Supply Professional June 2019

JUNE 2019

THE POWER OF PEOPLE

Jon Rosemberg on the importance of relationships Managing travel expenses

Extreme weather NAFA’s 2019 I&E Moving dangerous goods

PM 43096012

01_Supply Professional_June 2019_cover final.indd 1

EPIC award winners

2019-06-14 11:00 AM

EQUIP YOUR TEAM. MOBILIZE YOUR FLEET. Your drivers are at the forefront of your fleet. Ensure their safety and success with the best tools and supplies in the industry from Staples Business Advantage.

Learn more at: staplesbiz.ca/safety-solutions

Supply Professional_June2019.indd 2

2019-06-14 2:12 PM

VOL.61 No.3 JUNE 2019 SUPPLYPRO.CA COVERING CANADA’S SUPPLY CHAIN

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

14

18

COVER: JOHN PACKMAN PHOTOGRAPHY

40

36

FEATURES

ALSO INSIDE

6 SPARKING EXCELLENCE Highlights from the ISM2019 conference in Houston.

17 ENGINEERING GROWTH Highlights from the CAMSC 2019 Diversity Procurement Fair.

4 UP FRONT

9 LET’S TALK PROCUREMENT How to do architectural procurement better.

18 TRAVEL EXPENSE MANAGEMENT Tips for sourcing and implementing expense systems.

45 IN THE FIELD

10 FAIR OR FOUL Extreme weather and supply chains.

12 HANDLE WITH CARE Tips for dealing with dangerous goods.

14 THE POWER OF PEOPLE Indigo’s Jon Rosemberg on the importance of relationships.

23

5B USINESS FRONT

46 THE LAW

20 ROBOTICS Automating the supply chain.

22 NEGOTIATIONS Develop your patience to improve your negotiations.

40 PROCURECON CANADA Conference highlights plus the winners of the 2019 EPIC Awards.

42 INTELLIGENT SUPPLY CHAINS SCMA Conference highlights.

Fleet Managment

SUPPLYPRO.CA 3

Supply Professional_June2019.indd 3

2019-06-14 2:12 PM

UP FRONT

THE PERSONAL, DIGITAL TOUCH Some years ago, my wife ordered running shoes online from Nike.

It seemed novel at the time, but she could customize them in ways she couldn’t shopping in a store. While ordering, she could choose details for the shoes by clicking various options.

My wife is a huge fan of bright, bold colour and the shoes she designed were indeed colourful. She was even able to have her nickname stitched on the side of the heel.

This personalization meant that no one would ever have shoes exactly like hers, despite being manufactured by one of the biggest athletic apparel companies on the planet. Of course, other companies now offer similar services. Adidas even offers shoes with a 3D-printed sole for a custom fit.

Technology, digitization and e-commerce have sparked many things, not the least of which are personal solutions to customer needs. At one time, if you wanted a pair of shoes, you had limited options and the shopping experience was uniform—you went to the store and chose from whatever options were there. No one complained, or even noticed, that options were limited.

Pillpack, for example, is an Amazon company that bills itself on its website as “the pharmacy of the future”. The company is an online pharmacy “designed around your life” that sorts clients’ medications by date and time, then delivers them to those clients each month.

The service includes not only prescription medications but nonprescription supplements, like vitamin D or fish oil. It’s personalization in a bottle, almost literally.

At the Supply Chain Management Association’s 100th-anniversary conference in Montreal recently, keynote speaker and Walmart senior vice-president Ramesh Chikkala noted that, whatever business you’re in, you’re still in the people business. So start with the customer in mind.

He makes an excellent point. Even online, shoppers want a nice, personal experience. Not only through the product itself, but also the delivery and unboxing of those products must be a good experience.

The overall shopping experience now includes a combination of online and offline, as Chikkala also pointed out. People are looking for and getting things in traditional brick-and-mortar stores, but also while sitting in front of their computers or, more frequently, smart devices.

Although online shopping is by definition a remote experience, companies must remain connected to customers, lest they lose that personal touch. Perhaps ironically, technologies like AI and the Internet of Things will likely increase the personal feeling of dealing with technology.

Supply chain people, like everyone else in business, will work to keep that human touch—not just with customers but internal clients, colleagues and others. Just ask Indigo’s Jon Rosemberg, our profile subject this issue. On page 14, he explains how treating people well and fostering relationships is one of the most valuable lessons he’s learned during his career.

And cutting-edge, futuristic technology will help to foster those relationships.

PUBLISHER/ADVERTISING SALES DOROTHY JAKOVINA 416-441-2085 ext 111, dorothy@supplypro.ca EDITOR MICHAEL POWER 416-441-2085 ext 110, michael@supplypro.ca DESIGN Art Direction BARB BURROWS Design Consultation BLVD AGENCY CUSTOMER SERVICE/PRODUCTION LAURA MOFFATT 416-441-2085, ext 104, lmoffatt@iqbusinessmedia.com EDITORIAL ADVISORY BOARD LORI BENSON Procurement Compliance, L&D, Engagement and Knowledge Lead | Business Enablement, Ernst & Young LLP THOMAS HUDEL Manager, Purchasing and AP, Esri Canada Ltd. WAEL SAFWAT Procurement Director, Black & McDonald SHERRY MARSHALL Senior Manager, Meetings, Travel & Card Service, PwC Management Services KIRUBA SANKAR Director, Corporate Social Responsibility—RBC Global Procurement JEFF RUSSELL Director, Procurement— Carbon, Samuel, Son & Co. iQ BUSINESS MEDIA INC. Vice President STEVE WILSON 416-441-2085 x105 swilson@iqbusinessmedia.com President ALEX PAPANOU

PUBLICATION MAIL AGREEMENT NO. 43096012 ISSN 1497-1569 (print); 1929-6479 (digital) CIRCULATION Mail: 302-101 Duncan Mill Road, Toronto, Ontario M3B 1Z3 SUBSCRIPTION RATES Published six times per year Canada: 1 Year $ 99.95 CDN Outside Canada: 1 Year $ 172.95 USD Opinions expressed in this magazine are not necessarily those of the editor or the publisher. No liability is assumed for errors or omissions. All advertising is subject to the publisher’s approval. Such approval does not imply any endorsement of the products or services advertised.

Publisher reserves the right to refuse advertising that does not meet the standards of the publication.

No part of the editorial content of this publication may be reprinted without the publisher’s written permission. © 2018 iQ Business Media Inc. All rights reserved. Printed in Canada.

MICHAEL POWER, Editor 4 JUNE 2019

Supply Professional_June2019.indd 4

SUPPLY PROFESSIONAL

2019-06-14 2:12 PM

BUSINESS FRONT—BY MICHAEL HLINKA

THE CASE FOR TARIFFS HAS THE TIME COME TO PUT THEM IN PLACE? I am writing this column in the midst of a so-called trade war between the US and China.

The reason why I refer to it as “so-called” is because war is very serious business, and it seems to me that a more accurate term to describe what is going on would be a tariff tit-for-tat. The US put 25 per cent tariffs on $250 billion of Chinese exports and China retaliated by imposing tariffs that range from 5 per cent to 25 per cent on a variety of US goods. Some prognosticators are predicting that this will significantly slow down the global economy and even lead to recession in North America.

This strikes me as highly dubious. Higher tariffs will impact the Chinese economy significantly, but it will be much more a zerosum game in that what China loses, other countries will gain.

Manufacturing will shift to other developing countries, like Vietnam and Bangladesh for low-value added products, and there will be some limited relocation of production to North America. But the most important result will be that people will shift their consumption.

If, for example, iPhones are significantly more expensive, it’s likely that people will make do with their current phone, or perhaps substitute with a cheaper model and take those savings and spend more on something else.

By temperament and inclination, I’m in favour of free trade for a few reasons. In theory, at least, free trade makes perfect sense.

The explanation is comparative advantage. If everyone specializes in what they do best, then it will be a win for everyone. A simple model demonstrates: there is a surgeon who can earn $250 an hour doing her slicin’ and dicin’. Work around the house requires 10 hours a week. If she works 40 hours a week in medicine and does her own

housework, she grosses $10,000.

However, if she operates for 50 hours a week and pays someone $20 an hour to do her chores, now she’s netting $12,300.

Except, what if the surgeon’s services aren’t required for 50 hours a week? What if she can only get paid for surgical work 30 hours a week? Now the surgeon will clearly be better off if she does her own housework. It seems that the benefits of free trade hinge around a number of important assumptions and may be the most important of them is that all ultra-productive resources are always fully utilized.

And this is patently ridiculous.

If you believe‚ as I do, that there is still a tremendous amount of slack in the North American labour markets, then it strikes me that a very good argument can be made for imposing tariffs. And there is another and maybe even better reason for tariffs: they raise revenue.

TIME FOR TARIFFS There is general consensus among most economists that the best taxes are value-added taxes like the HST. The reason is because this “penalizes” consumption. Income taxes, on the other hand, discourage productive activity. It’s very difficult (particularly in the US) to argue in favour of sales taxes or value-added taxes. Tariffs are a back-door way of getting there and are generally politically popular which is just not true of sales taxes.

I almost can’t believe that I’m writing this but the time has come for tariffs. There should be something closely akin to a free trade zone between Canada and the US. The reason why I qualify that with “closely” is that nominal charges for the transfer of goods and services would help pay for border security. But otherwise, there should be a tariff policy that would work along the following

way: if an input or final product costs $100 or less, the tariff would be five per cent. If the final product costs $100 to $1,000, the tariff would be 10 per cent. Otherwise, for all products that cost $1,000 or more, making it 25 per cent.

This would mean the following for Canada. First, all automotive manufacturing would take place in the US and Canada which is just fine with me. There is sufficient competition to keep the auto companies in check. The majority of products that average Canadians use regularly (socks, dishes and so on) would be only nominally more expensive. And luxury products—and here I’m thinking of electronics—that should be understood as luxuries would become significantly more expensive. And that, too, is something I can live with.

Canadian society faces two important and related economic problems. One is the divide between the “have-alots” and “have-a-littles”. The second is that lower skilled, yet relatively well-paying, work has been exported to other parts of the world, and there is a broad cohort of Canadians who haven’t been able to find work that pays similarly well.

Tariffs won’t solve all of our economic problems, but they are a tax whose time has come. SP

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

“ Higher tariffs will impact the Chinese economy significantly, but it will be much more a zero-sum game in that what China loses, other countries will gain.”

SUPPLYPRO.CA 5

Supply Professional_June2019.indd 5

2019-06-14 2:12 PM

BY MICHAEL POWER

PROCUREMENT’S FUTURE, TECHNOLOGY AND ECONOMIC TRENDS HIGHLIGHTED AT ISM2019 With a tagline promising to “spark” creativity among attendees, ISM2019—the annual conference for the Institute of Supply Management— boasted roughly 2,500 attendees in Houston, Texas last April. There were more than 70 breakout sessions and three keynote speakers during three days of education and networking that focused on areas including digitization, supply chain and procurement leadership, the global economy and more.

The event saw supply chain practitioners from more than 30 countries attend and from practically every industry as well as direct and indirect procurement, Tom Derry, ISM’s chief executive officer, said in an interview with Supply Professional.

This year’s lineup of keynote speakers included Carly Fiorina, author, business leader and former US presidential candidate who spoke, among other topics, about her time at Hewlett Packard (HP), said Derry. Specifically, Fiorina told the audience about how important supply chain was to the execution of HP’s strategy along with the impact of leadership.

“Her message around leadership resonated 6 JUNE 2019

Supply Professional_June2019.indd 6

with everybody in attendance. We’ve got people still at the undergraduate level all the way to senior practitioners in attendance and her message was relevant to everybody,” Derry said.

“Particularly when she’s addressing the younger audience on the topic of leadership. She points out that the opportunity to be a leader happens at any moment. We all have an opportunity to perceive a problem in our business and to solve that problem.”

Fiorina highlighted a story about efforts to reconcile the circuitry design that she was responsible for in engineering while she was employed at US telecom company AT&T, with invoices she was receiving from the supplier.

“So, (she highlighted) the opportunity of taking a concrete problem and getting it resolved as an opportunity to enhance your standing within the company and gain some visibility and potential for advancement,” Derry said.

Derry also highlighted the introduction of the winners of the 30 under 30 Supply Chain Stars program, as well as the six recipients of the R. Gene Richter Scholarship program. The scholarship goes to the rising class of seniors

TOMORROW’S PROCUREMENT TODAY Technology and digitization faired heavily at the conference, as seen during the event’s digitization track. And not only supply chain, but technology is involved in mentally changing the way the world works in many other areas, said David Natoff, managing director, Blue Sphere Consulting. Today’s businesses, government and regular people are responding to these shifts, Natoff said during a session called Tomorrow’s Procurement Today.

The iPhone would have seemed unimaginable even a few years ago. Meanwhile, artificial intelligence and robotics are reinventing the workforce, he said. Drones and driverless cars are transforming supply chains. With 3D printing, for example, a failed part at a mining operation in a remote location can be replaced in less time and cost than shutting down operations while a new part ships.

“The technology that we’re talking about, it’s everywhere,” Natoff said. “It’s never been cheaper than it is today.”

Technology remains an enabler, said fellow speaker Amanda Prochaska, CEO of High Performance Procurement. But while it can solve problems within an organization, it can also succeed or fail around three areas: people SUPPLY PROFESSIONAL

2019-06-14 2:12 PM

IMAGE: COURTESY OF ISM

SPARKING LEADERSHIP

in their undergraduate programs. And while hundreds of students compete in the program, only six are selected. The program pairs students with mentors, both former scholar recipients and senior supply management executives, to get the students on the fast track to leadership roles in the profession, Derry said.

The 30 Under 30 program consists of people already in the workforce today and who’ve been nominated by their companies because of their positive impact.

“They have an amazing resume of things that they’ve been working on already,” Derry said.

“We’re able to connect people still preparing to go into the workforce with, at the undergraduate level, recent graduates already having a major impact.”

We have the opportunity to change the relationships, our business models, the way that we deliver services back to the organization in a way that we’re looking through the eyes of the customer.

IMAGE: COURTESY OF ISM

Janet Yellen, an economist at the Brookings Institute and former chair of the US federal reserve, speaks with ISM’s CEO Tom Derry, on economic trends.

process and technology, she said. It’s the people within an organization that must live with changes and work in a new way due to new technology. The leaders within an organization are responsible to help them with that process.

“Believe it or not, the technology piece is easy,” Prochaska said. “But if you don’t manage your people through the change curve, then you can talk about, ‘are they ready to follow the new process? Are they capable of doing what you’re asking them to do? Are you changing them from a transactional process to a strategic process? How are they supposed to make their decisions moving forward?’ People are always the hardest part.”

Having the wrong process in place then trying to layer technology on top only results in getting a faulty outcome faster, Prochaska noted.

For example, a newly automated master data process is worthless if the data remains wrong.

“These three all have to work together to be

successful in your journey,” she said.

Another speaker during the session, Chris Sawchuk, principal and global procurement advisory practice leader at The Hackett Group, referenced a study that the organization did focusing on organizational agility. The study asked whether people believed that digital transformation will change the way they operate globally, with 90 per cent of organizations answering yes. The survey also asked whether organizations had a strategy to deal with those changes. To that question, 66 per cent answered yes, while 46 per cent said they had the resources to execute such a strategy.

But Sawchuk said he was skeptical of the responses, noting that when he asks people what they think procurement will look like in threeto-five years, he sees a lot of “blank stares.”

“If you can’t describe what it’s going to be, how can you have a strategy for getting there?” he asked.

The survey asked about the different technologies available and where organizations sit in terms of adoption. Not surprisingly, Sawchuk said, many responded that they will be using them more going forward. But digital transformations aren’t just about technology, he stressed. The ability to move fast and fail quickly is important, as is the centricity of the customer.

“We have the opportunity to change the relationships, our business models, the way that we deliver services back to the organization in a way that we’re looking through the eyes of the customer,” he said.

To make a digital transformation happen, organizations need data to feed analytics and must build a foundation of data, Sawchuk stressed. An omni-channel experience is important, but not just for customers. Organizations must also look to digitize their own workforce or risk losing their top performers.

“It’s becoming not only a way to attract talent but also a way to retain that talent in your organization,” he said.

Digitization means more than adopting SUPPLYPRO.CA 7

Supply Professional_June2019.indd 7

2019-06-14 2:12 PM

technology, Sawchuk stressed. The process also involves improving the experience of customers, stakeholders, suppliers and others.

NEED FOR SPEED? Another session focused on supply sensing capabilities that organizations can put in place.

The session featured Joe Carson, president of JWC Advisory, who said that while the pace of business hasn’t increased much, what has risen is the ability of professionals to know what’s out there. So much data now exists that it’s challenging to know what to do with it. Supply chain professionals are now expected to be able to assemble, analyze and formulate a plan around that data. “When you think about the speed of business, it’s this preponderance of all this data that we all have to consume now,” he said.

Fellow speaker Colin Kessinger, managing partner at End-to-End Analytics, said that terms such as artificial intelligence, machine learning or advanced analytics are not very useful labels by themselves. The distinctions aren’t well established within the community, and titles like “data scientist” are about as useful as the title of “doctor,” which is rather vague without knowing

whether a doctor has a particular specialty within medicine. Context is key, Kessinger said.

“Why are we doing this and what do we expect to get out of the analytics?” he said.

IT’S THE ECONOMY During another keynote address, Janet Yellen, an economist at the Brookings Institute and former chair of the US federal reserve, focused on recent economic trends affecting both the US and global economies. The wage gap between those with a high school education or less and those with a college education has widen, Yellen told the audience, and in real terms, wages for less educated Americans have done almost nothing in decades. But while globalization gets blamed for stagnant wages, especially among those with high school or less, Yellen also said that economists point to changes in technology as the larger culprit.

“Globalization is part of it,” she said. “The more important part is technological change generally. Technological change, automation, IT, has boosted the demand for skilled labour and led to either offshoring or a reduced need for the services that less skilled labour provides.

That’s what’s been resulting in the loss of jobs that can be automated or offshored.”

At the same time, interest rates appear to be dropping in most developed countries, she said.

Current estimates place the neutral level of real short rates at just under one per cent and two per cent average inflation. Japan, for instance, has zero interest rates and, in Europe, there’s zero interest rates on safe assets without any change to the situation in sight.

“Here we are in an economy that has barely two per cent inflation with the tightest labour market we’ve seen in 50 years,” Yellen said.

“I don’t anticipate a recession coming—but of course eventually there will be for one reason or another—there just isn’t a lot of ammunition to address a downturn.”

Overall, the ISM2019 conference took on several large, topical procurement issues, with attendees treated to more than enough tips to “spark” innovation within the profession. SP

π SHIPPING SUPPLY SPECIALISTS

STORAGE SOLUTIONS OVER 36,000 ITEMS ALWAYS IN STOCK

ORDER BY 6 PM FOR SAME DAY SHIPPING

COMPLETE CATALOG

8 JUNE 2019

Supply Professional_June2019.indd 8

1-800-295-5510

uline.ca

SUPPLY PROFESSIONAL

2019-06-14 2:12 PM

BY TOON DREESSEN

LET’S TALK PROCUREMENT THERE’S A BETTER WAY TO PROCURE ARCHITECTURAL SERVICES Suppose your company needs to hire someone. You know you need the employee to have specific education, training and experience.

When you hire this person, you have some idea of what that person’s salary is likely going to be because you have industry standards and expectations.

The company human resources department is contacted and you give them this information. They post the qualities the person should have and ask applicants to apply.

In a normal HR scenario, they might ask the applicants to submit a cover letter and resume, but in this case, the HR department decides they want to do something different.

They ask applicants to provide a cover letter and their resume, but also some examples of the work they have done, references and salary of previous jobs. They also ask applicants to describe, in a few pages, how they might approach the job, what steps they might take to do the work, a schedule of how they are going to go about the job, and what key experiences they

bring that are going to make them the best fit.

Even though the HR department knows what the salary should be, they choose not to say anything and, instead, applicants are told to submit their salary offer in a separate envelope and that only the best candidates will have their “salary envelope” opened.

Several people apply for the job and, because the skills sought are pretty specific, most people have similar, comparable, experiences.

They all score fairly close to the same. There is no job interview— imagine hiring someone without ever meeting them in person!

When the salary envelopes are opened, the most points go to the person who offers to do the job for the lowest salary. All else being roughly equal, the best candidate has to offer to do the job for the least amount of money.

This sounds absurd. Who would hire someone this way? We do.

This is how governments hire architects and engineers, every day.

Applying for a job (project) can cost a firm tens of thousands of dollars in staff time and printing costs. It is not uncommon for the collective effort of a group of architects to spend $500,000 in pursuit costs to win a $50,000 contract (25 firms, spending $20,000 each). And for that award to then come down to not only who is best, and who is not only cheapest, but willing to play the game.

What game, you ask? What if, in the HR example above, the person started on the first day and began

If we want to achieve the better built environment we aspire to, we need to change how we hire the services that deliver lasting value.

asking for extras and bonuses to do the things you thought were part of their job: taking turns making coffee, or sharpening their pencil, or staying 5 minutes later to meet a deadline. What if you found that once you’d hired the person, firing them for this sort of behaviour was more expensive than just paying them the extras? And what if, in paying them the extras, you found that the total cost was what you’d originally expected the salary to be anyway? Except that you have the aggravation of constantly modifying their salary (change orders) every time something comes up.

If you hire someone, don’t you want them to bring their best ideas to the table, come prepared to do their best work, and collaborate to achieve success? Often the procurement department of a city or government agency has no understanding of architecture or engineering, and once the original contract is issued, they have no further involvement. In other words, procurement departments are often disconnected from the project itself.

A BETTER WAY There is a better way. And it’s just like we hire employees today.

We post a job (issue a request for qualifications) and ask applicants to submit their information and a cover letter and tell them upfront what the salary range is (professional fees) based on published and accepted industry standards. We sort through the best candidates and select the top few.

We invite the best candidates in for an interview: ask the most qualified to come forward, presenting their arguments for why they are the best team, and what they can offer to make the project a success. We offer the best candidate the job and negotiate a fair salary (professional fee) based on the published rate.

If we can’t come to an agreement on the salary (fee), we move on to the second-best candidate. This is called quality-based selection.

The way procurement is done today undermines best value. Firms are incentivized to compete and offer a low fee to get the job, then

Toon Dreessen, OAA, FRAIC, AIA, LEED AP, is an architect and president of Architects DCA.

provide lower levels of service, or beg for extras to deliver the services the client actually expects, exploiting loop holes in the RFP. This creates antagonism between client and architect, undermines our skills at effective project delivery and cohesive problem solving.

Procurement departments try to manage this process by inserting contract language into RFPs that undermine the public interest, drives down fair competition and further alienates the architect from being able to do the best job possible.

If we want to achieve the better built environment we aspire to, we need to change how we hire the services that deliver lasting value. And as architects, when we see a bad RFP, we need to call out our concerns to procurement departments, elected officials and, when needed, refuse to participate in processes that undermine our role in creating the safe, healthy, equitable, beautiful, built environment that the public expects. SP SUPPLYPRO.CA 9

Supply Professional_June2019.indd 9

2019-06-14 2:12 PM

BY MICHAEL POWER

EXTREME WEATHER IS HITTING SUPPLY CHAINS INCREASINGLY OFTEN Whether it’s flash flooding, hotter- or colderthan-usual temperatures, hurricanes and tornadoes or something else, the signs of extreme weather are everywhere. Alberta, BC and northern Ontario have all seen wildfires rage recently. At the same time, Alberta, Quebec, New Brunswick and Ontario have dealt with severe flooding this spring. While these types of events can affect our daily lives, displacing people from their homes and damaging property, they can also disrupt supply chains.

Among those who realizes this is Jim Wells, procurement manager at East Coast Tubulars Ltd., based in Newfoundland and Labrador.

The company deals with high-end specs for oil country tubular goods (OCTG), a group of product consisting of drill pipe, casing and tubing. Typically, Wells says, that involves highend steel grade pipe and premium connections.

The bulk of the product that the company orders comes from abroad, including from Germany, France, Japan and others countires, Wells notes, adding that the international nature of the products means a heavy reliance on the whim of the weather. “We’re at the mercy of ocean-going vessels,” he notes.

The company has seen a 30-to-40 per cent uptick in late deliveries recently, Wells says, citing typhoons, high seas and tsunami as playing a role in those delays. There has also been a 30 per cent increase in shipping damage.

10 JUNE 2019

Supply Professional_June2019.indd 10

Even the most secure loads won’t withstand more severe conditions, Wells says. Often, tubular shows up that needs the connectors replaced, the ends re-cut and, in most cases, materials have broken free from cargo holds as well as from the strapping that was holding it in place. If steel comes into contact with other steel, it needs to be retested before it’s used.

Last year, for example, a vessel left Japan carrying some product ultimately bound for East Coast Tubulars, Wells notes. But about four or five days into the trip the vessel hit a typhoon and the captain decided to ride out the foul weather rather than risk injury. While Wells supports the decision to put safety first, it also meant that the cargo was a mess. “It was arguably some of the worst affected material we’ve ever seen,” he notes.

Previously, the solution might have been to simply buy more product, Wells says. But in the current market there’s increased activity, a shortage of supply, more lead times and more expenses. It’s simply not practical for the company to have more inventory on the ground.

As well, being based in Newfoundland and Labrador means the company is too far away to do just-in-time operations.

While the company is located on an island, which adds complexity, the last five years has seen an increase in weather-related challenges, Wells says. In the last six months, each month

CONTINUAL SEARCH To help deal with the situation, the company is always looking to other sources of product from suppliers with shorter vessel delivery windows.

The organization has looked at its procurement cycle to figure out the worst periods in terms of weather (November to February earns that spot) as well as taking into account shipments from Japan and other locations. Scheduling RFPs by November 15 helps, as does avoiding major shipments during that four-month period. But oil is drilled constantly, so keeping to that planning schedule is challenging.

Technology can help, Wells says, and the company uses apps to track vessels globally.

But there is no control over what happens to those vessels while they’re at sea and Wells notes the importance of monitoring weather conditions. GPS tracking aids in following land-based logistics, while being careful with supplier selection is also useful. The company uses an internal system to capture information in different categories, such as lead times. It’s then possible to search the database over several days to see what the challenges have been, which helps to ensure continuous learning. “We do use technology to keep track of these events and avoid situations if we can,” Wells says.

Bill DeMartino, GM at riskmethods, notes a definite increase in awareness among clients of the potential for extreme weather to affect their supply chains. Last year the company saw an uptick in weather-related events. To help with planning, DeMartino advises to look at areas where the supply chain is exposed to such risks.

That can produce a “digital twin” of the supply chain that can include supplier sites, customer SUPPLY PROFESSIONAL

2019-06-14 2:12 PM

ILLUSTRATION: ANGELICA YIACOUPIS

FAIR OR FOUL

has seen roughly four to seven days in which there have been no ferries from the mainland.

Some product has sat in Nova Scotia for weeks before arriving on the island, Wells says.

“We’re constantly dealing with the weather,” he says. “I wouldn’t say we’ve gotten numb to it—we recognize where we are is a challenge, but in the last five years it’s gotten worse.”

ILLUSTRATION: ANGELICA YIACOUPIS

delivery sites, ports and hubs, warehouses and so on.

“You’re then able to pull in information that gives you a sense for the inherent vulnerability of those locations,” DeMartino says. “Maybe those flood plains are getting larger, or maybe they’re shifting. Or maybe the chances of a storm in this region are growing. That’s really the first step—making sure you’ve understood your risk exposure.”

Sometimes, when it comes to risk, the cause is less important than the impact on the supply chain and the subsequent reaction, says DeMartino. If a supplier is no longer able to produce goods due to weather events, what’s the contingency plan? It’s also important to know how long those goods will be unavailable. “If this is something that’s going to take them out for a day, they can recover,” he says. “If it’s something that’s going to be catastrophic, then it’s a different story. It’s much more about the impact than about the physical cause.”

THINK IN CATEGORIES This leads back to planning, DeMartino says.

Regarding supply chains, it’s helpful to think about in terms of categories of goods rather than individual supply entities or ports and hubs. From there, look at the overall risk to that category. For example, DeMartino describes working with the director of supply chain for an organization that had one supplier providing upwards of 90 per cent of the goods the organization needed. Riskmethods and the director decided this was too much risk, so another supplier was added. The organization went through the process of vetting the supplier, assessing their financial situation, their history and so on before bringing them onboard.

But to the director of supply chain’s surprise, riskmethods flagged some risk with that supplier. The risk came from the fact that the second supplier was located very close to the first one, and both were on a high-risk flood plain. From a business perspective, it may have been a good idea to bring on that supplier, but

You’re making a decision about risk whether you considered it or not.

The point is, get as much information as you can so that you make a decision that aligns with your risk appetite.

the decision had been made without considering the weather-related risks.

“I like to think of it as risk-aware decisions,” DeMartino says. “You’re making a decision about risk whether you considered it or not. The point is, get as much information as you can so that you make a decision that aligns with your risk appetite.”

And that awareness and preparation are key. Many organizations are quite prepared to react to threats to their supply chains and have teams ready to respond, DeMartino says. But they’re often not as prepared to prevent and mitigate risks. “They may need to enact those teams more often than they should if they were more prepared in terms of the actual design of the supply chain and the decisions that they’ve made,” he says.

Prioritize threats most likely to impact the business, DeMartino says. Supply chain professionals are under increasing pressure to digitize and operate faster. But it’s essential to ensure that risk management capabilities keep up with that pace of business. “That’s why I’ve got to know when that little flood happens in that area because I need to know if that shipment is going to be delayed,” he says. “I don’t have the ability to deal with these hiccups anymore.”

Climate change may be a reality that supply chain professionals must deal with and have little control over. Extreme weather events, while more and more common, will continue to affect how supply chains operate. But with awareness and planning, supply chain professionals can make great strides to mitigate those risks. SP

SUPPLYPRO.CA 11

Supply Professional_June2019.indd 11

2019-06-14 2:12 PM

BY MARIETE F. PACHECO

HANDLE WITH CARE DEALING WITH DANGEROUS GOODS IN THE SUPPLY CHAIN Prior to the industrial revolution most manufacturing and production of goods occurred at home. With the evolution of machinery and the expansion of global markets, the demand to transport goods grew as these activities were conducted offsite and away from the end user.

The complexity of transporting products has increased with the growth of dangerous goods along with the diversity of transportation methods: rail, sea, air, road, pipeline or intermodal. Dangerous goods within the supply chain can take on many forms, from liquids such as acids, to gases such as oxygen cylinders and solids like lithium batteries.

There are nine classes of dangerous goods according to Canada’s Transportation of Dangerous Goods Regulations (TDG Regulations). Some of these are further broken down by the nature or characteristic of the substances.

This includes explosives; gases; flammable liquids; flammable solids; oxidizing substances and organic peroxides; toxic and infectious substances; radioactive 12 JUNE 2019

Supply Professional_June2019.indd 12

materials; corrosive materials and miscellaneous products; substances or organisms and so on.

Each class of dangerous goods has unique requirements for handling, storage and transportation. There are some dangerous goods that may also fall in the controlled goods list which has supplementary security regulations as defined in the Defence Production Act in Canada.

These items include finished goods, components and technical data that have national security sensitivity or military significance along with some goods on the Export Control List. These goods are controlled by the federal government and managed by the Department of National Defense and the Public Services and Procurement Department.

Some examples include larger calibre firearms and ammunition.

The controls in place encompass several considerations such as limiting who can possess and transfer them, how the goods are stored, detailed documentation regarding transactions, inspections and breaches as well as working with law enforcement as required.

CHALLENGES Dangerous goods pose a risk throughout the supply chain— from manufacturers to carriers to distributor and ultimately the end user or customer. Strict adherence to regulations is paramount to ensure compliance and avoid fines, safety of employees and customers and maintaining an organization’s brand equity. The supply chain poses many challenges regarding dangerous goods both

The key to successfully mastering dangerous goods within the supply chain is an organization’s culture

externally and internally. The most significant external obstacle, government regulation, impacts the supply chain from production, to transporting and storage.

Regulations add complexity as they can vary by province and territory while governed federally under the Transportation of Dangerous Goods Act (TDG Act) and the Transportation of Dangerous Goods Regulations (TDG Regulations). The supply chain owner is responsible to ensure regulations are adhered to.

The TDG Act and TDG Regulations differ in their roles but work together to ensure the safe transportation of dangerous goods in Canada. According to Transport Canada: “the purpose of the TDG Act is to promote public safety during the import, handling, offering for transport and transport of dangerous goods. It sets out the general requirements that must be met and gives the government the power to: write regulations that elaborate on those requirements grant exemptions from requirements designate federal inspectors to verify compliance through inspections, etc.

The TDG Regulations is where you will find specific details on how to ship and transport dangerous goods on your day to day operations.”

Additional regulations govern the safe storage of dangerous goods depending on product type.

A good starting place is to refer to a hazardous good’s Material Safety Data Sheets (MSDS) that outlines general recommendations for storage, fire hazards, health hazards, reactivity hazards, first aid measures and preventative measures. The MSDS should be readily available (ie: attached to the container) and current.

For ease of accessibility it is recommended to have the MSDS available online as well for 24/7 availability, which is key when an organization’s operations span multiple time zones or in an emergency. Regulations are not static and may change to be

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

more industry relevant, in which case it is vital that an organization keep abreast of them. Some requirements include ensuring proper labels or markings of the goods (contents, UN number, etc.) and the vehicle the goods are being transported in being marked with warnings, called hazmat placards.

Internally, organizations can faced resource constraints, such as a lack of talent knowledgeable in dangerous goods and budget limitations to implement technology for record-keeping or keeping updated on regulations or buy protective equipment.

Secondly, organizations can be hindered by not having a clear definition of who owns dangerous goods compliance, compounded by a siloed company structure.

BEST PRACTICES Overcoming the challenges of handling and transporting dangerous goods can seem daunting given the risk and complexity. However, there are several resources available to help organizations such as connecting with specialized partners and carriers proficient in dangerous goods. The Transportation of Dangerous Goods Directorate (part of the Government of Canada’s Transportation of Dangerous Goods Program) maintains a list of organizations that offer dangerous goods training. Technology solutions can help to ensure a secure database for recordkeeping of product attributions and regulation requirements. The key to successfully mastering dangerous goods within the supply chain rests with an organization’s culture. Organization must ingrain SUPPLY PROFESSIONAL

2019-06-14 2:12 PM

CLASS

1 Explosives (sections 2.9-2.12)

DIVISION

1.1 1.2 1.3

1.4

1.5 1.6 2 Gases (sections 2.12-2.17)

2.1 2.2 2.3

CHARACTERISTICS OF DANGEROUS GOODS

A substance or article with a mass explosion hazard A substance or article with a projection hazard but not a mass explosion hazard A substance or article which has a fire hazard and either a minor blast hazard or a minor projection hazard or both, but does not have a mass explosion hazard A substance or article which presents no significant hazard beyond the package in the event of ignition or initiation during transport A very insensitive substance with a mass explosion hazard Extremely insensitive article with no mass explosion hazard A flammable gas which is easily ignited and burns A non-flammable, non-toxic, non-corrosive gas A toxic gas

3 Flammable Liquids (sections 2.18-2.19)

None

A flammable liquid with a closed-cup flash point less than or equal to 60.0 C

4 Flammable solids (sections 2.20-2.22)

4.1

A flammable solid which is readily combustible and may cause fire through friction or from heat retained from manufacturing A spontaneously combustible substance that ignites when exposed to air A water-reactive substance which emits flammable gas when it comes into contract with air

4.2 4.3

safety into their cultures and as part of their mission. This helps to ensure decisions, processes and infrastructure are there to support this organizational mandate.

COMPLIANCE For some organizations, compliance can be seen as merely another cost of doing business.

But compliance is much more than added cost. This could not be further from the truth, although there are important costs of non-compliance such as higher insurance rates, delays to shipments, remediation costs from errors or accidents during handling or transporting dangerous goods. But there are more benefits that outweigh these costs. An organization’s ability to comply with and exceed regulations places them at an advantage with faster deliveries; the ability to boast a wider product offering (especially

key as a distributor); increased revenue as the higher compliance rate can be sold as added value to the customer as evidence of quality assurance and industry knowledge; as well as a competitive advantage if competitors cannot ship on time or complete deliveries due to noncompliance rework.

Mitigating risk within the supply chain is incumbent on following regulations and rules within each jurisdiction. Although government regulations will vary by province and territory while being governed at a federal level, it is the supply chain owners’ responsibility to ensure regulations are followed. Dangerous goods compliance is at the heart of the supply chain and is a critical aspect of a business’s success through solid internal controls and recordkeeping, employee training, use of safety equipment and accessories. SP

More land for less money?

5 Oxidizing substances, 5.1 organic peroxides (sections 2.23-2.25) 5.2

An oxidizing substance which may yield oxygen and contribute to the combustion of other material An organic Peroxide which releases oxygen readily and may be liable to explosive decomposition, or sensitive to heat, shock or friction

TAKE US FOR A RIDE

6 Toxic and infectious substances (sections 2.26-2.36)

6.1

A toxic substance that is liable to cause harm to human health

Take advantage of Calgary’s low costs, new infrastructure and wide market access.

Grow your business on City of Calgary land.

6.2

An infectious substance

None

Radioactive materials as defined in the Packaging and Transport of Nuclear Substance Regulations

8 Corrosive substances (sections 2.40-2.42)

None

Solids or liquids such as acids or alkali materials that cause destruction of the skin or corrode metals

9 Miscellaneous None products, substances or organisms (sections 2.43-2.45)

A regulated substance that cannot be assigned to any other class. It includes genetically modified micro-organisms, marine pollutants and substances transported at elevated temperatures.

Source is the Government of Canada: http://www.tc.gc.ca/tdg

calgary.ca/movehere

19-00113617

7 Radioactive materials (sections 2.37-2.42)

SUPPLYPRO.CA 13

Supply Professional_June2019.indd 13

2019-06-14 2:12 PM

THE POWER OF PEOPLE

INDIGO’S JON ROSEMBERG DRAWS ON RELATIONSHIPS TO HELP TRANSFORM SUPPLY CHAINS When Procter & Gamble hired Jon Rosemberg as a strategic sourcing manager, he wasn’t entirely sure what the role involved or what a strategic sourcing manager was. So, on his first day, he asked for clarification on what the job entailed. He was told that they did “purchasing.”

“And I said, what, people can’t purchase their own stuff?”

Since then, Rosemberg has spent 15 years immersed in the world of purchasing and supply chain. And like many in the field, his route through the profession has been circuitous rather than straightforward: he has consulted, started and run a digital marketing business, worked in menswear, run a DJ school and sourced garbage in Latin America. He is now senior vice-president, merchant operations & program enablement for Indigo Books & Music, based in Toronto.

Rosemberg applied to Procter & Gamble right after finishing his undergrad in political science and Latin American and Caribbean 14 JUNE 2019

Supply Professional_June2019.indd 14

studies at McGill University in Montreal. He didn’t hear back immediately from the company so he began a side business. At the time, Procter & Gamble’s headquarters were in Caracas, Venezuela, so Rosemberg was based in that city and he travelled across Latin America for the company.

“The first portfolio that I was on was recycled paper,” he says of the role. “It was literally buying garbage. It was for the Charmin brand, for the toilet paper. You’d go out and negotiate, haggle, on the spot, and buy x-number of tons of recycled paper for the production of Charmin toilet paper. So that was my first job and that’s how I fell into it.”

A perk of the job was that Rosemberg received plenty of training, coaching and development from the company, especially in negotiations. Along with that entry into the supply chain world came Rosemberg’s interest in and love for the world of procurement and operations.

DEEPENING EXPERIENCE Rosemberg originally hails from Caracas and came to Canada to attend high school.

Beginning with his time at Procter & Gamble, he spent another 10 years there before returning to Canada in 2009. His stint with the company lasted a year and a half and, during that time, he started a digital marketing agency as a side business. The business did well, so he decided to leave Procter & Gamble after a year and a half.

Eventually, he was recruited by a menswear manufacturing company called Paramount Menswear and worked there as vice-president of operations. At that company, Rosemberg deepened his experience in end-to-end supply chain as well as gaining a handle on the world of manufacturing. Plus, he says, the experience was an entertaining one.

Rosemberg left the company in 2009 and returned to Canada, where Sears hired him. The company was looking to do a media agency review and he had extensive experience in media through digital marketing. Rosemberg worked on the company’s marketing portfolio from a procurement standpoint, which at the time represented about $350 million. He worked closely with the chief marketing officer on a lot of restructuring and transformational work.

He spent a year in the marketing department and, although he eventually decided the field wasn’t for him, Rosemberg gained a unique and interesting opportunity to see a different side of the business. He was eventually pulled back into operations at Sears, again for transformational work. Rosemberg had a hand in everything from looking for better ways to flow product through Sears’s networks, efforts to sell the organization’s logistics company to business process outsourcing.

The position at Sears lasted about four years, after which Rosemberg began consulting. “I didn’t love it,” he says of independent work.

“I’m a big fan of working in teams and working with people.”

Walmart had, for some time, been reaching out to Rosemberg and, in 2015, convinced him SUPPLY PROFESSIONAL

2019-06-14 2:12 PM

IMAGE: JOHN PACKMAN PHOTOGRAPHY

BY MICHAEL POWER

IMAGE: JOHN PACKMAN PHOTOGRAPHY

For us, the tactical work that we do is minimal. Most of what we do is highly strategic.

It’s trying to partner with a business to find ways to do things more effectively and efficiently

Supply Professional_June2019.indd 15

to accept a job at the company. But soon after, the person running Indigo’s supply chain at the time asked Rosemberg to join him for breakfast.

During breakfast, Rosemberg was offered a position with the company. He had just recently joined Walmart and wasn’t really looking for a change, he says. But after a few more meetings as well as a discussion with the CFO at the time and Heather Reisman, Indigo Books & Music’s chief executive, Rosemberg decided to make the switch.

“By the time I was done I called my wife and said, I’m working for Indigo,” he says. “I was kind of sold on the vision. That’s when I decided to join.”

Rosemberg has now been with the company for three years and was originally brought in to build a procurement organization. “We called it strategic sourcing and profit improvement,” he says. “Basically, the intent was to build some bench strength around how we interact with our vendors, how we negotiate our contracts and some rigor and discipline around that.”

Since then, the scope of his role with the company has grown significantly. For instance, Rosemberg has been involved with expanding Indigo’s online distribution centre and the acquisition of its Calgary DC. Currently, his team includes not only those from the procurement world but also vendor management and end-to-end supply chain. And the way in

2019-06-14 2:12 PM

DELIVERING THE HOLIDAYS His time at Indigo has afforded him some memorable experiences and unique opportunities to make an impact, Rosemberg says. One highlight involves working with the head of supply chain running the company’s online distribution centre during the Christmas peak of 2016. Rosemberg worked at Indigo’s DC for a few months, a stint that he says involved some very long days and nights.

“It was so rewarding to work with that team,” he says. “We ramp up very, very quickly in terms of labour and it’s great to see how people who have never worked together come together and make magic happen so we can deliver holidays to our customers. To me, that was definitely one of the biggest highlights of my career.”

Another career highlight stems from Rosemberg’s time at Sears, when he worked with the team there trying to transform the business and figure out ways to solve customer problems. Although the end result of their efforts had a painful side when Sears Canada closed, the process represented a “huge learning experience” for Rosemberg. “To me, that was a life lesson in purpose-driven management—it was a really good experience for me.”

Rosemberg’s own efforts in the field haven’t gone unnoticed by Canada’s supply chain community. In 2018, he won Innovator of the Year in the EPIC Awards at the ProcureCon Canada conference in Toronto. A procurement organization driven exclusively by savings doesn’t resonate with a company as obsessed with the customer as Indigo, he says. So when 16 JUNE 2019

Supply Professional_June2019.indd 16

When you put results ahead of people what you get into is very short-term thinking. When you do it the other way around, you can see value grow. he joined the Indigo team Rosemberg worked to tie the company’s business results to the results of the procurement team. He worked to create centres of excellence between the business teams and procurement. In many organizations, procurement focuses on delivering savings while business teams focus on operating their business.

“We were able to unite those two in a very significant way—there’s a true partnership,” he says. “The sourcing team here is seen as a trusted advisor that can support the team.

Moving away from that transactional nature of sourcing work to a more strategic, longterm vision with a customer focus is one of the reasons why they gave me the award.”

Rosemberg hasn’t taken his eye off of innovative trends in the field. He highlights artificial intelligence as a trend that will gain relevance in the field over the next five years.

AI will play a huge role in how people buy products, he says, adding that the free flow of information means that many products have become commoditized. The democratization of access to products and services has also removed a certain competitive edge.

“This idea of having artificial intelligence help sift through those huge amounts of data and come up with the right solution for people looking for it, I think that’s increasingly going to become more important,” he says. “I know that some big companies out there are already experimenting with it. That’s one big thing.”

Another trend Rosemberg notes is the shifting nature of the art and science of negotiations. This trend goes hand-in-hand with the way in which people’s view of the world is changing, he says. In the past, negotiations tended to be a rather transactional activity.

Today, he notes, it’s become far more about building relationships, regardless of the product or service being bought. More than ever, people realize the interconnectedness of the world and how things that go around, come around.

Procurement is seen less as an entity looking to simply save money and more as a trusted advisor for a business. And while this shift has been underway for at least a decade, it will ramp

up even more in the future, Rosemberg says.

“The way in which we work and interact is changing,” he says. “It’s very obvious in sourcing and supply chain because it’s such a transactional world by nature. There’s such a direct correlation between what you do and what you get back—but I think that correlation is going to dissipate a little bit.”

Rosemberg has a love for music and DJing, and the digital marketing firm he started early in his career began as a DJ school. He DJed in university as a hobby and after completing his studies at McGill spent a year in New York before returning to Caracas to start a DJ school.

The school evolved into a digital marketing agency after a company offered to sponsor it.

“We said, instead of sponsoring us why don’t you let us run your marketing for you? We did that and it just kind of grew from that. DJing is a hobby of mine and I love music.”

Now married with two children and a career, Rosemberg has little time to pursue that hobby.

He also enjoys cooking, going to restaurants and describes himself as a bit of a foodie.

PEOPLE FIRST Regarding those either entering the field or already working in supply chain, Rosemberg offers the hard-won advice to always put people ahead of anything else. Relationships, and the way someone interacts with those that he or she works with, remains the most important aspect of success in the field.

“I’ve worked with procurement professionals or supply chain professionals who are incredibly capable and well-versed at what they do,” he says. “But when you put results ahead of people what you get into is very short-term thinking.

When you do it the other way around, you can see value grow.”

In the past, businesses have all-too-often focused on getting the biggest piece of whatever pie is available, Rosemberg notes. But today, many more organizations are focused on ensuring that there’s enough pie for everyone.

By focusing on building relationships, businesses often discover that there are more opportunities available than what was visible at first sight.

“It’s about building a really strong team that you can trust, and they can trust you—that, to me, is at the core of everything,” he says.

“By the way, that’s not just supply chain or procurement, that’s anywhere.” SP IMAGE: COURTESY OF CAMSC

which Indigo works is unique, Rosemberg says, since it’s a highly creative organization. Its particular product management approach works “incredibly well” for the organization, he adds.

“I’m lucky enough to have an amazing team,” Rosemberg says. “For us, the tactical work that we do is minimal. Most of what we do is highly strategic. It’s trying to partner with a business to find ways to do things more effectively and efficiently. That’s really the focus of the procurement team. For the supply chain team right now, the focus is on flowing both goods and information in the most efficient and effective way.”

Much of his day consists of meeting and with people to talk about the business, what needs to be accomplished and how to accomplish it, Rosemberg says. Like many in the retail space, the organization is very active and has several projects going on at any given time.

Interpersonal interaction is highly valued and is a big part of the culture.

“I like doing walking meetings, just going out and walking around the block,” he says.

“Especially when the weather is nice.”

SUPPLY PROFESSIONAL

2019-06-14 2:12 PM

BY DAPHNE SHIH

Aboriginal drummer Aqua Nibii Waawaaskone performed during the Diversity Procurement Fair.

IMAGE: COURTESY OF CAMSC

ENGINEERING GROWTH CAMSC HOLDS ITS 15TH-ANNUAL DIVERSITY PROCUREMENT FAIR The Canadian Aboriginal and Minority Supplier Council (CAMSC) welcomed roughly 400 attendees on April 16-17 in Toronto for the 15th annual Diversity Procurement Fair.

The annual two-day business facilitation and networking event featured supplier diversity leaders representing corporations in a wide range of industries sharing experiences and leading workshops on a variety of topics.

With a focus on the theme of “Engineering Growth,” the many shifts and changes in the auto industry were top mind for many fair attendees. Many businesses that supply to the auto sector were eager to learn about what these changes mean for them and what future opportunities they offer. Representatives from FCA, Cummings, Enterprise and Flex N Gate delivered an engaging and insightful hour-long session, with standing-room only, on the shifts to electric and autonomous cars and the impact on future supply chains.

Their key message for suppliers was: push the boundaries of what’s possible and remain innovative.

Supplier development is always an essential component of the conference. The fair kicked off with the Supplier Bootcamp.

Katrina Turnbow from Kanopi Social gave a crash course on Google Analytics, explaining how suppliers can track marketing data and optimize their webpages for customer engagement.

Nadine Spencer from BrandEQ and Victor Chew from PENDA Productions gave suppliers insights to the importance of digital brand equity to expand their businesses, and how to unify their company image online. Spencer focused on increasing the brand value of a company to attract business through a social and digital presence. Chew echoed the message and reminded the suppliers to create authentic content.

A key component of the fair is the Corporate Member Forum, a gathering of CAMSC’s Canadian and American corporate members to foster collaboration and peer-to-peer learning focused on strengthening the Canadian supplier diversity landscape.

Committed to building robust supplier diversity programs and initiatives in Canada, the forum continues to be a gathering of minds on delivering solutions and driving supplier diversity to new heights in Canada.

The networking reception, sponsored by FMAV, featured Indigenous drummer, storyteller and educator Aqua Nibii Waawaaskone, who sang two songs from her album, Hand Drum Stories, Miigwech Away and You Are Not Alone. Hand Drum Stories shares Aqua’s experiences and journey of healing.

Day two of the fair kicked off with a CAMSC TED Talks-style session. Three CAMSC suppliers shared their journey to success with the audience. Cyrus Mavalwala, Advantis Communications, shared his supplier diversity journey; Kim Thiara and daughter Simmie Thiara, AceTronic Industrial Controls, spoke about their experience as women running a successful family business in a traditionally maledominated sector.

With a series of workshops featuring panelists from industry, attendees chose from sessions that focused on the future of the auto industry; millennials’ impact on how business is conducted; design thinking and bringing innovative ideas to life; AI/Big Data and its impact on small businesses; the future of smart buildings and other timely and specific topics that offered valuable knowledge and insight from industry experts and leaders.

Entrepreneur, philanthropist and founder of Dream Maker Inc., Isaac Olowolafe Jr. delivered a keynote speech, his message was to invest in minority communities to see them thrive. He recently signed a partnership with Ryerson University for the Black Innovation Fellowship (BIF).

The afternoon was dedicated to the Meeting Marketplace, where corporate members met prospective Aboriginal and minority-owned suppliers. Recruitment and potential deals began in these initial meetings, with suppliers having the chance to meet with representatives from BMO, TD, RBC, Merck, PepsiCo, TELUS, General Motors and Toyota.

“We strive every year to provide the best in thought leadership for all our attendees at this fair,” said Cassandra Dorrington, president

Daphne Shih is director of business development and partnerships at CAMSC.

and CEO, CAMSC. “We are fortunate to have such a strong network of certified corporate and supplier members who not only have the expertise and credibility in the supplier diversity area but are so generous to share their knowledge with our guests. This is a milestone year for the fair and organization and I am sure as we continue to grow, the fair will become even more of a must-attend event for organizations that want to lead in supplier diversity.”

As part of CAMCS’s 15th anniversary celebration, the Business Achievement Awards gala will be held on September 26.

Nominations are being accepted until July 13. Visit www.camsc.ca for more details. SP SUPPLYPRO.CA 17

Supply Professional_June2019.indd 17

2019-06-14 2:12 PM

TRAVEL EXPENSE MANAGEMENT

TIPS FOR SOURCING AND IMPLEMENTING EXPENSE SYSTEMS Do you recall having to use a pre-printed form to handwrite the details of each expense— including the date, amount, vendor and so on—then photocopy the form and the associated receipts, put the originals in an interoffice envelope and send it off into the ether?

Remember white-out? How about blotters?

Your manager would approve and forward it to payables or question one or more of the expenses and return the whole form to you for rework. Once approved, payables would issue a paper cheque that would be sent to your mail stop or home. And with petty cash, someone had to have a cash box that had to be replenished and reconciled, receipts chased and so on.

There might still be a few organizations managing their travel and incidental expenses this way. Regrettably, many others are still using spreadsheets, a baby step into electronic data formats, in which the forms are completed electronically, receipts scanned and emailed together for approval. The current state offers all-digital processes. The traveller can now launch a smartphone app, have corporate card expenses automatically downloaded into the app, take photos of the receipts and submit for processing.

Spreadsheets facilitate processing of 18 JUNE 2019

Supply Professional_June2019.indd 18

expenses, but that’s all. Expense management systems do that more efficiently, offer greater functionality and cost much less. Some organizations have estimated that their cost to process a manual expense report is over $50.

Depending on volume, that cost can be reduced well below $10 in an automated system.

This article is addressed to small and medium enterprises (SMEs) that might be amongst those still using spreadsheets, as well as those that may have signed on with a ‘free’ system such as Divvy or TravelBank and are looking for more capability. We will focus on tips for adopting systems for processing travel and incidental expenses, not inventory management and so on.

TO MANDATE OR NOT? There is an ongoing debate in the corporate travel world these days about whether or what to mandate in a travel policy. There is no right answer because policy must align with corporate culture—tight margin organizations tend towards cost control and more mandates (use of contracted, low-cost suppliers) while growthoriented organizations can allow travellers more discretion and be less restrictive. There is an exception to this, in my opinion, and that is to mandate the form of payment.

There is a long list of reasons to do so, but in this context, doing so facilitates accuracy and efficiency in using automated expense systems, as all charges can be routinely downloaded into the expense management system. Travellers validate and allocate the expenses and submit for reimbursement.

Approvers review clean information in a standard format—any non-approved expenses can be stripped off and returned to the traveller for explanation and approved expenses go to payroll or payables for electronic deposit, depending on how the organization chooses to reimburse. More organizations use the payroll system to reimburse to tap into the regularity of payments cycle and its ability to manage such taxable expenses as awards.

As with any procurement project, creating a team of stakeholders is critical to success.

Typical stakeholders in addressing expense management are, obviously, finance and travel, but also audit (if distinct from finance) IT, HR and potentially risk management. System users, such as budget holders (representing approvers) and top travellers should also be included.

Finance typically leads the team. As with any mission-critical project, and this would surely be considered as such, executive involvement and sponsorship is necessary.

With stakeholder input, a complete and accurate map of the current process should be drafted and frustration points identified. Specify the objectives of the project. The expected benefits include process efficiencies with associated accuracy and reduced processing cost; improved audit capabilities; improved reporting due to effective data capture; and, critically, employee satisfaction. Determine how each of these facets would support the objectives.

Also, specify the scope. If you have operations in different countries of varying size, do you want to implement in all regions, just the home region, or those representing some proportion of overall revenue or activity?

SUPPLY PROFESSIONAL

2019-06-14 2:12 PM

ILLUSTRATION: ANGELICA YIACOUPIS

BY GARTH JOPLING

Garth Jopling is partner at Nina and Pinta Group and member of the ACTE Canada advisory board.

ILLUSTRATION: ANGELICA YIACOUPIS

DATA SECURITY Data privacy and security are key factors that need to be addressed, especially if there are operations in Europe which introduced its General Data Protection Regulation (GDPR) last May, which provides for material penalties for breaches.

Working from the objectives, a list of requirements should be created and the related specifications ranked or weighted in terms of importance. Using a total cost of ownership model, including direct costs such as transaction fees as well as staff and management time, set targets for cost—determine your baseline and the optimal, midpoint and minimum acceptable cost levels. The lowest cost provider isn’t

necessarily the best, and the highest cost isn’t necessarily the worst, when comparing against weighted specifications. This will help you select the most appropriate vendor, as it provides a model for assessing the value of features— some are worth paying for, others might be nice to have but don’t add necessary value.

Once the objectives, scope and requirements are identified, conduct a survey of vendors.

You can start with an internet search to identify a range of vendors followed by introductory meetings and/or a Request for Information (RFI) process, in which the objectives and requirements would be used to narrow the field to the most likely candidates.

There are a great number of strong vendors,

from industry leader SAP Concur to Chrome River, Coupa, Expensify, and Zeno, each of which has its own strengths, weaknesses and pricing structure.

The next step is to develop and conduct your sourcing strategy. A well-structured Request for Proposal (RFP) is typically the best way to assess the offerings, but there are situations in which it might be best to enter into direct negotiations with a given vendor, such as when they are incumbent suppliers in other functions (SAP, Oracle) or your initial assessment clearly led you to one vendor’s product over all others.

Either way, this is not a short selection cycle. Organizations with unified management structures can expect a minimum of six to nine months for the selection process. Those with diverse operations or fragmented management can expect to need 12 months or more.

The project can also be resource heavy, so it is important that the management allocate sufficient time in advance. Too often organizations look at this as an incremental activity and the project flounders due to lack of availability of team members.

Implementation of a new system is the most critical stage and must be done with a thorough, explicitly detailed project plan.

Vendors typically have implementation templates to guide the process, but the organization’s processes, codes, relationships and interdependencies must all be identified and mapped. Many organizations take the opportunity to improve upon existing processes in the objectives and requirements stage.

Activities or flows that made sense in one world are no longer necessary in the new world. But such changes require even more attention to how the flows will work in order to minimize unintended consequences.

System testing with pilot groups is an effective way to mitigate risk and ensue the new process works as designed. Once fully implemented, procurement and travel will have access to data that will allow greater vendor analysis for improved negotiations and compliance management. Audit will have improved ability to analyze patterns and focus audits more quickly and reliably.

The future is near. Applications using artificial intelligence, such as AppZen, can perform 100 per cent audits in near real time, further reduce approval time and cost by isolating exceptions and allowing in-policy expenses to flow through without requiring further attention. Also, as with virtually all other areas of business, blockchain applications are being developed to drive further efficiencies and levels of security. Procurement professionals and travel managers would do well to keep an eye on these developments as they unfold. SP

SUPPLYPRO.CA 19

Supply Professional_June2019.indd 19

2019-06-14 2:12 PM

A HELPING HAND

ROBOTS ARE AUGMENTING HUMAN WORK IN THE SUPPLY CHAIN Technology is transforming many areas of modern life and the supply chain is no exception.

The so-called Industry 4.0—the trend towards automation and data exchange in manufacturing—is shaping the way companies do business, interact with their customers and workers, process and manage the information at their disposal and so on.

Robotics, one of the technology trends under the Industry 4.0 banner, offers several applications within the supply chain. For example, robots provide an advantage in warehouses for packaging and palletizing applications like lifting and moving heavy objects, says JeanPhilippe Jobin, chief technology officer for Quebec-based Robotiq. Online retailer Amazon provides an excellent example of using robots in warehouses for these tasks. Robots are also used often for picking applications in warehouses and an emerging trend is using them in sorting applications as well. There is still work ahead in figuring out how to use robots to sort, since identifying items with different shapes, sizes and materials remains a challenge.

Robots are also working alongside people more often, giving rise to the term ‘cobots.’

The packaging process is an example of where humans and robots can work together, says Jobin. Since today’s supply chains are so complex, people will always play a vital role.

However, robots will be used for tasks deemed ‘dirty, dangerous and dull.’ And the sky is the 20 JUNE 2019

Supply Professional_June2019.indd 20

limit when it comes to how robots will be used in the future. “You can see developments are being made to use them in sorting applications and in inventory management,” Jobin says. “We can expect to continue seeing them being used in more distribution centres as well.”

ROBOTS ON THE MOVE Among other trends in those distribution centres is that robots can travel around objects more easily than before, says John Hayes, VP of sales for Cambridge, Massachusetts-based Vecna Robotics. Robots used in DCs were once called automated guided vehicles, which are constrained to a specific path. But the automated mobile robot (AMR) available today uses path planning and can drive around objects and obstacles in its path, Hayes says.

The fact that you can bring the work to the employee and pick the most appropriate employee is what’s moving cobotics forward.

As well, instead of robots moving pallets, they are becoming picking solutions. Driven by retail, many organizations are using several small robots in their DCs rather than larger ones designed to move entire pallets. This, Hayes notes, has encouraged the rise of “cobots”, or robots that work alongside people.

The AGV system allowed the robot to follow a specific path before moving to the use of floor magnets, then laser guidance, Hayes says.

Today, robots don’t always need to follow specific paths. The facility floor can be mapped and both lasers and vision technology used before setting up specifically where a robotic vehicle can go. A robotic vehicle can learn the best paths, and areas to avoid, within a facility, such as a lunchroom or areas with high human traffic.

Or, if pallets, boxes or other objects aren’t in the correct location, robotic vehicles employ cameras and sensors to drive to the correct pallet. Systems can spot problems, such as a hole in the floor, and go around the obstruction. Robots relying on older systems would simply stop moving. “It’s a different way of approaching the application,” Hayes says.

Another significant, recent technology advance has to do with software. Rather than having a rigid set of operating parameters, the system can improve over time. “The biggest trend is the AI component and the adaptive solution now,” Hayes says. “Things are definitely changing.”

Previously, organizations would have to buy a workforce control system (WCS) that would then interface with other systems in the facility like the warehouse management system. The WCS might be large, cumbersome and expensive to install, Hayes says. But the rise of cobotics companies means the WCS is no longer needed because the software (Vecna’s software, for example, is called Pivotal) can visualize what needs to be done. The software can issue orders to the most appropriate resources (person), rather than relying on the WCS to do so. “The fact that you can bring the work to the employee and pick the most appropriate employee is what’s moving SUPPLY PROFESSIONAL

2019-06-14 2:12 PM

IMAGE: COURTESY OF GIANT TIGER

BY MICHAEL POWER

IMAGE: COURTESY OF GIANT TIGER

cobotics forward,” Hayes says.

But while the trend is towards automation, the primary goal is to makes people’s work experience better throughthat automation rather than to replace them, Hayes stresses. The first step in that process is, instead of people walking around the facility, they stay in their zone and the robots go to the next location. Ultimately, robots will be able to pick and place from one bin to an outbound bin that, basically, goes straight out the door. At that point, Hayes says, the facility has reached a state pretty close to lights-out. Such a state is still likely between five and 10 years away, he notes.

The material handling paradigm has changed so much that, when speaking with vendors, it helps to look not just at today, but what’s coming in the future, Hayes says. Things change and technology advances quickly, so sit down with vendors, consultants, and others to discuss the future state of your operations. “If you simply simulated what you have and not look towards what it could do because of the technology, you’re probably not getting as big a return as you could,” he says.

GIANT TIGER’S TRANSFORMATION The use of technology is growing, says John Hubbard, VP of distribution operation at Canadian retailer Giant Tiger. More companies are offering robotics, making such solutions more cost effective and viable. Success in retail means meeting customer demands, and as those demands grow organizations must find fresh ways to do that.

To support growth of 12 to 15 new stores a year, Giant Tiger recently amalgamated three distribution centres near Ottawa under one roof in Johnstown, roughly 40 minutes south of the country’s capital. The new 90,000sq-ft structure, which Giant Tiger finished moving into last January, meant a huge investment in technology, and now houses 240 autonomous bots. “When we looked at this facility we had to decide, what is our strategic plan for the next five, 10 years and beyond?” Hubbard says. “If we’re going to go into this capital investment now, we want to make sure it’s viable 10 years from now. We had to bring robotics into the mix, and that’s what we did.”

Hubbard describes the robots’ activity at the DC as “almost like an ant farm,” in which the robots put away and retrieve boxes throughout the day and night. The bots are equipped with capacitors which allows them to run on static electricity. Large robotic arms work in tandem to unpack inbound pallets while building outbound ones. Boston-based Symbotic supplied the technology. “We’re kind of proud to mention that it’s the first system installed in Canada,” Hubbard says.

The robots and people work together every

Automation technology is definitely a viable option for organizations however the implementation can make or break the business case

When designing its new facility and system, Canadian retailer Giant Tiger removed many of the pain points staff encountered with manual processes.

day, Hubbard says. People, he notes, will always be a part of the business due to the odd-sized and shaped goods the store sells that robots simply can’t handle without help.

When designing the system and new facility, Giant Tiger removed many of the pain points staff encountered with manual processes. The relationship between employees and robots is one of opportunity, Hubbard says, in which humans’ jobs are made easier. But the learning opportunities are considerable and make for a more skilled workforce.

Before moving to the new facility, Giant Tiger had complete manual pick outside of a WMS that had RF, putaway and retrieval and replenishment, Hubbard says. While the transformation represented quite the leap, Hubbard says he now sees no viable option other than investing in robotic technology to keep up with

the growth the organization planned. “With the robotics and the installation, we were able to save a ton of square footage on the overall design of our building,” Hubbard says. “We were able to, instead of go wide, go high, with the automation.”

Hubbard advises companies to understand the operational side of their business, and have a strong operational process in place, before moving far along with technology. If the process is flawed to begin with, robots will simply perform a flawed process faster. Rather, look at business needs down the road, the overall strategy and how robots can help achieve that.

“Robotics is not as simple as plugging it in and it just starts processing orders and all your problems go away,” he says. “Robotics are only as good as what information you feed them.

Automation technology is definitely a viable option for organizations however the implementation can make or break the business case.”

Robots in manufacturing and supply chain can wind up becoming “a tool looking for process,” says David Schwebel, VP of business development and market intelligence at Swisslog. While there are numerous autonomous mobile robots on the market, many perform a task but don’t provide a total solution.

“It becomes islands of automation,” he says.

It’s better to view robots as pieces of a larger solution that augment human work rather than replacing it.

That augmentation is only set to increase, Schwebel said. While archaic professions like typesetting and lamp lighting have disappeared, automation in supply chain will be a driving force in job creation rather than replacement.

The positions most targeted for such augmentation will be physical and repetitive, leading to greater safety and job satisfaction.

When it comes to robotics adoption, smaller works, says Schwebel. It’s better to spend $1 million on robotics ten times over than to spend $10 million once—learn first, scale later, he advises. At the same time speed is important and robotics adoption projects should take place over months rather than years. As well, perfection is overrated, and the 80/20 rule applies.

Finally, don’t try to do it all in a vacuum, Schwebel says. There are currently many more failures in robotics than successes. When possible, work with other companies that have already adopted these technologies and learn from their experiences.

There’s no doubt that, in many ways, robotics is the future for manufacturing and the supply chain. And like all new technologies there are risks involved. But with planning and a clear vision of their future direction and goals, organizations can reap the maximum gain from new technologies while minimizing the bumps along the way. SP SUPPLYPRO.CA 21

Supply Professional_June2019.indd 21

2019-06-14 2:12 PM

BY MARK RAFFAN

SLOW IT DOWN THE IMPORTANCE OF PATIENCE IN NEGOTIATIONS Patience is one of the most important skills to develop if we want to become great negotiators. Great negotiations require patience.

Patience, not only with the process, but with both the counter party and ourselves. We’ve all been in situations where we’ve felt our patience dwindling when a deal wasn’t moving as fast as we expected. The level of frustration that builds can sometimes be so overwhelming that we let that frustration bubble to the surface, and we pop, letting our frustration erupt like Mt. Vesuvius.

Crisis negotiators don’t have the luxury of getting frustrated and angry with someone who wants to take their own lives or harm someone else. They learn and develop what Chris Voss (Former chief hostage negotiator with the FBI and author of Never Split the Difference) would call, tactical empathy. That tactical empathy requires a unique situational awareness and a lot of patience.

Jack Cambria, former New York City Police hostage negotiator, is the embodiment of patience and understanding. In a recent conversation I had with Jack, he said “We have to have staying power and develop a rapport. And if we can develop that, it will lead to trust, in time. And there is a pro22 JUNE 2019

Supply Professional_June2019.indd 22

cess. And that process is allowing people the time to work through their emotions and that takes time.”

Jack’s career as a crisis negotiator has forced him to develop incredible patience. You can hear it in his voice when he talks. His calm, soothing tone smooths out any and all impatience and frustration. His evenly paced sentences and understanding moments of silence are a result of an entire career of negotiating intense situations of crisis.

Patience slows the process to the point where, as Jack says, everyone has time to work through their emotions and their process.

This includes us. Our patience allows us time to manage our emotions and expectations.

You may say, ‘That’s great Mark, but I’m not a crisis negotiator. How do I develop that same smooth patience that Jack has?’

Much of improving on anything is taking the first step to recognize that there is a problem and where that problem stems from. For most of us, our impatience stems from not managing our own expectations. We lose patience because ‘someone else isn’t getting it’ or ‘someone else is taking too long’, or ‘someone else is ruining the deal

The risk of not being patient is that we let our emotions take control of the negotiation and we rush through discussions, overlooking areas where we could develop and extract value.

with their ridiculous demands.’

It always seems to be someone else’s fault.

Reality check: maybe it’s us?

Maybe our expectations of the other person and how they should behave are out of whack. Kurt Dahl, an entertainment lawyer, and guest on the Negotiations Ninja Podcast, dropped some wisdom that still sticks with me. He said, “You can change the nature of the negotiation, but you can’t change the nature of the person you’re negotiating with.” Their nature is what it is and, we have to deal with it within the confines of the deal that we’re presented. And that means that we must have patience.

The activity that I can most attribute to helping me diagnose impatience is the habit of writing after-action reviews (also called post-mortems) following negotiations to reflect on what went well, what didn’t go well and what I need to work on for next time.

Regular use of this tool helps to develop our self-awareness and gives us the opportunity to develop actionable items in our negotiation skillset to work on.

The risk of not being patient is that we let our emotions take control of the negotiation and we rush through discussions, overlooking areas where we could develop and extract value. Have you ever looked back on a deal and thought, “Shoot, I should have seen that coming.”? I know I have. That’s often a function of rushing to deal completion. Impatience leads to frustration and frustration leads to lost opportunities and impasses.

Impatience is a deal killer.

Great negotiators use patience like a weapon and they’re able to wait out the other side’s frustration, timelines, anger and forceful negotiation techniques. This patience allows the other party to vent and when there’s nothing left to be angry or frustrated about, they magically become ready to talk about how to make a deal work.

Patience is difficult. Believe me, I get it. Especially when you

Mark Raffan is president of Negotiations Ninja Inc.

have a deal that is constrained by a time limit imposed by a leader or a contract expiry. Truthfully, patience is the single biggest thing in negotiation that I have difficulty with. I am not naturally a patient person and it takes considerable effort and focus for me to force myself to be patient.

It’s taken me years of practice to develop situational awareness enough for me to recognize when I’m being impatient and when I need to force myself to slow it down. I still get flustered and frustrated when I feel as though something, or someone, isn’t moving fast enough. But that’s why I utilize after action reviews. It’s so that I stay sharp and stay on track with my negotiation development.

And like everything in negotiation, there is no silver bullet that makes this immediately easier. It takes practice and it takes discipline. If you’re willing to practice patience, you’ll be well on your way to becoming a great negotiator. SP

SUPPLY PROFESSIONAL

2019-06-14 2:12 PM

Fleet Management 26

34

36

26

30

36

38

A mobile future Highlights from the 2019 NAFA I&E in Louisville, KY.

More value than meets the eye Test driving the Subaru Impreza.

Card connected Fleet cards can help bridge the data gap.

Supply Professional_June2019.indd 23

Global fleets Tips for running a fleet that spans borders.

34

Heavy half ton A look at the The Nissan Titan XD.

Getting it in writing The why, what and how of fleet policy.

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

23 FEBRUARY 2019

32

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

ADVERTISING INQUIRIES: Dorothy Jakovina, 416.441.2085 x 111, dorothy@supplypro.ca

SUPPLYPRO.CA 23 FLEET MANAGEMENT FM/SP SUPPLY PROFESSIONAL

2019-06-14 2:12 PM

Fleet Management

Canada’s NGV industry, government release report

24 JUNE 2019

Supply Professional_June2019.indd 24

Attendees of FCA’s recent fleet event got a look at the 2020 Jeep Gladiator Rubicon.

FCA hosts spring fleet event FCA kicked off spring with a fleet event held in Toronto May 16, with other dates upcoming in Vancouver, Edmonton and Montreal. During the Toronto event, attendees learned about the company’s Canadian operations, as well as the all-new 2019 Ram Heavy Duty and the 2020 Jeep Gladiator.

Bernie Moorcroft, national commercial sales manager, FCA Canada, gave the audience an update on FCA’s sales and Canadian operations. In Canada, FCA boasts the Windsor assembly plant where they build the Dodge Grand Caravan and the Chrysler Pacifica. There’s also the Brampton assembly plant, where the company builds the Chrysler 300, the Dodge Charger and the Dodge Challenger and a casting plant in Etobicoke, Toronto. The company’s head office is in Windsor, and there are regional offices in Toronto, Montreal and Calgary.

“We have a significant investment here in Canada,” Moorcroft said.

Attendees also got to hear about

the All-new Ram Heavy Duty, which sold 725,000 vehicles worldwide in 2018, 90,000 of which sold in Canada.

The new V8 delivers up to 395hp and 410lb-ft of torque, and with eTorque there’s an additional 130lbs-ft of launch torque. The truck has best-inclass towing capacity up to 12,750lbs and a max payload of 2,300lbs.

There’s an available 7-inch full colour customizable in-cluster display centre that comes with five themes to choose from.

The 2020 Gladiator has 4x4 capacity and best-in-class towing up to 7,650lbs and payload of up to 1,600lbs. Truck bed features include a three-position tailgate, an available roll-up tonneau cover and available 115-volt power outlet. Every Gladiator Rubicon has heavy-duty Dana 44 front and rear axles. The vehicle adds offload gear like lockable wide track axles, an electric disconnecting front sway bar, 33-inch all-terrain tires and available forward-facing TrailCam off-road camera.

Renault-Nissan-Mitsubishi launches Alliance Intelligent Cloud Automotive alliance Renault-Nissan-Mitsubishi announced the production release of the Alliance Intelligent Cloud, a platform to enable Renault, Nissan and Mitsubishi Motors to deliver connected services in vehicles.

The connected vehicle program will deploy using cloud, artificial intelligence (AI) and IoT technologies provided by Microsoft Azure. Azure provides the Alliance with a global data platform to capture, manage and analyze vehicle data to deliver intelligent services based on data created by connected vehicles.

The first vehicles produced with Alliance Intelligent Cloud technology will be the all-new Renault Clio and selected Nissan Leaf models sold in Japan and Europe.

These are also the first vehicles powered by the Microsoft connected vehicle platform available to consumers at scale.

Vehicles using the Alliance Intelligent Cloud will have internet access, enhanced remote diagnostics, continuous software deployment, firmware updates and infotainment services.

Toyota Canada has announced that its Mirai hydrogen fuel cell electric vehicle will be available to fleet operators at 12 Vancouver-area Toyota dealerships in July.

The Mirai is a zero-emission vehicle (ZEV) powered by hydrogen, uses no gas and emits only water vapor from its tailpipe. The Mirai has a roughly 500km range and refuels in about five minutes.

As a ZEV, the Toyota Mirai also qualifies for a rebate of up to $6,000 under the province’s Clean Energy Vehicle program.

The company says it’s been working with other hydrogen stakeholders across Canada to put in place fueling infrastructure, training and service to support the sale of FCEVs. The country’s first publicly accessible retail hydrogen station has been running in Vancouver since last summer with another opening in Burnaby.

IMAGE: TOYOTA

IMAGE: DOROTHY JAKOVINA

The Canadian Natural Gas Vehicle Alliance (CNGVA) has released a new report called Natural Gas Use in the Medium and Heavy-Duty Transportation Sector.

Following consultations with the natural gas vehicle industry and fleet users, this updated report builds on a 2010 report, Natural Gas Use in the Transportation Sector.

The revised report incorporates updated information on natural gas supply including: a section on renewable natural gas; information on technical developments as well as codes and standards developments; and examples of significant fleet successes to date.

Among other observations, the report says that natural gas as a transportation fuel can reduce emissions, with up to 25 per cent GHG emissions reduction potential, depending on the vehicle and fueling system.

NGV use by refuse, transit and trucking firms, as well as the use of natural gas by marine carriers, illustrates the market’s readiness for the technology in Canada and the potential for cost and emission savings, the report says.

Canadian natural gas costs remain stable, the report says, and high-fuel usage fleets can see cost savings.

Additional regulatory measures favour the emissions reductions associated with NGVs. As well, abundant supply of geological natural gas and the growing supply of RNG suggest price stability and enhanced lifecycle emission reductions.

Canadian transportation fleets are using more extensive OEM engine offerings and specialty off-road and marine engines, the report notes.

At the same time, fleets need more industry and government support to help them defray risks.

Toyota’s Mirai for Sale in BC starting in July

The Toyota Mirai is a zero-emission vehicle (ZEV) and emits only water vapor from its tailpipe.

ARI kicks off 2019 Canadian fleet forum series ARI has begun its 2019 Canadian Fleet Forums. The series provides information on best practices and examines how emerging business trends are impacting fleets. This year’s series began with the Toronto Fleet Forum on May 30 with events in Calgary, Montreal and Vancouver throughout the year.

The forums feature ARI leadership’s insight on it’s strategic priorities like its customer experience initiative. The company’s team of fleet experts will offer advice on some of today’s fleet management challenges. For more, visit ARIFleet.ca FM/SP SUPPLY PROFESSIONAL

2019-06-14 2:12 PM

ONLY THE BEST

FOR YOUR BUSINESS.

IMAGE: TOYOTA

When it comes to building your fleet, trust Ford Fleet. With the support of dedicated Fleet professionals and an extensive national dealer network, our experts will be by your side before, during and after sale, offering vehicle advice, plus a nationwide network of Ford-approved upfitters and modifiers.

We’re driven to make managing your fleet easier, because our ultimate goal is to make your business the best it can be.

2019 TRANSIT CONNECT 2019 F-150 2019 SUPER DUTY

2019 TRANSIT

FLEET.FORD.CA ©2019 Ford Motor Company of Canada, Limited. All rights reserved.

Supply Professional_June2019.indd 25

2019-06-14 2:12 PM

Fleet Management

By Michael Power

1.

Technology and future trends highlighted at the 2019 NAFA Institute & Expo in Louisville, KY North America’s largest show for fleet professionals, NAFA’s Institute & Expo (I&E), drew a large crowd to Louisville, Kentucky from April 14-18. More than 1,000 fleet practitioners from across the continent gathered to network, peruse the latest services and products, get training, attend education sessions and more. Corporate, government, law enforcement and other fleet professionals were represented at the event.

Thematically, this year’s I&E focused largely on advancing trends within the fleet and automotive world, including autonomous 26 JUNE 2019

Supply Professional_June2019.indd 26

vehicles, impending skills in the field and the future of mobility.

This year, the event drew a number of firsts for attendees from the fleet industry. For example, the inaugural I&E “Mobility Day” featured several education sessions built around the theme of moving people and materials more efficiently.

Mobility Day, held on the final day of the conference, featured mobility expert Lukas Neckermann’s keynote on major industry trends.

The I&E also included the new CAFM U certification study program. Named for the Certified Automotive Fleet Management

designation, the university style event helps jumpstart fleet careers through six days of boot camp classes focused on fleet best practices, study tips, networking events and testing. Over 80 participants took part.

This I&E this year also featured the first-ever training track specifically for fleet service and product providers. The track featured six educational sessions including fleet decision-making, customer retention, RFP responses and presentations, service level agreements and more. The 2019 I&E also featured stellar presentations from futurist

Chris Riddell, Tom Johnson’s rankings of the 100 Best Fleets of the year, and an all-star fleet management company executive panel.

“This year’s redesigned I&E brought new layers of training and networking to the fleet industry,” said Phillip E. Russo, NAFA’s chief executive officer. “These ‘firsts’ were developed specifically to add more value to the overall I&E experience, and give our industry a broader variety of opportunities to build their industry knowledge and contacts, while advancing in the industry.”

Also new this year was the format of the annual FLEXY Awards, sponsored by Wheels Inc., which honours the achievements of North America’s fleet profession.

This year, four fleet professionals received the award during a breakfast panel: Dave Dahn, CAFM, corporate fleet program manager, Erie Insurance Group; Mario Guzman, CAFM, director FM/SP SUPPLY PROFESSIONAL

2019-06-14 2:12 PM

IMAGES: COURTESY OF NAFA

Fleet’s Mobile Future

1. This year’s I&E featured a Q&A with past and present Flexy Award winners. From left: moderator Matthew Betz, I&E curriculum content committee chair; Mario Guzman, City of West Palm Beach, FL; Robert Stine, Hillsborough County, FL; Dave Dahn, Erie Insurance Group; and Adam Orth, General Mills.

2. Kentucky Derby buglar Steve Buttleman opens the show floor.

3. NAFA’s chief executive officer, Phillip E. Russo.

4. The FMC executive panel. From left: Tom Callahan, president, Donlen; Jay Forbes, CEO, Element Fleet Management; Bob White, president, ARI; Matt Dyer, president and CEO, LeasePlan.

Daniel Z. Frank, president and CEO, Wheels Inc., also sat on the panel.

3.

2. of support services, City of West Palm Beach, Fla.; and Robert Stine, CAFM, director-fleet management department, Hillsborough County, Fla. The fourth FLEXY winner, Jodi Weber, Americas fleet manager for Johnson Controls International, couldn’t attend.

Instead, Adam Orth, CAFM, fleet services manager, General Mills, participated in the panel as a special guest.

IMAGES: COURTESY OF NAFA

Canadian content

Each year, a portion of the event focuses on Canadian issues, and this year’s conference was no exception. Huw Williams, president of Ottawa-based Impact Public Affairs, gave a Canadian legislative update during an education session on the conference’s first day. During the session, Williams discussed trade and automotive tariffs, noting that trade between the US and Canada reached $673 billion in 2017. In fact, Williams noted, Canada is the largest trading partner for many US states. “It’s a pretty big economic impact going forward,” he said.

At the G7 meeting in 2018, US President Donald Trump said he may impose a tariff on auto parts, Williams told the audience.

While President Trump was talked down from imposing the tariff, a 25 per cent increase would be

4.

“Carmaggedon” for the Canadian fleet industry, he noted. NAFA has let the Canadian government know how big a problem that would be, Williams said.

Williams updated the audience on the federal government’s $435-million program for zero-emission vehicles, noting that the plan covers both electric vehicles and hybrid cars. As part of those plans, the government is investing $300 million over three years in a new federal purchase incentive for eligible zero-emission vehicles. Canadians who buy or lease an eligible battery electric,

This year’s redesigned I&E brought new layers of training and networking to the fleet industry.

hydrogen fuel cell or longer-range, plug-in hybrid vehicle, will get an incentive of $5,000. A shorter-range plug-in hybrid will yield a $2,500 incentive.

“It’s good news overall that fleets are going to be able to take advantage of the rebates,” he said.

Meanwhile, British Columbia introduced a zero-emissions vehicle (ZEV) mandate stating that all vehicles must be ZEV by 2040, Williams noted. Quebec also has a mandate in place. Some European countries are doing the same thing, while across Canada there are varying frameworks of readiness regarding how vehicles are powered. If the country went 100 per cent ZEV tomorrow, the hydroelectric grid couldn’t handle the strain, Williams said.

Williams also addressed the country’s new carbon tax, which he said had launched in Ontario, Manitoba, Saskatchewan and New Brunswick. The tax increases gas prices by 4.4 cents, going up to 11 cents in 2022, he said, but the federal government plans to provide a rebate directly to people in these provinces to offset the fuel price increase. Revenue from the carbon tax will also go to fund green energy programs. At the same time, Williams said, there has been political pushback among some provinces and the Ontario

and Saskatchewan governments are taking Ottawa to court over the new tax.

“This is an issue that’s highly political depending on where you are in the country,” he noted.

Williams also addressed Canada’s legalization of cannabis, which remains an emerging issue for Canadian fleet operators.

Currently, only smokable cannabis products are legal and people are struggling with the rules surrounding the drug. While some organizations don’t want to jump into making cannabis policy just yet, others are, Williams noted. The West Vancouver Police Department is an example—the department’s policy states that while officers must show up for work unimpaired, they can consume cannabis up to 24 hours before beginning work.

While they won’t be subjected to random drug testing, they will be asked to take a drug test if their supervisor believes they are under the influence.

NAFA plans to watch the impaired driving portion of the cannabis policy debate and will keep members updated, Williams said.

Fleet and procurement

The close relationship between procurement and fleet management continues in many organizations, and another education session— FLEET MANAGEMENT SUPPLYPRO.CA 27

Supply Professional_June2019.indd 27

2019-06-14 2:12 PM

entitled How Fleet Management Links With Procurement—at the conference highlighted that relationship. Over the past 10 years, it’s been common to see fleet employees leave an organization and not be replaced, said David Hayward, regional manager, fleet operations at Herc Rentals. Or, he added, organizations sometimes move the fleet function to procurement. While not ideal, this situation can work to realize savings and help manage the fleet, he noted.

In the past, Hayward said, he’d have a procurement manager assigned to their account. But that manager often didn’t know about fleet and Hayward would have to teach him, he said. The manager would perform the RFP and then move on. But that began to change with the introduction of category management.

It helps when fleet managers know with whom they’re dealing within the procurement department, said fellow panelist Jim Barnes, managing director at the Institute for Supply Management (ISM).

A complaint he hears often about procurement professionals is that they tend to be overly tactical, Barnes noted. But they’re often more strategic once they learn more about the category they’re dealing with. Barnes also cited an in-progress study by ISM that showed 19 per cent of fleet managers felt that procurement dealt with them in a tactical manner, while 26 per cent said procurement dealt with them in a strategic manner.

An older style of purchasing would not have encouraged much consultation with fleet managers to ensure that the organization’s needs were being met, said Hayward.

Fortunately, that kind of consultation often takes place now. As well, while supporting the RFP and purchasing process, procurement also ensures that fiscal responsibilities are met. Other stakeholders involved in the process include drivers, the legal department, risk management, HR and the health and safety department, he said.

In discussing procurement’s involvement with fleet, Barnes again referenced the ISM survey.

When asked the degree to which procurement selects fleet suppliers, 28 JUNE 2019

Supply Professional_June2019.indd 28

Organizations sometimes move the fleet function to procurement.

While not ideal, this situation can work to realize savings and help manage the fleet.

32 per cent said that they don’t select them. Meanwhile, 27 per cent said procurement selects some suppliers, while 24 per cent said they select most suppliers. As well, 17 per cent said the department selects all suppliers.

The best relationship between fleet management and procurement is a collaborative one, Hayward said, in which procurement is involved throughout the fleet program in partnership with the fleet manager. The reality can be different, he added, in which the fleet manager can end up absorbed into the procurement department. “It works, but it’s not ideal,” he said.

At its essence, Hayward stressed, the relationship between procurement and fleet management should be a partnership. “If you go in with an adversarial attitude you won’t be successful,” he said.

Executive panel

As in the past, NAFA’s I&E this year featured a panel of leaders of fleet management companies discuss what they see coming in the future for the field. Recently, fleet touches many areas of an organization, said panelist Dan Frank, president and CEO of Wheel Inc. As mobility and technology evolve,

fleet will touch other areas as well, he said. During the 2008 financial crisis, fleets focused largely on cost, Frank noted. But fleets can impact an organization’s revenue side as well. Work to translate fleet operations into business value by becoming more productivity and revenue driven, he advised, rather than focusing on savings alone.

When asked about what skills their companies are recruiting for, Donlen’s president, Tom Callahan, said that a key attribute—especially when fleet isn’t well understood— is the ability to write and promote a business case. It’s also useful to learn process tools, although he warned not to overemphasize such tools. “Six Sigma can take on a life of its own,” he said.

Be comfortable with ambiguity, he advised, and have the confidence to make judgement calls with limited information. As well, the ability to bear bad news at appropriate times is useful.

For fleet managers to make the best possible internal case for their departments, Element Fleet Management’s CEO Jay Forbes encouraged them to promote their strategic relevance. Let the organization know what the fleet department is doing to impact safety, sustainability, cost control and other areas.

Addressing the role of technology in their industries, ARI president Bob White said that fleet management companies are, in a sense, also tech companies. But there’s been a shift in the way innovation affects technology in the business-to-business world, White noted. People now expect the same technology experience in business as they get in the consumer world. Expectations surrounding service have also changed due to online shopping giant Amazon, ride-hailing and other innovations, he said, and the fleet industry must learn to adapt.

At the same time, expectations from drivers have changed, said Matt Dyer, president and CEO of LeasePlan USA. Fleet companies must support drivers in terms of safety, technology adoption and other areas. Rising accident rates, distracted driving and other topics are growing concerns, so fleet man-

agement companies must use data in addressing these areas. “This all defines how we are serving our customers,” he said.

Several education sessions at the conference offered a look at trends shaping the future of fleet management and mobility alike. In one such session, entitled Can Level 4 Autonomous Vehicles Work for your Organization Today?, Tim Schock of autonomous shuttles company Navya, noted that the organization already had 115 vehicles in operation around the world.

Use cases include theme parks, healthcare facilities, airports and industrial sites. “This is here,” he told the audience.

Schock also described Navya’s shuttle, which is a low-speed 11-seater vehicle suited in high density areas. He noted the unique look of the vehicle, which he credited to the company’s desire not to be a transportation option of last resort.

And while the vehicles haven’t deployed on city streets without a driver or attendant, that’s due to regulations, Schock said. An attendant is present as an extra layer of safety, and while Navya’s vehicle doesn’t have pedals or a steering wheel, the driver can still take control of the vehicle if necessary.

The vehicles use a closed system that doesn’t allow remote control due to cybersecurity concerns, Schock said.

When asked about the general applications for such vehicles, Chris Keefe, VP of Autonomous Programs at Ottawa-based Aurrigo, noted that dense areas offer an easier way to move people around.

Such vehicles can be implemented in many ways, for example creating a way to get around for people with mobility issues. Keefe described a four-seat vehicle that Aurrigo produces, although he stressed that the company has branched out since it’s been in the field for so long.

As always, NAFA’s Institute & Expo offered a diverse source of insights and best practices on how to deal with the issues that fleet managers face today, along with the myriad challenges they are likely to face going forward.

The conference returns April 6-8 2020 in Indianapolis, Ind. FM/SP FM/SP SUPPLY PROFESSIONAL

2019-06-14 2:12 PM

2

NO MATTER HOW YOU SEE IT, THE NUMBERS ARE ALWAYS RIGHT.

TOP SAFETY PICK+

1

Legacy, Crosstrek, Outback, Impreza: on models with EyeSight® & specific headlights.

Ascent: on models with specific headlights.

2019 ASCENT

2019 LEGACY

2019 CROSSTREK

SUBARU

BEST RESALE VALUE OF ALL MAINSTREAM BRANDS

2

5 years in a row

2019 OUTBACK

98.3% of our vehicles sold in Canada over the last 10 years are still on the road today.

2019 IMPREZA

3

And for the 5th consecutive year, ALG named Subaru as the Top Mainstream Brand for Residual Value.

The numbers speak for themselves. They are proof of Subaru’s reliability.

We know there’s a lot to consider when looking for a fleet vehicle to fit your company’s needs. So add low cost of ownership, responsible engineering, legendary safety and capability features into the equation.

You’ll find out that Subaru is always a great solution.

Visit us at subarufleet.ca 1. Safety ratings are awarded by the Insurance Institute for Highway Safety (IIHS). Please visit www.iihs.org for testing methods. 2. ALG named Subaru the Top Mainstream Brand for Residual Value in the 2019 Canadian Residual Value Awards. ALG is the benchmark for residual value projections in North America, publishing residual values for all vehicles in the United States and Canada. For more information, visit www.alg.com. 3. Based on IHS Markit Vehicles in Operation as of June 30, 2018 for Model Years 2009 to 2018 vs Total New Registrations of those vehicles.

Supply Professional_June2019.indd 29

2019-06-17 9:38 AM

Fleet Management

By Josh Ferguson

Preparing for the shift

Fleets of the Future

Fleet cards bridge the gap between data and fleet managers The fleet industry is amid an information overload. The average modern car possesses over 200 connected data points—and with so much data at our fingertips, knowing what information to tap into can be overwhelming.

But with challenge comes the opportunity for fleet managers to harness data in order to improve their fleet’s efficiency, productivity and protect against fraudulent activity; resulting in a positive impact to the bottom line.

While the fleet cards that drivers use at the pump today have functioned without much change for many years, the data we are able to unlock within them has advanced dramatically and provides a major competitive advantage to businesses committed to capturing the insights they provide. Fleet cards bridge the connection between data and fleet managers to facilitate the proactive identification of opportunities for efficiency in real time.

Keys to unlocking data

Below are just a few features that fleet cards enable for fleet managers to help them stay on top of the quickly evolving future of the fleet industry.

Security: Fleet managers can access precise information on driver mileage and enhanced level 30 JUNE 2019

Supply Professional_June2019.indd 30

Josh Ferguson is national director, Shell Fleet Solutions, Canada.

3 data that will tell them exactly who bought what and where, which in return can reduce fraud. Along with the cost-savings provided by the fleet card, administrative costs are significantly reduced because managers do not need to review individual receipts as the data is available through an online card management portal. In addition, using driver IDs or PINs means there’s less chance a card can be compromised but should a card ever be lost or stolen, the company can immediately block that card in real time, reducing exposure.

Insight: Data can be customizable and provide key data points on the health of the fleet, mileage and vehicle utilization. While fuel is a major expense, the depreciation and maintenance costs collectively

are the biggest expenses for fleets.

Technology places fleet cards at the forefront of insight as it helps to ease the steep depreciation of the fleet by providing awareness to fuel inefficiencies and maintenance.

Control: The ability for fleet managers to restrict or allow spending in alignment with company policies helps to minimize fraud both internally and externally to the fleet. Managers can identify fuel consumption of a vehicle and, based on those results, set maximum fuel limits per day, week or month. Restricting purchases to only be used for fuel or vehicle maintenance helps ensure the fleet card is not used for personal purchases.

Access: Some fleet cards are accepted at most fuelling stations or maintenance locations, allowing all the fleet purchases and data to be consolidated through a single information source.

The recent circulation of Driven by Data: Managing Fleet Information Overload report by Shell Fleet Solutions narrated that the fleet industry is lagging behind other industries in unlocking the full benefits of big data. Fleet cards are central to a fleet’s operations and the key to unlocking any fleet’s potential for future integration with telematics and the highly connected vehicles of the future.

“To keep their fleet running at peak efficiency and with the best possible balance of cost and performance, it is essential that fleet managers hone their data science and analytical skills” – Parminder Kohli, General Manager, Business Development, Marketing and Operations, Shell Fleet Solutions.

As pressure for efficiencies on fleets continue to heighten, the onus will be on fleet managers to lead the adoption of new technology and maximization of data. With skills such as data thinking, software integration, data-informed driver management, data privacy insights and performance optimization, fleet managers will help distinguish themselves in an ever-changing technological age.

Shell Fleet Solutions plays a key role in supporting managers with large and small fleets with two different fleet cards. The Shell Fleet Card can be used at over 1,350 Shell and Flying J locations across Canada. It provides fleet managers with a dedicated Shell Fleet Solutions account manager to provide support from the implementation stage to on-going support with identifying inefficiencies.

The Shell Fleet Navigator Card is also accepted at any fuel and maintenance location where MasterCard is accepted. It offers cost savings with 10 per cent discounts on products and services purchased at Jiffy Lube locations, and 24/7 emergency roadside assistance services through Road Canada at reduced costs.

Analysing the vast number of data points that exist can be challenging, but by knowing what to look for, digging in a little deeper for tangible insights and making small changes to the way information is utilized, fleet managers can have a long-term impact on fleet performance.

Leveraging the power and data that exists within fleet cards is a great first step as we move our fleets into the future. FM/SP FM/SP SUPPLY PROFESSIONAL

2019-06-14 2:12 PM

MITBRD1

This is a green SUV.

This is a green SUV.

This is a green SUV.

This is a green SUV.

The 2020 Outlander Plug-in Hybrid Electric Vehicle.

Easy on the environment and your budget.

Increase your fleet’s efficiency with the Outlander PHEV. Charge it from any household outlet, enjoy 3 innovative driving modes and get superior handling for any road with its advanced Super All-Wheel Control system.

Visit mitsubishi-motors.ca/fleet to learn more about adding an Outlander PHEV to your fleet. ** Whichever comes first. Regular maintenance not included. See dealer or mitsubishi-motors.ca for warranty terms, restrictions and details. Some conditions apply.

Supply Professional_June2019.indd 31 MITBRD19046_2019_Mitsubishi_Q1_Fleet_9x11_SupplyProfessional_E 3.indd 1

2019-06-14 3:23 2:12PM PM 2019-05-24

Fleet Management

By Kara Kuryllowicz

Thinking Global Data and technology can make a difference when deploying fleets across borders Global fleet management companies, technology and access to real-time data can provide insights on trends and issues pertaining to vocational fleets, whether they run across provincial and state lines or internationally, and even the vehicles themselves, the products they carry and the services they perform.

“Think global and deploy local—insight into all of these factors is critically important for fleets to be efficient and productive and more importantly, SAFE!” says Sherry Calkins, associate vice-president, strategic partners, Geotab Inc., which manufactures and supplies GPS fleet management solutions to local and Fortune 500 companies in more than 100 countries on seven continents. “Technology will play a huge role in our ability to efficiently, safely and sustainably transport goods and people.”

The worldwide trend to corporate consolidation and globalization has increased demand for cross-border transportation and since fleet operations touch virtually every part of every business, countless departments and employees need information: operations, dispatch, legal, IT, security, human resources, procurement, training, compliance, environmental health and safety, unions and workers councils and more.

“Knowledge and information— 32 JUNE 2019

Supply Professional_June2019.indd 32

what a business doesn’t know presents the greatest risks,” says Rob Hill, multinational business development liaison, ARI, which provides fleet management services and consulting globally.

“If you have visibility and transparency, you have the information you need to control everything from cost to your fleet’s ability to meet the needs of internal and external customers.”

Technology is the key to gathering and analyzing information, but integrated systems can be a challenge, since most systems run on closed-end not open platforms, which means data can’t be transferred in or out. Open-platform telematics, such as Geotab’s solutions, can be integrated with partners, such as Ford, GM OnStar, Navistar, Cummins, Seeing Machines, Nauto, ActSoft and AssetWorks, with all data brought into one view for visibility, reporting and analytics. As well, not every country on every continent has the connectivity and infrastructure required to support technology solutions such as telematics.

“International fleets need secure, scalable solutions to provide consistent visibility and vehicle data to manage logistics, routing and asset uptime while ensuring compliance with an extraordinarily diverse range of regulations country to country,” says Calkins. “Increasingly,

If you have visibility and transparency, you have the information you need to control everything from cost to your fleet’s ability to meet the needs of internal and external customers.

trucking fleets need to integrate information, from freight and warehousing information to freight matching and digital on-demand freight in a complex delivery and transportation world whose future depends on integrated data and systems.”

Think regionally

When multinationals lack fleet expertise, local or global, fleet management companies and their networks provide access to technology partners and local representatives that understand regional regulatory priorities, cultural challenges, and in specific markets, differences in vehicle and driver availability, training and safety.

“Be aware of local regulations and adapt your fleet and processes to ensure compliance,” says Hill.

“For organizations that operate on a global scale, it’s extremely difficult to implement a onesize-fits-all fleet strategy that’s effective for each region in which you operate. The vehicles, laws and regulations, and operating parameters vary so significantly across each country, often even by state or province, that regional expertise is vital to developing a successful fleet strategy.”

Whether you call it respect, diplomacy or basic common sense, experts offer to share best practices that have proven effective in other countries rather than impose those best practices. Very FM/SP SUPPLY PROFESSIONAL

2019-06-14 2:12 PM

Global vocational fleet management strategies: 1 Identify a consistent global safety program

diverse countries may share similar problems and while best practices developed elsewhere are likely to work in most countries, that’s not always the case.

“If you’re told a best practice won’t work in a particular area, you need to find out why because an issue with regulations or product or service availability might be overcome with nuanced changes,” says Hill.

Vocational fleets that include highly specialized vehicles, for example, a cement mixer, a refrigerated truck, a cherry picker or a vehicle with generator, delivering time-sensitive products and services, represent a significant cost. Vehicle availability may also be an issue, for example, pick-up trucks which are ubiquitous in North America, are far less common in Europe. Additional upfitting and customization can double and triple the initial cost.

These specialized vehicles are also more complex to maintain and repair and require highly trained drivers.

“No two configurations are the same and they can vary greatly from manufacturer to manufacturer,” says Calkins.

The safety features that are typically standard equipment in North America are often not available in certain countries because OEMs don’t offer them and they’re not mandated by government. Likewise, road safety is often lacking in certain regions with less stringent regulations, and basic infrastructure such as wellmaintained roads, proper lanes, traffic lights and signage.

While vocational fleets are inherently more complex than your average car fleet, the overriding premise is incredibly simple: What does the fleet and this specific vehicle need to do to

meet our company’s core business objectives?

“One size fits all never works— start with the premise that it has to be fit for the purpose, then consider a particular country or geographic regions’ unique requirements,” says Hill.

2 Leverage telematics and data analytics to ensure visibility and transparency 3 Consider consolidated systems and open platforms as a value chain pre-requisite 4 See fleet as a revenue generator not a cost centre 5 Leverage predictive analytics, machine learning and artificial intelligence to transition to predictive from reaction management

Know the job

Whether companies manage their vocational fleets in-house or outsource them to fleet experts such as ARI, they need to know what their employees and customers need the vehicles to do. For example, a generator truck may be required to provide power in remote oilfield locations or a boom truck might be needed to lift heavy, sometimes unconventionally shaped objects from location to location. Beyond these capabilities, vehicles likely need to comply with weight, height and width restrictions, emissions standards and withstand or adapt to unique, or harsh environmental conditions such as extreme heat or cold, or dust.

“The initial focus must be on fit for purpose,” says Hill. “Fleets often end up with the wrong vehicles, because they didn’t ask the questions or ask the right questions.”

Generally, Canada, the US and many European nations are extraordinarily well-developed, but elsewhere, the questions will change. A telecommunications fleet in Bhutan may need to carry different parts and equipment than comparable service trucks in more developed nations.

“We ask questions that will allow us to walk away knowing the exact job function of every vehicle in each country in which the fleet operates,” says Hill.

Certain basic questions will remain the same, but a company

that operates in 45 countries will need to tailor the questions based on the country’s level of sophistication pertaining to corporate culture, environmental sustainability, infrastructure, technology, telephony and more.

In certain parts of Europe and North America, corporate culture and emissions standards combined ensure CO2 emissions are a muchdiscussed fleet topic. Emissions and congestion in city centres around the world are resulting in regulatory restrictions that block off certain streets or routes and allow deliveries and trucks only at certain times of day. More broadly, regulations may apply to the vehicles and their engines.

“The last-mile delivery is really the challenging one and companies like Amazon, DHL, UPS and FedEx are finding ways to better comply with that,” says Calkins.

A smaller vehicle and engine will reduce the carbon footprint and fuel consumption, but it’s a viable option only if they can still do their job, for example capably carrying or towing half a tonne of equipment. Under-equipping or over-equipping vehicles is a poor use of capital and other resources and negatively affects fleet performance. Fleet managers must keep in mind that corporate sustainability and the companies’ responsibilities to shareholders and customers need to come first.

Driver shortages are a big

concern for every business right now and companies are relying on cameras, such as the Geotab GO device to monitor driver behaviour and identify training needs.

“Telematics and analytics offer so many tangible benefits, but very strict privacy laws, for example in Germany, can restrict or prohibit their use,” says Calkins. “Fleets need to be very aware of the data privacy regulations which vary greatly nation to nation and of the legal resources required to address related issues.” FM/SP

FLEET MANAGEMENT SUPPLYPRO.CA 33

Supply Professional_June2019.indd 33

2019-06-14 2:12 PM

Fleet Management

This Titan XD rides on a heavy-half chassis and is powered by an all-new mid-range diesel engine.

By Howard J Elmer

Heavy Half Ton

The Nissan Titan XD is worth a look Nissan built the Titan XD for a very specific marketing purpose. Its size and powertrain were designed to fit into a product slot that Nissan saw as being under-served in the pickup market. Hoping to fill that slot, they created a “heavy half-ton”.

This Titan XD rides on a heavyhalf chassis, powered by an all-new mid-range diesel engine; it’s pegged to tow over 12,000lbs. That number slides it comfortably in between the half-ton and three-quarter ton capabilities of its competitors. This is the market that Nissan saw and is working to make a dent in.

Launched as a 2016 the XD is building sales. And while the going has been slow the XD is worth cross-shopping because of its unique market placement.

The other unique feature of the XD is the engine. It’s a 5.0L displacement twin-turbo-diesel engine built by Cummins. The engine is not available anywhere else. It pumps out 310hp and 555lbs-ft of torque. The engine is smaller than 34 JUNE 2019

Supply Professional_June2019.indd 34

the more common 6.7L Cummins that the Heavy-Duty Ram uses, yet it’s larger than the 3L EcoDiesel in the Ram 1500 or the new 3L’s in the Ford and Chevy. Now there is a gas engine available in the truck, but this mid-size diesel is what’s putting the XD on the map.

The new Titan is built on a 151-inch steel ladder frame with traditional leaf spring suspension in the rear and double wishbone front suspension. The spacious Crew Cab is offered with a 6.5-ft bed which also features a factory installed gooseneck hitch. A fifth-wheel hitch that fits the gooseneck holes is also offered. These available hitches show that the XD is built to haul. Inside, I found an integrated trailer brake controller, Tow/Haul mode with downhill speed control, a rear-view seven-inch colour monitor that displays a clear image for hooking up trailers (either bumper or in-bed). It also has a bird’s eye view feature for tight spots.

Other driving aids include TSC

(Trailer Sway Control) and a unique trailer light check feature. Using the key fob, you can stand at the rear of the trailer and have the lights cycle through, running, signals and brakes, without anyone in the cab.

The standard mirrors pull out for towing and they are also heated.

These features make towing a trailer a simple, one-person job.

Everything worked well during my test drive, including the downhill speed control that uses the sixspeed Aisin transmission to hold the load on long slopes. However, I do think Nissan missed a chance here to throw a diesel exhaust brake into the mix. Perhaps next time around.

As for interior appointments, Nissan offers five trim levels and the top-of-the line one (Platinum Resource) is as sumptuous and well appointed as any other expensive truck on the market.

When it comes to the interior environment it drives quietly and confidently and with 16 cupholders ensures no one will ever go thirsty.

As for traction, in Canada, the Titan will only be offered with 4WD. An optional electronic locking rear differential is available. There is also an off-road package to order.

The cargo carrying ability of the bed was obviously another focus of the design team with items like LED bed rail lighting and tailgate illumination included. Nissan has also included its current Utili-track system that offers adjustable aluminum-alloy tie-down cleats on the side and on the floor of the bed. One surprise was a 120V utility power point outlet inside the bed—it offers up to 400 watts of AC power.

Nissan spent a lot of money designing, engineering and bringing this truck to market only to find that brand loyalty in the pickup segment makes any new truck a tough sell. However, for now, that means that there are deals to be had and while the truck may be unfamiliar to traditional Big Three truck buyers it is definitely worth a look. FM/SP FM/SP SUPPLY PROFESSIONAL

2019-06-14 2:12 PM

Supply Professional_June2019.indd 35

2019-06-14 2:12 PM

Fleet Management

By Stephanie Wallcraft

More value than meets the eye The Subaru Impreza With its absence of a bargain basement entry-level trim, the Subaru Impreza’s starting price of $22,024 including delivery charges—or $23,324 when the five-speed manual transmission is dropped for the continuously variable transmission—might lead buyers to shy away from it for business applications. But in certain contexts, this compact car can provide more value than meets the eye.

First and foremost: all-wheel drive is standard equipment. The only other compact car on the market in Canada that offers allwheel drive at all is the new 2019 Mazda3, for which you’ll need to spend $27,826 to equip it on a 36 JUNE 2019

Supply Professional_June2019.indd 36

GS model. So, if a car will often be operated in adverse conditions but its dimensions aren’t as high a priority, the Impreza comes off looking like a comparative bargain.

A single engine and transmission pairing is available to go with it, which is more common today in small cars than it once was—especially in the face of discontinued products like the Chevrolet Cruze, Ford Focus and Volkswagen Jetta TDI. Here, a 2.0-litre naturally aspirated four-cylinder, laid out in Subaru’s customary horizontally opposed configuration, produces 152hp at 6,000rpm and 145lb-ft of torque at 4,000rpm. That’s a better torque figure than a base Honda

Civic Sedan, Toyota Corolla, and Hyundai Elantra, three of the best-selling cars in the segment.

On the other hand, the delivery of that power is mitigated somewhat by the Impreza’s CVT, which feels tuned more to aid in fuel economy in the face of the higher-powered engine and allwheel drive. All told, the Impreza’s fuel economy as rated by Natural Resources Canada measures up at 8.3 litres per 100 kilometres in city driving, 6.4 on the highway, and 7.5 combined. This doesn’t measure up all that unfavourably to its competition on paper: the Honda Civic Sedan clocks in at 7.1 combined, as does the base

model in the new Toyota Corolla, while the entry-level Elantra gets 7.4. However, my real-world experience over a week of testing— which, to be fair, leaned far more toward city driving than highway cruising, although I wasn’t aggressive on the throttle—saw my fuel economy finish at a less-than-impressive 10.8L per 100km.

At the corners, 16-inch steel wheels are standard while the Touring trim upgrades to alloys.

Sport models are equipped with 17-inch alloy wheels, and SportTech equipped vehicles receive the largest-available 18-inch alloy wheels shown on this test unit.

The Impreza’s interior gives the FM/SP SUPPLY PROFESSIONAL

2019-06-14 2:12 PM

1. impression of quality, at least in this top-of-the-line Sport-Tech with EyeSight trim ($31,820 as tested), which includes leather upholstery with contrast stitching. For its segment, its back seat provides a notably comfortable amount of space. Despite the many black surfaces, one benefit that Subaru consistently provides is tall windows, which not only brighten the cabin considerably but also contribute to excellent all-around visibility.

A power sunroof is also integrated here, which is standard equipment from the Sport trim.

Safety systems that are standard equipment on other vehicles—such as Toyota’s Safety Sense package that adds pre-collision braking with pedestrian detection, dynamic cruise control, lane departure warning and automatic high beams to a base Corolla—require an extra charge on the Impreza. Subaru’s EyeSight suite of technologies, which itself includes pre-collision braking, adaptive cruise control, lane keep assist and departure warning and Subaru’s unique lead vehicle start alert, and is also packaged with high beam assist and reverse automatic braking, must

be selected as a package (pricing varies) and is only available with the premium Sport and Sport-Tech models. Subaru’s new DriverFocus feature, which monitors driver behaviour to ensure consistent attention to the road, is not available.

In terms of heated comfort features, heated and power-folding exterior mirrors are standard equipment, but adding heated front seats requires investing in the second-tier Touring trim. A heated steering wheel is available on the SportTech trim only, and heated rear seats are not available.

One of the most significant improvements in Subaru products over the past couple of years is in its infotainment system. Both the base 6.5-inch touchscreen and the premium 8-inch system benefit from clearer graphics and better functionality. Apple CarPlay and Android Auto compatibility comes as standard, as does the fast USB port that’s necessary to run them.

The premium system equipped in the Sport-Tech model tested here also includes on-board navigation and SMS functionality as well as an extra forward USB port. The one

disadvantage of the new design is that any adjustment of the volume briefly takes over the entire display, a detail that may grate on the impatient.

The Impreza may not have the lowest starting price on the market, but when there’s a case to be made for investing in affordable all-wheel drive—and if there’s anywhere that’s likely to happen, it’s in Canada—it’s a compact car well worth considering. FM/SP

2.

1. Both the base 6.5-inch touchscreen and the premium 8-inch system benefit from clearer graphics and better functionality.

2. For its segment, its back seat provides a notably comfortable amount of space.

As Tested Price (incl. freight and PDI): Starts at $22,024; tested at $31,820 Engine: 2.0-litre horizontally opposed 4-cylinder Power: 152 hp; 145 lb-ft of torque at 4,000 rpm Transmission: CVT Rated Fuel Economy (L/100 km): City 8.3/Hwy 6.4 Observed Combined Fuel Economy (L/100 km): 10.8 FLEET MANAGEMENT SUPPLYPRO.CA 37

Supply Professional_June2019.indd 37

2019-06-14 2:12 PM

Fleet Management

By Kate Vigneau

A Matter of Policy

The why, what and how of fleet policies A basic tenet of fleet management is to have a policy framework, nested within the organization’s strategic plan, that supports the full range of fleet operations. It sounds simple and yet is the fundamental requirement of a fleet program that fleet managers struggle most with. Help has arrived, in terms of explaining the relationship between strategic planning and policies, the type of policy documents that should be mandatory and how to educate staff and enforce policies.

Strategic planning is a vital function of successful organizations and the resulting strategic plan should include a vision or outlook on what the organization wants to be and where the organization wants to be at a point three to five years in the future. The building blocks of a strategic plan can be summarized as follows: Purpose is the fundamental reason that an organization exists. For example, Google was founded to make it easier to find high-quality information on the web.

Values are the foundation on which an organization is built.

Values are a very personal thing as they will help define the culture of an organization. Take the example of Clif Bar, the values of which are: connect, organic, restore, ethical.

Vision statements also help to define an organization’s purpose by focusing on its goals and aspirations. Tesla’s visions statement 38 JUNE 2019

Supply Professional_June2019.indd 38

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

There are new products being released every year that increase safety and allow for less stress on the operators.

is “to create the most compelling car company of the 21st Century by driving the world’s transition to electric vehicles.”

Mission statements define the organization’s purpose and primary objectives. Starbuck’s mission is “to inspire and nurture the human spirit—one person, one cup and one neighbourhood at a time.”

Goals establish where you intend to go and help define how you will know when you get there.

Objectives are the specific steps you and your company need to take in order to reach each of your goals.

Strategies are why you are doing something.

Tactics or action plans are the things you’ll do to accomplish the goal, meet the objective and fulfill the strategy.

Enter policy

Implementation of these action plans is where policies come in—they must be created in a way to support your action plans. The importance of policies that are well-conceived in support of not only the action plan but the overall strategies, goals and ultimately the very mission of the organization must not be underestimated. In practice, policy should serve as a facilitator for the execution of an organization’s mission, vision and organizational strategy and its commitment to delivering quality service.

NAFA Fleet Management Association defines policy as “the principles, rules and guidelines formulated or adopted by an organization to reach its long-term goals.” They are differentiated from procedures, which are the specific methods used to turn policies into action in the organization’s dayto-day operations. Simply put the policies and procedures of a fleet operation direct and guide the work of those who manage, deliver, support and use the organization’s vehicle services.

The various stakeholders in an organization have different policy needs and this is why a robust policy framework should consist of three documents: the fleet policy manual, driver handbook and service level agreements (SLAs).

Each of these references will contain different material (with some overlap) and is aimed at a different audience.

Fleet management manual: Describes the guiding principles, responsibilities and regulations regarding the use of fleet vehicles.

This reference is targeted for the use of the fleet manager, fleet staff and department heads. The main chapters of this manual should include governance and administration, vehicle acquisition, safety, vehicle operations, financial management, maintenance and remarketing.

Driver handbook: This provides drivers with their responsibilities, duties and accountabilities regarding the operation and maintenance of vehicles in their care. The handbook is for the use of the vehicle operator. It will contain sections on driver acknowledgement, permission to access motor vehicle records, daily responsibilities, what to do in the case of a crash and any other information you want drivers to have readily available.

Service level agreements: These detail the relationship expectations between fleet and their customers and is targeted at these two groups.

There should be a section of fleet responsibilities, user responsiFM/SP SUPPLY PROFESSIONAL

2019-06-14 2:12 PM

bilities, performance metrics and payment.

Even though content and format vary, the process for creating these references is the same.

1. Areas for policy development are identified 2. Staff or another group brainstorm the issues involved.

(Tip: focus on naming the issues; do not necessarily attempt to resolve the issues.)

3. One person prepares a draft.

(Tips: get copies of what others have written) 4. The draft is circulated for comment.

5. There may be a meeting to amend or revise the draft.

(Tip: where there are major differences of opinion, name them. Do not resolve them—the management committee might be good for a major policy debate).

6. The draft may be re-circulated for comment if necessary.

7. A cover sheet is prepared for the board/management committee identifying the steps that were used in the developing the draft policy.

8. Decision is made by the board/ management committee.

9. The policy is incorporated in the correct document.

(Tip: put in the date on which the policy was agreed as well as a

Policy

Our policy is to protect our employees and the communities where we conduct business from injury and property loss, and to reduce the cost of crashes involving company fleet vehicles. We require the full cooperation of every employee who drives a company vehicle to operate that vehicle safely, adhering to the procedures outlined in the driver handbook.”

Identify policy need

Management endorses

Include in manual

Brainstorm

Revise draft

Communicate

Prepare draft

Circulate draft

sunset clause or a statement saying the date on which the policy must be reviewed.)

10. The policy is communicated to relevant parties and, when necessary, training is provided to ensure all staff have the knowledge and skills to implement the policy.

The best policies in the world are useless if they are not communicated. The “Two Es” of successful policies are therefore education and enforcement. Fleet policies should be included in employee onboarding and be reviewed and acknowledged as understood before employees are assigned vehicles. Policy updates

should be communicated by emails, notices and in live updates whenever possible. Right from the start, all employees should understand the consequences of not following policy. Who enforces policy? Really it is the responsibility of every supervisor to ensure that policies are followed and to take swift corrective action when they are not. When policies are being followed, no external people need be involved. It is when a breach occurs that others, such as human resources (HR), legal and union representatives may be brought in. Every organization is slightly different, so it is important that policies document the specific

responsibilities of all stakeholders in the case of a policy breach.

Getting your fleet policies in order is not an easy task. It is a worthwhile exercise, however, that will save time in the long run and protect your organization from liability exposures. FM/SP

Procedures

To achieve the above, every driver is required to: 1. Maintain a valid driver’s license, 2. Undergo basic driver education and complete all other training mandated by the cain assigned vehicles according to established company maintenance standards, 4. Always operate the motor vehicle in a safe manner as required by regulations in the company’s driver handbook.

FLEET MANAGEMENT SUPPLYPRO.CA 39

Supply Professional_June2019.indd 39

2019-06-14 2:12 PM

BY MICHAEL POWER

PROCURECON CANADA CONFERENCE OFFERS PROCUREMENT SKILLS AND STRATEGIES, PLUS WINS FOR CANADA’S SECOND-ANNUAL EPIC AWARDS Roughly 200 procurement professionals attended the ProcureCon Canada Conference last April. The conference, held in Toronto, focuses on strategies, skills and techniques for modern procurement professionals.

The conference focused on professional and career development, procurement skills and technological developments shaping the field.

A keynote session featured Wael Safwat, head of procurement, North America, for Black & McDonald and Lori Benson, global procurement operations—procurement compliance, L&D, engagement and knowledge lead—business enablement, Ernst & Young. The two discussed leadership, career lessons and other topics.

Benson realized early that procurement was the career for her, she said. While she sometimes was unclear on the best action, she was able to find guidance. Also, leaving one’s comfort zone helps to expand horizons, she said.

Safwat counselled the audience to commit to themselves and their careers. “Your own brand 40 JUNE 2019

Supply Professional_June2019.indd 40

is really your main investment,” he said.

During a session about selecting a long-term technology partner, John Castelhano, AVP of strategic sourcing & procurement, North America, BGIS, discussed his team’s push to be seen as an effective, trusted partner. The difference between a technology vendor and partner is that a partner shares risk, Castelhano said. Organizations have transactional relationships with vendors, while there’s a shared stake with a technology partner.

Castelhano also touched on sustainability, noting the impact that procurement can have on corporate social responsibility. BGIS includes sustainability points in its RFPs, does industry consultations and reaches out to focus groups and community organizations on the topic.

Castelhano noted he wanted to change the perception of procurement towards a trusted advisor rather than an obstacle. “We want to be people who, if they have problems, they can come to us for help,” he said.

EUGENE FERNANDEZ—LIFETIME ACHIEVEMENT AWARD

From left: Michael Power, editor, Supply Professional; and Eugene Fernandez, strategic sourcing consultant, EF & Associates Ltd.

With a career spanning 54 years, Eugene Fernandez is currently strategic sourcing consultant with EF & Associates Limited. He graduated in mechanical engineering from the University of Bombay and holds a post-graduate diploma in industrial engineering.

After working in India for 15 years, Fernandez moved to Canada in 1979 and earned designations including the CPP, SCPM, CPM, CSMP, PMP and P. Log. He is a certified consultant in SAP, Oracle, and i2 Technologies.

Fernandez spent 10 years with IMB Global Business Services as a senior management consultant, working with organizations including Loblaw, Michaels Stores, Home Hardware, Nortel, Dell, United Rentals and others. He has SP SUPPLY PROFESSIONAL

2019-06-14 2:12 PM

IMAGES: COURTESY OF PROCURECON CANADA

EPIC INNOVATION

EPIC AWARDS ProcureCon Canada also featured the EPIC Awards, a program celebrating innovative and accomplished leaders in indirect procurement.

Nominations were accepted for individual and team innovation, rising star and lifetime achievement. The EPIC Awards were held in partnership between ProcureCon Canada and Supply Professional magazine.

mentored immigrants and served on the editorial board and as a speaker and panel member at ProcureCon Canada from 2014 to 2017, presented at SIG Group in Canada as well as the Canadian Trade and Wireless Conference.

Fernandez says he hopes to advance indirect procurement through the concept that all spend is addressable. Addressable spend can be determined through total operating expenses less wages and benefits.

“I was surprised but extremely happy to receive the Excellence in Purchasing Indirect Categories award as it was a professional endorsement to my decades of work on three continents adding over $2 billion in value to companies,” Fernandez says.

well as fleet, legal, engineering and business management, all of whom were instrumental in the success of this initiative,” he notes. “This initiative truly was a collective approach.”

By reducing cycle times and cost through modernized and streamlined practices, combined with best value procurement practices, fleet can better optimize asset life and reduce environmental impacts while providing improved customer service, Brierley notes.

The goal is to continue innovating to increase efficiencies while creating value for clients and taxpayers, he says.

thankful to my team, Mirza Ahmad and Sylvie Bouffard, as without their support, this award would not have been possible,” says Singh.

Singh says he will continue challenging himself on new and more complex projects while enhancing his skillset and adding value.

JOHN CASTELHANO—INNOVATOR AWARD

GURKIRAT SINGH—RISING STAR AWARD

CITY OF TORONTO—TEAM AWARD John Castelhano (right), AVP, strategic sourcing and procurement, North America, BGIS, accepts the Innovator of the Year Award from Supply Professional editor Michael Power.

IMAGES: COURTESY OF PROCURECON CANADA

From left: Alex Chard, ProcureCon Canada; Michael Power, editor, Supply Professional; Lloyd Brierley, general manager, fleet, City of Toronto; and Michael Pacholok, chief purchasing officer, City of Toronto.

The City of Toronto won the Team Innovation Award, with Lloyd Brierley, general manager, fleet, City of Toronto and Michael Pacholok, chief purchasing officer, City of Toronto, accepting. The city’s fleet services division and procurement and materials management division introduced an initiative to lower the cost of vehicles, equipment, supplies and services.

The initiative involved collaboration on local and provincial cooperative procurement and joining a North American Cooperative Procurement Alliance. An expanded network lets Toronto increase the diversity of suppliers and the number of bidders, Brierley says. Public cooperative procurement bodies must have strict rules that meet or exceed the City’s standards and show reduced procurement time/costs. This lets the City stretch the value of taxpayer dollars and has allowed fleet to improve its range of vehicles and equipment.

One benefit of being part of a larger organization is that the fleet and procurement teams have an extensive range of education and experience, says Brierley. “The depth of knowledge and skills includes a number of designated and experienced professionals in the procurement and supply chain field, as

From left: Michael Power, editor, Supply Professional; and Gurkirat Singh, strategic sourcing specialist at BGIS.

Gurkirat Singh, strategic sourcing specialist at BGIS, won the Rising Star Award. Singh did a multi-client formal procurement project: the company’s elevator program had several legacy contracts for eight clients, set to expire in 2018, and needed renewal. Most were based on an outdated scope of work not compliant with regulations. The project leveraged corporate volumes to create cost and service efficiencies, minimize client liability and find innovation.

Singh led a procurement project with annual category cost savings of over 15 per cent. The program was developed through the effort placed on data collection from eight suppliers.

Singh managed the equipment audit process, negotiating to ensure best value for clients. His innovative approach to negotiating financial penalties linked to KPIs will improve future supplier performance. He introduced an enhanced dashboard to improve performance monitoring; collected elevator inventory and consolidated suppliers from eight to two.

Another success was implementing technologies in the elevator maintenance program.

Singh graduated from the Schulich School of Business, York University in 2018, with a specialization in operations and supply chain.

He joined BGIS in 2017 as a summer intern and the company hired him after graduation.

“I’m proud of winning this award and, I am

John Castelhano of BGIS won the Innovator of the Year award and accepted it on behalf of his team. The strategic sourcing janitorial services team initiated an RFP program for traditional cleaning methods and process. This included continuous improvement strategies to optimize the janitorial RFP results. The program’s objectives included: collaborate with suppliers and internal stakeholders to identify risks and opportunities and focus on quality control and innovation; enhance the scope of work; test and demo new technologies to introduce autonomous cleaning and new mobile applications for KPI reporting and performance monitoring; include security audits and reporting; and leverage corporate volume and bargaining power.

BGIS partnered with suppliers to test janitorial equipment and applications. Suppliers acquired technologies and implemented new processes for the awarded locations. KPIs and reporting were developed and in 2018, strategic sourcing led the multi-client formal procurement janitorial initiative. This saw annual savings of over 18 per cent and introduced technological advancements without cost increases.

The team revised the scope of work, including financial penalties linked to KPIs and enhanced reporting and dashboard. Suppliers were also consolidated from 12 to three.

The team also includes Sylvie Bouffard, strategic sourcing director, Mirza Ahmad, senior manager, strategic sourcing and the janitorial category is managed by sourcing specialist Monruthai Sukthavorn. “This award is proof that we are executing our vision,” the team says. “We see this as a reward for our efforts to provide innovative and sustainable solutions to our clients.” SP SUPPLYPRO.CA 41

Supply Professional_June2019.indd 41

2019-06-14 3:51 PM

BY MICHAEL POWER

THE INTELLIGENT CHAIN HIGHLIGHTS FROM THE 2019 SCMA ANNUAL CONFERENCE AND AWARDS GALA Supply chain professionals descended on Montreal in May for the 100th anniversary of the Supply Chain Management Association (SCMA) conference. Hundreds of practitioners attended the event to network, socialize and learn about the issues affecting the supply chain management field.

Using the slogan “Intelligent Supply Chains,” the conference included a conference kick-off event, education sessions on supply chain future trends, global supply chain, technology and more. Attendees could also peruse several booths during the regular sponsor showcases.

No SCMA conference would be complete without the yearly gala evening. As in past years, SCMA announced the recipients of the Fellow designation. The designation is the highest honour the association can bestow on its members. This year’s recipients were Madeleine Paquin, president and CEO of LOGISTEC Corporation in Montreal and Robert Wiebe, chief administrative officer for Loblaw Companies Limited.

When the association started 100 years ago, 42 JUNE 2019

Supply Professional_June2019.indd 42

its first meeting was in Montreal. It therefore fits that the 100th-anniversary conference happen in that city, said Christian Buhagiar, SCMA’s president and CEO, during his opening address on the event’s first day.

“While the primary focus of the next few days is on inspiration, learning and networking, we are also here to celebrate and to honour,” he said.

Along with the fellow award winners, SCMA also awarded CN with its first NATION BUILDER award. The award commemorates SCMA’s 100th anniversary and recognizes the historical and future importance of building supply chains to building Canada. “ I am honoured to have CN recognized with the SCMA’s Nation Builder Award,” said JJ Ruest, president and CEO, CN, who accepted the award on the company’s behalf. “As with SCMA, this year marks our centennial, and while we are proud of the company’s heritage, our focus is on the future of the supply chain and how we can play an active role in moving Canada’s natural resources and our customers’ goods to market safely and efficiently.”

Also featured for the first time this year was a breakfast celebration honouring SCMA’s 100 Influential Women in Supply Chain and its first-ever Women to Watch in Canadian Supply Chain. The list boasts primarily practitioners, but also academics, consultants, search experts and others. The women on the list are achievers in Canada’s supply chain sector, contributors to the success of their organizations and role models for others in the profession. Dorothy Jakovina, Supply Professional’s publisher, was one of the women chosen for the list and honoured at the breakfast celebration.

The conference’s education lineup kicked off with a presentation by Louis Roy, founder and president, Optel Group and co-chair of the conference. Supply chains have become so critical in modern society that the world looks to them to solve an array of issues, Roy told the audience. Supply chain isn’t about manufacturing goods or growing commodities; rather, it’s about improving the efficiency of the entire system, Roy noted.

“The importance of supply chain now is obvious,” he said. “To solve the current issues, we need now to look at connecting people together. Traditionally, supply chain has been buying and logistics, so connecting to the outside but only to the first door. But now, supply chain will be connecting up to the consumer.”

Creating an intelligent supply chain will be the solution to many of the problems society faces, such as the plastic and deforestation crises, social problems and so on. Canada is poised to take the lead in developing such an intelligent supply chain, he said. The country has everything it needs to succeed but must create a movement around doing so.

“We need to make Canada a top country and the epicenter of the supply chain change,” he said.

While technology is important, the focus should be on how to use it in an intelligent way to create an intelligent supply chain. The task is an exciting one and both talent and the desire to create an impact will be keys to success, Roy said. Be open to change and to connecting with others while looking at supply chain from a global, holistic point of view rather than within silos. That view involves taking care of the end of the lifecycle and how things get put back into the supply chain, he said.

“Let’s build in Canada the model of the future economy based on the intelligent supply chain,” he said.

A BRIGHT FUTURE The first plenary speaker, Gina Chung, head of innovation Americas and trend research, DHL, agreed that it was an exciting time to be in supply chain. Change, innovation and SUPPLY PROFESSIONAL

2019-06-14 2:12 PM

With all the innovation that’s happening, it’s only a matter of time before we see the digital transformation taking place in full swing in the industry.

Supply chains of the future will be smarter, faster and more customer centric, said DHL’s Gina Chung.

digital transformation are happening now in the field, she said, adding that the pace of change continues to accelerate. According to a recent McKinsey & Company report, that digitization will have the biggest future impact on the revenue of companies.

“With all the innovation that’s happening, it’s only a matter of time before we see the digital transformation taking place in full swing in the industry,” she said.

The customer is fueling that need to innovate, Chung said. Like it or not, customers are changing. An aging population and coming labour shortage are changing demographics and the next decade will see a huge part of the labour force retiring. The Millennial population is growing and is already the majority of the workforce in Canada. Think of them as customers and employees, she said. To stay ahead, Chung suggested a customer-centric approach to innovation.

The three digital trends of Internet of Things (IoT), robotics and artificial intelligence (AI) will be particularly disruptive, Chung predicted.

An aging workforce, increasing volumes, advances in technology and other factors will fuel robotics adoption over the next three-tofive years. This will cause job profiles to change but more robotics will create both growth and new jobs.

Regarding IoT, Chung predicted increasing connectivity across the supply chain. Such connectivity is becoming more affordable, with cheaper sensors, better battery life and other factors. The need to find meaning in data will lead to a rise in analytics. The third trend, AI, has become a buzzword recently, and for good reason, Chung said. AI will be not only very disruptive but also a key supply chain enabler.

For example, the technology aids with autonomy and is important to self-driving vehicles.

Future supply chains will be smarter, faster and more customer-centric, Chung said.

Planning will evolve from forecasting to a more predictive model, while operations will become increasingly proactive. Processes will move from manual to autonomous while services will move from standardized to personal, Chung said.

CANNABIS AND SUPPLY CHAIN The SCMA conference often highlights the newest, most innovative trends in the field and this year was no exception. One education session highlighted cannabis, which perhaps boasts the newest supply chain in the country.

The session brought together several industry experts to discuss what makes cannabis supply chain unique.

While cannabis supply chains are basically the same there are a few factors that make them unique, including low inventory levels and an industry in which everyone is new, said Richard Cranwill, vice-president, business development, at Metro Supply Chain Group. Fellow panelist and president and CEO of Pure Sunfarms Corporation, Mandesh Dosanjh, agreed that an industry of newbies posed an obstacle, noting that trying to hire talented people can be

challenging, as is ensuring those people have the right skills.

Other areas of the cannabis supply chain remain unclear due to how new the industry is, added panelist Brett Marchand, senior vicepresident of operations at Aphria Inc. Other regulated industries have a clear path for people to follow, cannabis remains in a “grey” area with those working in the industry unclear of what to do in all situations.

One solution is to start with the customer in mind, said Dosanjh. A company can’t be everything to everyone, he said, so his company concentrated on its core clientele in the adult-use space and designed everything around that.

“You can’t be everything to everybody,” he said.

A lack of available information poses a unique challenge, said Genevieve Giroux, director of demand, product management and supplier relations for Societe Quebecoise du cannabis. Even if a reliable system existed, many in the industry wouldn’t have the information needed to put into that system. She therefore recommended companies stay agile, ensuring that they don’t build systems that are unable to change. Supply visibility is necessary, she noted, while a small field like cannabis means that organizations such as hers benefit from building close relationships.

Another session focused on sustainability within the supply chain. Panelist Mari-Lou Dupont, senior manager with the United Nations Global Compact, said that while many companies have sustainability policies, many of them don’t realize the impact those policies have because they don’t look for the information.

Organizations often struggle to put their policies into action. Fellow panelist and sustainability advisor Josef Lukan cited the increase in consumer awareness surrounding sustainability.

Consumers now want to know where a product comes from and what impact it’s had on people and the environment, Lukan said. While many don’t pay more for sustainable products, many will not buy a product if it has a demonstrably negative impact on sustainability.

“Supply chains play a huge role in seeing that products are made responsibly,” he said.

That means that companies that engage in sustainable practices can reap benefits, noted Jon Bostok, co-founder and CEO of Truman’s.

It’s also very possible to have a sustainable company that’s well designed and affordable.

“Sustainability is and can be a huge competitive advantage,” he said.

Once again, the SCMA conference focused on innovative supply chain trends, exploring areas such as technology and sustainability in depth. The “intelligent supply chain” highlighted at the conference is truly just around the corner. SP SUPPLYPRO.CA 43

Supply Professional_June2019.indd 43

2019-06-14 2:12 PM

2019

Business Achievement Awards Gala

Canadian Aboriginal and Minority Supplier Council

Conseil canadien des fournisseurs autochtones et membres de minorités

Thursday, September 26, 2019 Liberty Grand, Toronto

Nominations Now Open!

• Supplier of the Year Award • Small Business of the Year Award • Technology Innovation Award • Corporation of the Year Award • Tier 1 Champion of Supplier Diversity • Procurement Business Advocate of the Year Award • Collaboration Award

Submission Deadline: July 12th www.camsc.ca

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

NIGP Forum August 25-28 Austin, TX ASCM 2019 September 16-18 Las Vegas, NV

44 JUNE 2019

Supply Professional_June2019.indd 44

CAMSC Business Achievement Awards September 26 Toronto, ON

GBTA Western Canada Conference October 16-17 Calgary, AB

Distribution Logistics Summit November 5-6 Brampton, ON

Canadian Manufacturing Technology Show September 30-October 3 Toronto, ON

Canada Logistics Conference October 23-25 Niagara Falls, ON

ACTE Global Summit November 21-22 Montreal, QC

SUPPLY PROFESSIONAL

2019-06-14 2:13 PM

IN THE FIELD—BY MAHMUD KHAMIS

EMOTIONAL INTELLIGENCE THE PEOPLE PART OF PROCUREMENT In Kristi Fairholm Madar’s article entitled Social Procurement from the April 2019 issue of Supply Professional, the author mentions that “Businesses are incorporating social impact and outcomes … and are looking at the social and economic returns”, requiring procurement professionals to execute strategies on behalf of the organization, all in a diverse and multicultural world. This demands that we be armed with more than just hard skills, as Fairholm Madar rightfully highlighted.

The success of a professional supply chain enabler requires intellectual, emotional and, more important than ever, cultural intelligence. A successful leader requires experience across supply chain activities including operations, as the cost related to the supply management impacts profits more than any other area. Reducing or curtailing costs, streamlining the SCM cycles to the operational cycles and maximizing efficiencies in the delivery of goods is critical.

All of this just required intellectual intelligence, data capturing, data dissemination, trend analysis and foresight. Critical to this were relationships with likeminded stakeholders in Canada and the US. But times have changed.

ENTER THE GLOBAL ENVIRONMENT As the global environment continues to shift to protectionism, shallower trading partners, and soon cannabis-infused beverages and edibles, supply chains must respond, shifting not only in their technological capabilities but also their awareness of the changing consumer attitudes and their global strategic suppliers.

Supply chain professionals must not only improve efficiencies but also master diverse, cross-cultural communications. This is a must if they are to continue supporting their organizations in providing long-

lasting and exceptional services or be doomed to reside with the great giants of yesteryears.

These changes are significant and require a mindshift from the simple communication models to how this messaging is now viewed and interpreted on the receiver’s end. The use of intellectual intelligence and establishing relationships with vendors across North America are now augmented with strong interpersonal cultural competences, as the keys to the professional success. All this is in concert with the changing norms required to participate globally.

An understanding of success takes more than intellectual intelligence—it requires an understanding of global partners.

Accounting for emotional and cultural intelligence and selfknowledge no longer is the best way to understand the people around the world. Diverse goals and needs have to be addressed and these may not be simply financial if you are to build stronger and longer-lasting relationships and especially if conflicts are to be resolved positively.

SCM professionals must bring a valuable perspective—perhaps the most critical perspective providing stakeholders with the view of their global partners’ needs. This view is critical if they are to navigate their teams to meet the value proposition for their organizations and the diverse needs of customers.

The team must consist of talented members who have diverse experiences and complementing backgrounds, including crossindustry knowledge, as the foundation to take their organization from average to exceptional.

CHANGING BUSINESS METHODS New technologies provide great opportunities to gain greater insight into the flow of goods. At the same time, the customers’ changing expectations are putting pressure on

organizations as to how business must perform going forward. We are seeing quantum leaps and new ways to not only do business but also to think. Being ahead of the curve technologically can help meet these ambitious expectations.

But our teams must also be armed with the understanding of cultural nuances, making sure that they are prepared for the subtle changes that will impact the way they tackle these new opportunities.

I believe that a strong understanding of cultural intelligence is valuable. I feel this can be helpful, perhaps critical, to providing key perspectives so individuals can meet the value proposition for their organizations.

Our toolbox must consist of the understanding of cultural intelligence and diverse knowledge if we are to succeed in engaging in cross-continental communication as a foundational element that will take our global supply chains from average to exceptional.

Why is this important now?

Natasha Frost, writing for the Quartz business news organization, explains that the “open-plan office has laid waste to the sanctity of cubicles” and businesses now “dictate how well we live. We need them to make informed decisions so that they can best serve us”.

Our world has changed from highpowered executives commanding their employees and suppliers, to a world where leaders are willing to change their own minds, thus drawing out the real competitive advantage. We need to be adaptive, flexible and ready to change course while promoting accuracy, agility and growth for success.

As for procurement, being persuadable means having a willingness to change their minds in the face of evidence through cultural, intellectual or emotional intelligence, and using these keys in understanding what’s at stake and to make the right decisions. SP

Mahmud Khamis, is a purchasing manager with Medline Medical Mart.

“ Supply chain professionals must not only improve efficiencies but also master diverse, cross-cultural communications— all with an everchanging set of stakeholders’ expectations.”

SUPPLYPRO.CA 45

Supply Professional_June2019.indd 45

2019-06-14 2:13 PM

THE LAW—BY PHIL SYMMONDS

GOOD PROCESSES, GOOD OUTCOMES PROCUREMENT FLEXIBILITY AND DEFENSIBILITY NEGOTIATION SUCCESS Procurement of goods and services in Canada by way of tender and RFP is subject to a well-developed body of case law. In many cases it is also subject to international trade treaties to which Canada is a party.

Canadian courts have adopted a Contract A/Contract B analysis when examining the rights of the parties in a call for tenders. Pursuant to this, a contract may arise between a purchaser and each bidder when the bidder submits its bid. This contract is referred to as “Contract A” and imposes obligations on both the purchaser and the bidder. Contract A is separate and distinct from the actual project contract or purchase agreement, referred to as “Contract B”, to be entered into between the purchaser and the winning bidder. A call for tenders typically gives rise to Contract A and a request for proposals will also in many, perhaps most, circumstances depending on the extent to which it’s negotiated and the burden placed on proponents.

If Contract A is found to exist on bid submission, liability may flow from the breach of any express or implied term of Contract A by the purchaser. The express terms of Contract A will be the provisions in the bid document that pertain to the conduct of the parties through the procurement process. In determining whether there are any implied terms in Contract A, a court will look to custom and practice in the particular trade or industry and the presumed intentions of the parties.

One such implied term that typically arises is an obligation on the part of the purchaser to treat all bids “fairly and equally”. This obligation requires that bidders receive equal treatment, that the winning bidder be selected according to the criteria set out in the bid request and not undisclosed criteria and that the criteria not be inconsistently applied between bidders. Barring an express 46 JUNE 2019

Supply Professional_June2019.indd 46

term permitting otherwise, it is also an implied term that the purchaser will only accept compliant bids.

UNDISCLOSED CRITERIA It is the use of undisclosed criteria that is the source of many of the lawsuits in the procurement space.

Why does this happen?

It does not occur as a rule because of bad intentions on the part of procuring authorities. It occurs because procuring authorities are not always satisfied with the outcomes of their processes and find themselves with unintended outcomes. It is not surprising that there is a desire to fix the problem after the fact.

How can this be avoided? How can procuring authorities improve the probability of a successful outcome without sacrificing defensibility? There are several tactics procuring authorities should consider. First, mandatory requirements should be true must-haves. Other factors should be addressed in scoring or negotiation. Second, supplier engagement can significantly increase the likelihood of successful outcomes. These approaches are more common in some contexts than others but there is no reason why they should not become the norm and considered best practice.

It should be observed that Contract A is generally thought to be engaged when the parties intend to initiate contractual relations. When that occurs will depend on the particular facts but in the paradigm case Contract A would not arise until a bid is submitted.

A corollary of this is that there is greater latitude to engage in bidder dialogue before a bid is submitted.

There are a variety of techniques to engage with bidders that procuring authorities may utilize: Bidder Q&A is a table stakes form of engagement with bidders,

but it is extremely useful to allow purchasers to clarify their requirements. It is only when bidders begin to grapple with an RFP that many of its problem areas are identified.

Putting an RFP out for comment, in several drafts if possible, is a useful means of soliciting supplier input. In fact, it can be helpful for defensibility to sound bidders out on where they see issues and it allows procuring authorities to adjust to their market.

Reviewing draft bids ensures bidders are on the right track with their submissions, although it requires bidders to do advance work, which in turn involves time and expense and imposes a burden on the procuring authority.

Bidder conferences are a useful method of communicating information that is difficult to convey in dense RFP language and increases the likelihood that bidders understand the RFP and its requirements.

Cure periods also provide bidders with feedback and an opportunity to address deficiencies in their bids.

With each of these techniques, it is critical that they be exercised in compliance with the duty of fairness. Procuring authorities should govern themselves by the following principles: Bidders should have access to the same information and at the same time.

All bidders should be given the opportunity to engage and on the same terms.

Continuity is important; change in the middle of the game should be approached cautiously.

Good process drives good outcomes. Process is not mere window dressing. It allows for better decisions and better outputs. SP

Phil Symmonds is partner at Torys LLP in Toronto.

“ Supplier engagement can significantly increase the likelihood of successful outcomes.”

SUPPLY PROFESSIONAL

2019-06-14 2:13 PM

Supply Chain Powering Canada’s Economy

Power Your Journey to Success Join SCMAO and engage with Canada’s community of supply chain leaders BRENDA SHARP, SCMAO member for 22 years Purchasing and Supply Chain Manager, FPH

“I knew becoming an SCMAO member and working towards my CSCMP designation would ensure I was equipped with both the theoretical and working knowledge I needed to succeed. As a member, the SCMA not only allowed me the opportunity to obtain the educational edge required to be successful it also provided a network of incredible peers and mentors to guide me along my way.”

WENDY NGUYEN, SCMAO member for 7 years Senior Consultant, Government of Ontario

“Taking part in SCMAO’s educational offerings, professional development events, volunteer opportunities and more has helped to flourish my career. Nowadays, I am also an instructor for the Supply Management Training program at SCMAO and their volunteer regional ambassador for Toronto.”

LARRY LEUNG, SCMAO member for 11 years Procurement Specialist, LCBO

“CSCMP designation holders come with a broad academic base in supply chain management.

Coupled with relevant work experience, employers can be confident that these professionals can overcome today’s challenges while driving innovation, business outcomes and providing thought leadership from a connected community.”

DESIGNATION I DIPLOMA I PROFESSIONAL DEVELOPMENT I ON-SITE TRAINING I CORPORATE ENGAGEMENT SCMA™ Ontario 1 Dundas St. W., Suite 2704, Toronto, Ontario M5G 1Z3 Toll free: (877) 726-6968 info@scmao.ca

Supply Professional_June2019.indd 47

2019-06-14 2:13 PM

FLEET SUCCESS TO MAKE YOU SMILE

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

Discounts* on Maintenance Services with

Supply Professional_June2019.indd 48

SHELL.CA/FLEETSOLUTIONS | 888.212.8916 *Certain restrictions apply.10% Discount (before applicable taxes) on products and services on every visit at Jiffy Lube locations, including Jiffy Lube Signature Services Oil Changes and other preventative maintenance services. Valid for Jiffy Lube Signature Service® Oil Change services and additional preventative maintenance services which vary by location. Visit www.jiffylube. ca to locate a Jiffy Lube service center near you and view the services offered. Jiffy Lube® and Jiffy Lube Signature Service® are registered trademarks of Jiffy Lube® International, Inc. Jiffy Lube service centres are owned and operated by independent franchisees. ™Trademark of Shell Brands International AG. Used under license. The Shell Fleet Navigator MasterCard Corporate Fleet Card® is issued by WEX Canada pursuant to a license by MasterCard International Incorporated. MasterCard and MasterCard Corporate Card are registered trademarks of MasterCard International Incorporated.

2019-06-14 2:13 PM