A SOURCE OF JOY

Prepare Your Supply Chain Strategy for a Decidedly Different Ordering Cycle

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.

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

REASSESS YOUR CYCLING STRATEGY FROM A HOLISTIC STANDPOINT

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.

OPTIMIZE & MAINTAIN THE VEHICLES YOU DO HAVE

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.

BUDGET ACCORDINGLY

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. 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.

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. 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. 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.

BY MICHAEL POWER

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 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.”