Supply Professional June 2022

JUNE 2022

THE POWER OF TRANSFORMATION Patti Vora on her successful sourcing career

Cold chain update Test driving the Mazda CX-50 The integrated supply chain P2P systems

Supply chain as a service

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are now

There’s always been ju one Ho

A business built on doing the right thin for everyone we se

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e’s ys n just Holman.

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uilt on ht thing we serve.

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1.800.668.5586 • www.johnstonequipment.com SP Jun 22.indd 4

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VOL.64 No.3 JUNE 2022 SUPPLYPRO.CA COVERING CANADA’S SUPPLY CHAIN

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

10 14

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COVER: MIKE FORD PHOTOGRAPHY

16

FEATURES 10 A SOURCE OF JOY Patti Vora on sourcing and transformation.

13 SCAAS The rise of supply chain as a service.

14 INTEGRATED CHAIN What it takes to integrate the supply chain.

16 POST-PANDEMIC PPE The world of protective equipment, after COVID-19.

ALSO INSIDE 18 SUPPLY CHAIN RESILIENCY How technologies like 3D printing guard against disruption.

4 UP FRONT

20 MODEX 2022 Highlights from the MODEX 2022 show in Atlanta.

6 BUSINESS FRONT

22 P2P SYSTEMS A guide to buying best-of-breed technology.

36 THE LAW

5 INDUSTRY NEWS

7 IN THE FIELD

24 COLD CHAINS Temperature-controlled supply chains.

27

Fleet Management SUPPLYPRO.CA 5

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UP FRONT

FUEL PRICE WOES Happily, while the COVID-19 pandemic and its attendant restrictions hit supply chains hard, many such rules appear to be fading from much of our daily lives. Even Shanghai’s two-month lockdown appears to have lifted, at least for now. Yet the strain to global trade that lockdowns caused showed how important diversified supply chains are.

China may well do it again with little notice.

While that crisis may have eased, another one looks to be ongoing in the form of high fuel prices. Those prices have effects that ripple through industry and supply chains.

Refiners around the world are scrambling to keep up with soaring demand for gasoline and diesel, which is pushing prices up. This is aggravating shortages. Fuel demand is once again as high as it was before the pandemic, yet some lingering restrictions, sanctions on Russia and other factors mean those refiners are stressed.

The three biggest refiners – China, Russia and the US – are all under their peak processing levels. That makes it tough to keep prices low.

At the same time, the 27 EU governments have agreed to ban purchases of Russian crude oil and refined petroleum products such as diesel by year’s end.

While the EU said the move was ‘temporary,’ the price of Brent Crude went above $US120 a barrel on the news. That’s the highest it’s been since March.

Obviously, this has meant higher fuel prices for supply chains. Cargo ships often use diesel during part of their voyage. As well, most goods must be transported by truck at some point, often during the last mile of delivery. Higher diesel prices are a blow to the trucking industry, which already faces driver shortages and a capacity crunch.

All this trickles down to consumers in the form of higher prices for goods. Higher fuel costs are part of what’s increasing the prices of, well, everything.

Surging fuel prices affect industries as varied as transportation, manufacturing, mining, construction and others. In Toronto, as I write this, according to the CAA’s online calculator, average gas prices are 201.8L; in Halifax, NS, the price has hit 202.9L; In Calgary it’s a merciful 171.4L, and in Vancouver it’s a whopping 220.4L. There are steps that supply chain professionals can take to try to mitigate high gasoline and diesel prices – whether it’s looking at product packaging, reducing vehicle idling when possible, or consolidating orders.

There is also some good news out there. Container shipping costs, for example, have dropped this spring from the highs they hit back in September 2021.

But with Canada dealing with record-high fuel prices and the war in Ukraine having no end in sight, we’re not likely to see those prices drop for a while yet.

EDITOR MICHAEL POWER 416-441-2085 x7 michael@supplypro.ca PUBLISHER ALEX PAPANOU 416-441-2085 x1 alex@supplypro.ca DESIGN Art Direction ROY GAIOT Design Consultation BLVD AGENCY CUSTOMER SERVICE/PRODUCTION LAURA MOFFATT 416-441-2085 x2 lmoffatt@iqbusinessmedia.com ASSOCIATE PUBLISHER FARIA AHMED 416-919-8338 faria@supplypro.ca EDITORIAL ADVISORY BOARD LORI BENSON Procurement Compliance, L&D, Engagement and Knowledge Lead | Business Enablement, Ernst & Young LLP THOMAS HUDEL Manager, Purchasing and AP, Esri Canada Ltd. WAEL SAFWAT Procurement Director, Black & McDonald SHERRY MARSHALL Senior Manager, Meetings, Travel & Card Service, PwC Management Services KIRUBA SANKAR Director, Program Support, Purchasing and Materials Management— City of Toronto JEFF RUSSELL Corporate Purchasing Manager & Inventory Manager, Miller Waste Systems Inc. iQ BUSINESS MEDIA INC. Vice President STEVE WILSON 416-441-2085 x3 swilson@iqbusinessmedia.com President ALEX PAPANOU

PUBLICATION MAIL AGREEMENT NO. 43096012 ISSN 1497-1569 (print); 1929-6479 (digital) CIRCULATION Mail: 126 Old Sheppard Ave, Toronto ON M2J 3L9 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. © 2021 iQ Business Media Inc. All rights reserved. Printed in Canada.

MICHAEL POWER, Editor 6 JUNE 2022

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INDUSTRY NEWS

Cargojet appoints new CFO Cargojet has hired Scott Calver as its new chief financial officer. Calver, most recently the CFO of Trimac Transportation, also served as VP of finance for ICS Courier.

“I have always admired Cargojet’s entrepreneurial spirit and watched its success over the past decade,” said Calver, a London, Ontario native and Chartered Professional Accountant.

“I look forward to contributing to the next phase of Cargojet’s growth.”

Calver completed a Bachelor of Commerce at Laurentian University and a Master’s in Business Management at the Richard Ivey School of Business.

“Scott not only brings strong financial and operational skills, he also brings over 20 years of transportation and logistics industry experience,” said Ajay Virmani, Cargojet’s president and CEO.

Tech key to managing disruption: report According to a study from IBM and Celonis on supply chain resiliency, chief supply chain officers (CSCOs) recognize the role hybrid cloud, AI, process mining and execution management play in overcoming disruption. In fact, 72 per cent expect to automate their processes and workflows over the next three-to-five years, while 69 per cent will accelerate cloud adoption.

The study surveyed 500 CSCOs across 10 industries, showing organizations want to modernize their supply chains through data and hybrid cloud strategies while prioritizing sustainability.

Demand volatility is a top challenge for 80 per cent, while 77 per cent mentioned increased transportation and logistics costs.

Hybrid cloud, execution management, AI and automation can help CSCOs seize opportunities. Almost 87 per cent are implementing execution management and 77 per cent are implementing process and task mining to modernize operations. By 2025, 83 per cent plan to introduce AI-enabled, real-time inventory management.

Hapag-Lloyd add Port Saint John call Canadian Pacific and Hapag-Lloyd AG have added a call into Port Saint John, NB, via a seasonal extra loader.

This follows their inaugural service call in May 2021, connecting via CP rail service to inland markets in Canada and the US. CP regained access to Port Saint John in June 2020 by acquiring

the Central Maine & Quebec Railway, which has connections with the Eastern Maine and New Brunswick Southern railways.

Port Saint John is modernizing to increase container capacity to 800,000 TEUs and provide additional on-dock rail capacity over time.

Prince Rupert terminal re-brands as Trigon The former Ridley Terminals Inc., a bulk export terminal within the Port of Prince Rupert, has rebranded as Trigon Pacific Terminals Limited. Inspired

by Coast Tsimshian artistic traditions and Indigenous ownership, the new name and identity reflects recent and future changes at the terminal, and its progress towards a more diversified and sustainable future, the terminal said.

Formerly a Crown corporation, the terminal is now privately held by AMCI Group, Riverside Holdings and the Lax Kw’alaams Band and Metlakatla First Nation.

The three-pointed “trigon” that will be the visual identifier of the terminal comes from the cultural context of the company’s Indigenous co-owners, often seen in Indigenous art. The trigon represents transition and upward movement, reflecting the company’s ownership, community connection and future vision.

Trigon handles steelmaking and thermal coal, along with LPG exports. The company has advanced its strategy to handle new green energy exports by investing in infrastructure upgrades.

Study highlights supply chain collaboration SYSPRO has released findings from their 2021 global research study exploring the challenges and solutions to supply chain disruptions. The report reveals four themes and highlights the need for a long-term digital strategy using improved customer centricity, external collaboration and decision-making to recover from pandemic disruptions.

The first theme is a disconnect between investment in internal efficiencies and external collaboration.

Overall, 70 per cent of businesses experienced supply chain disruptions in recent years, while 60 per cent couldn’t engage and collaborate with customers and suppliers in real-time.

The survey’s second theme was that digital roadmaps don’t align to execution. Overall, 69 per cent considered a digitization strategy to enhance business processes. Only 29 per cent have a full strategy.

Theme three noted supply chains don’t compete globally. Regarding technology investments, 47 per cent had invested in sensors and IoT networks; 20 per cent had invested in data analytics tools, while 5 per cent had investigated AI and ML. The fourth theme was that customers are placed at the end of the supply chain. Only 22 per cent of businesses saw revenue growth.

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BUSINESS FRONT—BY MICHAEL HLINKA

FALSE ALARM? WHY WE SHOULDN’T WORRY SO MUCH ABOUT INFLATION At the onset of the COVID-19 pandemic two years ago, I did something I had not done for almost five years. I started going to the grocery store regularly. When my wife and I got married seven years ago, we agreed that she would be a stayat-home mother and run the house, while I would basically hold two full-time jobs to support the family.

This worked very well for all of us, until the lockdowns upset the Hlinka household’s applecart. If you recall, for several months the only “acceptable” reason to leave your house was if you were shopping for food.

There were two stores that we would visit weekly: No Frills (for basics) and Whole Foods. We’re simple people and there were several items we would always buy at No Frills: No Name potato chips, No Name soft drinks, No Name instant coffee, No Name pasta, bacon, eggs, hamburger meat and various fruits and vegetables. Here’s something I noticed when I compared prices from April 2021 to April 2020. The cost of some products – particularly bacon and hamburger meat – had risen sharply, while the price of the No Name products had stayed the same.

That got me thinking. No Name products might be understood as “inferior goods.” What’s an inferior good? It’s a product where there is an inverse relationship between your income and the quantity you buy. In other words, the wealthier you are, the less you consume.

I noticed that not all prices were rising uniformly. The more desirable foods (or “normal goods”) were becoming more expensive.

It seemed to me that what we were looking at was demand-pull inflation. This made sense. People 8 JUNE 2022

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couldn’t spend their money on the usual range of goods and services, so they treated themselves with better food.

Fast forward to April 2022.

I went to No Frills and the No Name coffee that had cost $5.99 two years before was now $6.49.

The 200-gram bags of potato chips that had been $.99 were now selling for $1.29. It seems that the inflation story has pivoted and now we are looking at cost-push inflation. Higher input costs are compelling manufacturers to raise prices. But the important question is whether we are amid an inflationary cycle or is this more like a one-off phenomenon due to the fallout from COVID-19.

WHAT’S INFLATION? I probably should have started this column by defining inflation. We generally think that when prices of things go up, we’re experiencing inflation. And this is true in one sense. But to a trained economist, inflation is an ongoing phenomenon where higher prices lead to higher prices, which in turn lead to higher prices. I’ve seen a couple of these cycles in my lifetime. In 1973, inflation was 7.5 per cent. It then spiked to 11 per cent and 10.7 per cent over the next two years. Then in 1980, inflation hit double-digits at 10.1 per cent, then 12.5 per cent and 10.8 per cent in 1981 and 1982, respectively.

The fear right now is that history could repeat itself. Inflation is currently running at an annualized rate of 6.8 per cent in Canada. It’s even worse in the US, where inflation has exceeded 8 per cent in the past three monthly reports. We’ve seen central banks on both sides

of the 49th parallel increase interest rates to cool things off and there is the expectation that more hikes are coming. There is the danger that this could push the economy into recession, as happened in the early 1980s. But in a sense, the Bank of Canada is between a rock and a hard place.

Or is it?

I’ve got a contrarian view on this. The economy was shut down for months. At the same time, money was being pumped into the system. As Milton Friedman pointed out years ago, inflation is always a “monetary phenomenon.”

In simple English, an economy will experience inflation when there is an imbalance between supply and demand. However, that has been largely corrected. Things are pretty much wide open with only minimal restrictions. Higher food and gas prices are forcing consumers to spend more of their budget on necessities which will reduce demand for other products.

We should remember that there are some strong anti-inflationary pressures. This year, Canada will welcome more immigrants than ever before which will have the impact of dampening wage growth. Yes, supply and demand holds in labour markets. Oil currently exceeds $110 per barrel and I wouldn’t be surprised to see that cut in half as early as a year from now. The biggest danger our economy faces right now isn’t inflation, it’s tepid growth. And this will be a persistent and long-term problem. And it’s much more worrisome than higher prices. SP

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

“In simple English, an economy will experience inflation when there is an imbalance between supply and demand.”

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IN THE FIELD—BY GERALD FORD

THE FOUR AMIGOS OF SUPPLY CHAIN THESE JAPANESE CONCEPTS CAN HELP TRANSFORM SUPPLY CHAIN PERFORMANCE Meet my four little friends. There are so many new supply chain professionals that a lot of them don’t know what they don’t know. So, I am introducing everyone to Gemba, Gembutsu, Muda and Kaizen.

My four friends, Japanese lean management concepts, have helped me a lot over the years. Three of them are very well known.

The first one I’ll discuss, Gembutsu, rarely gets mentioned.

During a course, instructors might refer to this stage as “current state.”

It refers to collecting data without making assumptions.

This is a critical stage. Remember that you shouldn’t have an outcome in mind when conducting Gembutsu. Your perceived solution might taint your viewpoint and the research being conducted. You then may end up with a future state that misses needs and requirements.

A trick I learned is that I do need extra help. If you are interested in making changes then go to a postsecondary institution offering supply chain instruction and ask them if they have a capstone for Gembutsu’s nickname, “value stream mapping.” You’ll be impressed by the results.

My next friend is called Muda.

When working with Muda, you are going to have to learn that Muda expects that your work area is clean. Muda loves the little things.

Muda does not expect big changes.

Muda is your champion when it comes to eliminating waste. It does not always have to be material. It can be a waste of resources, time or steps. Muda is all about finding deviations and unwanted activities.

There is a series of videos that you can view for free that might

help you learn more about how companies use Muda’s talent. Muda wants you to improve and one way you can do this is by learning from others. The videos are often titled “How it is.” Watch them with Muda’s critical eye and you will quickly see what you might want to change to make Muda happy.

CHANGE FOR THE BETTER The next little friend needs little introduction. Everyone has heard of Kaizen. You can always tell if someone is popular by the number of nicknames they have. Kaizen is also known as “continuous process improvement,” “change for the better” and “quality circles.” Kaizen is all about taking responsibility, which means you don’t leave challenges for a team or others to solve.

Unfortunately, Kaizen is often asked to help when things are bad.

When that happens, management is looking for big changes that are going to make a significant difference. Kaizen is supposed to be the friend that is always there for you, encouraging you to just be a bit better. Over the years, Kaizen will enable you to be the best you can be.

Kaizen is a team player and how you pick your team is what matters the most. I prefer to allow people to ask to be part of the team versus being nominated or appointed. Kaizen is about diversity and perspective. Normally, people think that harmony is needed for Kaizen to work. It does help that the team gets along. It is more important that the discussions are open and transparent. At that point you will then see what I call “catching the magic.”

This is where a team works so well together that significant prog-

ress can be made. It is unfortunate that this rarely happens. Yet when it does, it is a joy to behold.

A lesson is to avoid breaking up Kaizen’s team and moving them to different areas of the company to help those areas improve. A lone person with Kaizen is lonely indeed.

Kaizen needs the stimulus of others for it to be truly effective.

My last little friend is called Gemba. I shouldn’t play favorites, but I like spending a lot of time with Gemba. When we first met, Gemba was called MBWA. If you don’t know, MBWA is simply management by walking around. There are three ways to learn: auditory, visually and kinaesthetically.

I, for example, must go and see, which is often a plant tour. I take what information I already know and see what I can learn.

You need to go to the location and see for yourself how the job is done. Learn to read people versus reports. Ask open-ended questions to learn those doing the job. You need to spend more time with the people and less time on everything else. If the people doing the job say something that you can’t believe is true, you need to ask yourself why they believe it? Look at the situation from their perspective and you might realize what you thought was true might be flawed. Ask “why” to get to the root of the problem of challenge.

Feel free to spend time with my four little friends. I won’t be jealous. I enjoy when they help others make a difference. SP

Gerald Ford is director, supplier development, with Kinetic & CEO of QCsolver Supplier Management.

“Kaizen is all about taking responsibility, which means you don’t leave challenges for a team or others to solve.”

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Prepare Your Supply Chain Strategy for a Decidedly Different Ordering Cycle OPTIMIZE & MAINTAIN THE VEHICLES YOU DO HAVE

ROMY BRIA

Vice President Client Relations, Holman It is fair to say that recent ordering cycles have been unlike anything we have previously experienced. The entire automotive supply chain struggled with significant disruption. Although we’re beginning to see some supply constraints subside, there are still challenges, and we remain in uncharted waters as most fleets find themselves trying to catch up after nearly two years of extremely limited availability.

With many models still in limited supply, taking care of the vehicles you do have is critical. In all likelihood, your vehicles are poised to remain in service much longer than you initially anticipated and will likely require some additional TLC to keep them on the road as you await replacement units.

Start by re-examining your preventive maintenance (PM) strategy to better align with the reality that your vehicles will be logging more miles, incurring additional wear, and stretching their life cycle well beyond their original forecast. With life cycles extended, you’ll also want to review the services included in your PM schedules and, if necessary, add important services that typically occur later in a unit’s life cycle. Additionally, make sure you use full-service repair facilities (rather than quick lube locations) that perform a multipoint vehicle inspection to help identify potential issues early and avoid catastrophic component failures.

So what does all this mean for the outlook of this year’s ordering

BUDGET ACCORDINGLY

REASSESS YOUR CYCLING STRATEGY FROM A HOLISTIC STANDPOINT

Unfortunately, there’s no way around it. The reality is that the vehicles you order today are going to cost significantly more as compared to your last ordering cycle. Acquisition costs are up across virtually every segment of the industry. This sentiment holds true for the upfit sector as well. With an uptick in commodity (aluminum, steel, etc.) and component pricing, you’re likely to see an increase in upfitting costs as well.

cycle? Good question. With lingering uncertainty, it is more critical than ever to be proactive in your acquisition planning and budget allocation while also being prepared to adjust on the fly. To help you craft a comprehensive supply chain strategy for the year ahead (and beyond), here are a few key factors to consider.

As the supply chain begins to rebound, now’s a terrific time to take a fresh look at your overall fleet and cycling strategy. Ask yourself, how will supply chain delays and limited vehicle availability impact operations through all stages of the fleet life cycle—buy, drive, service, and sell?

With many units remaining in service longer than originally anticipated, you’ll want to ensure you develop a holistic strategy that addresses issues that may arise throughout each phase of the vehicle’s life cycle. You may also need to adjust your operating budget to account for variables such as increased downtime, higher maintenance costs, and the inability to capitalize on a strong resale market.

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Given those factors, you’ll want to be proactive in your planning and budget allocation to ensure you’re well positioned for this ordering cycle. Also keep in mind, the window for ordering may be volatile, and you’ll likely need to reallocate funding quickly to meet a particular deadline. Maintain an open dialogue with your finance team and have a variety of options in place so you’re ready to adjust accordingly.

BE PROACTIVE BUT PLAN TO WAIT While lead times and production delays aren’t as significant as they were several months ago, you still need to expect—and plan accordingly for—longer lead times for certain models. A good rule of thumb is to anticipate a minimum of six months to receive your vehicles.

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If you place an order for a standard vehicle today, you’ll probably receive it around the end of Q4. If your vehicle

requires upfitting, you likely won’t take delivery until early 2023

(potentially later) as upfitters continue to work through limited component availability and production backlogs. Additionally, some order cancellations are unavoidable, so you’ll want to have comprehensive contingency plans in place to minimize the impact on your business.

READY TO EMBRACE EVS? As organizations prioritize corporate social responsibility, a growing number of businesses are exploring a variety of sustainability initiatives. This often means fleet operators are evaluating the feasibility of electric vehicles (EVs), hybrids, and other alternative fuel options to align with your company’s overall sustainability strategy. As you find yourself reassessing your supply chain strategy, now may be the perfect time to determine if your organization is ready to embrace EVs. While the transition to electric vehicles won’t happen overnight, many businesses are ready to begin integrating EVs into their fleet mix. The good news is you don’t need to wait to get started.

STRATEGIC PARTNERSHIPS TO KEEP YOUR BUSINESS MOVING FORWARD

While disruptions are beginning to subside, fleet operators will likely have to navigate lingering supply chain issues for the

foreseeable future. To overcome these challenges, you may need to get creative, adapting your traditional budgeting, ordering, and overall fleet strategy to account for continued volatility.

This is one area where it will be extremely beneficial to partner with a fleet management provider, particularly one with visibility to the entire automotive industry.

Holman is ready to leverage the natural synergies of our various divisions and our collective competencies to deliver the integrated automotive solutions your organization needs.

Our unsurpassed automotive expertise helps our customers stay ahead of supply chain uncertainty, pivot accordingly, and capitalize on potential opportunities to keep their business moving forward. Learn more at Holman.com.

Holman—Driving What’s Right.

You can begin with an initial pilot program or portion of your fleet.

Then build on your initial successes by applying the insight and knowledge you gain to other segments or regions of your fleet.

Additionally, there are a variety of partners and resources available to help simplify electrification projects. When you streamline vehicle acquisition and infrastructure development, you can make integrating EVs into your daily operations virtually seamless.

REMAIN AGILE, MAKE QUICK DECISIONS With vehicle availability still rather limited, flexibility and quick decision-making are incredibly important. You’ll want to be well prepared to make acquisition decisions as quickly as possible.

Discuss your acquisition strategy and budget allocation with the necessary stakeholders well in advance to have the framework of your solution in place. When order banks open or a particular model becomes available, make decisions immediately.

You’ll also want to expect the unexpected in an effort to stay ahead of potential issues. Maintaining an ongoing dialogue with your supply chain partners will help you proactively adjust. These conversations may help you identify an opportunity to engage other OEMs to maximize your available options or perhaps streamline upfit specifications to get vehicles on the road sooner.

Strong partnerships across your supply chain and transparent communication will allow you to remain agile and flexible.

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THE POWER OF TRANSFORMATION FOR PATTI VORA, A CAREER IN SOURCING MEANS ALWAYS LEARNING SOMETHING NEW For Patti Vora, a big draw of a sourcing career is how varied the work is.

“You never do the same thing twice,” says Toronto-based Vora, currently the senior manager for sourcing transformation at TD Bank.

“It’s always something different. Things are changing, and you don’t have the same thing twice, ever.”

The field is dynamic and offers opportunities to learn about different businesses and industries, she says. As well, sourcing’s influence affects both customers and the bottom line. There are goals and objectives to strive for. And while sourcing has a methodology, practitioners must stay agile and pivot to adapt to what’s being sourced, or to customers’ needs.

“You learn how things are done, what happens in the industry, what’s important, who the players are and how they operate,” Vora says.

“It’s a continuous learning process. That’s what I love about it.”

Vora was born in India, and moved to Canada when she was four. Her father was a math 12 JUNE 2022

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teacher who pursued a second master’s degree at the University of Oregon in Computer Science. Her grandfather, after being expelled from Burma (now Myanmar), returned to India to open a store exclusively selling clothing made in India as part of the country’s independence movement. “In support of the store, Mahatma Gandhi gave a speech in front of the store as a part of that movement,” Vora says.

Vora grew up in Markham, Ontario with two sisters. One of her sisters now lives in France and works as an electrical engineer for a graphic chip company, while the other is a partner for an investment bank in New York City.

Vora earned a Bachelor of Arts degree from the University of Toronto in labour relations and sociology. She has also completed an associate certification in project management, a certification in change management, negotiation skills and some six-sigma training. She began sourcing 20 years ago when she started working at Dylex. At the time, the company was one of Canada’s largest retailers, operating chains

including Harry Rosen, Braemar Clothing and another called Big Steel Man. Vora worked for Braemar Clothing, which specialized in women’s apparel. One of her responsibilities was to buy and distribute boxes, bags and other goods to its outlets – items the stores didn’t sell but that kept them operational. She was also responsible for equipment in the company’s corporate offices, including photocopiers and coffee machines, adding facilities management to her role. The company didn’t use email much, and what was used was employed internally.

“It was very, very low tech,” Vora says.

“It was just a touch of sourcing. It wasn’t even called sourcing – just trying to understand what their volumes were, trying to forecast what they needed and distributing it to the store.”

After leaving Dylex, Vora pivoted to the insurance industry. She got a position at Canada Life as the company’s corporate services manager – part of the real estate team – with responsibility for corporate supplies. Along with items like paper and envelopes, Vora sourced travel and food services.

It was around this time that Vora began focusing more seriously on sourcing as a career.

She attended a Supply Chain Canada conference where one of the presentations focused on the process of centralizing sourcing, the function’s importance, and how it can save money. After the conference, Vora approached her superior to suggest centralizing sourcing for Canada Life. At the time, the company had already centralized its corporate buy, but little else.

“He thought it was a great idea,” Vora says.

“We did a business case and hired a consultant.

In parallel, we did a sourcing event, saved some money, and used that money to fund the implementation of a PO system. We went to the C-suite and presented it to them. We got money and we were on our way to centralizing our sourcing team.”

Vora eventually moved to ING, the bank now known as Tangerine. Her role involved putting together a process to ensure the management of outsourcing risk and related policies. Her next move was to CB Richard Ellis Global Corporate Services, for a sourcing role within facilities management. The company had just gotten RBC as a client, and Vora looked after their sourcing needs within facilities services. That included construction, signage, store removal, window and ATM cleaning and other areas.

“I used the same practice,” Vora notes.

“At the same time, there was a lot of learning to do because every category is different, every industry is different. There’s always the added complexity of understanding how that industry works or how the pricing works.”

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MIKE FORD PHOTOGRAPHY

BY MICHAEL POWER

MIKE FORD PHOTOGRAPHY

A NEW WORLD Her next career move opened a new sourcing world for her, when she began working at Labbatt in 2006, Vora says. Other organizations she had worked at focused on services. But as a manufacturer, sourcing and supply chain were critical to Labbatt. The company also had a disciplined approach to its supply chain function.

While focused on North America, Labbatt is owned by an organization called Ambev.

The chief procurement officer of Labbatt reports to that company’s CEO in Europe. Like in her previous roles, Vora learned a lot.

“One of the things I learned at Labbatt is that anything is negotiable, absolutely anything,” she says. “We had a lot of autonomy, and the corporate culture was very much that we needed to save money, we needed to drive dollars.”

Achieving those savings was very much part of the company’s culture, and not just in sourcing, she says. Savings were included in compensation. There was zero-based budgeting, and those who owned budgets were separate from those who used those budgets.

“There was absolutely nothing that we couldn’t put on the table. It was a huge learning opportunity,” she says. “Again, I managed a bunch of different categories. I outsourced facilities services. I also outsourced HR recruitment services and myriad other things.”

After Labbatt, Vora moved to Rogers in 2008.

She was again responsible for new and different categories, pivoting to collections and training services, along with professional and contingent labour. At Rogers, she honed her contract management and negotiation skills. She also built up the organization’s sourcing strategy as she learned the details of contract negotiations during her two years there.

“Even though we were able to save money, which is typically your focus in sourcing, we were actually able to improve their outcomes on collections,” she says. “We were able to drive business revenue through that process.

We were also able to improve customer experience along the way.”

Vora’s next career move was also within telecom, this time to Telus. That company, where she worked for the next seven years, had a different culture from Rogers. Vora again had a fair amount of autonomy and owned several categories including contingent labour and professional services. At Telus, she was able to move the contingent labour category up in terms of maturity.

The company went from a mediocre strategy to one considered world class, Vora says. Both service and contract levels improved significantly. Vora found herself owning sourcing strategy, operations, and vendor management.

“When building this program, I had the autonomy to challenge the status quo,” she says of the contingent labour program. “While not limited to the following, we in-sourced it and built the practice from the ground up, where everyone else outsourced it. We kept the number of suppliers very low, where most organizations had trouble consolidating suppliers. We partnered with the suppliers and utilized them to support and market the program with the business and held them accountable to our internal goals through scorecards and data transparency.

My team and the suppliers built trust with our stakeholders and improved our delivery time and quality, reduced costs and made it into a profit centre for sourcing. My team’s creative and data-driven approach is what led to the program being successful and recognized as one of best internally run programs in the world.”

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Sourcing has a unique, enterprise-wide view, Vora says. It also has a responsibility to understand the landscape and consolidate suppliers to ensure larger, more meaningful supplier partnerships. At Telus, she had an opportunity to support two different teams while finding suppliers to provide services that met needs on both sides. She was also able to influence the businesses to participate in a competitive process, while showing them the value of the consolidation of services.

“Being a key client to a third party allows us to grow the partnership more strategically and gives us the opportunity to take more risk and be more creative in how the services are delivered while improving the service,” she says.

Vora’s next career move was into banking.

She took a job at Scotiabank, where she was responsible for fixed-term labour, global delivery and contingent labour. But she soon made the move to TD where she became the lead in implementing an SAP Ariba solution. TD had an opportunity to increase system maturity. The implementation for the digital transformation took about three years, and the organization is now in the process of getting everyone on board.

“It’s a complete S-to-P system, I’m also including risk in that portion,” Vora says. “As a bank, risk is very important. So, we have executed, where you have a business come in and make a request. We do a risk assessment, we do the sourcing, we do the contracting. And then you connect the contract to the whole P-to-P cycle.

It’s all connected from a data perspective. Then the transactions happen, and all the transaction details roll up back under the contract. You have the visibility as well as the control from the list perspective that, when you’re transacting against the supplier, the risk has been executed.”

When implementing any system, it’s difficult to anticipate potential outcomes, Vora says. One objective is getting as much as possible into the system. With organizations unaccustomed to issuing POs or having invoices in the system, there must be discussion about change management. It’s necessary to solve problems continuously, looking at the process from end to end.

Whatever else, sourcing resembles a continual sales job, Vora says. You must influence the business to use sourcing as a service, so the business will consult sourcing before the contract negotiation cycle starts. In some regions, such as much of Europe, sourcing is a more mature function, Vora notes. In North America, influencing the business and selling sourcing’s value is still an ongoing process.

“You can absolutely overcome it,” Vora says.

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“Sourcing impacts every part of the organization.

Ultimately, it’s the strategy and the biz outcomes that drive the value that we bring to the table.” providing outcomes based on their needs.”

Sourcing and the business don’t always see eye to eye, Vora stresses. Saving money remains an important sourcing KPI, yet a business may value other indicators. Vora emphasizes the importance of focusing on what the business wants and what its problems are. From that, the savings will still come.

The projects that Vora counts as the most successful of her career were also the ones that were most transformational to the organization. Vora has sometimes been handed a category and told that it runs well. Yet she would quickly realize the category was far more immature than she was led to believe. Turning around such programs remains a highlight – renegotiating contracts, reconfiguring the system, redoing the KPIs and building a team from scratch all stand out. The process results in significant savings, improved delivery times and better supplier relationships.

Her efforts have paid off. Fieldglass, a cloudbased vendor management system, named one of her programs among the top one per cent of programs in the world, she says. The company designated her as a “Pro To Know.” She also won the TD Legendary Award twice, the TELUS Top Rung Award and the CEO Award, TELUS Passion for Growth Award, among other accolades.

“For me, the devil is in the details,” she says.

“You really need to understand the business to deliver a big outcome. Sometimes, even though it’s harder, trying not only to execute sourcing activities, but transform what you’re doing, is really important. Which I think is also what has made me very successful in some of the bigger projects that I’ve done. It’s transformational work, not just sourcing and negotiating.”

Vora is surprised by how many organizations haven’t yet done digital transformations. But the process is beneficial for several reasons: reduced cycle times, driving analytics to reveal more transparent data, and helping sourcing professionals to focus on strategy. Ultimately, automating tactical functions allows sourcing professionals to focus on strategic initiatives, she says.

Regarding future plans, Vora intends to continue the transformation at TD. She also plans

to eventually turn her focus to thought leadership, specifically how to drive better sourcing and business outcomes.

Outside of the sourcing world, Vora enjoys biking with her husband, Whitney, and covers over 500 kilometres a month. She also spends time reading, and the couple are avid movie fans.

Their older daughter, Kiran is in university, while their younger daughter, Maryn, is a high school student.

FOCUS ON THE BUSINESS When offering advice to sourcing and procurement professionals, Vora recommends focusing on business needs and solving business problems. As well, consider negotiation as an art rather than a science. Both negotiating and saving money are important, but the process must include benefits for the supplier, or the relationship will fail.

With any good sourcing initiative, details count, Vora says. Take the time to understand what a process will look like and incorporate that into building a contract to help ensure good outcomes. Vora cites the example of an agency of record initiative that she once did, in which she restructured and rewrote the master service agreement to ensure both parties involved were accountable. It took time, but the revamped contract documented the plan for the year, so that there were no surprises.

“I have had the opportunity to lead some very large multi-million dollar, high-visibility projects,” she says. “When I’m involved in these large projects, I use the opportunity not only to build relationships but also build knowledge of the industry I am sourcing from, as well as getting a deeper understanding of my stakeholders, their teams, operations, and the problems they’re trying to solve. As a trusted advisor, I worked with them to shape requirements and rebuild an agreement that supported solving their challenges and while helping build a strong third-party partnership.”

Sourcing and supply chain are great careers for those with a broad skillset, who love to lead, influence, and collaborate, Vora adds. “Success in sourcing is being able to have a customer mindset while delivering enterprise objectives, including total cost of ownership, continually increasing value to the end customer, and ultimately, giving the company a competitive advantage. Sourcing is a strategic role that touches every part of the organization. And while we don’t directly generate revenue, we certainly influence it.” SP

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BY MATTHEW CHANG

SUPPLY CHAIN AS A SERVICE E-COMMERCE IS DRIVING THE RISE OF SCAAS The prevalence of supply chain as a service (SCaaS) has been increasing along with the boom in e-commerce, global disruptions to the supply chain, and technology advancements in the retail industry.

Today’s marketplace must deal with SKU diversity, SKU rationalization, eaches picking, robotic automation, software and inventory automation, return logistics, online merchandising, and retailer requirements. This makes the marketplace somewhat complicated, which in turn makes an efficient SCaaS offering strategic and beneficial to the flow of goods.

THE INCREASING POPULARITY OF SCAAS Supply chain and inventory management are more than just strategic to customer service. They have become a strategic maneuver aimed at defending profits. SCaaS is increasing in popularity, however there are disruptions to the current model. Traditionally, the industry operated on third-party logistics

(3PL). The largest global providers of 3PL services are famous firms like DHL and UPS. Many industry-specific 3PLs exist, such as in the pharmaceutical, electronics, and perishable foods industries.

Supply chain disruptions such as the pandemic and the war in Ukraine are creating opportunity for SCaaS to morph and become more necessary than ever. The retail industry is booming more today than in previous decades, which puts more demand on efficient logistics in supply chain. The initial disruption came from e-commerce as a service with major services like Fulfilled By Amazon (FBA), which created wholistic solutions for companies to sell their products online and have all the inventory and fulfillment services completely outsourced.

COVID-19 further disrupted the SCaaS model when e-commerce experienced a volume explosion and the largest provider, Amazon, changed inventory requirements for companies to keep their inventory at Amazon locations. Containers, trucking, and seaports experienced significant delays and bottlenecks leading to decreased on-time performance and higher costs.

The net result is that companies are questioning their Just-In-Time (JIT) philosophy of staying lean on inventory and relying on global supply chains. Having the right inventory in the right place has become more important than ever.

GLOBAL DISRUPTIONS Global disruptions have abolished the concept of international JIT. SCaaS can help companies by offering small inventory solutions in optimal markets. A company is better off having local inventory with same day, one-day prime, or two-day prime delivery options, rather than bulk inventory in a centralized location. Diversity in the supply chain is essential to an omni-channel distribution approach.

Every company should have a mixed approach of self-operated facilities

“Disruptions such as the pandemic and the war in Ukraine are creating opportunity for SCaaS to morph and become more necessary than ever.” and SCaaS facilities. SCaaS can be 3PL, freight solutions, or e-commerce solutions. Essentially, a company does not want all its eggs in one basket.

A company can be more resilient in the face of global disruptions by diversifying its supply chain.

There are many advantages to SCaaS. One of these is better customer service due to localized inventory. Localized inventory allows for much quicker delivery options for the customer at a more reasonable price. There is a higher chance of providing good customer service by having a diversity of supply chain channels to market, like distribution, freight/trucking, ecommerce, and 3PL. SCaaS offers a diversification of channels that lowers risk and keeps more efficiency in the flow of goods in the marketplace. SCaaS also lowers overall cost of goods sold in the marketplace. Goods can be more competitively priced and more affordable to customers because SCaaS lowers the cost of distribution of those products.

LEVERAGING SCAAS Before any company considers leveraging supply chain as a service, it needs a strategy. The organization should therefore develop a robust strategy with a forward view on e-commerce proliferation and on-hand inventory sensitivities.

The next consideration before leveraging SCaaS is software

Matthew Chang is principal at Chang Industrial.

automation. A SCaaS partner must add to the digital supply chain and inventory transparency. Another consideration is robotic automation.

The partner must have a labourreducing robotic solution to increase performance and decrease reliance on labour, especially seasonal labour.

One of the final considerations would be geographic coverage.

The partner must have a geographic spread to get “the right inventory to the right place” while having the capability to manage bulk inventory. Inter-facility shipping and inventory balancing should be managed by the partner.

The last consideration before leveraging SCaaS is shipping diversity. The partner should have a network that can work with all major freight and parcel carriers, the postal service, and personal shopping (Instacart, DoorDash and so on).

Leveraging SCaaS ultimately means that a company can better focus on product design and manufacturing. SCaaS can also enable a fast-growing company to scale faster, since less internal competencies, infrastructure, assets, and talent are required for growth. SP SUPPLYPRO.CA 15

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BY JACOB STOLLER

THE TRANSPARENT SUPPLY CHAIN

MANY ORGANIZATIONS ARE SEEKING TO GAIN VISIBILITY OF EVENTS INVOLVING TIER-TWO AND TIER-THREE PARTNERS One of the many lessons from recent supply chain upheavals is that the delayed arrival of a component costing only pennies can trigger the shutdown of an entire manufacturing line.

This heightened vulnerability is causing many companies to extend the visibility in their supply chains to tier-two and tier-three suppliers and customers.

Gaining such visibility, however, is more easily said than done. According to a recent Association for Supply Chain Management (ASCM) – sponsored study titled “The Resilient Supply Chain Benchmark,” most companies are not ready for this new environment.

“In just over half the companies benchmarked, the view of supply chains is based on internal data, or relies on siloed or outdated data sets,” reads the study. “This limits their ability to detect emerging threats or calculate how a disruption will unfold across supply chains and business units.”

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partners. “One of the challenges that has really plagued supply chains is that there’s a lot of inconsistency in data collection, or lack thereof,” says Suzanne Livingston, vice-president of development for IBM’s asset and supply chain offerings. “Even when the data is being collected, it’s not necessarily collected in a way that makes it easy to understand how the products, the raw materials, the processes, and the manufacturing steps all connect.”

Consumer demand for sustainable products has raised the bar for transparency even further, with companies increasingly being called upon to share information about raw materials, production processes, and transportation methods with consumers. “Some companies are going so far as to share waste generated through the process of manufacture with the consumer,” says Livingston, “so the consumer has a better view of the sustainability of the product and its overall impact on the environment.”

THE INTEGRATION CHALLENGE The diversity of data input from dozens or even hundreds of partners forces supply chain operators to contend with one of the thorniest issues in IT – the chore of bringing data from multiple sources into a common end-user platform. The problem is that data stored by different IT systems can vary in structure, protocols, and formats.

“If you’re working with different companies, languages and parts of the world, making the information readily available and being able to rely on it is probably the biggest thing,” says Gavin Davidson, product marketing director at Oracle NetSuite.

To extend supply chain visibility to multiple tiers, a company’s suppliers must acquire that visibility as well – a company needs to have the data in order to share it. Newer technology is helping smaller players acquire that capability.

“The larger players almost always had Electronic Data Interchange (EDI) or other tools for building custom integrations,” says SUPPLY PROFESSIONAL

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Davidson. “I think the cloud is starting to make some of these capabilities more readily available to all businesses.”

A growing number of companies are building the IT infrastructure to handle data from diverse sources. “One of the priorities we’re seeing from customers is creating a common data platform, which is something supply chain leaders weren’t really thinking about five or six years ago,” says Sherief Ibrahim, GM, business applications, Microsoft Canada.

An early step for many, Ibrahim explains, is the creation of what is called a data lake – a repository that consolidates and organizes data of many types in a single platform, making it available to tools that transform it so that it’s usable by warehouse management systems, control towers, and other supply chain applications.

When companies share data, however, technology is not the only element that has to be agreed upon. In the grocery business, for example, each vendor might have different SKU numbers for apples. This means that the grocer needs a master data strategy that establishes how all the products are categorized, and how the data flows.

This is typically a multi-year project complicated by the fact that decisions about sharing data can’t be made by IT alone – senior executives at the highest levels have to decide what data should be made available, and under what terms.

Sharing new data – for example, by adding more information to a shipping label – can require significant process change at considerable cost. This is much easier to justify if the company sharing the data sees a benefit to that.

“Why would I submit more data and not actually see where it’s going?” says Livingston. “It’s really important that all parties get visibility, not just one or two strong parties in the system.”

In exchange for adding more information to a shipping label, a large distributor could share the final retail destination of that shipment with the supplier. This would give the supplier early feedback on sales that might have otherwise taken one or two months.

“It’s really important that all parties get visibility, not just one or two strong parties in the system.” ing the equivalent of a consortium,” says Livingston, “where they’re bringing together their suppliers, their collaborators, and in some cases their competitors, and collectively deciding to adopt a particular solution and make the respective process changes needed for all of them to benefit.”

Getting to transparent integrated supply chains, however, is an ongoing task that will never be complete. “You’re never going to get 100 per cent,” says Davidson, “but I think the

technology is definitely starting to make it a little bit easier for levelling the playing field for smaller businesses.”

Davidson also believes there are many opportunities to improve supply chains without significant effort. “Everyone thinks their business is different, but it’s really not,” says Davidson. “Sure, every company and every industry have their nuances, and some are more detailed than others. But the reality is that most common business processes are fairly standard.” SP

MOVING FORWARD The substantial increase in data sharing has spurred a rise in data consortiums such as Farm Connect, where the tasks involving data integration can be shared by multiple companies through an industry association. These bodies also have the resources to enforce compliance with standards and engage third party auditors to support governance practices.

Ad hoc consortiums are also being formed.

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BY MARIETE F. PACHECO

SAFETY’S NEW NORMAL

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

HOW PPE PROCUREMENT HAS EVOLVED SINCE THE PANDEMIC BEGAN It has been a unique and challenging time for nearly all industries these last two years. During this time, businesses have had to pivot their operations, with many needing to add new personal protective equipment (PPE) to their EHS toolkit to keep employees safe.

The greatest investment an organization can make is in keeping employees safe and certainly this has been demonstrated time and time again during the pandemic. Initially, the highest COVID-19 case counts came from food processing plants and warehouses; both of which are designed for maximum efficiency and product safety, not employee wellbeing.

These first major outbreaks resulted in many operations having to be shut down due to employees being unable to safely operate the business.

During the onset of the pandemic, the focus was on securing PPE as quickly as possible. Quantity over quality was the rule. This led to poor quality, unregulated products flooding the market caused by a surge in non-traditional PPE manufacturers beginning production to meet explosive demand.

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prices to never-before-seen levels and further exacerbated the shortage. The result was stockpiling for some organizations while others went without any product at all.

As organizations adapted to the onslaught, subsequent coronavirus waves combined with learning from government and industry experts. The result was greater knowledge both in terms of business needs but also regarding PPE standards. From ASTM for disposable surgical masks to NIOSH for N95 respirators, PPE standards had become commonplace beyond medical environments. Procurement professionals were now becoming authorities in PPE and had developed partnerships with reputable suppliers.

INVENTORY MANAGEMENT As COVID-19 waves ebb and flow, it will be paramount for organizations to optimize PPE usage from a risk management perspective to mitigate inventory risk from obsolescence or shortages. Procurement must manage a fine balance between how much to order and how much to use.

Since most PPE has expiry dates, it is critical to invest in inventory management practices to ensure

stock is rotated. This can help to avoid exposure to non-conforming or poor performing products (for example, expired N95 respirators have lower filtration protection and no longer fit as tightly due to the loss of elastic integrity). Considerations may include dual sourcing, prioritizing product by job task, investing in reusable PPE or partnering with domestic manufacturers.

Diversifying the supplier base with multiple providers reduces the risk that comes with not having inventory. As well, having backup suppliers may also help support cost management strategies. A common best practice is optimizing PPE use in healthcare. This is done by aligning the risk profile of employees with the PPE available. For example, in higher risk environments, N95 respirators are used in conjunction with other products such as gloves, goggles or face shields, whereas lower risk environments may only see the use of standard disposable surgical masks. The greater the risk, the greater the protection coverage.

Lastly, to combat the need for additional storage space for large stockpiles of PPE, more organizations are looking to make the shift

from disposable to reusable PPE. This can include N95 respirators, which have interchangeable filter cartridges, face shields and goggles that can be wiped down or sanitized between uses or the laundering of garments such as gowns and gloves.

The challenges with re-usable PPE include more complex supply chains, additional product complexity, and the need for additional services such as the laundering of products. These services often need to be outsourced. This not only offers a consistent supply of PPE but also provides a sustainably focused solution which many organizations are searching for, as corporate sustainable reports become more pervasive.

This year, organizations continue to face ongoing supply chain challenges, from long lead times to raw materials shortages. PPE procurement is no longer at the crisis level we saw in 2020. However, there remains rolling shortages. These have thankfully been offset by countless new domestic manufacturers across Canada and much of North America.

The ongoing need, regardless of the industry, continues to be the procurement of masks. This is due SUPPLY PROFESSIONAL

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to the respiratory nature of the virus’s transmission and the generally high protection and price point that masks offer compared to alternatives such as face shields. These benefits, combined with less severe flu and cold seasons the last two years, may result in greater acceptance and usage beyond the COVID-19-era. This is especially true in environments where physical distancing may be a concern, such as warehouses or production lines in manufacturing facilities.

The number of cases of these illnesses, along with the spread of other common respiratory illnesses, has decreased dramatically to record-low levels compared to the most recent 2017-2019 seasons, according to the Government of Canada, Centers for Dis-

ease Control in the United States and the World Health Organization. The secondary benefit of mask use in reducing absenteeism due to almost non-exist airborne illness during the fall and winter has generated interest from some organizations. These organizations are investigating masks as standard issue during select times of the year, which may keep PPE demand levels higher than pre-pandemic levels.

A NEW NORMAL? Looking forward to the “new normal,” what will EHS professionals be faced with? More of the same?

Changes to their standard operating procedures? New standard operating procedures?

It depends. If the last two years has taught us any lessons,

“The greatest investment an organization can make is in keeping employees safe and certainly this has been demonstrated time and time again during the pandemic.” it has been to expect the unexpected. More important, it has taught us how vital it is to keep employees safe as they are the core to any operations, whether in construction, manufacturing, or warehousing.

COVID-19 protocols for many industries, including food processing plants, manufacturing and construction sites, focused almost exclusively on increasing their PPE usage and enhanced personal hygiene measures, such as hand sanitizer availability, to counter virus spread to keep employees safe and their operations running.

Organizations are required to demonstrate they maintain an acceptable standard of employee safety. The last two years have left a long-lasting impact on how organizations approach this, especially as it relates to PPE usage. SP

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BY DR. HENRIKE WONNEBERGER

Dr. Henrike Wonneberger is COO and co-founder of BASF-owned, Replique.

BRIDGING THE GAP BUILDING A RESILIENT SUPPLY CHAIN Optimizing the supply chain contains huge potential for OEMs to increase profitability. Reducing inventory costs with punctual delivery has been, for many years, the focus of supply chain management. Over the years, supply chains have been optimized to perfection, using algorithms and digital tools, but it is a balance on a knife’s edge.

The COVID-19 pandemic and the subsequent closing of borders have revealed the limits of planning and the fragility of supply chains to suppliers, OEMs and end customers.

MITIGATING SUPPLY CHAIN RISKS When a part is needed urgently, every hour can cost manufacturers hundreds and thousands of dollars with the cost of the spare part itself often negligible compared to the economic and reputational damage caused by its absence. Increasing the buffer in warehouses could minimize the risk of supply gaps but counteracts previous efforts to reduce inventory. It can also increase tied up capital, warehousing costs and obsolescence.

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Another option is to source from several suppliers in multiple locations. Should one supplier fail, others can cover the demand.

However, interconnected global supply chains are often dependent on a few suppliers of basic materials. Subsequently, for specific parts or components, all worldwide suppliers might be affected by the material shortage. A better solution lies not only in supplier diversification, but also material alternatives.

A third way to improve the resilience of the supply chain is to return to localized manufacturing, as witnessed at the beginning of the pandemic. This saw many manufacturers 3D-print critical parts needed to fight COVID-19, such as face shields or valves for respiratory devices. This manufacturing philosophy, also named bridge manufacturing, can be used as a blueprint to improve supply chain resilience.

Essentially, bridge manufacturing means having a technically viable alternative to bridge a gap.

This gap can be economic if other technologies are too expensive, or an availability gap, if parts pro-

duced by another manufacturing technology are unavailable.

Bridge manufacturing requires a manufacturing alternative for the part that allows on-demand, decentralized production. This ensures the part can easily be made available anywhere globally in the event of a sudden unexpected shortage. Consequently, should supply chains be disrupted, the OEM or supplier has alternative options, potentially saving money and reputation. As a concept, bridge manufacturing comprises three different types: provisional solution, equivalent manufacturing solution, and ramp-up-phaseout bridging.

PROVISIONAL SOLUTIONS Well known in dentistry, this is where a transitional prosthesis – using a different material and a different technology – is provided as a makeshift solution while the actual prosthesis is manufactured.

Requirements for a makeshift solution are often lesser than for the original, making bridge manufacturing a second-best alternative from a technological standpoint.

Whether a part is used as a stopgap until the ‘original’ spare part is delivered, or until it breaks down and is replaced by the ‘original’ spare part, bridge manufacturing of the part takes place in parallel to ordering a standard ‘original’ spare part. Like this, the machine downtime is reduced in the same way, saving the OEM money and reputation.

EQUIVALENT MANUFACTURING However, bridge manufacturing can meet all requirements and specifications of the ‘original’ part.

In this case, bridge manufacturing might be more expensive in a regular supply chain situation, making it inappropriate for standard production, but it might have certain advantages when other constraints occur. For example, a polymer part could be manufactured at low cost per part in large quantities in a central location.

In the event of a global supply chain disruption and the part is needed overseas, this can be bridged by localized 3D printing close to where it’s needed in the required (probably low) quantity.

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If the manufacturing alternative was set up conforming to specifications, a part produced correspondingly might last as long as an ‘original.’ This eliminates the need to parallel order the ‘original’ spare part.

RAMP-UP-PHASE-OUT BRIDGING Change in demand over a product’s lifecycle can vary drastically and upon launch, it’s hard to forecast future demand. It could boom or stay at moderate volume. For small and mid-volume series, additive manufacturing is an attractive option throughout the whole lifecycle.

If product demand rises quickly, manufacturing methods like injection moulding are best from a priceper-part standpoint. Once manufac-

turing alternatives are in place, bridge manufacturing enables companies to switch as needed to optimize manufacturing costs.

3D printing is often favourable upon a product’s launch when only small quantities are needed, but when demand increases the OEM would benefit from another manufacturing method. Towards the end of the lifecycle, when demand decreases, the OEM can easily switch back to 3D printing.

With bridge manufacturing, it is important the technology does not need significant ramp-up time, is flexible with regards to quantities and is location-independent.

Few manufacturing technologies meet these criteria. Injection moulding, for example, requires high-tooling investments and ramp-up time before production

“The COVID-19 pandemic and the subsequent closing of borders have revealed the limits of planning and the fragility of supply chains.” can start. Milling can be expensive and material-intense, and is limited regarding geometries and complex structures.

ADDING VALUE WITH ADDITIVE MANUFACTURING The most viable option for bridging is additive manufacturing and in the last few years 3D printing has become increasingly popular.

This is especially true with regards to industrial applications.

Once a part is qualified and print parameters are set, it does not need any ramp up but can simply be sent securely to a 3D-print service bureau for fast, cost-effective production. That’s to say, exactly where the part is needed, when it is needed and in the precise quantity needed – even a lot size of just one.

It is these basic principles of 3D printing that continue to make it an agile and benefit-enhancing option for low-volume manufacturing requirements among OEMs large and small. SP

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BY MICHAEL POWER

AHEAD OF THE CURVE

MODEX 2022 SHOW HIGHLIGHTS TRANSFORMATIONAL SUPPLY CHAIN TECHNOLOGIES Investment in innovation will rise over the next two years as nearly 80 per cent of supply chain leaders say their digital transformation accelerated during the COVID-19 pandemic.

That’s according to an industry report from the Material Handling Institute (MHI), released during the MODEX 2022 conference in Atlanta recently. This year’s conference, which is held every two years, saw over 37,000 visitors at the Georgia World Congress Center. Over 857 exhibitors showcased advances in manufacturing and supply chain technology and innovation.

The conference’s dominant trend was digital supply chain solutions, including automation, robotics, artificial intelligence, autonomous vehicles, augmented reality, the Internet of Things (IoT), data analytics among others.

This year’s industry report, entitled Evolution to Revolution: Building the Supply Chains of Tomorrow, highlighted that push for innovation.

The report gives insights into trends and technologies transforming supply chains and the priorities of those running them.

REPORT RESULTS Many organizations are ready to spend big bucks to benefit from that technology. Of the 64 per cent of respondents increasing investments, two out of three said they will spend more than $1 million over the next two years. Investments are growing especially in the middle ranges from $5 million up to $100 million – where 41 22 JUNE 2022

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per cent say they spend over $5 million and 18 per cent say they will spend over $10 million.

The results come from survey responses from over 1,000 manufacturing and supply chain leaders from a range of industries who were queried at the end of 2021. Overall, 81 percent of respondents hold executive-level positions such as CEO, vice-president, general manager, department head or engineering management. Participating companies ranged from small to large, with 59 per cent reporting annual sales of more than $50 million, and 13 per cent reporting $1 billion or more.

This year’s report, the ninth in a series of annual industry reports published by MHI and Deloitte, provides updates on the technologies with the most potential to transform supply chains, including projected adoption rates of the next five years for each of the 11 technology categories covered and an analysis of common barriers to adoption.

The technologies covered in the report are AI; predictive analytics; inventory and network optimization; robotics and automation; wearable and mobile technology; driverless vehicles and drones; 3D printing; IofT; cloud computing and storage; sensors and automatic identification; and blockchain.

According to respondents, all technologies covered by the survey will hit an adoption rate of 66 per cent or higher over the next five years. Cloud computing, now the standard

platform for most supply chain software, continues to have the highest adoption rate at 40 per cent, the report says. Inventory and network optimization is expected to rise to the top over the next five years, with an expected adoption rate of 87 per cent (in a statistical tie with cloud computing at 86 per cent). However, artificial intelligence is expected to see the most accelerated growth – rising from 15 per cent to 73 per cent over the next five years, a nearly five-fold increase.

Predictive analytics, at 22 per cent, is expected to grow to 82 per cent over the next five years.

Industrial IoT, currently 21 per cent, is expected to grow to 80 per cent. Robotics and automation, at 28 per cent, is expected to reach 79 per cent.

Robotics and automation continue to top the list of innovations that survey respondents believe have either the potential to disrupt the industry (17 per cent) or to create competitive advantage (39 per cent). Yet a handful of other technologies are close behind, including predictive and prescriptive analytics; sensors and automatic identification; autonomous vehicles and drones; and AI technologies.

While hiring and retaining qualified workers has been the top supply chain challenge in the past, this year saw disruptions and shortages at the top with 57 per cent – presumably due to the pandemic. Talent issues (54 per cent) and customer demands (51 per cent) remain priorities, but in the context of avoiding disruption.

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For the first time, ‘lack of a clear business case to justify the investment’ was cited as the leading barrier to adoption for all 11 technologies in the report.

NEAR-CONSTANT DISRUPTION Each year sees more survey respondents say they’re adopting technology, John Paxton, the CEO of MHI, told an audience during a presentation of the survey’s results. Last year’s report, released during the pandemic’s height, saw a shift to “innovation-driven resilience” and dealing with disruption, he said. The past two years have seen near-constant disruption.

“Every time you turn around there are new challenges,” he told the audience. “It’s like drinking from a fire hose, or better yet, standing against a wall and being blasted by a fire hose.”

Disruptions will continue, Paxton said, with the war in Ukraine causing shortages of components used to make microchips. But supply chain professionals can view this as a “glass-half-full” situation. According to the report, 87 per cent of respondents said the pandemic had raised supply chain’s strategic importance, while 78 per cent said it accelerated transformation.

What’s more, the report projects “revolutionary adoption” growth over the next five years, said Thomas Boykin, senior supply chain specialist from Deloitte, who moderated a panel on the topic. While the pandemic saw reduced

“Every time you turn around there are new challenges.

It’s like drinking from a fire hose.” investments in supply chain, investments should rise over the next two years. Overall, 66 per cent said they plan to spend over $1 million over the next two years, while 41 per cent said they will spend over $5 million. A total of 18 per cent plan to spend more than $10 million.

Panelist Torsten Pilz, senior vice-president and chief supply chain officer with Honeywell, agreed with survey findings showing 87 per cent noted the pandemic and disruptions have altered the strategic importance of supply chains and accelerated digital transformations. His company sped up its transformation process when the pandemic and other disruptions hit, Pilz said.

Many organizations have underinvested in supply chains for at least the past 10 years, Pilz said. Just-in-time supply chains, which are long, complicated and need a lot of synchronization, are struggling. Supply chains can usually handle one disruption at a time. But many have been hit by several simultaniously, making things worse. “As soon as you throw three, four differ-

ent things at it, things start to break, and that’s what we’ve seen,” Pilz said.

Several panelists agreed that finding trained, skilled labour was challenging. Fellow panelist Jason Minghini, group vice-president of operations at Kenco, noted the labour crunch affected hourly workers needed to operate machines. But that shortage included skilled workers as well – fewer high school students entering university STEM programs means fewer engineers with the skills to design and implement those machines.

“You have a dichotomy that’s really going to merge together pretty soon to where, it’s not just a production worker labour crunch, it’s also very much a skilled engineering labour crunch,” Minghini said.

One hope was that more young people want to major in logistics and supply chain in post-secondary programs, said fellow panelist Terry Esper, associate professor of logistics, The Ohio State University. Some students now see supply chain positively, since it kept society and the economy running during the pandemic.

“That kind of heroic narrative increased the students that have walked in the door saying, ‘I want to major in supply chain,’” Esper said.

Even before the pandemic, emerging supply chain technologies were becoming more impressive, said panelist Adrian Kumar, vice-president and global head of operations and science and analytics at DHL Supply Chain. Through technology transfer into supply chain from other industries, the company invested $300 million centrally to funnel 10 to 15 key technologies into their operations, he said. That process became even more important during and after the pandemic. “It has greatly accelerated our investments in these technologies,” Kumar said.

INNOVATION AWARDS WINNERS Also at the show, MHI also announced the winners of the 2022 MHI Innovation Awards.

After receiving 121 submissions for this years’ awards, judges completed the initial vetting process. Four finalists were announced as the most innovative products in each category - Best New Innovation; Best Innovation of an Existing Product; and Best IT Innovation based on concept, value, and impact. The 2022 MHI Innovation Award winners are: B est New Product: Phantom Auto for Remote Operation Platform Logistics B est IT Innovation: Veryable, Inc. for On-Demand Labor Marketplace B est Innovation of an Existing Product: Ancra Systems B.V. for Skateloader System As the first MODEX show to be held live since the pandemic’s beginning, this year’s event allowed participants to discover cutting edge solutions and learn about supply chain’s latest trends. SP SUPPLYPRO.CA 23

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BY COSTAS XYLOYIANNIS

FIVE EASY PIECES FACTORS TO CONSIDER FOR BEST-OF-BREED TECHONOLOGY Extensive disruption at the beginning of the decade put resilience at the top of the agenda for most organizations. Now, more attention than ever is being placed on how digital procurement solutions can be used to boost agility.

But as digital transformation accelerates and procurement teams look beyond their established P2P or S2P suites to address pain points, this shouldn’t be done in a haphazard way. To be successful, organizations need a plan as to how new software is identified, selected and implemented.

When adopting best-of-breed technologies, what should procurement consider? The following are five key factors.

S top comparing best-of-breed versus single suite One of the greatest advantages of developing a best-of-breed stack is that organizations can benefit from vendor expertise in a particular area. With best-of-breed you are accessing this specialist knowledge. This means that specific issues can be addressed more rapidly and with greater success, which translates into better user experience and adoption.

Large P2P suites, on the other hand, can feel disconnected from the day-to-day reality of users because they are often restricted to a core set of use cases that apply to the broadest range of companies. Of course, compared to an individual best-of-breed vendor, the suites have considerably more capacity to invest and innovate. How24 JUNE 2022

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ever, when taking the best-of-breed ecosystem, the combination of expertise, agility and resources makes this option compelling for many use cases.

This is not to suggest that suites no longer have their place. They address core procurement functionality for many organizations exceptionally well and are ‘best-of-breed’ for several scenarios. It’s not a question, therefore, of one or the other, but rather how to identify and select the best solution today, while maintaining flexibility to adapt to tomorrow’s challenges.

K now the benefits of an environment that enables specialist solutions A best-of-breed enabled environment means that organizations can plug-and-play different solutions into large suites or other platforms that are provided by experts in their respective fields. They can empower users to self-serve even complex changes to forms, to adapt workflows or manage integrations, while providing an accelerated time-to-value and a superior experience for suppliers.

The best-of-breed approach yields many other advantages. For instance, it enables focused investment in solutions that address specific requirements. The approach offers depth and scale of knowledge. Because each best-ofbreed provider tends to solve a relatively narrow set of business challenges, they have significant in-depth experience in their area.

The approach also supports agility, because it’s far easier to make changes to the overall technology landscape if an enterprise is not locked into one vendor. Incidentally, the combination of these advantages results in new solutions brought to market more rapidly, which enables access to innovation.

Make planning a priority The Procurement Technology Landscape 2021

by Procurement Leaders reports that 59 per cent of procurement functions are targeting a best-of-breed approach to technology this year. But while best-of-breed adoption is accelerating, experts warn that randomly buying multiple software is not a strategy. Be mindful not to get carried away with new solutions that address specific pain points in an elegant and user-friendly way.

There’s a tendency when implementing a suite to adopt the standard workflow and practices that the suite best supports. This can be fine if it meets your requirements. However, while a bestof-breed strategy requires more upfront planning to decide how to assemble the various components to work together, this additional prep results in a much richer and deeper solution that more closely meets individual business goals.

Organizations that incorporate best-of-breed into the environment in a planned manner can realize the full benefits of the approach. To be efficient and profitable in the long run, it’s SUPPLY PROFESSIONAL

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important to be explicit about what the organization requires and select software accordingly, in a deliberate manner.

P ut data at the heart of your strategy Having a plan in place also helps to prevent data silos from occurring, which need to be avoided.

Underpinning any procurement process is robust data that’s accessible across different services and platforms. It’s key to have the right centralized platform configuration to enable a best-of-breed landscape.

The route to achieving good quality data is a single-entry point for information. It is much simpler to funnel data through one entry point down into different systems rather than creating multiple systems, then struggle to bring it all together. This helps to provide a single source of truth for supplier data, making procurement operations easier and more efficient.

The result is visibility, which otherwise wouldn’t be possible, and a foundation from which digital initiatives or automation can be run. To further avoid creating silos, data should ideally be consolidated, integrated and governed across systems.

F utureproof your approach Something else to account for in a best-of-breed landscape is adaptability. With the best will in

“When taking the best-ofbreed ecosystem, the combination of expertise, agility and resources makes this option compelling for many use cases.” the world, no business can predict what their data needs will be in 10 years. The environment should remain as useful in a decade as it is on day one. It’s worthwhile building a supplier data model that can evolve as new systems and use cases are introduced over time.

It’s also good to consider user experience in the landscape design – both from the perspective of internal teams and in particular the supplier.

For example, avoid having multiple systems, each with their own accounts and credentials, to support a more positive supplier experience.

Encouragingly, large mature organizations with complex requirements across source-to-pay have initially been driving the trend towards best-of-breed alternatives. As procurement

Costas Xyloyiannis is co-founder and CEO of HICX, a supplier experience management solution.

moves forward, the potential for digitization is significant. With good planning, best-of-breed provides organizations with the best mechanism to support digital transformation and futureproof themselves.

As organizations work to build supply chain resilience through best-of-breed, procurement should consider the value of big suites, specialist solutions, strategic planning and centralized data management – while adopting a forward-looking mindset. SP

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BY CHRISTIAN SIVIÈRE

CHILL FACTOR

THE PANDEMIC DIDN’T DULL DEMAND FOR TEMPERATURE-CONTROLLED SHIPPING Thanks to globalization, the movement of products around the globe has dramatically increased over the years and this includes food. We find fresh fruits and vegetables, from blueberries to asparagus, in our food stores and supermarkets year-round. In addition to fruits and vegetables, both fresh and frozen, we also find an array of cheese, meat and seafood products from all over the world. Many other products require temperature control, some chemicals and pharmaceuticals, fresh cut flowers, chocolate in summer, so it doesn’t melt, and wine in winter, so it doesn’t freeze.

This industry has been growing constantly.

From a historical perspective, we owe this convenience to an African-American engineer named Frederick McKinley Jones, who invented the first portable air-cooling unit in 1935.

Originally trained as a mechanic, Jones was awarded 61 patents in refrigeration equipment and in other fields like X-ray machines, sound equipment and gasoline engines. These refrigeration units were placed on the outside of trucks that carried perishable goods and this innovation greatly improved their long-haul overland transportation. He went on to create the U.S. Thermo Controls Company, which was eventually renamed Thermo King. The ability to keep food fresh and frozen during transport greatly contributed to the growth of the frozen food, supermarket and hospitality industries in the early 1950s.

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The 50s also saw the invention of the ocean container, when then-trucking magnate Malcolm McLean, frustrated with the inefficiencies of unloading and reloading cargo from trucks to ships by hand, acquired a Second World War-era oil tanker, renamed it the Ideal X and had it converted to carry metal boxes: a steel platform was added above the tank tops and piping, so that trailers, soon to be called ocean shipping containers, could be loaded on the deck.

The first recorded ocean container movement took place on April 26, 1956, when the Ideal X left the port of Newark, New Jersey bound for Houston, Texas, which it reached five days later, carrying 58, 35ft-long by 8ft-wide by 8ft-high loaded containers on deck, along with 15,000 tons of bulk petroleum in the holds.

This marked the beginning of containerization. By using steel containers, McLean increased the speed and efficiency of shipping products by ocean freight and reduced losses from breakage and theft. His company, SeaLand, became the first container ocean carrier.

Other shipping lines quickly followed suit.

Looking back, we can say that ocean container shipping was a great enabler of globalization, since it enabled the safe and economical movement of products around the globe.

From there, containerships then got bigger and bigger, creating economies of scale, which led to very low ocean freight rates, until early 2020. The biggest containerships today can

carry almost 24,000 TEU’s (twenty-foot equivalent units). The pandemic upset the equilibrium in March 2020, resulting in exorbitant ocean freight rates, container shortages, delays, congestion, poor service and severe supply chain challenges and disruption. Hopefully, this is a temporary situation, as the world gradually emerges from the pandemic.

INSULATION We touched on the invention of refrigeration units for overland transportation and standard containers for ocean transportation in the 1950s.

It is in the early 1960s that ocean carriers developed insulated containers known as “porthole containers.” They were connected to a ship’s cooling plant, had two holes at one end, one at the top and one at the bottom, through which cool air was pumped in and warm air extracted.

The first refrigerated marine containers were developed in the late 60s, based on converted truck units and the first “reefers,” with integrated cooling units coming to life in the early 70s.

Thanks to technology, today’s reefer containers are very sophisticated and provide controlled atmosphere – in other words, not just refrigeration and temperature control but they can slow down the ripening process of fresh fruits by controlling the level of CO2 inside the container.

Ocean carriers have continued to invest in reefer containers, since they provide higher revenue than standard containers and in SUPPLY PROFESSIONAL

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response to market demand. This did not slow down with COVID-19 – food is one of the few sectors that remained strong during the pandemic and it continues to grow. Industry had to adjust to changing consumer patterns, the rise in e-commerce, click and collect orders, as well as home deliveries.

Technological advances in cold chain today are centred on tools enabling the monitoring of movements, temperatures and all other relevant data, in order to provide maximum visibility to operators.

CONTINUED DEMAND As consumers’ appetite for both exotic and local products continues to be strong, we’ve seen an increase in investments into cold storage facilities. In the US for example and illustrating the anticipated growth in this field, Bain Capital and Barber Partners have teamed up on a US$500-million plan to build 10 to 15 refrigerated warehouses under the banner “Chill Storage” over the next few years. They are tar-

“Technological advances in cold chain today are centered on tools enabling the monitoring of movements, temperatures and all other relevant data.” geting grocery chains and logistics operators with multi-tenant facilities of around 300,000sq-ft each.

Grand View Research recently published a report showing that the global cold chain market overall is expected to grow steadily as many nations recognize the need to avoid food waste and loss of healthcare products due to spoilage.

Countries like China and India are also boosting

Christian Sivière is president at Solimpex.

their cold chain investments to meet both increased demand for exports and growing consumer appetite for imported refrigerated food.

Although the notion of cheap and efficient shipping has been challenged by the pandemic, due to various factors, the cold chain has a bright future and the need for temperature-controlled logistics, including trained professionals, will continue to grow. SP

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Fleet Management

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Fleet news The latest updates from the fleet world.

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Road test Driving the Mazda CX-50.

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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Van update What’s new in commercial vans.

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

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Chip shortage What the semiconductor shortage means for the auto industry.

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

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Fleet Management

Element’s offering to help electrify fleets

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AJAC announces two Canadian vehicles of the year The Automobile Journalists Association of Canada (AJAC) has announced the recipients of its Green Car of the Year and Green Utility Vehicle of the Year awards, coinciding with the kick-off of the AJAC EcoRun, a rolling showcase of fuel-efficient vehicles.

The 2022 Polestar 2 takes home top honours as the Canadian Green

Car of the Year, while the 2022 Volvo XC40 Recharge takes home the win in the Canadian Green Utility Vehicle of the Year.

These vehicles were selected by numerous AJAC journalists across the country after careful consideration recharge time, driving range, vehicle dynamics and overall value.

Element Fleet Management has launched Arc by Element, an electric vehicle fleet offering to help navigate and simplify the move from internal combustion engine (ICE) vehicles to EVs. The offering adds an EV solution to Element’s existing services.

Element’s full-service ICE fleet offering has been expanded to support the needs of EVs. Arc by Element is designed to help clients: Design and support EV pilot programs and build roadmaps to full EV deployment integrated with ESG mandates, Maximize public and private incentives to lower costs, Connect clients to Element’s network of EV-specialized providers, Plan EV infrastructure and charging solutions across mixed charging scenarios, Support driver reimbursement for home charging, and Work with fleets on driver training, change management and stakeholder engagement.

Goodyear adds two sizes to Workhorse MSA line The Goodyear Tire & Rubber Company has added two sizes to the Workhorse MSA tire line. These new, all-position tires deliver the same high-mileage tread features and construction as the other Goodyear Workhorse MSA products, now available in two new super single sizes.

The lineup now includes super single 425/65R22.5 and super single 385/65R22.5 sizes, designed for construction, logging, oil and mining applications.

“The addition of two new super single sizes to the Workhorse MSA lineup extends the hardworking benefits of the full line to even more end-use applications,” said Jessica 30 JUNE 2022

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Julian, commercial product marketing manager, Goodyear North America. “For jobs that take you on- and off-road, these new MSA tire sizes will help deliver long miles to removal with enhanced toughness and re-treadability.”

The two new Workhorse MSA sizes feature: A deep tread for long miles to removal; A tread compound designed for mixed service applications to help improve miles to removal and cut/ chip resistance; S tone protectors to resist drilling and enhance toughness; and

A reinforced steel belt casing that helps re-treadability through multiple cycles.

Honda teases styling of Prologue Electric SUV Honda released the first sketch previewing the design of the all-new Prologue full-electric SUV launching in 2024. The first Honda model designed primarily through virtual reality visualization technology, Prologue styling suggests an adventure-ready SUV capable of satisfying everyday driving and weekend getaways with a strong hint of the Honda e in the front fascia, the company said.

The exterior styling of the Prologue represents the clean, simple and timeless values of the global Honda design direction, together with a long wheelbase, shorter overhang and a strong stance. Prologue was designed at the Honda Design Studio in Los Angeles in collaboration with a Honda design team in Japan.

“The Prologue is Honda’s first electric vehicle in Canada and is the result of a strategic North American plan announced 2 years ago that includes a collaboration with GM to produce EVs in a more efficient manner,” said Steve Hui, vicepresident, Honda Canada. “The Prologue signifies our transition to electrification, with more Honda engineered and manufactured EVs in North America coming in 2026.

Our Canadian dealers are excited to see it come to their showrooms.”

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Holman aligns business units under one brand Automotive services organization Holman Enterprises has unified its business divisions and companies under a new, singular global brand, Holman.

After nearly a century in business, the organization’s seven integrated companies – Holman Automotive, ARI, Auto Truck Group, Kargo Master, Holman Parts Distribution, Holman

Insurance, and Holman Growth Ventures – will come together.

“As Holman nears its 100th year in business, we’ve reached a turning point in our evolution as a company,” said Chris Conroy, president and chief operating officer of Holman. “The automotive world continues to experience unprecedented change, which

means we face new challenges, but also new opportunities.”

Holman will continue to deliver holistic automotive and mobility solutions including fleet leasing and management services; vehicle fabrication and upfitting; component manufacturing and productivity solutions; powertrain distribution

and logistics services; personal and commercial insurance services; and retail automotive sales.

The company will continue to leverage its automotive competencies to deliver integrated automotive solutions.

E-truck charging set to grow

EV chargers coming to BC

By 2030, over half the trucks operating in North America are expected to be powered by an electric powertrain. Light-duty vehicles will be early adopters, with nearly 86 per cent share of the EV truck market.

That’s according to the recently released North American Electric Truck Charging Infrastructure Market Report 2022: Expanding Revenue Opportunities for Value Chain Participant Growth, released by Research & Markets.

Level 2 (20kW) to Level 5 chargers (350kW) will be the main charging solutions in the next 10 years, with even higher charging power developed by the end of the decade.

The charging infrastructure value chain must be robust and efficient to meet this demand, the report notes.

It starts from energy generation, followed by storing and energy distribution through transmission and distributor operators to reach hubs.

After that, charging stations are installed in private and public hubs to offer charging services. multiple participants are involved across the value chain to cater to increasing charging requirements, the report notes.

To ensure truck operation is not affected by charging infrastructure availability, destination, depot, and en route charging must be available. EV trucks will consume 130TW of electricity by 2030; therefore, 440k to 540k chargers are required, the report says.

British Columbia will see $3.5 million from Ottawa to help install up to 810 EV chargers across the province.

The investment is funded through the Natural Resources Canada’s Zero-Emission Vehicle Infrastructure Program (ZEVIP).

The Government of BC will select recipients based on demand. The EV chargers will be installed at multiunit residential buildings, workplaces or facilities for servicing light-duty vehicle fleets by October 2023.

Funding will be available through existing provincial programs, such as the CleanBC Go Electric EV Charger Rebate and Fleets programs.

Investments in charging infrastructure made so far will result in more than 25,000 new chargers, coast to coast.

The 2023 Toyota Tundra adds SX package to lineup The 2023 Toyota Tundra enters the new model year with a new SX Package offering an updated appearance. The 2023 lineup offers several options, with SR, SR5, Limited, Platinum and 1794 grades. TRD Pro and the new flagship Capstone grade return, both exclusively with the i-FORCE MAX powertrain.

The new SX Package is available on SR5 grades in 4x2 or 4x4. It is offered on Double Cab models with 6.5ft bed and CrewMax models with the 5.5ft bed. It dresses up the Tundra with Dark Gray Metallic 18-inch wheels and by substituting black for body-color trim, including outer door handles and the rear inboard bumper, the company said. The Tundra door badges are removed for a minimalist look, while the 4x4 badge on the tailgate gets blacked out on applicable 4x4 models.

The SX Package is available with four exterior colors: White, Magnetic Gray Metallic, Celestial Silver Metallic and Midnight Black Metallic.

The Tundra offers two new power-

trains: a twin-turbo V6 engine and a hybrid twin-turbo V6. Both engines team with a 10-speed electronically controlled automatic transmission with intelligence (ECTi). The new 10-speed features a sequential shift mode, uphill-downhill shift logic and tow-haul driving modes.

The i-FORCE 3.5-liter, twin-turbo V6 uses DOHC 24-valve cylinder heads and Dual VVTi systems to yield 389 horsepower and 479lbs-ft of torque. Top dog in the Tundra line is the available i-FORCE MAX hybrid powertrain with 437hp at 5,200rpm, and 583lbs-ft of torque at 2,400rpm.

The i-FORCE MAX combines the twin-turbo V6 with a motor generator, with a clutch located within the bell housing between the engine and 10-speed automatic transmission. The motor generator provides more power through the transmission, while the engine start-up, EV driving, electric assist and energy regeneration are done via the parallel hybrid components.

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Fleet Management

By Stephanie Wallcraft

Adventure appeal

Test driving the outdoorsy 2023 Mazda CX-50 Camping, hiking, skiing, biking, canoeing and kayaking – compact SUV buyers are doing more of these things post-pandemic, according to data presented by Mazda when explaining the logic behind its newest SUV. The 2023 Mazda CX-50 is an entirely new SUV that builds on the baseline created by the popular CX-5, while adding an outdoorsy twist to appeal to those of us who are newly venturing out into nature more often. Also important is that it doesn’t replace the CX-5 in the line-up: they’ll be sold alongside one another in dealerships across Canada.

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62mm, and 75mm, to be precise – and it also has a 115mm longer wheelbase. This allows for better access to the cargo area and to the roof, where a cargo box or racks for outdoor toys can be put within easier reach. The doors wrap around the sills to prevent dirt from collecting and help to keep pant legs clean. Otherwise, the exterior of the CX-50 looks much any other Mazda: the grille, headlights, taillights, and other exterior accents would look just as much at home on a CX-5 or CX-9, and there are no ladder-style roof rails or simulated skid plates. It’s a good option for people who like these dimensions but don’t necessarily love the rugged look.

Trim levels

At launch, the CX-50 will be sold in two trims. The entry-level GS-L comes with a normally aspirated 2.5L, four-cylinder engine with cylinder deactivation, paired with a six-speed automatic transmission and standard all-wheel drive.

At a base price of $39,850, including a $1,950 freight and PDI charge, it starts at a higher price point than many vehicles in its class, but at a price that’s in line with entry-level all-wheel drive grades among its competition.

The base engine produces 187hp and 186lbs-ft of torque, and its estimated fuel consumption according to Natural Resources Canada lands at 8.9L per 100km

combined. A panoramic sunroof is standard, as are 17-inch wheels, very effective heated front seats, and a heated steering wheel.

A strong set of standard safety features is included as well: emergency braking support, blind-spot monitoring and rear cross-traffic alert, radar cruise control with stop-and-go functionality, lane keep assist and lane departure warning, automatic high beams, and a driver attention alert are all equipped at no extra charge.

The higher GT grade comes with 20-inch wheels, ventilated front seats, heated rear seats, a 360-degree camera, and a wireless phone charging pad. The base engine is standard, while a 2.5L, FM/SP SUPPLY PROFESSIONAL

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1. The built-in infotainment system is displayed on a 10.25-inch screen, which is set far back on the dashboard and by default is not touch-operated.

2. Cargo figures are higher in the CX-50 versus the CX-5 with the rear seats up at 889L, and less space when the second-row seatbacks are dropped.

The 2023 Mazda CX-50 is an entirely new SUV that builds on the baseline created by the popular CX-5, while adding an outdoorsy twist.

1.

2. four-cylinder engine with turbocharging is optional, as tested here at a fees-in price of $47,550.

This engine has two sets of power figures listed: one is with 93 octane fuel, with which it makes 256hp and 320lbs-ft or torque, and the other is with 87 octane, which produces 227hp and 310lbs-ft.

In either case, the turbo engine uses an average of 9.4L per 100km, according to NRCan. Our realworld figure landed somewhat higher at 10.2L/100km, which is closer to NRCan’s city rating of 10.4L/100km.

Opting for the turbo engine also equips drive modes for Normal, Sport, and Off-Road, as well as a towing mode that works with

the turbo’s higher maximum towing capacity of 3,500lbs (versus the 2,000lbs capacity with the base engine).

Cargo figures are slightly higher in the CX-50 versus the CX-5 with the rear seats up at 889L (versus 871L in the latter), while there’s slightly less space to work with when the second-row seatbacks are dropped at 1,595L (as opposed to 1,680L).

Up front

True to Mazda form, the climate controls are easy to understand and operate with a simple layout of knobs and buttons. The built-in infotainment system is displayed on a 10.25-inch screen, which is

set far back on the dashboard and by default is not touch-operated.

Instead, the driver or front passenger interacts with it via a controller in the centre console. Interestingly, Apple CarPlay and Android Auto connect wirelessly as standard equipment, and unlike the rest of the system, they can be operated by touch, but only when the vehicle is stopped (unless touch functions are enabled while driving via the vehicle settings, which works for the smartphone apps only).

Overall, the 2023 Mazda CX-50 takes the brand in a new direction: it’s a functional and family-friendly compact SUV, with a hint of adventure appeal. FM/SP

As Tested Price (incl. freight and PDI): Starts at $47,500 Engine: 2.5L turbocharged four-cylinder Power: 256hp, 320lbs-ft (93 octane); 227hp, 310lbs-ft (87 octane) Transmission: 6-speed automatic Rated Fuel Economy (L/100km): 10.4 city/8.1 hwy/9.4 combined Observed Combined Fuel Economy (L/100km): 10.2 FLEET MANAGEMENT SUPPLYPRO.CA 33

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Fleet Management

By Howard J Elmer

Ford E-Transit

Mercedes-Benz Sprinter

Built for purpose

A look at commercial vans for 2022 In the world of commercial vans not that much changes year to year – mainly because the jobs these vehicles do don’t change much. However, propulsion, as in what drives those vans, is changing. First off, Ford has brought its E-transit to market. This all-electric van looks just like its gas-powered cousin – but what drives it are electrons. This innovation follows GM’s introduction last year of the larger livery van, the BrightDrop. GM’s Ingersoll, Ontario plant has been retooled to deliver these fleet vehicles to the likes of FedEx and Merchants Fleet.

In other news, Nissan is now fully out of the commercial van business.

With that, here’s a rundown of some of the vehicles available in the work van space.

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2022 Ford Transit & E-Transit

For 2022 the Transit is a carry-over – emphasis this year is on the E-Transit, which offers the same interior cargo dimensions and most of the same mounting points as Ford Transit. The E-Transit can be ordered with accessories like bulkheads and shelving, so the van is ready to work on delivery. Customers can also work with any of the Fordapproved upfitters, including 13 located conveniently within 50km of Kansas City assembly plant.

E-Transit offers the optional Pro Power Onboard, which provides up to 2.4KW of power. This transforms the vehicle into a mobile generator for powers tools and

equipment on job sites. That’s enough power to run everything from belt sanders to circular saws.

Ford says the average daily range for commercial vans in the US is 74 miles (75km). With a usable battery capacity of 68KWs, E-Transit has an available targeted range of 126 miles (200km) in the lowroof cargo van configuration.

The E-Transit battery is underneath the vehicle body, allowing for up to 487.3 cubic feet of cargo space inside the high-roof, extended-wheelbase configuration.

E-Transit comes with an eightyear, 100,000-mile (160,000km) electric vehicle component warranty. It has a maximum payload of 3,880lbs, or 4,428lbs on the cutaway version.

2022 Ford E-Series 350450 Cutaway

The E-series has added a few new features for 2022, such as a rear-view video camera kit. Flex Fuel Capability has also been added. A speed limitation feature is now available and the economy version of the 7.3L, V8 is available in the E450 chassis. The E-series is only available as a cutaway and or stripped chassis. Single and dual-rear wheel chassis have GCWRs ranging from 13,000lbs to 22,000lbs.

Meanwhile, the 2022 Ford Transit Connect is a carry-over year for Transit Connect. It continues to be offered as cargo or passenger equipped wagon. It has a maximum payload of 1,610lbs and a max towing capacity of 2,000lbs.

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RAM Promaster

GM BrightDrop

The (Ford) E-Transit can be ordered with accessories like bulkheads and shelving, so the van is ready to work on delivery.

2022 Mercedes-Benz Metris & Sprinter

A new generation of Metris arrived late last year. Highlights included enhanced driver assistance systems, the 9G-TRONIC automatic transmission, a tire pressure loss detection system and a refreshed design. The Metris also offers optional assistance systems, such as Active Parking Assist, Blind Spot Assist, and Lane Keeping Assist. It has a maximum payload of 2,502lbs or 2,447lbs, and a towing capacity of 5,000lbs.

The 2022 Mercedes-Benz Sprinter 1500 to 3500 is also a carry-over year for all versions of the Sprinter. There’s a maximum payload of 5,375 lbs and towing capacity of 7,500lbs.

2022 Ram ProMaster City & ProMaster 1500 to 3500

For 2022, the City includes a body-colour front fascia, daytime running lights, backup sensors, driver seat manual height and lumbar adjustments and cruise control.

It has a max payload of 1,890lbs and towing capacity of 2,000lbs (w/ tow package).

For 2022, the ProMaster is a carry over. However, the 2023 model has already been shown, and is expected late this year. It will carry a host of updates and upgrades. ProMaster is available as a cargo van, window van, chassis cab and cutaway model. It is a frontwheel-drive platform. It has a max payload of 4,680lbs and towing capacity of 6,800lbs.

General Motors BrightDrop

GM Canada’s CAMI Assembly plant in Ingersoll Ontario has been retooled to produce the BrightDrop. This is a fully electric commercial delivery van. When BrightDrop’s Zevo 600 production begins in Q4 2022, CAMI will become Canada’s first full-scale EV plant. The BrightDrop Zevo 400, (a smaller version of the electric Zevo 600) will also be built at CAMI beginning in 2023. BrightDrop currently has more than 25,000 production reservations for its electric delivery vans. The Zevo 600 promises 350km of range and the all-wheel drive motor makes 300hp and 390lbs-ft of torque. It’s GVWR is 10,000lbs.

2022 Chevrolet Express 2500 and 3500

Once again, for GM, the van business remains steady and unchanged. The Chevy Express 2500 and 3500 have a maximum payload of 4,503lbs and towing capacity of 10,000lbs. The interior is 284.4 cubic feet. The 2022 Chevy Express Cutaway 35004500 also carries over with a maximum payload of 9,247lbs. FM/S

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Fleet Management

By Dr. Naveed Ahmed Khan

Running on empty

Dr. Naveed Ahmed Khan is a professor (adjunct) at the School of Management, George Brown College, in Toronto.

1.

What’s behind automotive’s paltry supply of semiconductors Microchips are in nearly everything we use, including smartphones, smart watches, computers, washing machines, trimmers, toys, televisions, and automobiles. But as industries phase out COVID-19 restrictions, they face an unprecedented material shortage. One such industry is automobile, where global automakers are facing a severe shortage of semiconductors.

During the pandemic’s early months, automobile sales plunged by as much as 80 per cent in Europe, 70 per cent in China, and around 50 per cent in the US. Declining sales resulted in an inaccurate forecast of the future needs of semiconductors for automobiles.

As auto sales pick up, there’s been a severe global shortage.

Manufacturing chips is complex and it takes more than three months to make one chip. Since production can’t be pushed on short notice, it will take manufacturers a long time to catch up. It’s projected that the growth of the global semiconductor market will rise from $425.96 billion in 2020 to $803 billion in 2028 at a compound annual growth rate of 8.3 per cent.

Semiconductors, commonly called integrated circuits (ICs) or microchips, are made of materials such as silicon. Semiconductors are 36 JUNE 2022

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produced in various sizes. Hosting numerous transistors, they are considered the brains of modern electronics. Their construction involves multiple steps, expert input, and long production times. IBM’s latest chip packs around 50 billion transistors into a two-nanometer, fingernail-sized space.

Semiconductors are the lifeline of many industries, including automobile. An average, modern automobile uses over 1,400 semiconductors for safety features, the electrical system, powertrain, and communication.

Taiwan and Korea control most microchip production. While invented in America, the number of US chip manufacturers has fallen. In 1990, the US manufactured 37 per cent of microchips. By 2020, that number dropped to 12 percent. For decades, the tech industry has been driven by a prediction, made by Intel cofounder Gordon Moore in 1965, that the number of transistors in a chip will roughly double every 24 months.

While demand has increased, microchip availability has shrunk.

Microchip factories have a high investment cost. One estimate says it can cost around $10 billion to build a chip manufacturing factory.

The shortage is expected to cost the automotive sector around $200 billion. All major automobile producers are seeing unprecedented demand-supply mismatch, resulting in downtime and assembly line closures. Jaguar Land Rover shut down two of its main car manufacturing factories temporarily because of this massive chip shortage. GM, Cadillac, Ford and Stellantis have either reduced production capacity or suspended assembly line operations in North America. GM halted parts of its pickup truck operations.

Nissan announced in May that, due to chip shortages, it would make 500,000 fewer vehicles.

Mike Hogan, VP of GlobalFoundries, estimates it could take up to 20-to-25 weeks from the time the chip order is placed to when the order reaches cars using the supply chain. The chip shortage is predicted to continue throughout 2022 as raw materials sourcing continues to be affected, mainly by new COVID19 variants. Still, experts believe that when regular production resumes, organizations won’t be able to offer as much variety.

REASONS FOR THE SHORTAGE Since 2015, there has been high volatility in the semiconductor market, mainly due to geopolitical

tensions, longer lead times, natural calamities, carbon emission curbs, and customer purchase changes.

Microchip manufacturing plants are limited globally in number as they are expensive to operate.

A few that operated during the pandemic faced a series of unfortunate weather events that halted manufacturing. Japan’s Renesas plant, which produces almost one-third of the world’s microchips, was severely damaged by a fire, while winter storms in Texas forced microchip plants to stop production.

In September 2020, the US Department of Commerce had imposed restrictions on Chinese chip manufacturers. These restrictions forced companies to turn to other manufacturers in countries like Taiwan, which were already producing at maximum capacity.

Taiwan, one of the world’s largest semiconductor manufacturers, was hit hard by drought in 2015 and 2021, reducing water supplies to chip makers. Chip makers, including one of the largest in the world, Taiwan Semiconductor Manufacturing Company (TSCM), have become water efficient and adopted processed-water recycling techniques.

Yet, increasing demand has overshadowed such initiatives.

On the other hand, when car FM/SP SUPPLY PROFESSIONAL

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sales dropped due to the pandemic, automobile manufacturers cancelled semiconductor purchase orders due to their lean approach, resulting in little to no inventory.

Now, as car sales have increased sharply, auto manufacturers are running short of semiconductors.

The lack of microchip safety stock and the nature of short-term contracts with chip makers have proved catastrophic, as automakers failed to hedge against uncertainty.

There are other reasons behind the semiconductor shortage: the increasing use of technology like IoT to improve logistics operations; the growing demand for gaming devices during shutdowns; an increasing use of cloud computing and electronic devices for online education and work-related virtual meetings during the pandemic; and an upsurge in 5G communication technology adoption in developed and developing markets.

It is estimated that 5G smartphones will account for 71 per cent of smartphones by 2024. This will also dictate generating a demand for more complex chips for advanced mobile applications in a shorter

time. Growing interest in cryptocurrencies and the resulting need for crypto-mining devices have also played their part in creating the semiconductor shortage.

Finally, since most chip makers are in Taiwan and China, which were seriously affected during the pandemic’s first wave, production was halted in early 2020. The pandemic also hit the upstream supply chain, limiting raw material sourcing and availability of factory workers. These workers need specialized training for handling the toxic chemicals used in the chip-making process. Intel is even running a “help wanted” advertisement campaign on TV and radio programs aimed at college students to work part-time.

Many automakers are now operating in crisis mode, and few expect a rapid resolution. Experts believe that the crisis will extend into 2023, creating loss of billions of dollars for the industry. Automobile manufacturers and chipmakers must work together to tackle the demand imbalance.

Toyota, a pioneer of the Just-inTime (JIT) production management approach, has announced it will

Since (microchip) production can’t be pushed on short notice, it will take a long time to catch up and meet demand. reconsider its JIT management principle to avoid shortages and has introduced a business continuity plan which mandates the suppliers to stockpile two to six months worth of microchips. Unlike the traditional automotive industry, Tesla which has roots in the silicon industry, swiftly modified its software to integrate alternative chips into its vehicles.

TSMC has announced it will raise its production of semiconductors for the automobile industry by 60 per cent. Intel and Samsung have also developed plans to improve

production and meet the automobile industry’s requirements.

The chip shortage has forced governments into action. US President Joe Biden met the CEOs of AT&T, Intel, Dell, Ford, General Motors, and other industry officials, stressing the need for more government investment in the industry and to stay ahead of the competition. As a result, the Biden administration’s $2-trillion infrastructure investment package includes $50 billion for the semiconductor industry. Similarly, South Korean government has announced a $451-billion investment to help companies boost semiconductor production.

Several chip manufacturing companies have established new facilities to increase capacity. Completion of these sites will have major impact on containing the chip shortage issue. At a conference in September, AMD CEO Lisa Su said that new manufacturing plants will considerably reduce such supply chain issues by the second half of 2022. However, this is very optimistic, as Matt Murphy, CEO of Marvell Technology, said that these expansions won’t be effective to produce semiconductors until 2024.

To avoid future shortages, auto manufacturers can focus on leveraging standard chip designs. That could provide a larger and more diverse supply base. In addition, collaborative forecasting, better relationships with chip suppliers, and improved risk analysis could ensure a continuous supply of semiconductors. Such initiatives can also lower the risk of counterfeit parts and curtail the higher prices of chips for the automotive sector. However, diversifying the supply base and opening new production facilities doesn’t seem to be a short-term solution, as changing the design requirements, adapting to the specifications of new suppliers, and the licensing process of the patented chips would take significant time. FM/S For full references, please see this story here: https://bit.ly/3za5mRr. FLEET MANAGEMENT SUPPLYPRO.CA 37

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THE LAW—BY PAUL EMANUELLI

GUIDING PRINCIPLES USING REFERENCES IN BID EVALUATIONS The use of references in public sector bid evaluations has been subject to multiple bid protests. This article summarizes leading Canadian cases and offers governing principles for evaluating references based on domestic and global rulings.

In its April 2003 decision in AirTite Sheet Metal Ltd. v. Canada (Attorney General), the Newfoundland and Labrador Supreme Court found that the government improperly rejected a bidder after evaluators acted as self-references to reject a bidder’s prior project experience based on their flawed recollection of its past performance. Similarly, in its June 2003 decision in Rockwood v. Harbour Grace Community Youth Network Inc., the Newfoundland and Labrador Provincial Court found that evaluators used an undisclosed reference requirement to improperly deny an award to a sole bidder.

Further, in its October 2009 determination in TELUS Communications Co. v. Canada, the Canadian International Trade Tribunal ordered a re-evaluation after finding that a low bid was improperly rejected due to ambiguities in the reference questionnaire. Similarly, in its June 2010 determination in Valcom Consulting Group Inc. v. Canada, the Tribunal found that the government changed its evaluation rules by introducing a more lenient process for accepting reference information from government institutions compared to other parties. Finally, in its February 2015 determination in 4Plan Consulting Corp. v. Shared Services Canada, the Tribunal determined that the government improperly used reference information to retroactively 38 JUNE 2022

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define the meaning of past projects to evaluate prior experience.

GUIDING PRINCIPLES These Canadian cases are reflective of broader global case law. In summary, the case law indicates that the following governing principles should apply to the use of references during bid evaluations: 1) Remedies for misuse: The improper use of reference information can result in re-evaluation orders, the nullification of contract award decisions, and, in some jurisdictions, lost profit damages awarded against the purchasing institution. Evaluators should therefore avoid using reference information to evaluate bids in an inconsistent, arbitrary, subjective or non-transparent manner.

2) Use of evidence: The use of references should be limited to situations where the collection of information from references would be sufficiently reliable and relevant to enable a defensible evaluation. Purchasing institutions must establish evaluation rules that clearly define how collected reference information will impact the scoring of bidders, since that information must be used in a consistent and rational manner.

3) Transparent scoring: Prior experience and related reference checks should be scored out of an identified number of total points, with a clear description of how those total points will be allocated.

4) Disclosure to bidders: The information required from references, and the procedures around the col-

lection and use of reference information, should be clearly identified in the solicitation document to allow bidders to select the appropriate references for the specifically required criteria and to allow evaluators to use that information based on clearly established procedures.

5) Avoid process over substance: Purchasing institutions should avoid the mechanical application of “content-free” reference check procedures that require the name and title of references in situations where no relevant information will be collected from the references.

6) Transparent rectifications: The post-bid substitution of non-responsive references should only be allowed where the solicitation rules specifically permit that practice. To avoid unnecessary disqualifications and resulting bid protests, solicitation documents should incorporate clear rectification procedures to allow bidders an opportunity to provide additional references when the originally identified references fail to respond to reference requests.

7) Self-references: Purchasing institutions should establish clear rules for providing references for their own evaluation procedures to incumbent bidders or to bidders who have worked for them in the past. When providing references to their own bidders, purchasing institutions should avoid creating more lenient standards for their own references than those applied to third-party references.

8) Duty to investigate: Purchasing institutions should proceed with

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

caution prior to denying a bidder a contract award due to a bad reference or concerns over past experience. Purchasing institutions are under a duty to look behind negative references and to assess whether the failure to complete prior projects was due to material non-performance by the bidder or due to factors outside that contractor’s control.

9) No division of work: Evaluation committees may not divide up the reference check process among evaluators since this creates the risk of biasing the collection of information. All evaluators should have equal access to all reference information.

10) Evaluation records: Evaluators should maintain detailed, contemporaneous records of how reference information was used as part of their evaluation process.

Public institutions should follow these principles, since failure to meet proper legal standards can undermine the defensibility of their evaluation and award decisions. SP SUPPLY PROFESSIONAL

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