Supply Professional June 2023

FORGING LINKS

Supply chain’s diverse challenges keep Siobhan

Chinnery engaged

Supply assurance

Last-mile deliveries

Cold chain update

The 2024 Chevrolet Trax

MRO buying

KEEPING TALENT

In the post-pandemic world, the supply chain field is showing renewed signs of life. According to the 2023 MHI Annual Industry Report – an report published each year by MHI and Deloitte and presented at the ProMat show in Chicago in March – organizations have been spending more on supply chain.

The report, called The Responsible Supply Chain: Transparency, Sustainability, and the Case for Business, shows that 90 per cent of surveyed organizations plan to spend over $1 million on their supply chains, a 24 per cent increase over last year.

This spending means more investment in technology, with organizations planning to purchase wearable and mobile technology, 3D printing, robotics and automation, and other innovative products.

Yet one data point that stands out from the report is the emphasis organizations place on workforce challenges. The report shows hiring and retaining qualified workers (57 per cent) and the talent shortage (56 per cent) were the top supply chain challenges cited by survey respondents.

The picture the report paints shows a shortage of labour and talent. Yet a new report from Statistics Canada seems to question the idea that, overall, Canada is experiencing a labour shortage. True, the country’s job vacancies hit over one million last year. But according to StatCan, the picture is rather subtle. Vacancies appears to depend on how much education the job requires.

For example, there were 113,000 vacant positions requiring a bachelor’s degree or higher in the fourth quarter of 2022, but 227,000 people with that education level were unemployed during the same period.

For positions needing a high school diploma or less, the shortage of workers started in the third quarter of 2021. This doesn’t necessarily mean that labour shortages don’t exist, including within supply chain. Rather, those shortages may not be as extensive as previously thought.

For employers trying to fill vacancies needing a post-secondary education, the report says their hiring challenges cannot be due to a lack of workers with those qualifications alone. It may be due to a mismatch in skills needed for the job and those that people actually have. Another factor could be that wages aren’t on par with what’s expected in the position.

So, what can organizations do to entice workers into areas with shortages? Increasing compensation is likely a good start. As well, focus on retention and keeping the talent you have. A positive work environment can help this.

So can training. Technology’s role will increase in places like warehouses and distribution centres, so providing knowledge of how to use that technology, and opportunities to do so, can help entice people to stay.

A campaign emphasizing how great a supply chain career can be is also important. That positive PR push should start at the high school level.

No doubt, there are shortages of workers for certain supply chain jobs. As organizations focus more on their supply chain, finding ways to make such work appealing and potentially better paid should be a priority.

EDITOR

MICHAEL POWER 416-441-2085 x7 michael@supplypro.ca

PUBLISHER

ALEX PAPANOU 416-441-2085 x1 alex@supplypro.ca

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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.

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THE ALMIGHTY DOLLAR US CURRENCY STAYING ON TOP RELIES ON OTHER COUNTRIES KEEPING IT THERE

How long will the US dollar remain the world’s reserve currency?

That’s a good question. Let’s start answering it with a Woody Allen joke that goes as follows. Woody Allen is meeting with his psychiatrist. The psychiatrist asks Woody about his problems, and he replies, “my brother is driving the family up a wall. He thinks he’s a chicken. He runs around the house clucking like a maniac. ‘Cluck, cluck-cluck, cluck,’ flapping his arms like they’re wings, and it’s making us all crazy!”

“Have you told him he’s not a chicken?” the psychiatrist asks.

“No,” says Allen.

“Why not?”

“Because we really need the eggs.”

Believe it or not, by the time you’ve finished this column, this joke will tie directly into the question I introduced in the first sentence. But first it would be good to understand what is meant by a “reserve currency” and why it’s currently the US dollar. The story starts in 1944 with the Bretton Woods Agreement. Those of you familiar with history will recognize that the Second World War was raging, but it seemed certain that the days of Germany and Japan were limited, and the Allied Powers would ultimately triumph.

All told, 44 countries met at Bretton Woods and agreed that the best system to manage currency exchange in order not to disadvantage anyone would be to maintain fixed exchange rates with the US dollar. There were several reasons why the USD was chosen. First and foremost, America was clearly going to be the single global super-

power after the devastation that had been wrought on the European continent. And second, the dollar itself was linked to gold, which meant that there was something inherently anti-inflationary about this currency compared to others.

AS GOOD AS GOLD

And that’s how the US dollar became the world’s reserve currency. The 44 nations unanimously agreed that they would accept US dollars as payment for international transactions. Central Banks around the world began to accumulate dollars (or greenbacks) because they were almost literally as good as gold. That is, until 1971 when President Richard Nixon closed the gold window. Which meant from that point forward, foreign governments would not be able to exchange their dollars for gold. Post 1971, all the world’s currencies were fiat, that is, there was nothing tangible behind any of them.

Then why has the US dollar remained the world’s reserve currency? In 1971, the US economy accounted for 35 per cent of global GDP. The most recent numbers suggest that this percentage has declined to 24 per cent, but that’s still pretty impressive for a country that has four per cent of the global population. However, more significantly, the US currently spends more on its military than the next 10 countries combined. And that, to me, is the decisive reason why the US dollar will remain the world’s reserve currency for the foreseeable future.

By the way, I don’t think that being the world’s reserve currency has been good for America. Due to the fact that many countries have

been buying up greenbacks for years, the dollar is more expensive than it should be, and interest rates in the US have been artificially low for decades. This has allowed the country to be slothful with its fiscal policy, running deficits year after year which is precisely what was anathema to the thinking of John Maynard Keynes. He believed that deficits were necessary when the economy was weak, but during the upswing of the business cycle, debts incurred should be retired.

YUAN RISING?

A few months ago, the story emerged that Saudi Arabia was seriously considering accepting payments for oil in the Chinese Yuan, rather than the US dollar. Currently, the world prices a barrel of oil in USD. If Saudi Arabia ever made this move, it seems to me that this could be the first domino to fall. Doesn’t it stand to reason that other OPEC members, like Kuwait and Venezuela, would follow? For that matter, I wouldn’t be surprised if Russia isn’t already accepting yuan for its raw material exports to China.

Now let’s get back to the joke that started this column. Why is it so funny? Yes, it’s ludicrous that a human can lay eggs. But if the joke stopped there – ‘my brother thinks he’s a chicken and he’s laying eggs’ – we wouldn’t find it nearly as amusing. It’s the fact that while Woody Allen on one hand resists the notion, he thinks that if he stops going along with it, then the eggs will stop as well. It points to the power of self-fulfilling prophecy. Which is a longwinded way of saying that the US

dollar will remain the world’s reserve currency just as long as the rest of the world believes it is in their interest to make it so. And it’s pretty much as simple as that. SP

Toronto-based Michael Hlinka is a tenured professor at George Brown College. He hosts a weekly podcast about wagering on professional football. His website is www. michaelhlinka.com

“Due to the fact that many countries have been buying up greenbacks for years, the dollar is more expensive than it should be.”

A CIRCULAR SOLUTION HOW PROCUREMENT AND SUPPLY CHAIN CAN HELP SAVE THE PLANET

Repurposing resources through design innovations allows us to save existing resources and materials and support continued economic activities. This foray into the circular economy encourages and requires many sectors to rethink how they will function in the years ahead. Appropriate compromises must be made as society cannot continue to absorb tonnes of waste materials, which are increasing year over year.

The positivity related to the outcomes by leading companies which have adopted circular economy principles and practices, should encourage and embolden other organizations to do so. When we can realize savings in energy, resources, labour, and offset the impact to climate change, we are on the right track.

ENERGY

Energy and fuel alternatives must continue to be developed in scalable formats to make meaningful reductions in GHGs. Scientists reiterate the criticality of the 2030 reduction target of 1.5C to achieve the mean global average temperature of 13.6C.

Electricity will compete with hydrogen fuels in some sectors. Renewable energies will be multifaceted. It will take decades and is highly improbable that a single renewable energy source will dominate all sectors. Much as today where fossil fuels dominate the commercial, industrial and transportation sectors alongside other forms of energy.

ENVIRONMENT

The environment has been on our radar for 50 years and we have only recently realized how ineffective

our tactics have been to mitigate our collective impact. The clock is ticking and more urgency is necessary to address our common problems. The WEIRD economy used the emerging economy countries as dumping grounds for our waste products for decades. This allowed the continued design-for-disposal strategy in the production of goods. Global warming is melting glaciers at a rate that threatens water supplies. Despite these signs, we wait for government edicts to curb our thirst for water in production and attaining natural resources to sustain a lifestyle which conflicts with the balance of the ecosystem.

The environment gets more attention when it affects potential economic interests or social values. The voice of science should have a stronger presence in boardrooms, as there are more responsible solutions. Some of these solutions will not have the same ROI but can be more sustainable. Science needs to be present at the government policy planning stage to have the longterm perspective as to how we transition away from the fossil fuel economy. Science and research will need to make the case for which technologies should be supported in design and marketing and which, just because we can make it, should be given closer scrutiny.

TECHNOLOGY

Disruptive technologies will continue changing how we do business and how we move goods for resilient sourcing in an economy framed around circularity. As new pharmaceutical products may be discovered in our oceans, it will create debates as to who benefits. Sharing of land resources has largely been determined by the

companies that buy the rights to control. Agreements, such as the UN Convention on the Law of the Sea, are causing a pause and reflection as to how to manage the wealth of the oceans, where there are few sovereign rights. Developing countries will want an equitable share or access to these relatively new resources.

GOVERNMENTS

Legislation, based on scientific research, is the best means to affect the requisite change. Industry can’t voluntarily reduce emissions and consumptions without governmental intervention. Consumers are at the receiving end of the problem and it is at the source which needs to be corrected for designs, materials, production, health, and economic sustainability.

The social procurement strategies deployed by governmental agencies at all levels must continue and be amplified. It is creating meaningful employment for people facing systemic barriers to employment. Social procurement does not cost government agencies more to train and hire these individuals. It’s a win for all parties.

SUPPLY CHAIN RESPONSIBILITIES

Policies are the starting point for adopting ESG practices.

Supply chains are embedded in every organization’s environmental and social footprint. Yet, a 2023 study by Efficio, a global supply chain consultancy, recaps that 93 per cent of C-suites target revenues and profit maximization. This compares to 66 per cent on net-zero plans and 71 per cent on social impact. For supply chain professionals, two thirds continue to

“About half of supply chain decision makers say that incentives do not include climate-related priorities.”

assess financial strength and service capacity of their suppliers, with less than one third looking at ethics and governance issues. About half of supply chain decision makers say that incentives do not include climate-related priorities. These self-limiting governance gaps impede the ESG agenda.

AFFORDABILITY

Governments must realize the need to make the transition in a way that is affordable to the same taxpayer base. Affordability encumbers taxpayers in all aspects of their lives. While the needs may be necessary so is the ability to afford the investments within an acceptable time.

This article is an edited excerpt from Larry Berglund’s book, PlugIn Planes, E-Trains, and Autonomous Vehicles: How ESG Practices are Changing the Purpose of Business. SP

Larry Berglund, SCMP, MBA, FSCMA, is principal at Presentations Plus Training & Consulting Inc.

BY MICHAEL SHELTON

SUPPLY ASSURANCE LESSONS FROM SECURING SUPPLY DURING THE COVID-19 PANDEMIC

For anybody in supply chain, the past three years have been interesting, difficult, exciting, and challenging. We had to adapt to a changing landscape, adopt new methods, and ensure that data was updated and realistic. Data to make tactical and strategic decisions must be updated to reflect the environment, which has been very dynamic.

When the pandemic started, no one would have guessed the impact it would have on the supply chain. I remember first hearing about COVID-19, and back then, many people (including myself) thought it would be contained outside of Canada, yet that assumption proved false. Driving into work one day, I realized that the traffic was considerably less. To me, it was the start of the challenges in supply chain. Supermarkets were another indicator on how our lives would

change. Shelves were empty, there were long line ups at the check outs and shoppers bought in bulk. Disinfectants were nowhere to be found and third parties sold it at outrageous prices. The rule of supply and demand was now in force, with more demand than supply, which meant higher prices.

MANUFACTURING CHALLENGES

The first challenge within manufacturing was attempting to get a supply of personal protective equipment (PPE). Regular sources were out of stock, and we had to source and qualify other suppliers quickly. This process was no longer as simple as ordering catalogue items from a website. Another key topic was raw materials and component replenishment. Suppliers started changing their commit dates on purchase orders due to labour shortages since employees that tested positive for COVID-19 were off from work. Certain jurisdictions had restrictions on whether employees could be in certain areas, to mitigate the spread of the virus and, of course, lockdowns were enacted in different regions that affected the ability to get materials.

No one wanted to declare Force Majeure due to COVID. This condition did reside in most terms & conditions. There were delays, but they were just delays, and sooner or later goods would arrive. Most parties understood that. Consumers could witness the impact of delays by driving past an automotive dealer and seeing the empty lots which, prior to the pandemic, were well stocked.

Assumptions had to be validated throughout the supply chain. Distributors, due to supply constraints from manufacturers, no longer maintained a certain level of inventory, therefore revising their terms and conditions of sale. Normally, companies are allowed certain rescheduling or cancellation privileges, but under the “COVID Umbrella” those conditions were

amended. Rescheduling privileges were either eliminated or reduced and some items were upgraded to be non-cancellable. A widely used industry term to describe this is non-cancellable, non-returnable (NCNR).

In logistics, door-to-door lead times increased and then there was the shortage of shipping containers, congestion at ports, transport truck driver shortages, instability of vessel sailing times, rail yard congestion, and so on. Container and truck loads were stuck in congested yards awaiting clearance. Price increases also had an impact on product costs. Companies had to ensure goods were moving and provide a clear delivery date to sales staff, who could communicate with customers. Planning had to update transit times since the current ones in the system were not relevant, thus painting a false picture. A vicious lead time syndrome had started, and in some cases changed weekly.

Data integrity within an organizations’ ERP platform has always been the foundation in providing information and used in planning and other decisions. During the pandemic, it was paramount to ensure critical items on the Item Master in the ERP platform were updated to reflect current conditions. Regarding suppliers, it was important to ensure these Item Master attributes were updated: replenishment lead time, rescheduling and cancellation privileges, and supplier-to- destination transit time. If the supplier was classified as sole source, other items like changes in an organization’s policy surrounding safety stock had to be looked at. This had to be updated in the ERP platform and procurement would put more surveillance on the supplier to limit disruption.

SUB-TIER SUPPLIERS

The other important element of ensuring sustaining supply is understanding the sub-tier supplier portfolio. If your supplier is providing

a product, where do their materials come from? One example is procuring an item built to your drawings and specifications. To understand the impact, drill down to the sub tiers of your primary suppliers. There is a benefit when a supplier is classified as high risk if those new suppliers were developed and validated during the on-boarding process. Sometimes, the results were better replenishment lead time and sometimes even better pricing. Although the champion of ensuring supply assurance and cost containment was supply chain, results came from collaboration with cross-functional teams like engineering, operations, sales, finance, and program management.

Supply chain professionals recently faced another issue: the invasion of Ukraine. When this situation occurred in February 2022, some commodity pricing immediately started to increase due to the situation’s uncertainty.When governments imposed sanctions, organizations had to understand what materials came from Russia and the impact those sanctions would have on supply chains.

Working in supply chain means being adaptable and building contingencies to ensure supply assurance and cost controls. As stated, the data integrity in the ERP platform is paramount in providing accurate information. As the COVID-19 emergency retreated and lead times decreased, these attributes also had to be updated in the ERP Item Master. SP

Michael Shelton is director of supply chain at Accelerated Systems Inc. in Waterloo.

BY MICHAEL POWER

KEEPING COOL TECHNOLOGY AND THE RISE OF E-COMMERCE ARE SHAPING THE COLD CHAIN

The instability and disruption of the past few years has kicked off several supply chain trends. The COVID-19 pandemic, the rise of e-commerce, and other events have changed what goods we buy, along with how we get them. This is reflected in the increasing need for or cold chain services. Cold chain – supply chain and logistics services designed for low-temperature goods – continues to change due to shifts in the consumer and technological landscape.

Demand for cold chain solutions has increased due to a changing retail environment, among other reasons, says Michael Keck, senior director, business development, at DHL Supply Chain. Consumers now want omni-channel solutions, and buy goods in ways that best suit their lifestyles. The rise of e-grocery options has meant smaller, more frequent orders, like when consumers order a single recipe ingredient they forgot when shopping.

“As the omnichannel trend grows, so too does the need for temperature-controlled warehousing specifi-

cally for additional fulfilment centres,” say Keck. “Some of DHL’s innovations use the new and emerging technologies in temperature monitoring, building out chain change storage in warehouses or conveyance technology like totes that will control the temperature up until the delivery to the customer.”

The company has also invested in robotics and advanced digitization in its cold chain, including collaborative robots to manage the dynamics of demand such as offsetting labour challenges during peak seasons, then ramping down during slower months, Keck notes. DHL also improves package visibility through MySupplyChain.com, its digitization platform.

“We use advanced sensors in our facilities to monitor the temperature throughout the warehouse,” Keck says. “Our solution can detect warm spots and control the response to cool those warm spots without kicking in the entire cooling system, thus reducing costs and maintaining the exact requirements for the products.”

There’s also growth in temperature-controlled logistics in the life sciences sector and healthcare, says DHL Supply Chain’s VP of lifesciences & healthcare, David Kopstein, as next-generation Rx/biologics is all cold chain. This supply chain is visible, as organizations make their ESG commitments a greater priority.

“The pandemic has also driven the transformation of more safety stock needed, more local production, and hence more warehousing need for I2M(inbound to manufacturing) and finished goods capacity,” Kopstein says.

DIGITAL FUTURE

Artificial intelligence (AI) and the Internet of Things (IoT) can also track data and predict outcomes, among other functions, he adds. For example, generation sensors help to rescue exceptions, while AI can simulate different coldchain pack-outs and materials to increase efficiency and support sustainable solutions.

Early and frequent planning with partners helps to ensure cold chain visibility, build resiliency, and ensure business continuity while meeting growth needs, Kopstein says.

As well, it pays to adapt to today’s environment rather than standing still, Keck recommends. “Select your partner that has expertise, depth of resources, and the ability to implement to achieve your objectives,” he notes. “Delays will most certainly cause your supply chain capability to be far behind your business’s needs.”

E-commerce activity has remained high, even though people are able to shop more in person now, says Douglas Kent, executive vice-president, strategies and alliances, at the Association for Supply Chain Management (ASCM). Track and trace capabilities are especially important for temperature-controlled products, to know where they are as they move through the cold chain, Kent says. Advances in temperature-control technology have proven especially useful for products like pharmaceuticals that must arrive at clinics, pharmacies, and hospitals at specific temperatures. Otherwise, the products can’t be used.

“Always keep an eye on the technology,” Kent says. “See what you can do to become more efficient, more secure in the cold chain environment. By secure, I mean both the protection of the quality of goods but also counterfeit goods entering the market. So, keep ahead of those technologies.“

Part of the problem, Kent notes, is organizations sometimes get interested in technologies that don’t align with the talent and training they have. Companies that adopt new technology must ensure they have staff trained in its use to integrate it into their operating model.

“Oftentimes, I think what we see is chasing technology for efficiency and effectiveness reasons, and we forget that we have to grow the talent to be able to do that and in order to make the best use of that technology and the best ROI on those investments,” Kent says.

Recent challenges associated with e-commerce pushed Missis-

sauga, Ontario-based Amplify Logistics to focus on cold chain services, says Matthew Zarzycki, the company’s chief operating officer. That means more consumers are looking to buy local, organic goods. There has also been growth in the use of technology to increase visibility, Zarzycki says. Whether it’s visibility into trailers or temperature, having more than one data source can help relay more information to customers, faster, about their goods.

Zarzycki also recommends continually researching new technology to see what’s available, what you can potentially utilize, and how it can affect business.

I divide the trailer into three segments have a dry, two different reefer zones, or I can have three different reefer zones?’ That’s something that I’ve seen far more merging into the marketplace.”

largely due to older infrastructure that needs replacing with more efficient and right-sized cold chain solutions, says DHL’s Keck. This issue is compounded by increased demand as well as products like fresh pet food needing cold chain.

“DHL’s real estate solutions team has at their command the ability to build to suit facilities that directly meet the clients’ needs in location, size, and purpose,” he says.

onto products on trailers since there’s nowhere else to put it, says Zarzycki of Amplify Logistics. The company’s solution has been to focus on rapid, agile deployment – a smaller space closer to the end-market often works better than a large distribution centre further away.

“I don’t want to build a giant 400,000 square foot warehouse out in Milton (Ontario), he says. “I’d rather have a 50,000 square foot warehouse in downtown Toronto. Why? Because then I can rapidly deploy direct to the customer, right to the store, bypass the DC and get that product to the customer a lot quicker.” SP

SPACE MATTERS

While not a new technology, more customers also now require dual- and multi-temperature trailers, Zarzycki says: “Traditionally, you’d have a single temp across the whole reefer; now customers are looking for more of those technology solutions,” he says. “‘Hey, can 23_003274_Supply_Professional_JUN_CN

Space constraints in warehousing and distribution centres remain a challenge in cold chain. That’s

There’s often a two per cent or less vacancy rate in many key industrial campus markets, says Kopstein, also of DHL. Add to that long infrastructure build-out timeframes due to supply chain challenges on chiller parts like compressors and finding adequate cold chain space, and the situation can be challenging.

“However, building out larger/ more multi-client facilities will help to meet the demand,” he says.

A lack of warehouse capacity has meant that some organizations hold

“Oftentimes, I think what we see is chasing technology for efficiency and effectiveness reasons, and we forget that we have to grow the talent.”

BY MICHAEL POWER

FORGING LINKS

SUPPLY CHAIN’S DIVERSE CHALLENGES KEEP SIOBHAN CHINNERY ENGAGED

For Siobhan Chinnery, much of the satisfaction she gets from her time in supply chain has come from the teams she has worked with and the relationships she has built along the way. She has worked at several organizations and stayed in touch with many of her colleagues from those different organizations, which include Petro-Canada and Sanjel. The members of one of those groups that are still in touch with each other called themselves ‘The A-Team.’ To this day, Chinnery looks for opportunities to work with former colleagues whenever possible.

“For me, one of the highlights when I look back is the teams I’ve built – the teams I’ve had that have really come together – and those friendships and relationships,” she says. “I think that would be a highlight for me.”

Chinnery is now vice-president, supply chain, Canada, at Finning, based in Calgary. The company is the world’s largest Caterpillar dealer and sells, rents, and provides parts and service for equipment and engines to customers in var-

ious industries such as mining, construction, petroleum, forestry, and a wide range of power systems applications.

While Chinnery is now based in Calgary, she grew up in Saskatoon before moving to Canada’s East Coast. She lived there for about eight years – in both St. John, New Brunswick and Halifax, Nova Scotia where she earned a Bachelor of Commerce at Dalhousie University (she also earned an MBA from the European University in Brussels, Belgium) – before moving to Vancouver, British Columbia. She and her husband got married in 1994 before relocating to Prince George, where Chinnery worked for Canadian Forest Products (Canfor). They stayed there for 10 years before moving to Calgary, where she has lived since.

Like many, Chinnery’s route into supply chain was anything but direct. She took several accounting courses while pursuing her degree at Dalhousie University. When she graduated, the economy was in a recession and there

weren’t many jobs available. Yet she discovered that she could work in accounting if she pursued her designation, the Chartered Management Accountant or CMA, in that field.

She was also awarded the Supply Chain Management Professional (SCMP) designation when she was named to the 100 Influential Women in Supply Chain in 2019 by Supply Chain Canada, as part of the honour of being on the list.

“That’s how I started off, was in accounting,” Chinnery says. “And then, frankly, I would quickly get bored, and I’d asked my boss for more work or new challenges or something in accounting. So, she asked me to go on this special project. It was a strategic sourcing project, and that was the late 90s. And so that’s what kind of got me started.”

The project lasted two-and-half years. When it finished, Chinnery decided that she did not want to go back to accounting. She opted to stay in supply chain instead. That first supply chain job was as manager, sourcing and supply, at Canfor.

She enjoyed the position, which provided a varied routine and new challenges. The variety was a welcome change from accounting, which proved routine and repetitive. She continued that position for about 10 years, before Petro-Canada recruited her in 2004 and she moved to Calgary for a position with that company.

While she didn’t lead a team at Petro-Canada, she was responsible for more spend at her new position. Chinnery was quickly promoted into leadership roles. She held several different positions at the company, eventually leading all of the supply chain and international offshore natural gas and corporate services.

Sanjel Corporation, an energy services company, eventually approached her with a job offer. She became vice-president, supply chain, for the organization in 2011. After four-anda-half years there, she took a position at DB Schenker, a logistics company, eventually rising to vice-president, global projects/oil & gas, Canada. After almost three years there, she moved into a consulting role at PwC Canada.

“I was travelling back to Toronto almost every week, and that’s when my husband was ill,” she says of the role. “I wanted to be home. So, I took the role with PwC, and I was able to be at home more, and then I took a leave of absence when he was really ill. And then, when I came back after he passed, it was pretty quiet. There wasn’t a lot of work going on in Calgary.”

Chinnery ended up parting ways with PwC Canada because she didn’t want to spend as much time travelling as the position demanded. She then worked for Superior Propane

during the COVID-19 pandemic. She did a brief stint in consulting for a company called Slalom Consulting before finally ending up at Finning in July 2022.

Finning’s business operations consist of three regions – Canada, South America, as well as the UK and Ireland. Chinnery is responsible for Canada, which is the company’s largest business unit. The team she is responsible for is the sales and operations (S&OP) team, which is also known within the industry as the integrated business planning team.

“Our team is accountable for working with sales and understanding the demand signal from our customers for parts and equipment,” Chinnery says. “And then they plan how we’re going to meet that demand. So, we have teams that work specifically with Caterpillar because Finning is a Caterpillar dealer. The majority of our purchases are from Caterpillar direct, and we get all the equipment and parts from Caterpillar.”

Chinnery also leads another team responsible for non-Caterpillar purchasing such as safety supplies, MRO supplies, consulting contracts and so on. Even within that category, that spend can include parts used in service operations. Within that, there are category management and procurement functions.

Another team looks after transportation, warehousing, and customs compliance. Finning has several large, regional distribution centres as well as branches across Western Canada. Each one has a warehouse with parts to support customer demand and service operations.

“We work on our customers’ equipment, so we have parts at the sites to do that,” Chinnery says. “We also sell parts to our customers who do their own service. Selling parts, moving parts, is a huge part of Finning’s business. We look after that, the warehousing and transportation, getting the parts to our distribution centres and to our customers.”

Finally, Chinnery leads a team that rebuilds and remanufactures engines and components, mostly for large mining trucks (and the construction industry) for customers at a large, 900-person facility in Edmonton, Alberta. Overall, there are about 1,700 people within Finning that Chinnery oversees.

“First and foremost is making sure that everybody goes home safe every day, so that’s a big part of my day as well,” she says.

Among the accolades that Chinnery has received during her career, being named among the 100 Influential Women in Supply Chain by Supply Chain Canada stands out, she says. The recognition was especially meaningful since it focused on influence within the profes-

CHRISTINA (PLUS) NATHAN PHOTOGRAPHY

sion and how she has given back to the supply chain community.

“I was also very much involved with a group called Women in Supply Chain, and we did a lot of great work in getting women together and talking to them about supply chain as a career,” she says.

CHALLENGING TIMES

Among the challenges that Chinnery sees supply chain professionals facing recently is the shift towards digital transformation. Before the pandemic, when she worked in consulting, Chinnery says she would speak with clients about the importance of a digital transformation within supply chain. When the pandemic hit, many organizations digitized. Those transformations happened practically overnight, simply because they had to.

“They were suddenly working from home and so it was like ripping the BAND-AID off,” she says. “A lot of organizations were really hesitant about getting more digital, more virtual and that type of thing, but then COVID really escalated, and moved a lot of organizations forward, which I think was needed.”

Those working in the field also face challenges surrounding risk, Chinnery adds. And the longer the supply chain, the greater the hazard. That became even more apparent during the pandemic, as extended supply chains saw their exposure increase.

“Suddenly, how long your supply chain was became really, really evident,” she says. “A lot of organizations really struggled.”

Even now, three years after the pandemic first took off, enormous challenges remain, Chinnery notes. For example, demand outstrips supply in many areas. The further ahead you can plan, and the further ahead you can get customers to commit, the better your overall planning, the more accurate your forecast will be, and the more likely you are to secure supply, even in a tight market.

“Integrated business planning is critical. Being digital is critical,” Chinnery says. “A lot of companies want to go digital, but they don’t have the backbone or the ERP system to support it. You have to start at the basics and get your data and your system in place so that you can be more digital because, frankly, you know your customers want to be able to deal with your company like they deal with an Amazon. They want to be able to order it and have it tomorrow. They want to be able to track the shipment online.”

The need to digitize spills into other areas of the business, including recruitment, Chinnery says. Recent university graduates are used

to operating in a digital world. A slow, cumbersome purchase order process may discourage many of them from working for organizations that haven’t yet embraced digitization.

Having worked at Finning for the past year or so, Chinnery says she remains excited to be part of the company. In a way, her work there feels like returning home. It’s a great organization, she notes, and she feels as if it’s a good fit for her. Her future plans involve working for Finning until retirement, perhaps in about a decade. Until then, her focus remains on getting the most from her career, she says.

Outside of work, Chinnery also volunteers with the Calgary chapter of an organization called Dying With Dignity Canada. Her interest in the organization stems from her husband having taken advantage of Canada’s medical assistance in dying (MAID) program when he was ill, in order to end his suffering.

“I also got involved because navigating the process was really, really challenging,” she says. “And then when you’re in a very, very stressful moment in your life, it should be easier.”

Chinnery has two grown daughters who also both graduated from Dalhousie University –Daimhin, 26, and 22-year-old Hannah. She also has two dogs, both of which are Corgis. One of the two, which is actually a Corgi cross, is a 13-year-old rescue dog from Mexico. The second one, a year-and-a-half-old purebred, is what people now call a ‘COVID dog’, she says.

A GREAT CAREER

Like many in the profession, Chinnery is quick to recommend supply chain to anyone interested in going into the field. The job is different each day, which helps to keep one interested and challenged. There’s always something happening, and whether the market goes up or down, supply chain is always busy. That’s one of the reasons that she enjoys the field so much.

To advance your career, Chinnery advises finding a mentor or sponsor to help you get ahead professionally.

“But you have to knock it out of the park to become interesting to someone, so they become your sponsor,” she says. “It’s really going that extra mile and really exceeding expectations. So, you stand out and then you have your sponsor, who will find you and people will help you in your career if you really stand out.”

Many people have in mind a clear, traditional career trajectory in front of them, Chinnery says. Yet, one thing her own career has taught her is that sometimes, you take sidesteps. Along her own path, she has stepped out of supply chain at times, then stepped back in later. Each experience became a tool in her professional tool kit. For those who stay open to opportunity, resilient and able to bounce back from setbacks, it’s possible to keep moving in the right professional direction.

Throughout it all, it’s important to stay aligned with your values, Chinnery stresses. When her children were young, for example, she declined any roles that would see her travel extensively, because she didn’t want to be away from home for long periods.

“I had a supportive spouse who would have totally handled it,” she says. “It was a personal thing. I just didn’t want to, so I probably missed opportunities because my values were saying that I needed to be a mom and I needed to be at home more.”

It was only when her children grew older that she began travelling for work more.

“And that’s just a personal choice. But could I have been way farther ahead in my career if I had been willing to put my values second and my career first? Probably. But I probably wouldn’t have been happy. I think that if you stick with your values, you will always be exactly where you’re supposed to be.” SP

“One of the highlights when I look back is the teams I’ve built – the teams I’ve had that have really come together – and those friendships and relationships.”

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BY JACOB STOLLER

ROBOTICS AND THE SME MANUFACTURER

COLLABORATIVE ROBOTIC TECHNOLOGY IS GENERATING COMPELLING BUSINESS CASES FOR SME ADOPTION

In mid-2022, the unemployment-to-job vacancy ratio in Canada hit a historic low, according to Statistics Canada, signifying a record tight labour market. The trend has hit manufacturers especially hard, causing a surge in automation investment that is increasingly including SMEs.

Automation wasn’t an option for smaller manufacturers until recently. What’s changed is that new collaborative robotics technology has lowered the cost, slashed the implementation cycle, and greatly increased the versatility of robotic installations.

“Robots used to be these big monsters of automation, but a lot has happened in that space in the past 10 to 15 years,” says Kristian Hulgard, General Manager - Americas at OnRobot, based in Irving, Texas. “Today, the technology is at a much lower cost, and does not require a high level of expertise.

Two developments have made this change possible, Hulgard explains. “With the software we have today, operators can program their own devices, whether that’s a robot, a conveyor, a PLC, or whatever that might be. The user interface is intuitive, like familiar consumer apps, so people pick this up pretty quickly.”

Hardware has also gone through a major transformation. “The other advance is plug-andplay hardware that’s also multifunctional,” says

Hulgard. “So, you can simply plug a gripper into a robot, and it synchs automatically with the software. And this gripper can handle different shapes, different sizes, and different materials by changing a software setting.”

This means that rather than having to rebuild a robot to handle a new task, changes can be made immediately by an operator on the shop floor. “In the past, you’d have to get an engineer to design a specific gripper for the part you want to grip,” says Hulgard. “ So, this has removed an enormous barrier for SMEs.”

The versatility of these machines also makes it easier to get a solid return on investment. “With traditional robotics, you had to match one robot to one tool,” says Joe Campbell, head of Americas marketing and application development for Universal Robots (UR), Ann Arbor, Michigan, “which meant that as a shop owner, you had to make sure that you had enough production to keep that machine tool and robot combination busy. But today’s robots, because they’re versatile and easy to program, they can be easily redeployed to other tasks. So, the utilization of the robot is extremely high.”

Dramatically reduced costs are another major factor in lowering the bar. Both OnRobot and UR routinely deliver complete solutions for less than $100,000. “Prices have dropped to

about a third,” says Campbell. “The actual robots are about the same price. But the engineering, peripherals, safety infrastructure, installation and training costs are all greatly decreased or eliminated entirely.”

FIRST STEPS

Part of the power of the new collaborative robotics is that the technology adapts well to an incremental approach, where a company can start with straightforward projects and expand its efforts as the competency grows.

“The first advice I would give is to start simple,” says Hulgard. “Don’t think you can fully automate the whole floor in one afternoon. There are a lot of things around automation that you need to consider, like the workspace culture, and helping your employees get used to changes. So if this is new territory, it makes sense to start with a very simple process, right, and then be very keen and very focused on your ROI calculation.”

SMEs are starting their automation journey with routine tasks that otherwise tie up workers with low value work. The three most popular applications are machine tending, for example, loading and unloading a CNC machine, general material handling, and palletizing. “If you’re doing a lot of palletizing, it now makes absolutely no sense to do it manually,” says Campbell.

Discrete processes that don’t interfere with other processes are the most straightforward targets. “Palletizing is a relatively easy process to automate because it is at the end of the line,” says Hulgard. “If you try to automate something between other processes, that gets more difficult.”

Welding is another important area, and the fastest growing for UR. “We’ve got a number of partners that provide welding solutions on our platform,” says Campbell. “The interface is designed for welders – it uses the same symbology that a welder sees on a welding drawing.”

GETTING INTERNAL BUY-IN

The incremental approach allowed by collaborative technology makes the transition much easier on the workforce.

It’s also important to emphasize the userfriendly aspects of the technology. “There’s an emotional side to this,” says Campbell, “but once people see that you deploy the cobots without safety cages, safety interlocks, and big red “danger” signs, the comfort level just goes up. In many cases, workers start to see the cobot as a helpful co-worker.”

The other important aspect is that cobots are best suited for dull, tedious work. “Cobots take

the unpleasant task workload off the operator,” says Campbell. “A skilled welder, for example, does not want to weld 350 little brackets. So, when you present this as a tool that will simplify their tasks and give them more job satisfaction, then they’re up for it.”

But perhaps most satisfying is the fact that collaborative robotics leverages the knowledge that workers already have. “If you understand the work process, then you’re more than halfway there,” says Campbell.

MOVING FORWARD

To make collaborative robotics a success, Hulgard and Campbell recommend working with local partners that understand SMEs. Internally,

it’s best to find a champion that can act as a catalyst for further advances. “You get some people that are excited about the technology and are not afraid of it, and then you start building out and adding on,” says Hulgard.

Companies with some successful projects under their belt can then proceed to some of the more complex applications. “If you can’t mechanically ensure the location of an object, you’ll need some kind of sensor to find it,” says Campbell. “There’s a whole class of applications that do that. But for SMEs just starting out, I would say find an application that doesn’t require a vision system.

This barrier prevents SME logistics companies from implementing robotics, Hulgard says. “Logistics is more complex because of the variety of shapes and sizes that the machinery has to handle,” says Hulgard. “It is a rapidly growing area for robotics, but it requires vision systems and are more complex.”

Constraints aside, the SME market for robotics is growing at an unprecedented rate. “It’s eye-opening for people to see how much technology they can get for their dollar,” says Hulgard. “We’ve seen an incredible rise in demand – more than we’ve ever seen before.” SP

“Robots used to be these big monsters of automation, but a lot has happened in that space in the past 10 to 15 years.”

BY CHRISTIAN SIVIÈRE

THE FINAL PUSH

LAST MILE DELIVERY TRENDS AND THE CHALLENGES AHEAD

The term “last mile” delivery refers to getting a product from the closest fulfilment or distribution centre to the final customer and end-user, meaning the last leg of the sometimes long journey from online retailer to consumer. During the e-commerce boom years, that is during the pandemic, operators paid less attention to this, as they were focused on keeping up with growing customer demand and expanding market share.

The growth of e-commerce has now slowed down, as consumers look for human contact – following a couple years of lockdowns, many of us enjoy getting back to physical stores. In the US, for example, when it peaked in 2020, the share of e-commerce sales reached almost 17 per cent of total retail sales, whereas it’s down to around 15 per cent today. With less growth and more competition, operators are looking for ways to cut costs and last-mile delivery is one of the components they scrutinize closely.

VARYING COSTS

The cost of last-mile delivery varies a lot, depending on several factors, like package size and weight, geography, market density, season, traffic, and waiting times. Delivery

points vary greatly in distance and customers may be far apart, with only one item delivered at each location. In urban areas, delivery points are closer together, but traffic congestion often leads to delays and inefficiencies. But an average cost that’s often mentioned is around US$10 per package. Interestingly, the average revenue per domestic package in the UPS network in the first quarter of 2023 was reported at US$12.54. There is no direct correlation between the two, but it gives us a scale and it’s amusing that they come to relatively similar amounts.

How do we know the cost of the last-mile delivery has become a prime concern? This factor, and logistics costs in general, are often mentioned in reports by financial analysts who examine the prospects and stock market value of this or that company. And confirming the importance of the last-mile delivery and its costs, in early May, Amazon started offering US customers a US$10 credit to pick up any purchase of US$25 or more, at selected pick-up locations, rather than having it shipped to their home address. This is an amazing development, as since its inception, the Amazon business model has

been to get consumers hooked to fast, free delivery (and returns), and this is another example of the e-commerce giant trying to cut costs, as consumer demand slows.

Courier companies, on their side, are trying to cut costs and reduce the time a driver spends delivering a parcel, by maximizing the use of communication technology: consumers are contacted ahead of time by email and text and encouraged to preauthorize delivery without signature. When some charges need to be collected, for example freight, handling, customs, taxes, and so on, customers get their bill electronically ahead of time and are strongly encouraged to pay online with their credit card. This saves drivers an enormous amount of time: no need to ring the bell, wait for a response, issue a slip so the customer can pick-up their parcel from a depot, and so on.

The cost of returns is also a big issue for e-commerce, as the probability of a customer returning a product bought online is around 30 per cent, compared to below 10 per cent for traditional brick-and-mortar stores. In these cases, the last-mile delivery takes place as usual but is repeated in reverse, more than doubling the overall cost. Many opera-

tors use third parties to handle their reverse logistics, consolidating returns in order to reduce the number of trips, thereby cutting costs.

Technology brings various solutions and provides tools like predictive analytics that will help rationalize the deployment of the last-mile delivery, by anticipating challenges, risks, and options.

Route planning software analyzes historical delivery data, including distance covered, time per delivery, fuel used, the number of successful deliveries versus failed ones, to help identify inefficiencies, optimize the number of trucks and drivers, improve service while generating cost savings at the same time. Managing the proof of delivery confirming that the customer received his or her package in good condition, can also be helped thanks to technology: electronic signature versus paper, photo signatures, contactless signatures, digital ID verification, and so on. Another method that emerged recently is “crowdsourced delivery,” with stores pooling (or crowdsourcing) their delivery services together to hire delivery contractors, giving them the flexibility to scale up or down, as required and without major investments.

SMALL IS BEAUTIFUL

Micro-fulfillment is another option used primarily to improve delivery times, but also to potentially reduce the cost of last-mile delivery: it refers to using networks of small fulfillment centres strategically located in densely populated areas, closer to customers. It enables retailers to offer very fast delivery services and simple store replenishment, though this solution is not very green and increases the carbon footprint of e-commerce.

No matter how much help technology can provide, some undisputable facts remain: shipping single orders across the globe to someone’s residence has a cost, including ecological, and the last-mile delivery is one of them. Shipping is not free and as the growth of e-commerce is slowing, it can be challenging for operators to achieve economies of scale in this respect. This was indirectly confirmed by Shopify, the Canada-based online retail services platform, who announced in early May that

it was selling its logistics fulfilment operation. Furthermore, Loblaws has recently announced that it is shutting down its e-commerce marketplace platform for third-party sellers effective June 14. Hudson’s Bay has also suspended its marketplace, though temporarily, while it reviews its processes. This means hard times for independent merchants who depend on these platforms to reach

a wider market. And it may also lead to increased business concentration, with the likes of Amazon and Alibaba eventually grabbing an even greater market share. No doubt, they’ll continue to look for ways to master the last-mile delivery cost challenge, which incidentally, we could call the “last-kilometre delivery” in Canada. SP

Christian Sivière is president at Solimpex.

“Technology brings various solutions and provides tools like predictive analytics that will help rationalize the deployment of the last-mile delivery.”

BY VINEETHA JAYARAM

SUPPLIER AUDIT BEST PRACTICES STEPS FOR SUPPLY CHAIN RESILIENCY

There are numerous reasons why supplier audits are crucial in the current manufacturing environment. A supplier audit is a practical business approach for manufacturers to evaluate new suppliers and drive accountability within the existing supply base to ensure early identification and mitigation of supply risks.

With the onset of multiple supply disruptions in the last few years and the focus on domestic manufacturing, on-site audits can be an effective supplier development strategy to determine the capabilities and competencies of potential sources in new markets. Assessments are also critical to demonstrate due diligence and ensure supplier regulatory compliance in different markets. The regulatory compliance risks can be related to ethical, trade, and environmental standards that could impact the organization’s brand value and reputation.

Traditionally, global organizations have adopted standard frameworks for overseeing audits, such as ISO9001 and SA8000, based on organizational objectives such as quality control, supply chain security, safety, and compliance to determine the reliability of suppliers and identify corrective actions for improvement.

Here are six best practices for organizations to follow while conducting supplier audits to maintain a resilient supply chain:

REVIEW SUPPLIER BUSINESS LEADERSHIP APPROACH

A critical section of the supplier audit that is often overlooked is the supplier’s management structure and policies to ensure that the business

is flexible and has the appropriate resources and capabilities to manage supply chain disruptions and variability in customer demand. Does the leadership team have the experience to handle contingency situations? Does the company make investments in new technologies and processes to improve productivity? Determining how the supplier leadership team evaluates its performance and prioritizes its customers is also essential. This could be with respect to how business performance metrics are tracked and measured. How many larger preferred customers does the supplier have? How is interaction with global customers handled? The supplier leadership team’s attitudes and strategies can also provide insights into unanticipated business events related to mergers and acquisitions and whether the supplier’s competencies, vision, and values align with the organization’s business. How are the employee skills assessed and developed? Does the management participate in regular quality control reviews? Does the management have a formal strategic plan with goals that are shared with employees?

FOCUS ON SUB-TIER SUPPLIER MANAGEMENT SYSTEMS

To mitigate the supply chain impact of geo-political events and manage compliance-related risks, it is crucial for organizations to assess the entire value chain of their suppliers and determine whether these suppliers have formal purchasing, quality, and compliance control processes in place to manage sub-tier suppliers for raw materials, components, packaging, and freight.

Some examples of these controls are:

Selection, evaluation, and approval

Product qualification and acceptance

Performance measurement and monitoring, including sub-tier auditing programs

Product quality defects and corrective actions

Process change management procedures

With respect to traceability, does the supplier clearly understand where the materials are coming from? Are these multi-sourced or single-sourced? Does the sub-tier supplier have a certified quality management system? Are there metrics in place to track the performance of sub-tier suppliers? Can the finished product be traced to its original material and subcomponents?

EVALUATE RISK MANAGEMENT PLANS, INCLUDING SAFETY POLICIES AND RESOURCES

Suppliers must be evaluated on their risk response plans for business continuity related to multiple factors, including demand management, forecasting, manufacturing, quality, technology, compliance, and disaster management. Is there a detailed plan to limit production interruption due to unforeseen extreme circumstances? Does the company have vendor managed inventory or Kanban/ consignment programs with its suppliers? The other factors to be considered in the supplier’s risk response plan are labour standards and environment, health and safety (EHS) metrics. What are the current environmental, health and safety practices in place?

How does the company set safety targets and periodically evaluate them? How are internal and external resources managed?

INVESTIGATE PROCESS CONTROL PLANS AND TOOLING PROTOCOLS

Special attention must be given to internal quality controls for materials and components, documentation controls, and production controls for early detection and mitigation of quality and process issues. What methods are used to document and control critical processes such as receiving inspection and design validation testing? How are both internal and external issues managed? How are continuous improvement projects handled?

There also needs to be an emphasis on preventative maintenance procedures, including equipment maintenance protocols and tooling validation methods to minimize product nonconformances. For example, how are fixtures and spare parts maintained? How are gages calibration scheduled and monitored? How is the tooling inventory tracked and maintained?

VERIFY IMPORT/EXPORT AND OTHER COMPLIANCE PROCEDURES

Global organizations must require suppliers to be familiar with trade and environmental compliance protocols to facilitate the smooth flow of goods and services between countries. This includes and is not limited to:

Port customs regulations

P roduct shipping requirements, including markings, safety labels, country of origin identification, and other special requirements

Shipment documentation control

Import and export packaging and labelling specifications

Labour and import-export control laws based on country

Environmental, social, and governance (ESG) initiatives

Additional factors to consider – does the supplier have a dedicated employee or legal function that directs all import-export compliance activity? Can the supplier share appropriate documentation of compliance? Are these appropriate requirements extended to sub-tier suppliers?

COMMUNICATION AND FREQUENCY OF AUDITS

The success of an assessment depends primarily on the transparency in communication between both parties and the supplier’s willingness to collaborate and share information for process control and corrective actions to mitigate risks.

The frequency of conducting audits depends on the type of business relationship – strategic or transactional, priority classification of the supplier based on the criticality of the parts in the

supply chain, and supplier performance based on key performance indicators, including quality and service. This should never be only at the start of the business relationship.

Preferred strategic suppliers must be audited at least once or twice yearly. Suppliers who have consistently maintained high quality and service need not be audited as often as those identified as having repeated cases of late shipments or delivering non-conforming products. Other reasons for performing audits could be new product introductions or changes in equipment and production methods and sources of supply.

Therefore, audits can serve as opportunities for organizations to learn and enhance their suppliers’ capabilities and competencies, increasing their brand value and customer satisfaction. Finally, the above recommendations can help organizations fulfill the primary purpose of an audit: to take a closer look at their supplier’s systems, processes, and policies to identify compliance gaps and implement continuous improvement plans to maintain a resilient supply chain. SP

Vineetha Jayaram is global category manager at nVent.

“A supplier audit is a practical business approach for manufacturers to evaluate new suppliers and drive accountability within the existing supply base.”

BY JEFF RUSSELL

MANAGING MRO CONTROL COSTS AND HELP THE BOTTOM LINE THROUGH MRO

MRO, known as maintenance, repair and operations (MRO) is concerned with all things related to the upkeep of a facility. MRO can also be about managing the equipment used to produce the company’s primary product and setting up preventive maintenance programs on the equipment to avoid costly downtime. There is debate about whether equipment is a part of the MRO category or is it a part of the production maintenance schedule – that is a discussion that can be had on its own. That said, what are some of the current trends in MRO that would be worthwhile to pay attention to?

Critical to managing MRO today is understanding the vast amounts of data available to be collected in your organization. You can do this by developing an MRO spend analysis. Similar to spend analysis for production components, MRO spend analytics will allow you to develop an understanding of what is happening in each of the MRO categories you create, allow you to group similar suppliers under one category, and rationalize the total number of suppliers that you’re using.

As an example, you can create categories such as janitorial services and cleaning supplies, landscaping (winter and summer), or even a travel program (air, hotel, rental vehicles). As procurement professionals, we want to focus on the most exciting, high dollar spend categories, and not on the low-hanging fruit because it is not as exciting. Our goal should be to get involved in all total spend goals, which is to reduce overall costs for your company.

For instance, in janitorial services, other than looking at the services being rendered and how they are performing (which is critical), you can analyze the cost per square foot of cleaning area being performed. If your cost per square foot is high, then you can re-evaluate the monthly charges to get the cost per square foot down, or switch service providers where the costs are more acceptable. For hotel travel programs, hotels are interested in the total number of nights being booked in a given year and will offer higher discounts on their standard rate if your organization books a higher number of hotel rooms than those that don’t. Understanding the MRO spend analytics will allow you to develop the appropriate strategies to minimize costs within your organization.

INDUSTRY STANDARDS

To aid in grouping suppliers together, it is best to use an industry standard classification code, such as the United Nations Standard Products and Services Code (UNSPSC – www.unspsc. org), or the North American Industry Classification System (NAICS – www.siccode.com). If using UNSPSC, the code would be eight digits in length, and if using NAICS, it would be six digits. Looking up an industry standard code is free on both sites.

In selecting a code, you can be as generic as possible: 90110000 – Hotels and Lodgings and Meeting Facilities, or as very specific: 90111800 – Hotel Rooms. If using NAICS, the code would be 721110 – Hotels and Motels (Except Casinos).

The action would be to categorize all suppliers under the appropriate code being used, identify what your total spend is for the category, create supplier profiles detailing payment terms, locations, rebates, total number of nights, and so on. The goal is to create a strategy for the category as a whole that will reduce costs and improved services levels for your organization.

Another key area to focus on when developing MRO strategies is to develop a supplier diversity program for MRO commodities. If your organization is looking to do business with any level of government, developing a metric that measures how diverse your supply base is can set you apart from your competition. The diverse supply base recognizes doing business with companies that meet the following criteria: women-owned; minority-owned; Aboriginal-owned; LGBTQ+-owned, and owned by those who are physically challenged. If one of your suppliers does not meet the above criteria, they would be classified as other. Once you have built supplier profiles to identify what percentage of your total spend meets the criteria of being diverse, you can develop strategies to grow the total spend with these businesses. There are a host of organizations out there that can help you identify suppliers for specific MRO categories and services.

One such organization is the Canadian Aboriginal and Minority Supply Council (CAMSC). It is known that by diversifying your supply base, you increase the level of competition within each commodity and will reduce overall costs as a result of the increased competi-

tion. More important, there is a huge social procurement opportunity for your organization that can generate increased sales and market presence by advertising your supplier diversity programs and how much total spend is diverse.

CATEGORY MANAGEMENT

Another growing trend in managing your MRO spend categories, particularly around facility maintenance, concerns energy and the environment, or minimizing the impact of energy consumption on the environment and managing HVAC costs. Energy costs were spiking during the pandemic due to raw materials such as natural gas (impact on heating), and have recently declined to pre-pandemic levels, but they are still a concern. Reducing your overall carbon footprint by using the proper tools and equipment can help keep energy costs to a minimum and make your facility more environmentally sustainable over the long term.

Like all spend categories, first identify how much is being spent on energy. Secondly, especially in older buildings and with your maintenance team, review HVAC and lighting to see if more energy efficient upgrades can be made. Replacing old fluorescent light fixtures with LED light fixtures can reduce your energy bill by as much as 65 per cent and LED fixtures are 30 per cent more efficient and will last three times longer, cutting down on the number of times they need replacing.

In another area, look at your windows. As our outside temperatures increase, another solution is to add window coverings to block heat penetration, but still offer external views. This strategy involves looking at installing solar shades, blackout curtains, awnings, cellular shades and reflective blinds. The goal with this technology is to keep rooms warm in the winter and cool in the summer without overtaxing the HVAC system. It has been reported that installing an awning can reduce heat build up by as much as 77 per cent, cut air conditioning use by 25 per cent and lower energy bills by 100 hours per year. Another tool to employ is internal sensors, such as smart room sensors which can determine if a room is occupied or not. This technology will ensure lights will shut off if a room is unoccupied and turn back on when someone enters the room. How many times do we drive by an office at night to see lights on and no one in the building? To alleviate this, use sensors to automatically shut off lights when the room is unoccupied.

The last thing to look at with MRO trends is managing the contracts. Just because MRO

spend is in the low-hanging fruit and not as exciting as production components, we still need to manage the relationship with the key MRO suppliers. Equally important is to clearly spell out the service requirements being performed, pricing, payment terms and dispute resolutions in case there are problems or issues. Not having a properly laid-out contract could increase costs when services are not

performed properly and another supplier must be brought in at a higher cost.

As purchasing professionals negotiating for production components or CAPEX equipment, we should not forget about the MRO products and services within our organization. We have an opportunity to control all costs and generate positive bottom-line results. SP

“Understanding the MRO spend analytics will allow you to develop the appropriate strategies to minimize costs within your organization.”

Jeff Russell is director of procurement and strategic sourcing at Merrithew.

By Michael Power

Fleet electrification Organizations need a framework for the coming EV revolution

The push is on globally for economies to decarbonize, with organizations investing in environmental, social and governance (ESG) programs to boost their ethical business performance. The environmental aspect of these policies helps organizations ensure that they’re acting as good corporate citizens while bolstering the planet’s wellbeing. Fleets are also enacting such policies, working to reduce fuel consumption while in many cases moving their vehicles from traditional gas and diesel to hybrid or fully electric powertrains.

This growing interest in electrified vehicle technology is on display at events like the EV & Charging Expo 2023, held in Toronto in May. The event saw 2,000 attendees and over 70 speakers address issues surrounding vehicle charging, enabling organizations to transition to EVs, and other topics.

Yet knowing whether your fleet is ready and suitable for an EV transition takes analysis and work. Basil Marcus, executive vice-president at Foss National Leasing and LeasePlan Canada and one of the speakers at the expo, said that the company has designed an EV readiness guide that considers government incentives, climates, vehicle

1.

availability, use case scenarios, as well as a survey of a fleet’s drivers.

Organizations can then consider what level of electrification works for them given their circumstances. Drivers who take their vehicles home but live in apartments, for example, may not be able to charge those vehicles easily. Routinely carrying heavy goods can degrade the battery or the range. As well, how cold the climate is can also affect a fleet’s suitability for electrification. Moving to a smaller internal combustion engine (ICE) or hybrid vehicles as a first step may be better options for some organizations, Marcus says.

“One facet says ‘great’, but the rest of it says, ‘not right now,’” he says of the criteria for electrifying a fleet. “So, you might want to look at a hybrid solution, something that’s going to be a better solution on a pathway.”

There is low-hanging fruit available for fleets looking to electrify, says Todd Marron, decarbonization and electrification lead for PowerON and another speaker at the expo. For example, large organizations with several different vehicle types can look first to electrify their pickup trucks, rather than long-haul rigs that drive hundreds of kilometres each day.

“A lot of it has to do with the duty cycle,” Marron says. “A good example would be a large entity that sells tinned beverages, but they also sell very lightweight chips. The chips side of the business is becoming electrified because the payload, is it’s a volume thing, not a weight thing, whereas the tin soda is not even close. So, there are these types of considerations.”

Information rules

Gathering data is key for organizations looking to start electrifying their fleets, says Elizabeth Baker, partner at Deloitte Consulting, who also spoke at the conference. Having the right information about your fleet, network, electrical capacity, and other key areas is important.

“What are your emissions targets? What are you expecting to get from emissions targets? What percentage are you expecting to come from your fleet?” she says. “Then starting to leverage that data to drive out the considerations around vehicles, infrastructures, and financials. Once you have your data, you understand what your current network looks like. You can start to look at what are the routes that current vehicles can start to replace and be leveraged for. What are the routes that are

potentially longer range or higher payload that the current technology won’t cover?”

Sequencing and prioritization are vital in building the business case for electrification, Baker notes. Consider the total cost of ownership: while there are often large capital costs upfront, operational costs can be lower due to less vehicle maintenance and a lower cost of electricity per kilometre, compared to fuel for the same distance.

“The market is evolving so much that you’re not going to be able to put a roadmap down and say, ‘this is what we’re going to do over the next seven years,’” Baker says. “The roadmap needs to be agile and flexible enough to change with the evolving market, but it gets your leadership aligned and it gets you onto a path that you’re able to govern through. It’s not a linear procurement journey.”

Another conference speaker, James Carter, principal consultant with Vision Mobility, also stresses the importance of measuring the total cost of ownership (TCO) of electrification. Don’t look at the high upfront vehicle costs; rather, look at its TCO while viewing charging as an infrastructure cost associated with the depot, or whatever facility charging happens at.

“With infrastructure, you tend to have a longer payoff period of 20 or 30 years,” Carter says. “It’s important for fleets to understand what the TCO is, and that the cost upfront for charging the vehicles will really only add value to wherever you’re putting that.”

While the environmental benefits of fleet electrification are important, organizations are also interested in the financial incentives of the process, Carter says. Leading with the potential to lower vehicles’ TCO, while then also addressing the environmental benefits, can help to get decision-makers on board with the process.

“The first thing you should do is get the data,” he says. “Get your telematics in, understand carefully

what that is. Understand carefully what your range is, what your use case is, where you’re operating it – that’s the starting point.”

Getting drivers to buy in to a switch to electric vehicles can be challenging. Yet Carter says that generally, EVs are popular with end users since they’re smooth, quiet, and powerful. They often include the latest high-tech features. Some companies even reward drivers with the use of EVs for a good driving record.

Having an EV champion who can praise the vehicles can also help to convince other drivers that adopting them is beneficial, Carter adds. It works better to have drivers talk to other drivers about their positive experiences with EVs than to have a manager do so.

“If they like EVs, if they own one already or if it’s something they’re interested in, put them in first,” he says. “They’re able to share their experiences with the other drivers and get them on board.”

Basil Marcus of Foss National Leasing and LeasePlan Canada agrees on the benefits of having an EV champion who is also a driver. Driver surveys can also help to identify and understand unique situations and circumstances. Some drivers who take vehicles home on weekends may use them on Saturdays and Sundays, causing concern about a vehicle’s range. Include drivers in the process, do the research with them, then train them properly in the use of electric vehicles, Marcus says.

“It’s a whole process of iteration as you go through this and it’s evolving so quickly,” he says. “If it doesn’t work today, that doesn’t mean it won’t work in a year’s time, two years’ time, so it’s going to change dramatically.”

Have a plan

Switching fleets to EVs can be time consuming and complex, says Baker of Deloitte Consulting. Organizations with 2030 sustainability goals must act now if those targets include fleet electrification, she notes. Organizations must know what their targets are and how they will reach them. For private-company fleets that haven’t made ESG commitments for 2030, the switch to EVs can be a bit further away. But they must still start now.

“Where are you trying to get to? Start small, but with the big picture in mind,” Baker says. “Have an idea where you’re getting to and start small. But just start. Because it’s coming, and those who wait are potentially going to miss out on some of those opportunities to really optimize the process of the transition rather than being forced into it.” FM/S

It’s important for fleets to understand what the TCO is, and that the cost upfront for charging the vehicles will really only add value to wherever you’re putting that.

By Kate Vigneau

Best-in-class fleet usage

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A fleet manager’s guide to a utilization review

Do you want to have a best-in-class fleet to support your organization in an effective and efficient way? One of the first things you should address is fleet utilization. Having a fleet that is the right size with the right type of vehicles using the right fuel is a starting point down the road to optimum maintenance staffing (if you own your own shop) and future replacement planning. With some time and experience, most fleet managers can do this type of internal review with impactful results.

Utilization reviews call for organizations to have a mobility mindset. When a transportation requirement is identified, the default should not be to purchase an additional resource. Management and users should first ask whether that requirement can be met more efficiently by other means such as leasing, renting, public transportation, employee reimbursement or loaner pools. Vehicle ownership should be the last resort. Where ownership is the best option, care should be taken in matching the asset to the requirement in a way that promotes efficiency and sustainability.

Assessing vehicle utilization over the past three years has been challenging. In some cases, vehicles

were parked because employees were working from home, or had left positions and not been replaced. In other cases, utilization increased as employees could not travel together so had to each take a vehicle. These factors must be considered when looking at overall fleet usage. A formal five-step process can ensure that utilization reviews are worth the time invested.

1. Review vehicle utilization data for each asset.

2. Identify averages of usage by vehicle classification.

3. Establish utilization thresholds (for example, 70 per cent of the average for that class).

4. Interview users of low-usage assets.

5. Assign final vehicle dispositions with cost/savings.

Interviews with fleet users are key as the odometer reading of an asset may not fully reflect utilization. A work truck, for example, may drive only a short distance to a job site but remain there all day. It is fully utilized even though it only travelled a short distance. Asset criticality must also be considered in studying emergency fleet utilization. A specialized response truck

may be used only once a month, however, if it is the only asset of its type and is critical to operations, it cannot be eliminated.

The outcome of this process should be one of the following vehicle dispositions.

Retain – keep current unit in service and replace according to the organization’s multi-year replacement plan based on optimum lifecycles.

Replace – commence the process to replace the asset immediately with a like asset.

Right-type – replace the asset at the next replacement cycle with an asset more suited to the job function.

Right-Fuel – replace the asset at the next replacement cycle with an alternative fuel. Eliminate – the utilization does not justify retention and the asset should be eliminated.

Other – the requirement for an asset can be met through borrowing, leasing, renting or the use of a pooled asset.

Once a disposition is determined, it is possible to calculate the costs or savings associated with the changes. The one-time cost-avoidance of

eliminating a vehicle from inventory is only the start. The number does not reflect the longer-term capital or operating cost implications of eliminating or downsizing an asset.

A utilization review is not an activity that happens once with lasting results. Organizations need to develop fleet utilization policies that cover vehicle justification, use and disposal. These policies should include:

Alignment with job descriptions and necessary specifications. Vehicles should only be kept for specific jobs in the organization where their specifications have been developed to match the needs of the job to which they are assigned.

Frequency and volume of utilization. Vehicles should be used regularly enough and for long enough periods that the mobility need associated with the work being done cannot be met with an alternative such as a rideshare, a pooled vehicle, a rental, or a travel reimbursement.

Emergency need. If a particular unit needs to be constantly available to respond to emergencies, it may be necessary

Kate Vigneau, CAFM, is director of fleet, MCG Consulting Solutions.

even if its frequency or volume of utilization would not otherwise justify it.

The policy should state that vehicle utilization should be reviewed on an annual basis. Vehicles with utilization well below the average for their vehicle class should be pooled or eliminated as appropriate to ensure that the size and composition of the fleet are optimized. Regular reviews of asset utilization also provide an opportunity to consider the organization’s progress toward converting to alternative fuels and electric

fleet assets. As new vehicles arrive to market and new charging technology becomes widely available, utilization reviews are a good time to consider which units should be candidates for right-fuelling.

This policy should be part of the organization’s Fleet Policy Manual and should be reviewed annually when it is applied to review the utilization of the organization’s fleet.

The two most important factors that contribute to the success of a fleet right sizing program are mindset and data. On mindset, fleet users should be encouraged to be proactive in identifying units which are

under-utilized. Fleet liaisons in each department should be provided with monthly utilization data so that they can review, comment, and make recommendations with greater frequency than the annual review process allows. Rather than dreading a utilization audit, employees should welcome the opportunity to consider the most efficient way of supporting the organization. Results of these reviews often reveal that fewer, more reliable vehicles can replace older vehicles resulting in a newer fleet that drivers can rely on. None of this is possible without comprehensive, accurate data.

As a minimum, mileage and/or hours of use is needed. As previously mentioned, however, this is not the only indication of asset usage. The number of trips and idle time are other utilization indicators. In the end, an asset is being utilized any time it is not available for another use. Telematics systems are the best way to get this type of information.

There is no better time for this type of review. Gather your data, educate your users, write some policies, and follow the five steps described for a fleet that fits your present and future needs. FM/S

Vehicles with utilization well below the average for their vehicle class should be pooled or eliminated as appropriate to ensure that the size and composition of the fleet are optimized.

By Stephanie Wallcraft

A seriously smart buy

The new Trax is positioned as a value-driven and utilitarian crossover

Was the first-generation Chevrolet Trax a car ahead of its time? Possibly. It launched for the 2013 model year at a time when subcompact crossovers weren’t nearly as widespread or sought out. And by the time it retired after 2022, newer competitors were outpacing it both on power and overall value.

Now, the second-generation 2024 Chevrolet Trax is here, and by all measures it’s a completely new vehicle. It’s 27.9 millimetres (11 inches) longer than the outgoing version, 51mm (two inches) wider, and has 76mm (three inches) more rear legroom. Total cargo space is up by 161 litres to a total of 1,532 litres behind the first-row seats (or 725 litres when the second-row seatbacks are upright).

On paper, the powertrain configuration isn’t quite as impressive. The only available engine is a 1.2litre three-cylinder, down a cylinder and lower in displacement versus the old Trax. But this powerplant has a lot going for it. It’s turbocharged, as was the previous Trax’s 1.4-litre, four-cylinder, and horsepower in the new engine is down one point at 137hp. But torque is what really matters, and that’s up by 14lbs-ft to a total of 162lbs-ft. The latter is also available across a wide band, with 90 per cent of it being accessible from 1,700 to 4,800rpm.

Six-speed automatic Chevy could have gone with a continuously variable transmission, and

no one would have batted an eye. Instead, the engineers stuck with the six-speed automatic. This is helpful in situations like the one where we found ourselves, testing the 2024 Trax on the rolling hills of the Charlevoix region of Quebec. It was brave of Chevrolet to offer up the Trax in this environment, but the risk paid off. We saw for ourselves that between the added torque and the downshift control a stepped gearbox provides, the new Trax handles challenging environments like this one just fine, even when loaded with passengers and cargo. There are a couple of caveats to note, though. While the new Trax’s fuel consumption is rated at 7.9 litres per 100kms combined –which is better than the 8.4

L/100km combined in the previous generation with front-wheel drive –that’s higher than competitors that do come with a CVT. Given our observations in challenging terrain, many drivers will consider that a fair trade.

And unlike the old Trax, the new Trax has no all-wheel drive option. Chevrolet says this is by design and the new Trax platform was never intended to support it, a statement backed up by the lack of drivetrain channel in the second row. Buyers who are looking for an all-wheel drive subcompact SUV will be served by the Chevy Trailblazer, the brand says. From the start, the new Trax is positioned as a value-driven and utilitarian crossover, while the Trailblazer

1. The 2024 Chevrolet Trax has 76mm more rear legroom, and the total cargo space is up by 161 litres for a total of 1,532 litres behind the first-row seats.

2. All trims include heated front seats, wireless Apple CarPlay and Android Auto functionality, and a subscription-based Wi-Fi hotspot, equipped on either an eight-inch screen (LS and 1RS) or an 11.4-inch screen (LT, 2RS, and Activ).

is the right fit for buyers looking for something further upmarket.

Value is an apt descriptor. The 2024 Trax starts at $24,498 for the LS grade, and that’s including freight and PDI plus dealer fees. The 1RS is an entrylevel sport-oriented option, priced at $25,998 with fees. The LT starts at $28,698. At the top of the ladder, two trims share the spotlight, each priced at $30,798. Activ is a more premium offering with eight-way power driver seats with lumbar support, 18-inch black alloy wheels, and an acid yellow and black interior colour scheme. On the sportier side, the 2RS trim has a flat-bottomed steering wheel, 19-inch black alloy wheels, and red interior accents.

The tech up front

All trims include heated front seats, wireless Apple CarPlay and Android Auto functionality, and a subscription-based Wi-Fi hotspot, equipped on either an eight-inch screen (LS and 1RS) or an 11.4-inch screen (LT, 2RS, and Activ). Key safety features are also standard, including automatic emergency braking, forward collision avoidance assist with front pedestrian braking, lane keep assist, lane departure warning, rear seat reminder, and automatic high beams. Blind spot monitoring and rear cross-traffic alert is available or included on all grades.

Chevrolet has identified four value-motivated buyers that are likely to be attracted to the Trax: first-time buyers, empty nesters,

sedan defectors, and used-car shoppers who might be enticed by a similar price and a new vehicle warranty. They can add fleet managers to that list, too. This is a well-packaged and economical subcompact SUV that’s powerful and spacious enough for four adults on weekend trips. Not only does it no longer feel like driving in a penalty box, but it’s also actually decently powerful and feature packed. For urban applications where front-wheel drive and a small profile will meet a fleet’s needs, the 2024 Chevrolet Trax is a seriously smart buy. FM/SP

Price (incl. freight and PDI): Starts at $45,955; tested at $31,293

Engine: 1.2-litre turbocharged three-cylinder

Power: 137hp, 162lbs-ft of torque

Transmission: 6-speed automatic Rated Fuel Economy (L/100km): 8.3 city/7.4 hwy/7.9 combined

Observed Combined Fuel Economy (L/100km): First drive test did not produce relevant results

Key safety features are also standard, including automatic emergency braking, forward collision avoidance assist with front pedestrian braking, lane keep assist, lane departure warning, rear seat reminder, and automatic high beams.

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2.

As Tested (Chevrolet Trax 2RS and Activ)

THE LAW AND AVERAGES

TRIBUNAL UPHOLDS AVERAGING EVALUATOR SCORES

Recent Canadian federal procurement rulings have recognized a public institution’s right to average individual evaluator scores instead of using group consensus scoring to arrive at final bid evaluation scores. This article summarizes some of those rulings and offers recommendations on how to incorporate averaging into overall group scoring.

For example, in its February 2019 determination in Temprano and Young Architects Inc. v. National Capital Commission, the Canadian International Trade Tribunal confirmed that averaging individual evaluator scores rather than conducting group consensus scoring sessions is an acceptable evaluation practice. The dispute dealt with a Request for Standing Offers (RFSO) issued by the National Capital Commission (NCC) for the provision of architectural consulting services. The complainant challenged the evaluation process, arguing that, amongst other things, the NCC failed to ensure a fair and unbiased evaluation since it failed to conduct a group evaluation process. The Tribunal disagreed, finding that the contracting authority conducted the evaluation in accordance with the criteria and essential requirements specified in the RFSO. More specifically, the Tribunal confirmed that even in instances where suppliers were required to meet a minimum scoring threshold in a specific evaluation category, averaging individual scores instead of conducting group consensus scoring sessions was an acceptable method of arriving at final evaluation scores. The Tribunal therefore determined that the complainant’s grounds for complaint were invalid and rejected the bid protest.

Similarly, in its August 2019 decision in Harris Corporation v. Department of Public Works and Government Services, the Tribunal once again confirmed that it is unnecessary to engage in group consensus scoring since averaging individual evaluator scores is an acceptable evaluation practice. The dispute dealt with a bidding process for the provision of night vision goggles for the Royal Canadian Mounted Police (RCMP). The evaluation process was based on direct user testing of the proposed equipment. While the complainant challenged the group evaluation of the competing binoculars as subjective and arbitrary, the Tribunal disagreed. Rather than engaging in group consensus scoring after the independent evaluations, individual evaluator scores were simply collected and averaged to arrive at a final score. The Tribunal upheld this practice, finding that there is no obligation to conduct consensus scoring and that averaging out the scoring variations between evaluators was just as acceptable as addressing those variations through group consensus scoring meetings. The Tribunal therefore dismissed the complaint.

GOVERNMENT’S RIGHT TO AVERAGE

Finally, in its February 2022 determination in Pacific Northwest Raptors Ltd. v. Canada (Department of Public Works and Government Services), the Tribunal rejected a complaint after recognizing the government’s right to average individual evaluation committee member scores to arrive at final evaluation scores. The dispute involved a solicitation issued

by the Department of Public Works and Government Services (PWGSC) on behalf of the Department of National Defence (DND) for aerodrome wildlife control services at Royal Canadian Air Force 12 Wing Shearwater, Nova Scotia (Shearwater). As the Tribunal noted, it will defer to government evaluation decisions that are reasonably conducted. Further, the Tribunal confirmed that there were several recognized evaluation methods that could be used to arrive at final scores and that those methods could include the averaging of individual scores, particularly where the range between initial individual scores is relatively small, while larger differences between initial individual scores may require a more thorough evaluation method that could include group consensus scoring meetings. Further, the Tribunal ruled that the averaging of scores did not constitute a hidden evaluation practice, stating that it saw “no reason to rule that the averaging of scores represented an error in the scoring or represented the application of undisclosed evaluation criteria”.

As these cases illustrate, purchasing institutions are not required to engage in group consensus scoring or compel individual evaluators to agree to an identical group consensus score, and can instead average individual evaluator scores to arrive at final group scores. In fact, many public institutions are adopting enhanced consensus scoring methods that average individual evaluator scores when those scores fall within a predetermined variation tolerance and limit group evaluation discussions to areas where there were significant dis-

crepancies between the individual scores. These enhanced methods also ensure that group evaluation sessions are properly moderated with clear procedures that protect the autonomy of each individual evaluator so that group discussions do not open the door to pressuring individual evaluators to change their scores against their independent judgment. As recent legal rulings reflect, evaluator independence should prevail over artificially imposed uniformity. This blended approach helps streamline the overall evaluation process while bolstering the defensibility of evaluation and award decisions. SP

“Purchasing institutions are not required to engage in group consensus scoring or compel individual evaluators to agree to an identical group consensus score.”

Workforce Shortages: 6 Unexpected Costs for Manufacturers

Besides better benefits and compensation, manufacturers are cobbling together a patchwork of tactics to maintain production. But doing more with less is starting to cost manufacturers more.

NO MORE NEW BUSINESS

Almost half of manufacturers were unable to take on new business and lost revenue opportunities in 2022.

RECORD-BREAKING PRODUCT RECALLS

A lean pool of new, inexperienced, or undertrained workers are prone to make more mistakes that impact product quality. Is it a coincidence that a record-breaking 900 million of product units were recalled in the first quarter of 2022?

SLOWED DOWN EXPANSIONS

This year, over 59% of manufacturers say the inability to find enough workers has impacted decisions to make investment plans or expand.

MORE WORKER INJURIES & FATALITIES

Nearly 66% have increased reliance on temporary sta ng services. Almost 10% reported using an “on-demand” labor force (like gig workers) to meet production demands. But temporary workers and subcontracted employment have significantly higher fatal and nonfatal injury rates than permanent employees in standard jobs.

SMART FACTORY CYBER RISKS

Manufacturers are turning to robotics, co-bots, and other connected technologies to make up for the shortage of human workers. Cyber risk exposure will only increase as manufacturers embrace and scale automation. Nearly 50% of those surveyed say sites were targeted or victim of a cyberattack - and say the attacks have increased in frequency – as often as daily or weekly.

WANT TO ACHIEVE SAFER, SMARTER, MORE PRODUCTIVE OPERATIONS?

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