ft at 4,000rpm), and more spritely handling, though it does come with a slightly higher CVT entry-level price of $21,240. The Kicks also outdoes the
Venue on wheel size at lower trims, sporting 16-inch steel wheels to the Venue’s 15-inchers (steel at Essential, alloy at Preferred), until they both even out to 17 inches at their mid-priced grades. Where the Venue pulls ahead is in base-model features. Heated front seats and outboard mirrors are included from the entry level, as is an eight-inch touchscreen infotainment system with Android Auto and Apple CarPlay functionality. (It isn’t possible to equip satellite radio on the Venue at all, however, while on the Kicks these features all become integrated at the SV grade.) Several desirable safety technologies are available on the Venue—forward collision avoidance with pedestrian detection, blind spot warning, lane keep assist, and rear cross-traffic collision warning—but they aren’t included until the Preferred grade, while this equipment is standard on the Kicks. That said, the Venue also offers Hyundai’s driver attention alert system at that same price point, which can be a valuable feature in certain applications. In situations where comfort, technology features and a trendy crossover body style are called for at low price points, the new Hyundai Venue shines. However, the value proposition isn’t quite as stark at higher trim levels, and some cross-shopping may therefore be called for when higher budgets are in play. FM/SP FLEET MANAGEMENT SUPPLYPRO.CA 19
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Fleet Management By Mario Gionet
Safety first
What to do when your fleet gets hit with a vehicle recall Those working in fleet management face vehicle recalls regularly. But what exactly is a vehicle recall? And what should fleet managers do when we have a large group of vehicles in our fleet that has been targeted by such an event? So what are they? According to Transport Canada, a manufacturer must issue a notice of defect or notice of non-compliance (recall) when they: find a safety defect in a vehicle, tire or child car seat; or when a product doesn’t comply with safety standards. A safety recall notice from the manufacturer includes: a description of the issue and the safety risk; and steps you need to follow to fix the problem. Since 2014, there have been 8,464 different types of recalls, including for truck child seats. Yes, that many. Some involve a small number of vehicles while others, like the Takata airbag recall that started in 2013, do affect a large number of vehicles and most of all manufacturers (cars or trucks). In that case, 6.7 million vehicles have been affected in Canada alone. We should still be clear, vehicles are now much safer than just a few years ago. Think about the back-up cameras now standard in all new vehicles. Rules and safety standards are also tighter, and manufacturers are deploying major quality controls and tests on their products so they can avoid excessive costs for after-production safety issues. 20 FEBRUARY 2020
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Mario Gionet is a fleet professional and consultant who recently retired as CBC-Radio-Canada’s fleet manager. Reach him at mariogionet19@ gmail.com.
Be transparent with your users. Inform them and let them know the steps you are taking to resolve the situation.
Yet major responsibilities come with the fleet manager role, including dealing with vehicle recalls. Again, according to Transport Canada: “When your vehicle is subject to a recall, you should have it repaired right away. Why? To ensure it is safe. After all, if you own a vehicle, you are responsible for your personal safety, the safety of anyone who drives the vehicle, your passengers, anyone who owns the car after you and other road users.” When you get a notice pointing to a serial number, the first thing to do is to evaluate the number of vehicles potentially touched by the recall. “Potentially” because it could affect all vehicles of a specific model year or only part of that model year. By doing so, you can prepare to act accordingly. Also, be transparent with your users. Inform them and let them know the steps you are taking to resolve the situation. Remember, they will still learn about recalls from the internet, conversations with colleagues, and so on.
Who to contact
What if you manage your own fleet without the help of a fleet service provider? In that case, contact the vehicle manufacturer. Most of them have a fleet specialist responsible for sales and technical support. You can ask them about the availability of the recalled parts and when dealers will have all the instructions to process. In the case of a large recall, parts availability is important and sometimes it takes
months before parts are available. Your manufacturer support team is your best information source. Do you use a preferred dealer regularly? Call and prepare a plan on when to bring your vehicles in. The recall notice normally mentions the time evaluated by the manufacturer for the repairs. This gives you an idea of the down time your fleet will have so you can plan the operation production impact. Contact them before you send your vehicles. You will save time and frustration if they do not have the parts or correctives to be applied. In all cases, the relationship (or even better, partnership) with the manufacturer or dealers is crucial. Only they can solve the problem and they have, for a single recall, many owners just like you to satisfy and the pressure is on. Are you using a fleet service provider to lease or own? Again, no problem. They have direct contact with manufacturers’ specialists and can introduce them to you. They also have preferred dealers and, most important, more leverage due to the volume they manage. Even with that access and leverage the responsibility, operation and production planning are still yours. Your fleet service provider is there to support your obligations and facilitate the process. They will have the same problems with parts availability and corrective measures as dealers. The big difference, however, is the support they can give you. In summary, here’s what to do in the event of a recall: Be proactive; establish strong partnerships with manufacturers, service providers and dealers. They can resolve the issues. It is your responsibility as an owner to act. Be transparent with your employees (it’s a safety issue), show them you’re taking responsibility and that their safety is your number one priority. Evaluate the situation, be prepared for a large impact and remember that, just like the Takata air bag issue, it could touch your entire fleet across multiple manufacturers. FM/SP FM/SP SUPPLY PROFESSIONAL
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We know there’s a lot to consider when looking for a fleet vehicle to fit your company’s needs. So add low cost of ownership, responsible engineering, legendary safety and capability features into the equation. You’ll find out that Subaru is always a great solution.
Visit us at subarufleet.ca 1. ALG named Subaru the Top Mainstream Brand for Residual Value in the 2019 Canadian Residual Value Awards. ALG is the benchmark for residual value projections in North America, publishing residual values for all vehicles in the United States and Canada. For more information, visit www.alg.com. 2. Based on IHS Markit Vehicles in Operation as of June 30, 2018 for Model Years 2009 to 2018 vs Total New Registrations of those vehicles.
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BY MICHELLE WHETTER AND PETER BUSCEMI
Michelle Whetter is with Communications & Engagement at Manitoba Hydro.
UNPRECEDENTED STORM SHOWS HOW PEOPLE STRENGTHEN SUPPLY CHAIN Natural disasters are becoming a common occurrence. Wild fires in California and Australia or hurricanes in the Caribbean have a wide impact on people, wildlife and to the environment we live in. A severe multi-day storm last October plunged many parts of Manitoba into darkness on Canada’s Thanksgiving long weekend. The wet snow and strong winds caused extreme damage to Manitoba Hydro’s electrical system, which left over 100 transmission towers and nearly 4,000 wooden utility poles broken and crumpled, taking down almost 1,000kms of power line and leaving over 266,000 customers without power. PROACTIVE PLANNING The groundwork to deal with such events begins in advance, with businesses having emergency management plans in place that will enable them to effectively respond to a major emergency and continue to conduct business as normally as possible. Based on a worsening weather forecast, Manitoba Hydro began preparations a day in advance of the storm’s arrival. Emergency plans 22 FEBRUARY 2020
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Extent of the damage Broken Poles: 4,000 Kilometres of power line down: 1,000 Customer outages: 266,000 for key resources such as operations, IT, risk management and supply chain were launched. TAKING CARE OF THE HEROES After the storm passed and as the full extent of the damage became evident, the Government of Manitoba declared a state of emergency, allowing Manitoba Hydro to activate—for the first time in the utility’s history—mutual aid agreements with neighbouring utilities including Hydro One, SaskPower and Minnesota Power. They were instrumental to the restoration effort, not only in terms of manpower, but also the specialty vehicles and repair supplies they brought. As over 1,000 field staff mobilized on short notice and as crews began pouring in to work
in remote areas, there was an urgent need to feed and house them. And with staff working 14- to 16-hour days, accommodations had to be provided within reasonable distance to allow proper rest - with the ability to provide hot meals in the morning and evening. That’s no easy feat at the drop of a hat. “When we realized hotels would be filling with evacuees, I started calling everyone I could about what mobile work camps could be available,” said Sherry Scott Lemke of Manitoba Hydro’s procurement operations department. Within days, commercial camps were sourced and set up for over 900 staff at five locations near the work sites. As equipment and material was required across the province, temporary on-site distribution locations were set up to support the operations crews, vendors and other support services. Employees switched gears from their usual jobs and tracked down and coordinated everything from porta-potties, to boot-dryers, socks, underwear and hip waders, as well as bringing in fuel for vehicles (since many gas stations were not operational), gravel and landscaping equipment to make parking pads for camp trailers, and propane to heat the trailers— not to mention setting up laundry and Wi-Fi. “The amount that was accomplished was nothing short of incredible,” said Jim Law of Manitoba Hydro’s Construction rural department who, along with many others, worked to help manage and supply the camp and the crews with the things they required. MATERIALS REQUIRED Due to the complexity of the transmission and distribution systems, a vast amount of replacement parts had to be sourced in a very tight timeframe. “Without the necessary materials to repair infrastructure, crews would not have been able to make the quick progress that they did,” said Andy Larson, of Manitoba Hydro’s central warehouse. SUPPLY PROFESSIONAL
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IMAGE: MANITOBA HYDRO
POWER RESTORED
Peter Buscemi is with Supply Chain Management at Manitoba Hydro.
The role of the materials management department was to get the necessary materials to where the crews needed them, wherever in the province that may have been. “On the Saturday of the storm it felt like mayhem,” said Larson. “Materials were required on a scale we had never seen before. But we focused our efforts. We put our resources to those tasks and it became controlled mayhem.” The team at materials management did three important things to make the most of their resources. Firstly, they contacted existing suppliers, asking those suppliers to reach out to other utilities to source materials, and to reach out to other suppliers that Manitoba Hydro may not deal with directly. “Suppliers were extremely cooperative, filling orders within the day and giving priority to our orders,” said Larson. Secondly, they moved supplies in and out quickly.
Temporary camps were supplied with
IMAGE: MANITOBA HYDRO
7,059 articles of fire-retardant clothing (Shirts, overalls and jackets) 3,168 pairs of gloves/mitts 2,727 pairs of socks 1,162 pairs of underwear 808 blister kits 715 boot dryers 500 laundry bags 411 pairs of rubber boots 244 hip/chest waders 157 pairs of shoelaces
On the Saturday of the storm it felt like mayhem. Materials were required on a scale we had never seen before. But we focused our efforts. We put our resources to those tasks and it became controlled mayhem. “We shipped out most of our stuff immediately. We were running into empty shelves and we had to get our vendors to start coming in on a holiday weekend,” said Kristi Arbuckle of materials management. “As soon as it hit our floor, it was right back out the door again.” Lastly, nothing went to waste. “We had crews working out in the field salvaging all the material that they could. That helped us immensely,” said Larson. “Once we recovered these materials, we sorted them, and shipped what was useful to where it was needed. AWARD-WINNING EFFORTS While Manitoba Hydro still had to restore multiple transmission lines (required to meet winter heating loads and restore system reliability), all communities that lost power were restored within two weeks and evacuated residents were able to return home. It was an impressive amount of work
considering the extent of the damage in challenging conditions. In fact, in January, the Edison Electric Institute (EEI) presented Manitoba Hydro with the association’s “Emergency Recovery Award” for its outstanding power restoration efforts. “Manitoba Hydro’s work to restore service safely and quickly to customers, often in dangerous conditions, makes them deserving of this award,” said EEI president Tom Kuhn. “Their efforts exemplify the high standards our industry seeks to uphold, and I applaud their commitment to their customers.” LESSONS LEARNED In the weeks after the storm, Manitoba Hydro conducted lessons learned. Here are some of the highlights related to supply chain: The value of partnerships – Several suppliers supported the effort by drawing on inventory from other utilities or deferring orders. One supplier kept their plant open during the weekend to manufacture additional required products. Flexibility of the team – Employees stepped up to the challenge, adapting quickly and taking on other duties as required. They also had to readjust plans and make decisions on the fly as the situation and therefore priorities changed hour by hour. For example, shifting work crews to other locations required a quick coordination to transport people, equipment and material. Access to the latest information –The situation was changing constantly, so having daily update meetings (morning and night) allowed teams to react quickly to potential risks and mitigate them efficiently. Solid communication – through social media and news, Manitoba Hydro made customers aware of the magnitude and complexity of the restoration effort. This helped customers remain understanding about the longer-thanusual outages -so understanding in fact that the support from customers was unprecedented: at times cooking for crews in their areas and sending hundreds of messages of encouragement as just two examples. While the storm strained the supply chain to the limit, the dedicated and skilled employees throughout Manitoba Hydro—with the help of their suppliers, neighbouring utilities and communities—focused their efforts and went above and beyond to restore power to their customers. That teamwork is what helped them accomplish such a monumental restoration in such little time. SP Due to the complexity of the transmission and distribution systems, replacement parts were sourced in a very tight timeframe.
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BY JOSH LEVIN
STAYING ON TOP OF CHANGE
Josh Levin is senior director of supply chain for Synovos (www.Synovos.com) where he develops and implements strategy, policies and procedures related to sourcing MRO materials in support of enterprise client groups.
THE CASE FOR CONTINUOUS IMPROVEMENT IN MRO If there is one constant in supply chain management, it’s change. Managing inventory, sustaining critical spares and supplying materials required to maintain production—these activities never stop. For some manufacturers, supply chain management is more like a checklist. Part ordered? Check. Invoice paid? Check. For others, it’s about creating a strategy behind the actions. For those taking the strategic approach, the New Year is always a good time to evaluate successes and failures from the past year. This includes examining the causes and identifying areas of weakness that need to be addressed while also confirming the successes that must be sustained. It’s also a good time to evaluate and introduce continuous improvement to your supply chain management program. The first step is to define the starting point. While there are differing opinions, in this context we’ll define continuous improvement as “programs and processes that improve plant reliability and reduce costs.” While supply professionals concentrate mostly on reducing costs, others, like maintenance management, engineers and production personnel, focus on plant and operations reliability. In any continuous 24 FEBRUARY 2020
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improvement plan, both are important to success. Disruptions in the supply chain (consider the 10,000-pound gorillas Google and Amazon) are forcing companies to rethink how and where materials are sourced. Technology enables anyone and everyone to optimize piece price. As a result, finding additional savings in material costs alone is becoming more challenging. Supply chain professionals must find alternative ways to lower costs beyond piece price. That’s where a continuous improvement program can help. A forward-thinking supply chain organization looks to engage with internal and external stakeholders to drive continuous improvement opportunities for the entire organization, making materials more readily available at lower total costs. That strategic approach enables others further down the supply chain—maintenance, for example—to be better prepared. IDENTIFY THE PROBLEM Continuous improvement is like problem solving: first, identify the problem before trying to solve it. Whether using Lean principles, Six Sigma, DMAIC (design, measure, analyze, implement and control), Plan Do Check Act
(PDCA) or some other program, all of these methods begin with planning: • Understand and identify the objectives; • Determine the approach; • Design and implement the plan; • Analyze the results; and • Confirm those results and manage the program to maintain or improve. Among the methodologies to consider: Cross-functional engagement Different perspectives bring greater visibility, creating opportunity for sustained improvement. Kaizen events Continuous improvement requires continued education, whether it involves new technologies, improved processes or new personnel. LEAN Six-Sigma A team-oriented approach designed to identify and eliminate waste. It’s a team approach with multiple layers of training and certification available, if desired. Value-stream mapping More of a single technique, value-stream mapping is intended to better manage the flow of materials in the manufacturing process by identifying inefficient or slow areas of SUPPLY PROFESSIONAL
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production. It fosters a communicative approach. 30-60-90 day / 1-3-5-year plans Setting benchmarks throughout a continuous improvement initiative is imperative. Understanding where you started and where you want to be means a stronger focus on the different elements required to get you there. Among the different types of initiatives: • Reliability and up-time • Standardization • Processes • Data • Commercialization • Accepting of non-OEM materials • Shutdown Planning (e.g. kitting) • Scheduled maintenance to avoid unplanned downtime and parts interruptions • Inventory Management Implementing an inventory management program—whether through in-house resources or third-party efforts - directly affects maintenance wrench time. It also impacts the amount of time spent fixing or maintaining production equipment. It’s an important ingredient in a continuous
improvement program. Better understanding of material needs and the flow of those materials through the supply chain allow for more accurate parts availability. That translates to less time ordering or searching for parts, as well as more time fixing the equipment that’s broken. The good news in this is that this process leads to higher levels of maintenance efficiency, higher productivity and lower total costs. CASE STUDY For one company in the life sciences industry, the continuous improvement objective was to optimize inventory without increasing out-ofstock risk. To accomplish that, the first step was to determine relevancy of spare parts to the existing operating equipment. That was done by: • Documenting part transaction history; • Assessing bill of materials for accuracy; • Verifying risk tolerance in terms of inventory turns; • Developing desired stocking strategy; and • Analyzing inventory findings; The findings were as follows: • 28 per cent of SKUs considered active;
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• 42 per cent of SKUs with no usage history; • 32 per cent of SKUs (18 per cent of spend) was not linked to equipment; and • There was opportunity to reduce inventory. The action taken was: • To update the equipment bill of materials and create a spare part usage profile to identify opportunities for current inventory reduction without increasing risk; and • To adjust and apply a replenishment strategy based on agreed-to terms that will drive future inventory to desired levels. A well-developed continuous improvement program enables supply professionals to gain leverage on the overall purchase, generate better reporting, reduce duplicate inventory, improve order accuracy and introduce automation for easing transactional costs. Continuous improvement initiatives fail because of unclear objectives, failure to measure and track progress and lack of executive support. To overcome these challenges, it’s imperative to remain focused, strategic and timely. It’s a time-intensive exercise, but well worth the outcome. SP
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BY MARIETE F. PACHECO
CUTTING EDGE SAFETY
PPE TURNS TO SUSTAINABILITY AND TECHNOLOGY TO KEEP WORKERS SAFE Employees require personal protective equipment (PPE) across many industries, whether manufacturing, distribution, healthcare or construction. And yet, for some workplaces, it’s an afterthought until an inspector visits a jobsite or, worse yet, when someone is injured. PPE is a key element to ensuring employee health and safety in addition to the overall organization’s sustainability and profile in the marketplace, both with customers and the community. When an organization is found at fault, non-compliance to PPE requirements can be costly—fines, litigation, work stoppages or even closures can result. Depending on the industry and work task, PPE can either be a temporary measure to avoid workplace hazards until an effective hazard control method (either as an administrative control or engineering control) or a permanent solution is in place. PPE requirements vary by province or territory and may differ based on the number of employees or industry type. Other factors that can impact PPE requirements locally include lone-worker situations (common in 26 FEBRUARY 2020
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remote areas) and confined spaces. PPE can be especially critical in these workplaces due to their demanding nature and unique requirements. Check with local workplace safety ministries and associations to determine what’s required for your region. Organizations can conduct workplace hazard assessments and risk assessments to identify hazards and risks that may be unique to their business. The Canadian Centre for Occupational Health and Safety (CCOHS, at www.ccohs. ca) offers tools to learn about workplace safety, such as tips, training workshops and workplace safety signs. For regional or business specific assistance contact your local PPE supplier or industry association as they may offer workplace safety audits and assessments if you’re unsure where to start. TYPES OF PPE PPE spans categories from head to toe, including most commonly used steel-toed boots and head protection such as hard hats and hand protection, like gloves. PPE is broken down into eight main types: head protection; face protection; hearing
protection; hand and arm protection; respiratory protection; foot and leg protection; body protection and fall protection. Head protection includes hard hats and bump caps used when there’s a risk of falling objects or the potential of head injury from working in small quarters, which risks the head coming in contact with surrounding objects—a common occurrence on construction sites. Replace head protection devices after impact, regardless of whether damage is visible. Face protection includes face shields and safety goggles used during activities involving risk to the eye due to contact with foreign objects like metal chips or splashes from chemicals or biological matters—commonplace in manufacturing and healthcare. Safety checks on eye protection include looking for cracks in the lenses and ensuring straps are not loose and still provides a proper seal. Hearing protection includes PPE such as ear plugs and earmuffs. Hearing injuries are often overlooked as a workplace safety hazard since the impacts are not instantly perceivable. Hearing loss occurs over time due to repetitive, unprotected exposure to excessive and loud noises. Replace hearing protection when cracks or splits appear or when there is no longer a good fit in the ear canal or there is a poor seal for earmuffs. Hand and arm protection includes gloves, hand and finger guards, finger cots, finger wrapping tape and protective sleeves used in tasks that expose the worker to chemicals, biological hazards, abrasions or heating, as well as cutting or sewing hazards. Replace hand and arm PPE that has cuts and tears or has signs of contamination like residue from chemical spills or handling. Respiratory protection includes respirators, masks, air hoods and self-contained breathing apparatuses (SCBA). These are used when a worker is exposed to harmful gases or fumes and in dusty conditions. Safety checks on respiratory PPE include looking for cracks on the devices and ensuring straps still provide a proper seal SUPPLY PROFESSIONAL
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Mariete F. Pacheco, MBA, PMP is managing director, FRW Services Ltd.
Organizations can conduct workplace hazard assessments and risk assessments to identify hazards and risks that may be unique to their business.
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around the user’s mouth, nose and the face, if applicable. For foot and leg protection, think steel-toed boots, knee pads, chest waders, leg guards, overboots and overshoes, traction aids or speciality devices such as dielectric boots, footwear sanitizers and anti-fatigue soles. Foot and leg PPE is used in workplaces to avoid injuries due to exposure to slippery floors, electrical hazards, falling objects or chemical splashes. Replace foot and leg protection once there are holes and tears or they have signs of soles wearing out. Body protection includes arc flash clothing, flame resistant clothing and safety vests. These are used for protecting the body from tasks that can cause injuries from flames and sparks, extreme temperatures, chemical or biological spills and when visibility is needed in low light conditions. Replace body PPE when there are signs of wear and tear such as holes, burns or punctures and when there’s no longer a good fit. Fall protection includes lanyards and
harnesses which protect wearers from falling when working at heights. Safety checks on fall protection include ensuring the webbing or surface is free from tears or burns, there are no loose buckles or grommets and there are no cracked components. Dispose of any fall protection device that has been in a fall. TRENDS PPE has advanced greatly with improved materials that offer better comfort. Natural rather than man-made materials reduce the risk of allergic reactions. Lightweight materials such as carbon fibre reduce fatigue and the incorporation of ergonomic functions reduce repetitive strain injuries and improve comfort. Aligning the level of protection to the task boosts employee compliance. For example, if full hand protection is not required finger cots may be suitable, as they offer some protection and provide improved dexterity, breathability and comfort as compared to a glove. The PPE market is evolving to incorporate
technology into products while becoming more sustainable. The creation of “smart PPE” has advanced, such as with the introduction of “smart hard hats” and “smart safety vests” and even “smart ear protection”. The high-tech company Daqri, for example, incorporates augmented reality into the clear visor of its hard hat, allowing users to see 3D modeling of the jobsite in real time (similar to Google Glasses). This not only reduces the amount of equipment the employee must carry but also downtime by having hands-free access to drawings and renderings, all while staying safe. Elokon has taken hi-vis safety vests further by introducing safety monitoring in its “smart vest” which monitor’s a wearer’s activity to determine if an accident has occurred and advising a supervisor via text. It also has a built-in gas detection sensor to warn the user of toxic gases. To avoid injury, the vest integrates with forklifts to slow down the equipment when a worker wearing the vest is nearby. PlugFones’ line of “smart ear protection” combines the safety of foam and silicone ear plugs with the added benefit of wireless Bluetooth capability for the user to connect to Bluetooth-enabled smart devices up to 33 feet away. The PlugFones keep the worker protected like traditional ear plugs but also keep them connected. That way, in an emergency they can contact help. Lastly, awareness of the need for sustainability and to reduce an organization’s carbon footprint is at the forefront of operations. Disposable gloves are an option in hand protection. These tend to be single use and generate a lot of garbage due to their limited, short lifespan. Watson Gloves has made an environmentally friendlier hand protection option with its Green Monkey landfill biodegradable nitrile gloves, which fully degrade in 10 years in moderate landfill conditions, as compared to 200 years for regular disposable gloves. Employee safety is paramount to an organization’s long-term success. Personal protective equipment plays a big part in an organization’s workplace safety plan. PPE is critical in all industries to maintain employee safety from workplace hazards and to avoid injuries. The extensive range of PPE leaves nothing to chance, regardless of which employee task or industry a business operates in. Each organization is accountable for ensuring workplace safety, from the correct PPE being available, to proper training in its function and, finally, to employee compliance in consistent usage. PPE continues to evolve to better adapt to employee needs by becoming more environmentally friendly and incorporating technology to maximize safety. SP SUPPLYPRO.CA 27
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BY NOELLE STAPINSKY
UNLOCK YOUR SUPPLY CHAIN POTENTIAL WITH THIRD PARTY LOGISTICS Third party logistics (3PLs) play a massive role in today’s supply chain. It’s about leveraging expertise, gaining access to technology and transportation fleets and having a team monitoring, analyzing and optimizing the logistics to cut costs and increase efficiencies. There are many reasons why a company would look to outsource its logistics. Perhaps a small company is growing and needs help dealing with cross-border shipping or access to a more international supply chain, or maybe it requires warehousing closer to its core market. Quite often, outsourcing logistics and supply chain management to a 3PL allows a company of any size to focus on its core competencies. “There are great benefits for small, medium and large companies,” says Doug Harrison of Harrison & Partners Consultancy and a board member for several companies. “The first thing is that you made a decision to outsource what is a non-core part of your business. Secondly, you’re partnering with a company that’s going to bring expertise in an area that’s beyond what you have. In outsourcing their supply chain, the customer is moving into a better, more efficient 28 FEBRUARY 2020
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network at a lower cost.” As well, 3PLs offer the flexibility of being able to scale business up or down depending on demand and manage warehousing on behalf of clients. “Sometimes it just comes down to a decision on core competency,” says Darryl Nelson, managing director of Supply Chain Alliance. “For example, if a retailer is prioritizing use of capital in its store network, it might be more focused on expansion, renovations and/ or inventory rather than investing in distribution facilities and material handling equipment. It can also be about access to systems. When you get into warehouse management systems (WMS) and warehouse execution systems (WES), they can be both expensive and time consuming to deploy. Companies may prioritize to utilize their resources in different ways.” For C.H. Robinson, one of the largest global third-party logistics companies, the focus is on navigating the extremely complex global supply chain by leveraging expertise and technology to achieve efficiencies. “What’s really important is a combination of local expertise and global knowledge,” says Scott Shannon, vice-president
STARTING THE CONVERSATION While the term third party logistics may be used by providers that only offer freight or warehousing services, a true 3PL will bring a bundle of services to the table that can be customized to the customer’s individual needs. “My recommendation is to identify what you really need from a 3PL,” says Harrison. “Send out RFIs and analyze the responses in line with what you really need.” To start, look at whether or not the 3PL meets your requirements. “Do they live your values? These can be very close relationships, so is it someone you can work with? How are they going to respond in a crisis or moment of need?” suggests Harrison. “Once you have that narrowed down, ask them to tell you how they would operate the network. Let them analyze your data and come back with a proposal of how they would run all or elements of your supply chain. You will get a chance to see how capable they are in terms of using engineering tools and standards and modeling to see how they’re going to manage your supply chain.” Nelson agrees, “You really want to prequalify the market and make sure that you’re lining up with the most suitable 3PLs and educating yourself thoroughly during the process. These solutions are highly customized, so you need to fully understand and clearly articulate your service requirements, starting with the amount SUPPLY PROFESSIONAL
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MAKING THE MOVES ON 3PL
of North American surface transportation for C.H. Robinson. “It’s not just about decreasing costs, but how we can improve the overall process. When you look at it more holistically, there are multiple winners when you do it that way.” The relationship with a 3PL can be as simple as employing a carrier service when needed or as complex as outsourcing all aspects of your supply chain management. But when considering 3PL services, having a clear understanding of your company’s needs—present and future growth—and being as transparent as possible are paramount to finding the right partner.
As technology evolves and the global supply chain grows in complexity, data analytics has become one of the most powerful tools for 3PLs.
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of space you’ll require, whether it’s to be shared space or standalone, and what kind of technology you’re likely going to need to facilitate the process that you envision and the degree of integration that will be required.” 3PLs have different strengths and often play in different industry verticals. Nelson suggests touring their facilities, talking to their references to make sure there are credible people with similar requirements doing business with them today that will promote them or offer a testimonial. “You want to get to know the people that will run your account—the general manager, operations manager, customer service
and senior systems or IT people are all people that you will come to depend upon should you choose to outsource.” You want to provide visibility through integrated planning and timely communication, Nelson adds. “Tie the 3PL into your forecasting process, and make sure they’re at the table when talking about seasonal increases, new product launches and other planned events that will impact on volumes or otherwise impact their day-to-day operation,” he says. “One common mistake we see is businesses looking at outsourcing as a quick fix or a means to offload problems affecting their organization—such as
a lack of planning and/or a lack of compliance.” And lastly, being as transparent as possible will allow 3PLs to understand your scale and propose a price accordingly. DATA REIGNS As technology evolves and the global supply chain grows in complexity, data analytics has become one of the most powerful tools for 3PLs. Being able to harvest business intelligence out of raw data is increasing visibility into the supply chain and is a key driver for many customers. Today, predictable analytics and forecasting are the key drivers for optimizing logistic processes. Whether it be a seasonal change in demand, weather patterns, political events or even traffic issues, having access to real-time data allows shipments to be rerouted on the fly, and provide information for companies to react to their clients’ needs more effectively. “3PLs can manage licensing, data storage and technology issues such as fire walls, transportation management systems (TMS), and use all of that information to provide dashboards that allow customers to monitor how their supply chain is operating on a daily basis, and alert them when there’s failure points,” says Harrison. That flexibility and visibility is very important. “You can’t improve something you’re not measuring, and you can’t measure something that you don’t have visibility or access to,” says Shannon. “Ninety-nine per cent of all data that exists today around the globe was created in the past two years. If you think about the future and how many data points will be out there, it’s mind-blowing. And that’s where technology comes in. You need to turn that big data into solutions and make that data work for you.” One way that C.H. Robinson has employed data is through an AI pricing tool that its client, Anheuser-Busch, uses to manage demand outside of its normal shipping patterns. This application allows the macro-brewery to access the best spot rates for freight in seconds. “When they have freight that falls outside of their normal supply chain, we can use live data to get them the best price and service for these loads,” says Shannon. “That’s a good example of how we’re using visibility, data, supply chain collaboration and AI to access the best rates.” Today’s end consumer is finicky, the service standards are high and the cost of mistakes is exorbitant. Such a rate of change is forcing companies to make decisions much more frequently. Nelson says, “This constant state of change is forcing 3PLs to be as innovative as they have ever been, and clients need to keep looking for that expertise and leveraging it whenever it can add value.” SP SUPPLYPRO.CA 29
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THE LAW—BY PAUL EMANUELLI
GOVERNANCE GAPS MANAGING PROCUREMENT GOVERNANCE RISKS While purchasing institutions tend to focus their attention on managing the tendering process and dealing with external supplier issues, they often overlook their internal challenges. This review of recent public audits highlights widespread systemic weakness in procurement governance across Canada and underscores the need to bolster institutional governance to ensure the proper stewardship of public spending. In its August 2019 report entitled Trudeau II Report, Canada’s Conflict of Interest and Ethics Commissioner determined that the Prime Minister breached the Conflict of Interest Act by attempting to influence the criminal prosecution of SNC-Lavalin, a large Canadian engineering company charged in 2015 for allegedly bribing Libyan government officials. As the report summarized, the Prime Minister made multiple attempts to influence the Attorney General into revisiting the independent prosecutor’s decision to proceed with the criminal prosecution of SNC-Lavalin, a prosecution that put the company at risk of losing future contracting opportunities. While the Prime Minister justified these actions as an attempt to save jobs, the scandal betrayed a profound lack of appreciation of the importance of depoliticized decision-making in areas closely connected to government contracting. The City of Ottawa also faced recent procurement governance challenges. In its November 2019 report entitled Audit of Stage 2 Light Rail Transit (LRT) Project Procurement, the City’s Auditor General made a series of recommendations for improving procurement practices in major projects. The Auditor 30 FEBRUARY 2020
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recommended that in the future more training be provided to evaluators before participating in major projects. The Audit also recommended a clearer delegation of authority, noting concerns raised by members of City Council over their lack of involvement in the process. As with the federal interference scandal, the Ottawa report highlighted the importance of clear procurement governance practices. Similarly, in a 2019 report entitled eHealth Saskatchewan— Mitigating Vendor Influence and Related Conflicts of Interest, Saskatchewan’s Provincial Auditor raised significant concerns regarding conflicts of interest in eHealth Saskatchewan’s procurement processes. As the report detailed, these conflicts included employees accepting allexpense-paid trips from vendors, along with a recurring failure to declare conflicts when involved in specific procurement processes. The Auditor General recommended that the agency bolster its conflict of interest practices given the self-evident lack of appropriate institutional safeguards. DOCUMENTATION Recent audits have also raised concerns over the violation of open tendering rules. In its July 2019 report entitled BC Distribution Branch Directly Awarded Contracts, the Auditor General of British Columbia found that the government failed to follow open tendering rules and repeatedly engaged in improper direct contract awards. The government also failed to properly document the reasons behind those awards and failed to document whether it sought appropriate legal advice before making those awards. Similarly, in its 2019 annual Report to the
Legislative Assembly, the Auditor General of Prince Edward Island found weak procurement oversight practices, including improper sole-sourcing and unauthorized expenditures. The audit found that one-third of the reviewed contracts should have been put to open tender but were improperly solesourced, and that in 97 per cent of tested transactions, the employee who signed off on receipt of goods lacked designated signing authority. Finally, questionable contract management practices have also been uncovered. In its May 2019 audit entitled Transportation and Infrastructure Renewal: Selection and Quality Management of Bridge Projects in Central and Western Districts, the Auditor General of Nova Scotia found that the province failed to prioritize projects based on the condition of its bridges and often failed to inspect bridges after the completion of maintenance projects. Similarly, in its June 2019 report entitled Phase Two: Construction Contract Change Management Controls Should Be Strengthened, the Toronto Auditor General found over one-third of 90 reviewed change orders were caused by design errors made by City consultants and that City staff repeatedly failed to hold those consultants accountable for those errors. Further, in its April 2019 report entitled Ensuring Value for Money for Tree Maintenance Services, the Toronto Auditor General concluded that City contractors may have been paid for doing no work, with GPS records showing that instead of attending locations where City trees were planted, crews went to other locations including coffee shops, plazas, residential houses, and streets with no trees.
Paul Emanuelli is the general counsel of The Procurement Office and can be reached at paul.emanuelli@ procurementoffice. com.
“ Governance gaps in government procurement run deep, impacting a wide range of public institutions across all stages of the procurement cycle.”
As these recent audits illustrate, the governance gaps in government procurement run deep, impacting a wide range of public institutions across all stages of the procurement cycle. In the future, government institutions need to double down on their procurement oversight or risk being the next public audit case study. SP SUPPLY PROFESSIONAL
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