Supply Professional October 2019

OCTOBER 2019

RISING TO THE CHALLENGE

Alma Arzate’s supply chain success The 2019 Annual Survey of the Canadian Supply Chain Professional

NIGP Forum Business travel quality management Trade agreements update 2020 Vehicle previews

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VOL.61 No.5 OCTOBER 2019 SUPPLYPRO.CA COVERING CANADA’S SUPPLY CHAIN

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COVER: JOHN PACKMAN PHOTOGRAPHY

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FEATURES

ALSO INSIDE

8 TRAVEL QUALITY MANAGEMENT ACTE searches for metrics to measure trip quality.

20 A MOVING MARKET Challenges and opportunities in supply chain employment.

4 UP FRONT

10 FREE TRADE AGREEMENTS Making sense of Canada’s trade accords.

22 RISING TO THE CHALLENGE Alma Arzate’s supply chain success.

7 FINANCE CORNER

12 PUBLIC PATHWAYS Highlights from the 2019 NIGP Forum.

42 A BETTER WORLD Highlights from the ASCM 2019 Conference.

13 ON THE RISE The 2019 Annual Survey of the Canadian Supply Chain Professional.

44 NIGHT OF CHAMPIONS The winners of the 2019 CAMSC Business Achievement Awards.

5B USINESS FRONT

45 IN THE FIELD 46 THE LAW

19 ROAD TO DIGITIZATION Survey highlights rate of technology adoption in Canada.

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Fleet Managment

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UP FRONT

COMMUNICATING CHANGE Despite what you hear or read about the alienating effects of technology, I’d wager that all of us are communicating more than we ever have.

Mobile devices and the apps they support mean almost constant communicatio—or the possibility of it—through email, social media, texts, and yes, for some real traditional types, phone calls.

Each morning, my personal and professional inboxes are filled with emails vying for my attention, trying to persuade me of some call to action or another. That persuasion and influence is a big part of communicating with our fellow humans, whether digitally or in person.

It’s no surprise then that when asked, several recruiters recently cited communication as a top skill for supply chain practitioners going forward.

Indeed, so-called soft skills generally are lauded as equally, if not more, important than hard skills.

Communication, emotional intelligence, teamwork, adaptability, problem solving, time management and so on speak to the advisory and consultative nature of the supply chain role these days. Procurement, for example, is no longer simply about filling out purchase orders and hasn’t been for some time. It involves influencing decisions within an organization to not only save money but add value beyond the bottom line.

These soft skills may become even more important as the use and scope of technology grows. Indeed, many of the more mundane, routine and repetitive tasks may well be taken over by automation. There has even been talk of certain functions of automation making supply chain roles redundant. Practitioners would be replaced, the thinking goes, by AI-driven robots and computers that could do most tasks just as well, if not better than, humans.

Supply chain recruiter Tim Moore, for one, refutes this point of view (see story on page 20). Rather than technology eroding the role of the supply chain practitioner, he says, the field is exploding with possibilities.

AI, blockchain, robotics, the Internet of Things (IoT), virtual reality—all of these innovations open doors of possibility.

The growth of technology also means more supply chain transformation. Fellow recruiter Neil Drew (also page 20) sees more and more Canadian companies investing in transformations, not only through adopting technology but overhauling how the procurement and supply chain departments function. This drive to transform, says Drew, means a rise in the importance of soft skills such as communication.

Process? Sure, it’s important, Drew says. But advancing technology will be able to take care of many of those process-driven tasks. What’s left is the advisory, consultative nature of what procurement and supply chain practitioners do for stakeholders, vendors and clients.

So develop those hard, technical skills. But also make sure to work on your soft skills. They’re going to be important in the future.

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 SALES REPRESENTATIVE FARIA AHMED 416-441-2085 ext 106, faria@supplypro.ca EDITORIAL ADVISORY BOARD LORI BENSON Procurement Compliance, L&D, Engagement and Knowledge Lead | Business Enablement, Ernst & Young LLP THOMAS HUDEL Manager, Purchasing and AP, Esri Canada Ltd. WAEL SAFWAT Procurement Director, Black & McDonald SHERRY MARSHALL Senior Manager, Meetings, Travel & Card Service, PwC Management Services KIRUBA SANKAR Director, Corporate Social Responsibility—RBC Global Procurement JEFF RUSSELL Purchasing Manager, ABS Machining iQ BUSINESS MEDIA INC. Vice President STEVE WILSON 416-441-2085 x105 swilson@iqbusinessmedia.com President ALEX PAPANOU

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

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

No part of the editorial content of this publication may be reprinted without the publisher’s written permission. © 2019 iQ Business Media Inc. All rights reserved. Printed in Canada.

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BUSINESS FRONT—BY MICHAEL HLINKA

WEALTH TAXES AN IDEA WHOSE TIME HAS COME? There was a quote attributed to the French political philosopher Baron de Montesquieu that I’ve been thinking about quite a bit lately and it goes something like this: “Happy the nations whose annals of history are boring to read.”

In spite of the economic boom that is going on in the US right now, there seems to be—at least if you watch the mainstream news—a great deal of unhappiness, some of which centres around economic inequality.

Elizabeth Warren, currently one of the leading contenders for the Democratic nomination for president, was first out of the blocks with a wealth tax proposal.

Her trial balloon suggested that there should be an annual two per cent tax on anyone whose net worth exceeded $50 million, and then a three per cent charge on anyone whose net worth exceeded $1 billion. And there is a certain populist appeal to this idea. If someone would be worth, say $60 million dollars, it’s hard to see how their life would be impacted horribly if after the tax, they were left with $58.8 million. And once net worth for any reason fell below $50 million, then that tax would no longer apply.

WEALTH INEQUALITY The idea of a wealth tax comes out of the growing wealth inequality that we’re seeing in North America.

Look at it simplistically and you’ll see that the top one per cent of the American population has more wealth than the bottom 90 per cent.

The reason why I’m qualifying this with “simplistically” is because it ignores wealth and income that comes from pension income. A simple model demonstrates the point: there is an entrepreneur whose business has been valued at $2 million and this would be her net worth. Meanwhile, there is a government bureaucrat who will receive a $100,000 pension, fully

indexed for inflation, over the next 25 years. But he has no tangible assets right now. His current net worth would be considered zero, even though the present value of those pension payments would be $2 million. You tell me who’s better off: the entrepreneur with a risky $2 million or the bureaucrat with a 100 per cent guaranteed pension?

But even with that qualification, it is impossible to argue that the concentration of wealth is increasing and mostly because of factors out of their control. It’s largely a function of the scalability that is possible in a global economy, something that wasn’t true for most of the 20th Century.

Back to the wealth tax. There have been some estimates that it could rise by as much as $2.75 trillion over the next 10 years. That might be true, assuming that everyone in those high tax brackets went passively along with it. However, there are a few major problems with a wealth tax: • How will a privately held company be valued?

• How will wealth splitting impact the revenue raised?

• How much avoidance would occur?

I’ll deal with each in turn.

It would be easy to assess a wealth tax for someone like Jeff Bezos, the founder of Amazon.

We could calculate the number of shares he held on average throughout the year, multiply (I would imagine) by the average share price, then take three per cent of that. There is an open and visible liquid market for those shares. However, there are many privately held companies worth tens of millions of dollars, and the valuation of those entities is far more complicated. Financial theoreticians agree that there should be liquidity discounts for these types of companies. How much would that be? And who

would be responsible for the valuations?

WEALTH SPLITTING Then there’s the issue of wealth splitting. I read one commentary that suggested that families worth $200 million with husband, wife and two children would be motivated to “split”, giving each individual $50 million to avoid the tax. I think that everyone would agree that tax policy should not encourage family break-up, but this is what a wealth tax would do.

That’s another important strike against it.

However, by far the most serious issue is how much avoidance would occur. If you had what you believed was the next great idea … Amazon or Google, would you remain in the US? I wouldn’t and I suspect that this would be true of those visionaries whose products and services fundamentally transform the world.

Elizabeth Warren is a politician.

And in a democracy, there is no requirement for politicians to demonstrate knowledge of economic matters—or anything else for that matter. It is the public, and that means us, who are responsible for critically evaluating the ideas that are put before us and determining what will work and what won’t. So while economic inequality is something that should concern us all, a wealth tax isn’t the best way to address it. SP

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

“ In spite of the economic boom that is going on in the US right now, there seems to be—at least if you watch the mainstream news—a great deal of unhappiness, some of which centres around economic inequality.”

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

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ACTE Global Summit November 21-22, 2019 Montreal, QC

MODEX 2020 March 9-12, 2020 Atlanta, GA

Cargo Logistics Canada February 4-6, 2020 Vancouver, BC

NAFA Institute & Expo April 6-8, 2020 Indianapolis, IN

CAMSC Diversity Procurement Fair April 15-16, 2020 Toronto, ON SIAL Canada April 15-17, 2020 Montreal, QC

ISM2020 April 26-29, 2020 Boston, MA ProcureCon Canada May 4-5, 2020 Toronto, ON

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FINANCE CORNER—BY DIANE DALY

FOUNDATIONS OF SUCCESS MANAGING THE RISKS AND FINANCES OF CONTRACTS The art of business management lies in maximizing operational and financial performance while reducing risk. Contracting and contract management are key operational activities impacting how business is conducted.

Organizations must be agile and recognize the importance of incorporating specific planning and processes into their contract management activities to reduce risk and obtain best value.

Contract management involves looking at what the business requires, defining the need, developing the need into a plan to obtain it, tendering the requirement, awarding the contract, managing the contract and closing it out.

When a contract requirement is developed poorly, it can result in large financial loss over a technicality either not defined properly to overcharges on missing deliverables. The value of being proactive and linking management of contracts as a critical tool to operational needs will ensure stakeholders realize its importance.

To succeed in contract management, start at the precontract stage. Most of the upfront work will impact the contract’s value. Initial requests for requirements must focus on why the requirement is being established. Understanding what the organization needs is critical.

Why do you need the contract?

From this flows the other questions: What do I need? What is my budget? Who needs to be involved?

When do I need it? What is the impact if I don’t get it?

These questions are critical in establishing the requirement and defining the risks, stakeholders, roles and responsibilities and the importance and methodology to source what is needed.

To get management

commitment to move forward with contract requirements, establish the business case. By planning the outcomes, any critical elements, the risks, milestones, options and impacts will ensure clarity.

Prepare the business case with the involvement of all stakeholders such as comptrollership, technical owners, procurement, risk, legal and management.

When the final contract requirement is identified, the technical authority/client must engage procurement to help.

Contracting will review the contract requirement, incorporating appropriate terms and conditions into the solicitation documentation or contract. Contracting will consider what the requirement is and work with the client to process it into a strategy.

This includes formulating the contract, stakeholder roles and responsibilities and contract administration.

Contract strategy is key.

Consider issues like the nature, scale and significance of the requirement, it’s value, level of understanding and milestones, market capacity and attractiveness to industry. Evaluation criteria, success factors, business requirements and stakeholders will filter out suppliers that can’t meet the need.

MANAGING RISK Risk management is also critical.

Risk mitigation tactics in each stage must consult, ask “what if” questions and address the risk with procedures/processes. Costs to control the risk, impacts on time/ projects and the establishment of financial terms should be incorporated. Critical risks such as fraud, risk transfer and negative market share/reputation/supplier relationships must be front-and-

centre when administering a contract. Terms such as contract exit strategies and financial requirements can mitigate risk.

Stuff happens, so a kickoff meeting with the supplier gives the chance to discuss how the contract will work. A discussion with the contractor on contract governance, expectations, milestones, performance measures, and roles and responsibilities is critical.

Changes and amendments to contracts are normal. Option periods and other administrative amendments form part of the approval of contract requirements at pre-contract award stage.

Change is determined by a number of factors such as markets, technological developments, legislative changes and changing business needs (outcomes).

When changes are known, it’s easier to amend the contract and adjust the term. Negotiation between stakeholders is easier to manage and the amendment to the contract is simplified. Unexpected changes happen and should form part of the risk evaluation at the onset of the contract requirement (to consider the unexpected).

It is important that stakeholders in the contract management process understand their roles.

Contract management monitoring, records retention and relationship management are key tasks organizations must manage.

Formal amendment procedures should be set out in the contract and change control procedures initiated to allow for adjustments.

Changes must include the justification or reason and allocate what is being requested.

Continuous risk analysis must be part of the contract management process. Lack of capacity by the supplier, reduction in demand leading to potentially higher per

Diane Daly, SCMP, CFSP II, is senior advisor, project resource management, Business Application Services Directorate, Canada Border Services Agency.

“ To obtain management commitment and approval to move forward with contract requirements it is important to establish the business case.” unit costs, deterioration in the supplier’s financial standing, supplier staff changes, delivery delays, market fluctuations and other issues may arise. If so, having an open and honest relationship with the supplier can alleviate some of the ambiguity. It is easier to mitigate risk and resolve issues if your relationship with the supplier is honest and transparent.

Risk can also result from poor contract management. Staff turnover, poor understanding of what the contract is about, unwillingness to engage the supplier and mismanagement of the contract can result in unexpected costs. Contract administration is the organization’s, not the supplier’s, responsibility. Poor internal contract management can result in overpayments, interest costs, default by the organization, court actions and reputation impacts.

Successful contract management is proactive. The aim is stakeholder consensus. Planning, risk managing the contract and establishing an honest relationship with the supplier will build a foundation for a successful contract that meets the organization’s needs. SP SUPPLYPRO.CA 7

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QUALITY METRICS IN BUSINESS TRAVEL ACTE, BCD STUDY ON BUSINESS TRAVEL ENTERS CRITICAL SECOND PHASE Twelve months ago, the Association of Travel Executives (ACTE) in collaboration with BCD Travel released a groundbreaking study that tackled the tricky subject of quality management and business travel. Findings were mixed, for they revealed that there appears to be more questions than answers when it comes to determining what the best metrics are to use to measure the worth of an organization’s travel program.

“Every great journey begins with a first step and in the vital and important discipline of corporate travel, the first step must be some level of measurement,” Miriam Moscovici, senior director of research and corporate innovation at BCD, wrote in the report.

“We don’t measure for measurement’s sake,” Moscovici wrote. “The purpose of measurement is improvement—a path to quality. Without a set of principle measurements, it is difficult 8 OCTOBER 2019

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to analyze data meaningfully and build an understanding of progress over time. This paper is intended to provide our industry with an entry point for establishing standard measurements of quality. It has the potential to improve results for companies as small as mom and pop and as big as the Corporate Travel 100.”

The foreword to the report also states that technology innovations such as artificial intelligence, voice recognition and machine learning will “greatly improve your travellers’ experiences, some not so much. With no standard or consistent way to measure quality management—or even consensus as to what exactly constitutes quality—it’s hard to know which metrics are helpful and which are just noise.”

The report goes on to say that “despite the technology, we are still assessing quality management as we always have—with

valuations like booking statistics, policy compliance and call centre stats.”

Based on a survey that was mailed out to 301 ACTE members from around the world, key findings revealed that: • 80 per cent of respondents want a standard system of measurement; • Compliance, savings, spending and booking stats have been considered more important assessments of quality than actual traveller satisfaction or trip success rate; • Factors such as traveller friction, trip success and HR information were rarely used as indicators of quality, despite the importance placed on these same indicators; and • The needs of today’s traveller are now more complex, and this complexity is directly related to digitalization.

According to the report, the results also show that the “industry is using some incomplete or even outdated metrics to measure quality. Survey respondents identified policy compliance, spending savings and booking statistics as the most important in measuring quality management. They gave each of the four a higher priority than traveller satisfaction, trip success rate and traveller friction.”

The survey also found “a curious trend in which customer-satisfaction is primarily being measured through third parties or is even given a lower priority than back-office processes, with quality considered.”

These days, digitalization not only removes human interaction, but also allows the customer to simultaneously interact with the travel ecosystem across multiple touch points, the report says. “From flights to hotels, taxis and ancillary services, almost any travel-related form of content can now be arranged through digital third parties,” it reads. “This leaves the travel manager with less control over the end-user’s experience, making it harder to demonstrate value.”

There were also stark differences related to what is used versus what is important when it comes to the quality measures of a travel SUPPLY PROFESSIONAL

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program: “Only nine per cent of respondents cited human resources as a quality management measurement, placing that category among most overlooked factors. Trip success rate (13 per cent) faired only slightly better, and traveller friction (21 per cent) was also rarely used as an indicator of quality.”

In some ways, that turned out to be a positive for instead of moving on to another subject matter, both ACTE and BCD made the decision to find out exactly why that is.

Call it phase two, and for the past year since the release of the initial report, researchers from both organizations have held focus groups made up of ACTE members and plan to release a second report this fall.

The reason, says Moscovici, is based on a single concept: while much has changed in the last 15 years in the “way that we work. Not a lot has changed in the way we measure quality.

“We believe that travel management is a strategic part of a business,” she says. “The numbers tell us that there are a variety of Harvard Business Review articles that are published every six or eight years talking about the value that business travel drives to a bottom line. But the travel management leadership team can be a strategic asset to other shareholders in the organization and we want to reveal ways

When I personally think back on what has prohibited my business success while I travel— and I travel almost every week— it usually has something to do with my connectivity or my equipment. that this can happen.”

According to Anusha Chatterjee, research manager with ACTE, business travellers are used to a seamless user experience when travelling on their personal time.

“To them, having a smooth business travel experience—all the way from booking to trip completion—seems like the logical next step,” Chatterjee says. “They expect better quality business travel experience.”

At the same time, the metrics that are currently in place don’t tell the entire story when it comes to the quality of a travel program.

“Metrics like spend-savings, booking statistics and policy compliance may tell us what the cost of a travel program is, but it does not capture the value of the travel program, such as, how it facilitates the business traveller to meet their goals,” Chatterjee says. “Or, for instance, how trip disruptions might affect the traveller’s productivity and well-being.”

Trip success rate, adds Moscovici, is “one of those things that we’ve been ruminating over because how do you self-report a number like that? And as a traveller, while they’re completing an expense report for $3,500, are they going to check the box that says, ‘No I didn’t complete my business objectives?’

“And then we started saying well, ‘wait a second, why are we so vain to even think that the booking process or the travel experience is the hinge” that determines what overall business success is,” Moscovici says.

“When I personally think back on what has prohibited my business success while I travel— and I travel almost every week—it usually has something to do with my connectivity or my equipment,” she says. “And so that wrung another bell in our heads thinking well, is this a new opportunity for the travel manager to really understand what’s driving quality?”

An example of that is an almost symbiotic relationship that could exist between IT and travel management staff members in order to collectively drive better results together.

“What the travel manager can bring is intelligence and understanding around the impact of a mobile phone plan, their satellite phone plan, their battery choices they make when they lease laptops and the peripherals they negotiate as a company for their road warriors,” Moscovici says. “Maybe there is some intelligence to be shared, maybe there are ways that they can join together.”

The findings, she says, really “hit all these buttons. Gone are the days of huge savings negotiating an airline program. If you’re a relatively modern travel program you squeezed all that stuff out long ago.”

As for what comes next, following completion of phase two, phase three will be the creation of an actual quality management model, says Moscovici.

“Is it going to be perfect? No, but it’s going to be the beginning of starting to look at programs in a more holistic way and show travel managers and other strategic leaders that the levers to pull are numerous and interesting.” SP

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BY CHRISTIAN SIVIERE

FREE TRADE AGREEMENTS HOW CANADIAN COMPANIES CAN BENEFIT Free trade agreements (FTAs) provide great opportunities for exporters, as they enable those companies’ products to enter these markets mostly free of tariffs (or customs duties), giving them a competitive advantage.

Likewise, importers, distributors and manufacturers benefit, since they can import raw materials, components, parts and finished products mainly with zero customs duties. These agreements also provide other advantages for the trade in services, investment, business travel and so on, but in this article we will focus on the trading of goods.

Canada’s main FTA, the North American Free Trade Agreement (NAFTA), linking us with the US and Mexico, has been in effect since January 1, 1994. It would be hard to find a businessperson who is unaware of NAFTA and there are two reasons for this.

First, because year after year, the US market represents 75 per cent of our exports and about 60 per cent of imports, illustrating the importance of this special relationship for Canada and how our economies are, to a certain extent, integrated. The second 10 OCTOBER 2019

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reason everyone in Canada knows about it is that the current US administration has embarked on a renegotiation process, also called modernization, of the agreement.

This exercise has been highly publicized, often via social media, sometimes using undiplomatic language like “worst deal ever” and so on.

In addition to NAFTA, Canada enjoys FTA’s with a number of countries, namely Chile, Columbia, Costa Rica, the European Free Trade Association (Iceland, Liechtenstein, Norway and Switzerland), Honduras, Israel, Jordan, Korea, Peru and Ukraine, some of which have been in effect for some time—such as with Israel since 1997—and many of which mirror agreements the US has too. In addition, we enjoy two relatively new FTA’s, linking us to two markets that are even larger than the US, namely CETA and the CPTPP. CETA stands for the Comprehensive Economic and Trade Agreement, the FTA signed with the European Union and its 28 member countries, and provisionally in effect since September 21, 2017. CPTPP stands for the Comprehensive and Progressive Agreement for TransPacific Partnership, linking us with 10 other Pacific countries, the most significant one, in economic terms, being Japan, the world’s third-largest economy. The TPP has been partially in effect since December 30, 2018.

COMMONALITIES And what do these two massive FTA’s have in common? They are

We can say that globalization has opened tremendous opportunities, but it doesn’t mean that exporting or importing goods is easier.

unique in that the US has no such agreement, neither with Europe nor with Pacific countries, giving Canada a definite competitive advantage. The other interesting aspect is that these FTA’s are not well known in Canada, hence they are largely underutilized

by Canadian companies. How do we know this? By looking at our monthly trade figures, for example with Europe, where we see that Canadian exports have not grown as fast as our imports have. Secondly, according to a survey of Canadian exporters released by Global Affairs Canada in June, only seven per cent of surveyed businesses were familiar with the details of the Canada-EU agreement. The survey asked questions of 507 exporters in March and April and involved 40 “in-depth” telephone interviews.

Researchers asked questions about a dozen of Canada’s FTAs and found that CETA wasn’t the only deal in need of more promotion. “Among Canadian small-to-medium-sized enterprises, there was fairly low awareness of Canada’s free-trade agreements,” said an analysis that accompanied the results. “Few companies use any of these free-trade agreements, the exception being NAFTA”. In addition to CETA, respondents were asked about Canada’s deal with Pacific countries and only seven per cent were aware of the CPTPP’s details. The questions also took up other FTAs and the majority of companies said they had never heard of Canada’s bilateral deals with Ukraine, Israel, Chile, South Korea, Jordan, Panama, Colombia, Costa Rica, Peru or Honduras. Evidently, more promotion needs to be done in Canada to entice our exporters to take advantage of these trade agreements.

Why are Canadian businesses very aware of NAFTA and apparently unaware of our other trade deals? Geography speaks for itself, since most of the Canadian population (and industry) lives within a few hundred kilometres of the US border, it is easier to develop sales there than, say, in Finland or in New Zealand.

Christian Siviere is president at Solimpex.

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But distance is not the only reason and another survey done

by Reuters-KPMG in 2015 gives a hint. They surveyed 446 corporate trade specialists from multi-national corporations in 11 countries and found that 70 per cent of companies were not fully utilizing FTAs. RULES OF ORIGIN Respondents said the biggest challenge they faced was managing complex and changing regulatory requirements. The other survey findings were that 79 per cent of respondents said their biggest roadblock was complex rules of origin. Other factors were the time and resources needed for documentation, import product classification, licensing, interpreting rules across borders and changing requirements.

Indeed, to manage these activities properly is demanding and requires trained resources.

What are rules of origin (ROO)? If all products were manufactured from local raw materials and components, we wouldn’t need ROOs. And if we excluded products containing foreign content from free trade agreements, not many products would qualify. ROO’s are designed to enable products that contain a certain proportion of foreign content to qualify for the preferential tariff, usually 0 per cent customs duties.

Because there isn’t one ROO that could fit all products, negotiators who conclude these agreements, sometimes after months, if not years of negotiations, agree on productspecific rules of origin (PSROOs), that vary according to the product.

They are organized by HS code (harmonized system), the international numbering system of products managed by the World Customs Organization in Brussels.

To the untrained eye, they are hard to read: once you find your product amongst the 99 chapters of the HS code, you must decipher what a tariff change means, especially as some refer to chapters, some to headings, others to subheadings, and lastly understand the percentages of local content requirement.

There are often two possibilities: a percentage based on the net cost of making the product, and another percentage based on the “transactional” price, meaning the sales price of the product. And the exporter decides which one applies, for example under which of the two formulas his product qualifies. To navigate through these rules requires a certain level of knowledge that only specialists may have. However, it’s also a matter of taking the time to learn about these very important details of trade agreements.

We can say that globalization

has opened tremendous opportunities, but it doesn’t mean that exporting or importing goods is easier. In fact, several factors, in particular protectionism and nontariff barriers, actually make things more complex, and companies must be agile and keep up to date on rules and regulations to thrive.

The same applies to benefitting from free trade agreements: managing their rules of origin and other requirements is quite a job but it is definitely worthwhile, as it provides a competitive advantage and works for both exporters and manufacturers/importers/ distributors. With NAFTA or its successor, and with CETA and the CPTPP, Canadian businesses have the tools to conquer the world, or at least a good chunk of it. SP

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BY STEPHANIE DION

Many Canadian procurement professionals also attended the event, which hosts a Canadian agencies session.

For the second year in a row, the National Institute of Government Purchasing’s (NIGP) Annual Forum broke records in September in Austin, Texas with over 1,600 public procurement professionals in attendance.

Attendees were treated to over 70 educational sessions, an amazing expo with more than 150 vendors and countless networking opportunities. It always amazes me how NIGP staff and numerous volunteers join together their Herculean forces to pull together these annual events. That’s especially true this year, as 2019 is a year of change for NIGP, which recently launched its new learning platform: Pathways.

Pathways is an innovative approach offering the flexibility to develop personalized, competencybased learning and credentialing paths for public procurement 12 OCTOBER 2019

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CHALLENGES A common trend among attendees continues to be attempts to “do more with less”. Agencies still face challenging times due to increased regulatory requirements

It has become increasingly hard to access the time and expertise needed to keep up with ever-evolving daily operations.

and scrutiny, political promises, a shrinking workforce, difficulty hiring qualified professionals and the social impacts of local procurement. For some attendees, it has become increasingly hard to access the time and expertise needed to keep up with everevolving daily operations.

Demonstrating the value of procurement is a struggle. We agreed in principle, what is valuable and how to capture it will vary based on what is important to our respective organizations.

Some agencies are considering including additional procurement tools in their arsenal to achieve efficiencies. Tools such as participating in the Canadian Collaborative Procurement Initiative (CCPI) from the federal government, joint procurements between two or more agencies as well as the use of group purchasing organizations (GPOs are known as co-ops in the US) like Sourcewell, University Health Network or Kinetic to name a few. While the GPO or co-op model is mature and widespread in the US, it has been used for a long time in parts of Canada—namely in southern Ontario, the Maritimes and the health sector.

We briefly discussed the National Cooperative Procurement Partners (NCPP), an organization that elevates the advocacy, collaboration and education for cooperative procurement professional bodies, now including Canadian members. This may help support and demystify the GPO model in parts Canada.

COLLABORATION IN PROCUREMENT Collaboration in procurement is near and dear to my heart. This all started when my mentor, Vern Jones, retired chief procurement officer with the State of Alaska, took me under his wing in 2012

Stephanie Dion, CPPB, is strategic sourcing specialist, supply chain management— strategic sourcing, corporate services division with Manitoba Hydro.

and provided me with firsthand exposure to the biggest co-op in the US, Naspo Value Point. Ever since then, I have been advocating for collaboration in public procurement.

Another discussion point was public procurement training.

Attendees expressed the need for more practical operational training delivered by procurement practitioners in Canada.

We learned NIGP is investing resources in reviewing its content and training materials. This involves inclusion of Canadians in “not-yet-dedicated’ volunteer positions, content creation and training delivery. Those are steps in the right direction and hopefully result in a more global perspective to NIGP’s procurement narrative, which has been heavily focused on US content and practices. Of course, the proof is in the pudding, eh? SP

IMAGE COURTESY OF STEPHANIE DION

PUBLIC PATHWAYS THE NATIONAL INSTITUTE OF GOVERNMENTAL PURCHASING FORUM IN AUSTIN SEES RECORD ATTENDANCE

professionals. It includes multiple training options and a new certification program called Certified Procurement Professional or NIGP-CPP. A s a Certified Public Professional Buyer (CPPB) myself, I was pleased to learn NIGP’s certification program does not replace the existing CPPBCPPO designations offered by the Universal Public Procurement Certification Council (UPPCC).

With resources being in short supply for public agencies, diversity in the market will hopefully make training and certification more accessible.

Now what about us Canadians?

Susan Kosey from the City of Regina and I hosted the Canadian agencies session. To be completely honest, it feels to me like a family gathering as the first thing we do is dismantle the room and set up the chairs in a giant circle so everyone can be equally part of the conversation if they choose.

It was a pleasure to facilitate this conversation with approximately 30 Canadian colleagues.

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THE 2019 ANNUAL SURVEY OF THE CANADIAN SUPPLY CHAIN PROFESSIONAL IMAGE COURTESY OF STEPHANIE DION

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BY MICHAEL POWER

ON THE RISE THE PAST YEAR SAW A HEALTHY JUMP IN AVERAGE SALARIES, ACCORDING TO THE 2019 ANNUAL SURVEY OF THE CANADIAN SUPPLY CHAIN PROFESSIONAL

F FACT

76%

The total number of 2019 survey respondents who say the supply chain role in their organization has increased in influence with senior management

Salary by region

$101,735 British Columbia

$92,047

Manitoba/ $103,376 Saskatchewan Alberta

$95,568 Ontario

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Supply Professional_October2019.indd 14

$94,978 Quebec

$82,317 Atlantic Canada*

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YOU SAID

Good news overall for Canadian supply chain professionals: it appears that average salaries in the field have seen a rise in 2019. Not only that, but every region of the country has gotten an increase in the average salary since the previous year—with British Columbia receiving the largest jump.

These are a few of the highlights from the 2019 Annual Survey of the Canadian Supply Chain Professional. Each year, Supply Professional magazine surveys readers about work-related topics including salary, job satisfaction, employment situation and organizational influence, along with challenges and trends in the field. This year, we’ve partnered with Supply Chain Canada for a more comprehensive look at the state of the field.

A REGIONAL LOOK Overall, the Canadian supply chain professionals we surveyed reported an average salary of $97,183. That’s an overall increase of 8.8 per cent over last year’s reported average of $89,334. British Columbia’s average salary rose from $89,063 in 2018 to $101,735 this year— an increase of 14 per cent. Alberta also saw a sizable jump from $93,694 to $103,376 for a 10per cent increase. Quebec saw the average salary increase from $83,581 to $94,978 (a 13-per cent jump) and Atlantic Canada went from $74,973 to $82,317 for a 9-per cent increase. Ontario went from $91,991 in 2018 to $95,568 this year, while Manitoba/Saskatchewan jumped from $89,560 to $92,047.

Among respondents, 41 per cent reported they had received a salary increase of 2 per cent or less, while 33 per cent had received a 2.1 to 4 per cent increase. Another 9 per cent gotten a

A lot more employers are now asking for supply chain training or if an individual is enrolled in a designation program/or has their designation. salary boost of 4.1 to 6 per cent. Nine per cent was also the amount of respondents receiving a 6.1 to 10 per cent increase and 7 per cent got a raise of 10.1 per cent or more, up from 5 per cent last year. Sixty-four per cent anticipated a raise next year.

GENDER GAP The gap between the reported earnings of male and female respondents closed slightly this year.

Since Supply Professional began performing the survey, a consistent result has been that women report making less than their male counterparts.

n=589

$91,429

Mean Salary by Type of Position n=589

2019 Executive

Managerial

Consultant Strategic Engineering/professional Supervisor Analyst Operations/tactical Clerical/administration Other positions

SALARY BY POSITION As is the case each year, a person’s position within an organization affects their salary. Not surprisingly, those at the executive level have the most earning power. Supply chain professionals at the executive level had an average salary of $140,715, up from last year’s reported average of $119,770. Next up is managerial professionals, who earn $108,537. Consultants took home an average of $104,664, a 22-per cent increase over the $80,697 they reported in 2018.

Those in “strategic” positions earned $100,813, while the engineering/professional category had an average salary of $91,913.

Supervisors reported that they earned $97,052 while analysts earned $82,460. The “operations/ tactical” category earned $81,613, while “clerical/administration” saw an average salary of $73,478. The average salary for “other” positions was $98,313.

AGE MATTERS A respondent’s age also affects how much they earn, with the younger the respondent the lower the salary. Those under 26 earned the least, at $41,520 (although the sample size was small, under 30). Respondents 26 to 35 years old earned $75,836 while those 36 to 45 took home $96,670. Those 46 to 55 had an average salary of $99,221 and 56-to-65 year olds earned $110,302.

Another factor affecting earning potential

Mean Salary by Gender

$100,605

In 2018, female supply chain professionals reported that they earned about $12,000 less per year than males. This year, men said they earned $100,605 while women took home $91,429 for a gap of $9,176 or 9 per cent.

BASE: All respondents

$140,715 $108,537 $104,664 $100,813 $91,913 $97,052 $82,460 $81,613 $73,478 $98,313

F FACT

66%

The number of survey respondents whose base salary increased in the past year.

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$110,302 $119,000 $96,670 $99,221 $75,836

Mean Salary by Company Revenue Up to $50 million

$

$41,520*

Under 26*

26 to 35 36 to 45

46 to 55 56 to 65

over 65*

$82,357

$51 million to $1 billion

n=589

Greater than $1 billion

$$ $$$ $102,038

$111,594

*small sample size (<30) in 2019

YOU SAID

Driving transformation to move from tactical cost savings to become a strategic business partner providing the organization with competitive advantage is key.

Mean Salary by Education Level is education, with a higher education level generally translating into higher earnings. Also, every age range with an adequate sample size saw their earnings increase this year. Those with a trade/technical diploma earned $87,273, up from last year’s $76,410. A college diploma meant an average salary of $94,961, while those with a bachelor’s degree saw a salary of $96,821. At $108,811, those with an MBA degree took home the most. Supply chain professionals with a university degree of any kind had an average salary of $98,183.

SIZE MATTERS The type of organization a respondent works at, along with its revenue and the number of employees, also affects how much supply chain professionals earn. Those working in the oil and gas extraction field earned the most this year, with an average salary of $121,270.

Those in the natural resources sector took home $108,693. The trade/wholesale sector earned $98,011 while those in public administration and manufacturing reported average salaries of $94,461 and $94,165, respectively. Those in the service industry earned $92,632 while the construction sector saw an average salary of $88,562. That’s followed by educational services at $87,130.

Those in supply chain looking for higher earnings would do well to join organizations with higher revenue, according to the survey.

The highest earners in the field work for companies with revenues greater than $1 billion, with an average salary of $111,594. Supply chain professionals employed at organizations with revenues between $51 million and $1 16 OCTOBER 2019

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High school or less Trade/technical diploma College diploma/CEGEP Some university University Bachelor’s degree MBA Other Masters PhD Univ. Degree/MBA/Masters/ PhD (Net) BASE: All respondents

2019

$91,963 $87,273 $94,961 $98,099 $96,821 $108,811

*$89,791 *n/a $98,142

*small sample size (<30) in 2019

Mean Salary by Type of Organization

2019 Natural Resources (Net) $108,693 Service (Net) $92,632 Trade/Wholesale (Net) $98,011 Manufacturing $94,165 Public administration $94,461 Educational services $87,130 Utilities $101,154 Oil and gas extraction $121,270 Construction $88,562 BASE: All respondents

billion earned $102,038 while those working at organizations with revenues up to $50 million took home an average salary of $82,357.

The same pattern shows up regarding the number of people on a company’s staff. With an average salary of $101,198, the highest

earners worked at organizations with 500 or more employees. Companies with 100 to 499 employees paid their supply chain professionals an average of $93,736, while the average salary for those employed by companies with one to 99 employees was $85,950.

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F

F

500 or more 100 to 499

$101,198

$93,736

1 to 99

$85,950

FACT

90%

The number of survey respondents who are Supply Chain Canada members that report being satisfied with their overall job.

Mean Salary by Number of Company Employees

THE TYPICAL RESPONDENT This year, the average respondent is 45.8 years old—slightly younger compared to last year’s average age of 49.7—and works an average of 42 hours a week. They have 18 years of experience in supply chain and 8.4 years at their current companies. They have also been in their job an average of 5.8 years.

When it comes to job functions (respondents checked all that applied) 90 per cent said they worked in purchasing/procurement while 72

per cent said supply chain management. A total of 69 responded with vendor management, while 69 said strategic sourcing. Overall, 39 per cent work management positions, 32 per cent have a strategic position and 26 per cent are in operations/tactical. They each supervised five people. Fifty-six per cent of respondents were male, while 41 per cent were female.

Respondents also personally placed an estimated annual sourcing volume of $29 million, while their departments placed $69

Q.10 to Q.12 Years of experience...

BASE: All respondents 2019 2109 2019

Total Supply Chain Canada Non-Supply

Chain Canada

n=456 n=456 n=57

Mean Mean Mean

In supply chain 17.9 At your current company 8.4 In your current job 5.8

18.1 8.3 5.6

20.1 11.9 8.6

Q.14 Has influence at the C-level

2 46 29 20 3 0

Supply Chain professionals are required to be at a higher level than ever before in terms of negotiations, collaboration, influence, strategy and marketing.

n=589

million. Their departments’ average supply chain budget this year was $80 million.

SATISFACTION RATES The overall higher salaries this year appear to come with an overall high satisfaction level from respondents. A total of 90 per cent of respondents said they were very or somewhat satisfied with their jobs overall. Within that percentage, 33 per cent said they were very satisfied, while 57 per cent answered that they

F FACT

BASE: All respondents 2019 2109 2019

Total Supply Chain Canada Non-Supply

Chain Canada

n=611 n=456 n=57

% % %

Yes, I am at the C-level Yes, I have influence at the C-level No, but I would like to have influence No, I don’t need to have influence Don’t know NS/ REF

YOU SAID

2 43 30 22 3 0

4 53 19 19 4 2

$108,693

The average salary for natural resources workers, the survey’s highest paid industry.

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YOU SAID

were somewhat satisfied. Another 8 per cent were not very satisfied and only 3 per cent said they were not at all satisfied.

Looking specifically at salary, 85 per cent of respondents were very/somewhat satisfied with their income. Among them, 27 per cent said they were very satisfied and 58 per cent were somewhat satisfied. Another 15 per cent reported being not very/not at all satisfied with their salaries. At the same time, 65 per cent agreed that their compensation level has kept up with their job responsibilities. Only 9 per cent strongly disagreed.

Along with their satisfaction regarding salary, the survey asked whether respondents felt their compensation level has kept up with their job responsibilities. Overall, 65 per cent agreed they had, with 20 per cent of those strongly agreeing.

Thirty-one per cent disagreed and 9 per cent strongly disagreed.

Across several other areas, respondents reported high levels of satisfaction with their employment situation. For example, 92 per cent

The pace of change and adoption of SaaS products has made it much easier for small companies to start leaping forward. However, a large number of forwarders are not making the leap and are still stuck on decades old legacy systems. said they were very/somewhat satisfied with their work/life balance, while 78 per cent said the same about the support they received for their career and professional development. As well, 87 per cent were very/somewhat satisfied with their benefits and 90 per cent were very/

somewhat satisfied with vacation time. A sense of job security is also high, since 89 per cent very/somewhat satisfied with how secure they were in their position.

As with previous years, the survey asked what the top supply chain issue respondents anticipated facing over the next 12 months.

Cost control usually ranks as the top concern, with this year no exception. Overall, 25 per cent of respondents answered cost control as the main issue, with staffing issues second at 8 per cent. Risk management, capacity shortages, technology upgrades and reorganization each garnered 6 per cent while lack of internal support was the main issue for 5 per cent of respondents.

Through reaching out to Supply Professional readers and Supply Chain Canada members across the country, we surveyed 611 supply chain professionals. That provides a margin of error of plus or minus 4 per cent, 19 times out of 20. The survey was fielded online from June 4 to July 21, 2019. SP

BASE: All respondents

Education courses and other continuing professional development Membership in professional associations Professional certification programs None of these NS/ REF

2019 Total

2109 Supply Chain Canada

n=611 %

n=456 %

2019 Non-Supply Chain Canada n=57 %

75 74 62 15 0

76 78 65 13 1

74 60 56 21 0 Š123RF.COM/ SUMKINN

Organization pays for...

Gross base salary, that is, before taxes or other deductions BASE: All respondents

Less than $50,000 $50,000 to $59,999 $60,000 to $69,999 $70,000 to $79,999 $80,000 to $89,999 $90,000 to $99,999 $100,000 to $119,999 $120,000 to $139,999 $140,000 and higher Prefer not to say 18 OCTOBER 2019

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2019 Total

2109 Supply Chain Canada

n=611 %

n=456 %

2019 Non-Supply Chain Canada n=57 %

4 7 10 12 22 14 9 6 n/a 16

4 6 11 13 23 13 10 6 n/a 14

4 7 7 14 23 12 9 5 n/a 19

Mean Salary by Education Level BASE: All respondents

Increased Decreased Remained the same NS/ REF

2019

58 5 36 2

SUPPLY PROFESSIONAL

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BY MICHAEL POWER

©123RF.COM/ SUMKINN

TECHNOLOGY ADOPTION SURVEY SHEDS LIGHT ON CHALLENGES OF USING NEW TECHNOLOGY Transformation has become a common pursuit among supply chains eager to adopt the latest technologies to help their organizations run smoother. Yet the tsunami of new technologies that are available can overwhelm to most experienced supply chain professionals. Organizations not only face challenges choosing among those technologies, but also various hurdles in implementation.

With this in mind, Supply Professional magazine asked about technology implementation and its challenges in our 2019 Annual Survey of the Canadian Supply Chain Professional. We surveyed respondents about the use of technology and digitization within their organizations.

According to the results, eight per cent of respondents said they’re currently using artificial intelligence, while 16 per cent said they plan to use it within the next 12 months. Meanwhile, 74 per cent have no plans to use it.

When asked about robotic process automation (RPA), 13 per cent of respondents said they are

currently using it, and another 11 per cent plan to do so in the next 12 months. As well, 75 per cent have no plans to use it going forward.

When it comes to blockchain, 84 per cent have no plans to adopt the technology, while 10 per cent said they plan to do so in the next 12 months. A total of three per cent are currently using it.

The internet of things (IoT) is seeing a slightly higher number who plan to use the technology in the next 12 months, at 19 per cent.

Another 12 per cent are using IoT, while 65 per cent have no plans to do so. At 61 per cent, cloudbased applications had the highest number of respondents who said they currently use it; 20 per cent said they planned to use it in the next 12 months, while 18 per cent said they had no plans to do so.

THE POWER OF BUZZWORDS But many organizations currently using technologies like AI and blockchain may not be aware they’re doing so, says Jon Trask, chief guru at Blockchain Guru.

Some of those functionalities are embedded in software design without users knowing it’s there unless they researched the system’s architecture, he says. Google, for example, contains elements of AI. “The Google search functionality uses natural language processing, and natural language

I just select the technology that I put in a platform that I’m building. And if blockchain was the right technology, they would get it and they wouldn’t know what’s in there

processing is a subset of artificial intelligence,” Trask says.

Now that terms like “blockchain” and “artificial intelligence” have become buzzwords with a certain marketing hype attached to them, clients frequently ask him how they can get started using them in their organizations, as well as asking about the benefits, Trask says. “I’ve never had to do that in the past—I just select the technology that I put in a platform that I’m building,” he says. “And if blockchain was the right technology, they would get it and they wouldn’t know what’s in there.”

ADOPTION CHALLENGES The survey also asked about challenges organizations faced when adopting technology, with 23 per cent of respondents saying a lack of strategic vision was their biggest challenge. Having no budget came in second, at 21 per cent while 15 per cent cited integration issues as their biggest challenge. Talent shortage (9 per cent), a lack of user buy-in (also 9 per cent) and lack of time (8 per cent) were the next largest hurdles.

He wasn’t surprised by the number of respondents saying they lack strategic vision surrounding technology adoption, Trask says. But it’s necessary to define what strategic vision means. For example, government organizations often have large documents outlining the system’s intent. But with other organizations, practically any $1 million implementation will have some type of paper or business case outlining what it hopes to accomplish. In many cases they may not share that with manageror associate-level employees. “So, the company has it,” he says. “The question is, are they sharing that?”

While not the case across the board, many Canadian organizations are innovative, early adopters of technology, Trask says.

Particular companies and industries tend to be more innovative than

others, with Canada’s oil fields having a global reputation for leadership in innovation. The country also tends to be innovative from a supply chain perspective, he notes.

In terms of advice for technology adoption, focus on what the system does rather than what the technology is, Trask counsels.

Rather than adopting blockchain or AI, companies should look to adopt a tool that solves a business problem—evaluate the tool based on how well it solves that problem rather than the nature of the technology itself.

“Companies tend to put a lot of pressure on internal employees to make that evaluation,” Trask says. “But work with good advisors that can help you evaluate the landscape. Especially if your company is demanding that you go evaluate blockchain as opposed to the merits of a blockchain system.” SP

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A WHOLE NEW WORLD

TRENDS IN THE WORLD OF SUPPLY CHAIN EMPLOYMENT Supply chain professionals face myriad challenges in the contemporary employment field. The evolving world of business means they must learn new skills while altering and improving their job-hunting techniques. At the same time, organizations looking to hire must ensure they are doing what’s needed to attract and retain the right talent.

To look at these and other supply chain employment trends, as well as to discuss the results of Supply Professional’s 2019 Annual Survey of the Canadian Supply Chain Professional, we spoke with several procurement and supply chain experts. They weighed in on the survey results, employment trends and more.

The increase in the average supply chain salary this year to $97,183 from last year’s $89,334 was a good sign for the industry, says Sean Naidu, business manager—procurement/ purchasing at Hays Recruiting Experts Worldwide. Overall, the job market is busy with plenty of opportunities across the board in services and manufacturing, especially in Ontario. At the same time, many organizations are looking to reduce their number of employees while increasing efficiency with the staff they have, Naidu says.

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Vacant positions are often at the buyer or senior buyer level, with candidates more able to jump from one industry to another for novel experience and exposure. “Gaining more exposure and confidence in working in different industries is something that a lot of people want to try to do versus just being in that one industry for say, 10 years,” he says.

The importance of soft skills is also rising, Naidu notes, with the traits of communication and confidence increasingly important to hiring managers. The ability to influence, collaborate and work closely with stakeholders as well as think strategically are all important. While companies still need those with technical skills, strategic ability is increasingly a factor when making hiring decisions. “It’s almost a balance of finding someone that has the transactional and the strategic ability,” Naidu says.

The services area, and indirect procurement services specifically, are seeing more hiring, Naidu adds. Manufacturing and the public sector are also hot right now. Whatever the field, Naidu advises researching the company before applying and be targeted in your approach. As well, companies don’t want candidates who apply to multiple business units in one organization.

“Know what you want to achieve in your career—what’s the path you really want to get into,” Naidu says. “If you get the call from the employer, are you able to sell your skill set as it applies to the job?”

GENDER PAY GAP Looking at this year’s salary survey, Neil Drew, director at Winchesters, a recruitment firm, highlighted the gap between salaries earned by men and women. Men reported earning $100,605 while women reported earning $91,429—a gap of 9 per cent. While that’s a smaller difference than 2018, it shouldn’t exist at all. “It has closed, but it’s still a 9 per cent difference, and it shouldn’t be,” Drew says.

“I’ve said it every year and I think we need to continue to say it every year. Why?” A larger emphasis on supporting the new generation of female procurement and supply chain professionals may help to maintain the gains women have made in the field, he suggests.

The survey results show salaries increasing overall, and Drew notes he has seen the same trend. Small- to medium-sized enterprises (SMEs) are paying more and catching up to larger organizations, likely driven by SUPPLY PROFESSIONAL

2019-10-09 4:41 PM

competition for the best candidates. In fact, the market is more candidate driven than it has been since the financial crisis in 2008.

Some employers are starting to invest in trying to hire the best talent, Drew says, which has pushed salaries up this year. Companies that have tried to hire staff at lower salary levels haven’t seen the quality of candidates they want, especially in the hyper-competitive market in Toronto and its surrounding municipalities. As well, more investment in procurement and supply chain transformation has meant a booming job market, and therefore, competition for top talent, Drew adds.

“The first thing to do in a transformation is hire,” Drew says. “We’ve always said that in procurement and supply chain, we’ve been a little behind some countries in Europe and the US. We seem to be really attacking it now.

So, there seems to be in the couple of years a big influx of hiring and that leaves gaps elsewhere. Which means salaries have gone up to compete.”

Regarding important skills in the field, Drew stressed the advisory, consultative role of procurement and supply chain to stakeholders, vendors and clients—strong communications skills will be necessary going forward.

“Systems are getting better, so administrative, operational functions will decrease,” Drew says. “Technology and process implementation is big now, but once that’s done, I think what will be left is an advisory approach and giving stakeholders a service to walk them through the process, versus just ordering some stuff and letting them know when it comes in.”

RISING SALARIES It’s heartening to see salaries rise in the survey over the previous year, says Sam Manna, specialty recruiting partner in supply chain and logistics, direct and indirect procurement, operations and planning at Horizon Recruitment. Practically every region and province saw an increase in the average salary, with the $9,682 jump in Alberta perhaps due to recovery in the oil and gas sector. Also encouraging were increases in Atlantic Canada and Quebec, Manna says.

He agreed with others in the field that the supply chain job market holds plenty of

Know what you want to achieve in your career— what’s the path you really want to get into. If you get the call from the employer, are you able to sell your skill set as it applies to the job?” opportunity for candidates. Growth across most sectors makes it a candidates’ market, with organizations fighting to attract top talent. The jump in average salaries for strategic positions (consultants’ salaries jumped 22 per cent, for example) indicated the value placed on such positions and the importance of innovation.

Adapting to the times, thinking outside the box and embracing new technologies and ideas are characteristics supply chain professionals should hone to be successful, Manna says.

“Those that are able to adapt are seeing it reflected in their salary and in the demand for candidates like themselves,” he says.

One trend Manna sees is the rise of the cannabis industry and supply chain candidates looking for employment there. It’s not so much the product that attracts them, Manna notes, but the opportunity to start on the ground floor of a new industry.

“It’s also the challenges that go along with that as well, from building a supply chain from the bottom up, to putting in the contracts with the manufacturers, the producers, and then getting that out to market,” Manna notes. “It’s a challenge in so many different ways, from market penetration and from the industry, from the regulations and dealing with the different provincial guidelines as well.”

BIG BANG TO SUPERNOVA Tim Moore, owner and president of Tim Moore Associates, notes that it’s important for companies to consider the attitudes and behaviours of different generations when searching for candidates, whether it’s the Traditionalists (born before 1946), Boomers (1946 to 1964), Generation X (1965 to 1976), Millennials (1977 to 1997), or Generation Z (1995 to 2005).

While members of demographic groups

spanning 20-plus years won’t all share the same behaviours and attitudes, Moore encourages companies to think openly and generationally to evolve and accommodate all age groups.

Doing so helps employees of all generations grow, motivates them to stay while allowing employers to benefit from their unique skills and perspectives.

Through new technology and innovation, Moore sees the supply chain field expanding so much and so rapidly that there is a looming shortage of qualified candidates with the right academic credentials. With disruptive trends like AI, the Internet of Things, digital twins, blockchain and other innovations, the field will see a “big bang” of potential employment opportunities rather than technology wiping out jobs in the field.

“In reality it’s gone supernova with expanded scope, far faster and further than we ever thought,” Moore says.

With an aging workforce, supply chain managers are retiring faster than they’re being replaced and there’s not enough new supply chain talent to fill the gap, Moore notes. By some estimates, there are six roles to fill for every new graduate with supply chain skills.

Now, he notes, supply chain practitioners need skills that include geopolitical savvy, corporate social responsibility, deep understanding of logistics and disruptive technologies and socalled soft skills like leadership, creativity, communication and collaboration. Meanwhile, business schools aren’t keeping up with the demand for qualified teaching staff in the supply chain field.

“The qualifications are expanding as well,” Moore notes. “You’re getting fewer people and the ones we have must expand their qualifications for the job they’re doing now.”

With so many disruptive forces affecting supply chain, it’s more important than ever that practitioners hone their skills and stay abreast of technology developments. However, it also affords opportunities to grow professionally, advance in the field and potentially earn more.

It’s a rewarding, if challenging, time for the field. SP

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BY MICHAEL POWER

ALMA ARZATE ON THE IMPORTANCE OF PERSEVERANCE AND PASSION IN SUPPLY CHAIN When Alma Arzate was little she dreamed not of supply chain but of medicine. Her childhood ambition was to become a doctor and she even worked as a volunteer paramedic while still living in Mexico. Like many others, it was by happenstance that she applied for and got a position in the field, a decision she made only after encouragement from a manager at the time.

The decision has served her well. Since entering the field, she has relocated to Canada, risen to become global director, supply planning at Apotex Inc and has been named to the top 100 influential women in her field, among other accomplishments.

And yet, Arzate notes, when looking to advance their careers, women often hold back if they don’t check every possible qualification box. Other sources support that claim—for example, a 2014 blog post by Tara Sophia Mohr in the Harvard Business Review says that men apply for a job when they meet 60 per cent of the qualifications, while women apply only to openings if they meet 100 per cent. The statistic, from an internal Hewlett Packard report, has also been cited in books such as Lean In, by

Facebook’s COO Sheryl Sandberg.

But not having all the answers can be a strength, stresses Arzate. “I’m sure we have all been put in positions before where we didn’t have past experience, and we made up for our lack of experience with passion, creativity, perseverance and collaboration,” she says.

“As women, we just need to keep reminding ourselves we are more than capable to rise to any challenge.”

While she has faced her share of such challenges during her career, Arzate has also risen to meet them. Earlier this year, she was named to the Supply Chain Canada’s (formerly the Supply Chain Management Association) first ever 100 Influential Women in Canadian Supply Chain list. She and the other winners were honoured at the organization’s annual national conference in Montreal in June. At the request of Supply Chain Canada’s president and CEO, Christian Buhagiar, she also gave a speech on behalf of the winners at the celebratory breakfast ceremony held at the conference.

“I had to reflect on what being named into the first-ever list meant to me and to others,”

A START IN BUSINESS That journey began in Ciudad Juarez, the most populous city in Chihuahua state, Mexico.

Ciudad Juarez is sister city to El Paso, Texas, and the two cities and surrounding areas host the operations of a number of large, multinational companies. It also has several maquiladora— which are factories run by a foreign company that export products to the country in which that company is based. These factories operate largely duty and tariff free.

Despite this international environment, Arzate notes that supply chain was never really a career option she considered. Despite her childhood interest in medicine she decided in high school to get a business degree, encouraged by her mother, Dora, who showed her classified ads from maquiladora companies looking to hire those with a bachelor of business administration.

It simply seemed like a practical path.

Supply chain also wasn’t highlighted as a career choice while she attended the Technological Institute of Ciudad Juarez (ITCJ), where she earned her BBA, or the Autonomous University of Ciudad Juarez (UACJ), where she got her MBA. But when a vacancy for a buyer, indirect procurement position arose at the company she worked for, her manager encouraged her to apply. At the time, she had experience largely in the finance area. But the hiring manager took a chance, Arzate says, and offered her the job.

“I really enjoyed the fast pace, how every day brought me different challenges to overcome, and how I was able to make tangible contributions to the success of the business—I was hooked!” she says.

By the mid-2000s, Arzate and her family made the decision to relocate to Canada. This,

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JOHN PACKMAN PHOTOGRAPHY

RISING TO THE CHALLENGE

she says of the speech. “To me, besides being an honour, it has also served as a recognition for the challenging journey that brought me where I am today, and I also shared this recognition with my husband, Jesus, who has been supporting me every step of the way.”

JOHN PACKMAN PHOTOGRAPHY

I’m sure we have all been put in positions before where we didn’t have past experience, and we made up for our lack of experience with passion, creativity, perseverance and collaboration. We just need to keep reminding ourselves we are more than capable to rise to any challenge.” she now says, was her biggest challenge in her over 20 years in supply chain. After about four years of back-and-forth processing, Arzate, her husband and their (then two) children were granted Canadian permanent residency status in 2005.

But the family had to return to Mexico after their initial landing in Canada, as they weren’t yet ready to make the final move. Arzate had to remain at her job in Mexico as a supply chain manager for Johnson & Johnson Medical Devices for another year and a half. Finally, an opportunity arose at a J&J subsidiary in Canada, and Arzate applied. She had been monitoring job alerts for four years, but no solid opportunities had come up until then.

“I did well in the interview process, which you could say was the most important interview of my life,” Arzate says. “After sorting out some logistical challenges I was offered a job as a project manager, new product launch, in Toronto. We relocated in 2007.”

The physical relocation to Canada was the easy part of the process, she says. The real challenge surrounded integrating into the Canadian culture and workplace. On top of having to establish good working relationships with office peers and superiors, the family’s first winter in Canada was a harsh one. Arzate was pregnant, her son’s lack of English meant he struggled to find friends at school and her daughter began speech therapy. The family had no friends in Canada and no ties to the local community.

“We didn’t know where to get our hair cut, or where to buy our favourite food; even getting our driver’s licences was a long and complicated ordeal.”

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Reading books that are unrelated to my profession allows me to expand my horizons, which in turn helps me bring fresh perspectives and insights to what I do every day.

But as she was able to demonstrate a solid performance, Arzate was promoted to manager, project management in 2009, then to senior manager, supply chain in 2011. That helped her land a role as a director, supply chain planning in 2012 with Apotex Inc, a pharmaceutical manufacturer in Toronto. She is now global director, supply planning, for the company.

NO DAY TYPICAL And like many in supply chain, Arzate stresses that few if any days qualify as “typical.”

Collaboration, resiliency and perseverance are among the key traits that must be developed to succeed in the field long term. While some challenges can be resolved quicker than others, not knowing what lies around the next corner comes with the job.

Generally, a day in supply chain for Arzate involves lots of emails, several meetings and face-to-face conversations, comparing KPI results with targets, discussing talent and development planning with managers, along with reviewing the status of projects and initiatives. “I’m lucky I have a chance to work with a world-class team that’s as passionate about continuous improvement as I am,” Arzate says. “There are, of course, standard business processes and reporting going on, but no one day is exactly the same as the prior one, and that’s one of the main reasons why I really enjoy what I do. It keeps me on my toes!”

Facing these daily challenges still didn’t prepare her for the surprise last February when she got an email from Supply Chain Canada’s Buhagiar saying that she had been named to the 100 Influential Women in Canadian Supply Chain. At first, she says, she thought the message was a prank, but then recovered enough to check that the message was real. “When I met Christian a few months later at the 2019 Supply Chain Canada National Conference and Awards Gala in Montreal, he told me that most of the honourees reacted the same way,” Arzate says. “We just could not believe we were being recognized.”

The recognition paved the way for Arzate to join Supply Chain Canada and begin a role as a volunteer regional advisor for York Region, north of Toronto. She was also a guest speaker at the Ontario chapter’s “Take the Lead: Women in Supply Chain” conference in London, Ontario. She was asked to join its member engagement committee, which reports to the board of directors, and works to ensure the Ontario Institute’s strategic plan is executed

properly, and members are involved, engaged and continue to advance the profession. She officially joined the committee in September.

As she shared the honour on social media, other internationally trained supply professionals who now call Canada home contacted her to say her recognition gave them hope that they too could achieve their dreams.

Arzate remains positive about the supply chain sector and her place in it. And while she has over 20 years of experience in industries including automotive, electronics, medical devices CPG and pharma industries, she is always looking to explore new areas and hone her skills. In the years to come, Arzate hopes to continue adding value and taking on challenges that will offer her an expanded scope and increased responsibilities.

Along with her supply chain career, Arzate is a mother of three children: a 20-year-old son, Jesus, attending York University in Toronto, a 14-year-old daughter Victoria attending Grade 9 pre-AP high school and another daughter Gabriella, 11, who is in Grade 7. She met her husband Jesus while volunteering as a paramedic (EMT) for the Mexican Red Cross.

Her husband was an ambulance driver and EMT team leader at the time. These days, each of the couple’s children have their own activities and need support at different levels, she says. On top of that, the family includes a six-year-old diabetic dog and a rescued tabby cat, age 12.

“You get the idea of how busy life at home can become at times,” she says. “That means that I must get creative when it comes to carving out some me time.”

Arzate does that through audiobooks, which help her transition from work to home and back again. She thanks her father, Rogelio, for encouraging her love of books when she was young. He would buy her comics and short stories when she was little, moving later to broader topics and larger books. Her father, she notes, was cultured and well-read despite never finishing university. “We were a middleclass family growing up, my mom being a kindergarten teacher and my dad working for the Mexican government, so we weren’t able to take too many vacations,” Arzate recalls. “Books were my ticket to new worlds and allowed me to use my imagination and enrich my perspectives in life. Once I grew up and started working, I was able to travel and meet a lot of interesting people. But my love of books always remained strong.”

While Arzate can’t read physical books

as often due to her schedule, she switched to audiobooks about 10 years ago. Since then they’ve become her commuting companions, and she’s now able to browse the e-library aisles and check out any topics or authors that catch her interest. A recent book is Matt Richtel’s An Elegant Defense: The Extraordinary New Science of the Immune System.

“Reading books that are unrelated to my profession allows me to expand my horizons, which in turn helps me bring fresh perspectives and insights to what I do every day.”

The term “supply chain management” can seem confusing to those new to the profession, Arzate points out. But the field becomes more relatable once you realize the impact it has on the daily lives of most people. Food, clothing, electronics and many other products rely on the interconnected network of activities that brings goods and services to consumers, she says.

TALENT NEEDED There’s also a sizable shortage of supply chain talent, both now and into the foreseeable future, Arzate notes. Finding and retaining that talent remains a major focus of leaders in the field, she says, counselling those new to the profession not to limit themselves to one position or industry.

There are several ways to gain more experience and hone skills—on-the-job training, coaching and mentoring, advanced education, along with professional designations like the SCMP—that can help those looking to take on more advanced roles in the field. Supply chain career choices cover a broad spectrum and the skills that can be learned are transferable across many careers and industries, Arzate says. High demand also means employers will offer competitive compensation for those skills.

For those considering supply chain as a career, Arzate suggests simply giving it a try.

After all, she notes, what’s the worst that can happen? Those who decide supply chain isn’t for them can always change fields. But they can still keep the experience, which can prove valuable and transferable to other professions.

And what about those who end up loving supply chain and decide to stick with it?

“Then you can gain the satisfaction of helping resolve the many challenges that come with it, working your way through the many pathways until you become an expert in your field, and ensuring that supply chain becomes a competitive advantage for your company,” Arzate says. “Trust me, the journey is fun and rewarding. You will not regret it!” SP

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2020 car previews Highlights from the 2020 model year.

Fleet optimization Getting the most from your fleet program.

2020 truck previews An autumn truck haul.

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Cold weather driving tips Fall and winter driving tips for safety.

Tire trends Whatâ&#x20AC;&#x2122;s new in the world of tires.

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

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

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

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Fleet Management

Jim Pattison Lease partners with Visa Truck Rentals and Leasing Jim Pattison Lease has partnered with Grande Prairie, Alberta-based Visa Truck Rentals and Leasing. The partnership will continue to operate the existing rental and leasing business that has been in operation for over 40 years.

“Jim Pattison Lease is excited to welcome Visa Truck Rental customers to our group, and we look forward to continuing to provide superior customer service as well as expanding the lease and fleet management service offerings available,” said Michael Rusch, president of Jim Pattison Lease.

“We are pleased that the entire team of employees will continue to look after the existing customers.”

Visa has locations throughout Western Canada offering vehicles for short- and long-term project needs, including light and medium duty applications. All employees of Visa will join the new operation.

ARI launches interactive video for fleet stakeholders

NAFA Ontario holds annual ride & drive NAFA Ontario held its annual ride and drive event on September 26 at the Paramount Fine Foods Centre in Mississauga, Ontario. Several hundred fleet professionals registered to attend the full-day event, which featured over 90 vehicles from NAFA’s OEM partners along with displays from fleet suppliers and an upfitter and aftermarket equipment area.

Several automotive companies were on-hand to allow fleet professionals and other attendees to test their sedans, crossovers, SUVs and trucks in an in-traffic course.

Hyundai to form autonomous driving venture Aptiv and Hyundai Motor Group will form an autonomous driving joint venture. The venture will advance the design, development and commercialization of SAE Level 4 and 5 autonomous technologies, the companies said. They will begin testing fully driverless systems in 2020 and have an autonomous driving platform available for robotaxi providers, fleet operators, and automotive manufacturers in 2022.

Hyundai Motor Group and Aptiv will each have 50 per cent ownership stake, valued at US$4 billion. Aptiv will contribute its autonomous driving technology, intellectual property and roughly 700 employees focused on the development of scalable autonomous driving solutions.

The new joint venture will be led headquartered in Boston, with technology centres across the US and Asia, including Korea.

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Vancouver gets two electric buses Saint-Eustache, Quebece-based Nova Bus has delivered two fully electric Nova Bus LFSe vehicles to TransLink, South Coast British Columbia Transportation Authority in Vancouver.

The buses were delivered as part of the Canadian Consortium for Urban Transportation Research and Innovation (CUTRIC) Canada-wide Interchangeability Project.

With an electric motor system powered by an integrated battery system, the electric buses provide better fuel economy, reduced

maintenance costs and reduced greenhouse gas emissions, the company said.

Nova Bus’s collaboration with CUTRIC began in 2016 to help municipalities make the most of the investments that electric public transit requires, in particular by making electric buses and manufacturers’ charging stations cross compatible. The goal is to standardize infrastructure and equipment to give transportation companies more flexibility.

Fleet services provider ARI launched an interactive video experience to help fleet stakeholders navigate business challenges. The eight-part video series highlights how an organization’s fleet investment can influence the company’s success, the company said, providing insight for viewers to maximize their fleet’s revenuegenerating potential.

“For most organizations, fleet represents a significant investment but all too often, fleet is viewed as a cost center with a myopic focus on simply containing costs,” said Rick Tousaw, executive vice-president and chief commercial officer, ARI. “One of the goals of this video series is to change the lens through which fleet is viewed and help stakeholders solve their real-world business challenges that transcend fleet.”

The video at FleetIsAnInvestment.ca guides viewers through covering the key lifecycle phases of a fleet vehicle: buy, drive, service and sell. Fleet stakeholders can explore how external factors like economic trends, evolving technology, and shifts in consumer buying habits may disrupt the way they conduct business and alter their fleet strategy.

Throughout the video experience viewers can access additional resources such as whitepapers and cost calculators, letting them delve into specific topics relevant to their business challenges, including cost containment, driver safety, vehicle downtime and capital forecasting.

Curbing distracted driving Despite penalties and new technology, many can’t ignore their cellphones and other distractions while behind the wheel. Results from Desjardins’ national survey show 53 per cent of Canadians admit to having driven distracted by their cellphones at least once—up from 38 per cent last year.

More are also aware of the dangers, with 32 per cent (27 per cent in 2018) saying it’s the riskiest driving behavior, just behind alcohol-impaired driving at 35 per cent (37 per cent in 2018).

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THE BEST DESERVES THE BEST.

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.

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Fleet Management

By Lesley Wimbush

Toyota

Subaru According to Subaru’s research, while loyal buyers expect improvements, they don’t want their cars to change too much. Therefore, Subaru’s popular all-new Outback crossover returns in 2020 with a host of new technology but retains the same familiar styling. Standard in all but the base model is a new 11.6-inch touchscreen infotainment system. Also new is available driver distraction monitoring, and a new Onyx Edition appearance package with upgraded off-roading capability.

New and Noteworthy What’s in store for the 2020 model year The brisk air, changing leaves and diminishing daylight are all signs that the year is coming to a close. But while 2019 may be winding down, the automakers are ramping up to deliver a whole new crop of vehicles for 2020. Here are just a few of the new and noteworthy.

With over a million units sold last year, Toyota’s compact Corolla is the world’s most popular car. Thanks to its reputation for reliability, affordability and efficiency, the Corolla’s never really had to woo buyers with stylish looks or sporty handling. But for 2020, Toyota’s bread and butter car gets a groundup makeover with fresh new looks and vastly improved driving dynamics. In addition to the base 139hp four-cylinder engine, is a 2.0L four-cylinder producing 169hp, or a new hybrid that delivers 4.5L/100km in fuel efficiency.

Mitsubishi Mitsubishi has turned around and is once more enjoying a healthy growth rate. Outlander crossover is largely carried over for 2020, having been refreshed this year with a new front fascia, 18-inch wheels, new eightinch touchscreen and upgraded suspension and steering for PHEV models. There are two engine choices: a 166hp, four-cylinder and a 224hp V6, or a hybrid model with a combined output of 197hp and rated at 9.0L/100km.

Ford Ford recently made the shocking announcement that they’d be axing all of their passenger cars except the Mustang, and 2020 marks the beginning of that process. The compact Escape crossover assumes the role of bread-and-butter car, receives a ground-up makeover and becomes longer, wider and safer than ever before. It also returns with its first hybrid powertrain, in addition to the current 180hp, and 250hp turbo four-cylinder engines.

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FCA

Nissan Despite the crossover domination, Nissan’s compact Sentra sold just over 213,000 vehicles last year– even though it hasn’t had a major refresh since 2012. The latest Sentra will be longer, wider and ride lower for 2020, with the floating roof and V-motion grille design that debuted with the new Altima. It’s sleeker, bigger and rides lower with a better centre of gravity for improved handling. The revised cabin also resembles the more upscale Altima, offers optional two-tone leather and new tech features like Pro-Pilot assist suite of driver safety aids. The older base 1.8L four-cylinder will most likely be replaced by the same new 141hp 2.0L in the Rogue Sport crossover.

Fiat Chrysler group may have retired the Plymouth name in 2001 but it owes a lot to that brand for creating a whole new segment when it introduced the Voyager minivan. The Voyager returns for 2020 as a budget model based on the Pacifica. Standard equipment includes a 287hp V6 and ninespeed transmission, a seven-inch touchscreen, blind spot monitoring, cross traffic alert, rear park assist, air, keyless entry, stowable third row seat, cruise control, Apple CarPlay and Android Auto. Upper trims will get Chrysler’s famous “Stow-andgo” second row seats.

Mazda

Chevrolet The Trax, introduced in 2013, was Chevrolet’s first foray into the new subcompact crossover segment.

Refreshed in 2017, there are a couple of changes for 2020, after which it expected to be redesigned as the all-new Trailblazer. For 2020, the Trax has a standard six-speed automatic across all-trims, dropping the six-speed manual on the base LS. Standard equipment includes 3.5 inch driver display, keyless entry, seven inch touchscreen, tilt/telescoping wheel and power door locks. Available features include six-way power driver seat, passive keyless entry, rear park assist, rear cross traffic alert, lane departure warning, and all-wheel drive. Fuel consumption is 9.1/7.6L/100km (city/highway) and 10.0/8.0 for all-wheel-drive models.

Consumers can’t get enough of small crossovers it seems. Reflecting that, Mazda is adding another small crossover to its lineup that’s predicted to become its new core model. The 2020 Mazda CX-30 will slot between the sub-compact CX-3, and the CX-5. Based on the Mazda3, the all new crossover features and hatchback styling with rugged black-plastic lower body cladding.

Powertrains include the 2.0L with cylinder deactivation technology and a new SKYACTIV-X engine that reportedly reduces fuel consumption by as much as 25 per cent. All-wheeldrive and G-Vectoring control are available, and there’s a choice of manual or automatic transmissions, both six-speed.

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Fleet Management

Hyundai Hyundai’s mid-size Sonata returns all-new from tip to tail. A sleek new design features a coupe-like roofline, and distinctive chrome “lasso” encircling the LED headlights. A raft of new technology comes standard, forward collision assist, smart cruise control with stop and go, lane follow assist, highway drive assist, driver attention warning, parking collision avoidance, blind-spot collision avoidance assist, rear cross traffic avoidance assist, blind spot monitor and high beam assist. There are two new engines available, a 2.5L fourcylinder with 191hp, and a turbocharged four-cylinder with 180hp that promises 8.5L/100km. The new Sonata offers such sophisticated technology as digital key, which uses a smart phone app to store customer profiles and can be used in lieu of the traditional key. Remote smart parking assist lets you use the key fob to guide your car in and out of tight parking spots, while you’re standing outside within 30 feet of the car.

Mercedes-Benz In order to stay relevant in a segment that’s increasingly competitive, Mercedes compact GLC crossover, which only debuted in 2016, gets revised front and rear fascia and some interior updates. New upholstery and trim choices are available and the redesigned centre stack features a 10.25-inch touchscreen with the latest Mercedes software and standard Apple CarPlay and Android Auto. While the hybrid powertrain carries over unchanged, the base model GLC now comes with a 255hp turbo-charged four-cylinder, and the AMG GLC 43 gets a power boost from 362hp to 385hp. There’s a new nine-speed automatic transmission and 4MATIC AWD is standard on all Canadian GLCs.

Honda Although it had a complete makeover in 2017, the Honda CR-V gets a refreshing facelift for 2020. As one of Canada’s best-selling crossovers, the CR-V can’t afford to rest on its laurels – its competitors certainly won’t. While the design continues

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virtually unchanged, all new CR-Vs will get darker chrome, and unique badging and logo for all hybrid models. Like the Accord and Pilot, the CR-V will get a push-button gear selector, freeing up room in the console. Hybrid models receive a new digital display, and paddle shifters to control brake regeneration. The 212hp hybrid is predicting a 50 per cent better fuel economy rate than the traditionally powered model, with 6.2L/100km, which makes it more efficient than the Toyota RAV-4 hybrid.

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Fleet Management

By Howard J Elmer

Trucking into 2020 New truck models for the New Year

GMC

The small diesel program is complete. For 2020 each of the Big Three automotive companies now has a 3L turbo-diesel available in its half-tons; and in the case of Ram, a second-generation updated version of the Eco Diesel. The midsize segment gained a new player in late 2019 with the all-new Jeep Gladiator and along with the Ford Ranger’s return this market is once again healthy.

Heavy duty pickups are also on the move—larger, stronger and more powerful—and this expanding market niche is getting lots of attention with updates to all the players complete by the first quarter of 2020.

Dodge The 1500 Ram was all-new last year, and there’s a significant body and interior updates carryover to 2020. What is new is the re-introduction of the 3.0L EcoDiesel engine. This small diesel has undergone an extensive mechanical update. Max payload is 2,300lbs, while towing capacity is 12,7000lbs.

Regarding the 2020 Ram Truck HD 2500 and 3500, the new generation of HD Ram dropped as a 2019 earlier this spring. The truck gained all the interior appointments already found in the 1500 series as well as new electronic technology like the seven-camera surround view system broadcast on the 12-inch center stack screen. The other big news was the next generation of the 6.7L Cummins diesel that now makes 1,000lbs-ft of torque.

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Updated at the same time as the Silverado, the Sierra nevertheless carries some unique features into the 2020 model year. It’s multi-function convertible tailgate and carbon-fiber bed liner are proving to be very popular. There’s a maximum payload of 2,030lbs and towing capacity of 9,600lbs. The 2020 Canyon and Colorado are midsize twins that are in a carryover year and sales remain strong. They have a maximum payload of 1,620lbs and maximum towing capacity of 7,700lbs (with the 2.8L I-4 diesel).

Jeep Jeep is doubling down on its success with a brand-new midsize pickup truck for 2020. This new 2020 Jeep Gladiator’s body-on-frame design offers four doors on a stretched frame that’s 31 inches longer than the Wrangler four-door. The wheelbase on the truck is also 19.4 inches longer. This design provides for a five-foot cargo bed. It’s powered by the Pentastar 3.6L V6 and can be ordered with a manual six-speed. The max payload is 1,600lbs and the max towing capacity is 7,650lbs.

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Ford Ford’s Super Duty is the last to post its new 2020 HD numbers, so it’s no wonder they are the highest. Max gooseneck towing is up to 37,000lbs, fifth-wheel towing is 32,500lbs and conventional towing is 24,200lbs. The power stroke diesel itself is also updated to 474hp and 1,050lbs-ft of torque.

The all-new 7.3L gas V8 is also best in class with 430hp and 475lbs-ft of torque. Max payload has increased to 7,850lbs. Ford’s new 10-speed TorqShift automatic transmission is available with all the engine options. Meanwhile, the F-series is in a carry-over year, however it continues to hold the number-one Canadian sales position, primarily because of its multiple engine, body and trim options. The maximum payload is 3,279lbs and its max towing capacity is 13,200lbs. On sale since spring the 2020 Ford Ranger returns after an eight-year absence. A mid-size truck, its powered by the 2.3L Eco-Boost engine and 10-speed automatic transmission. It also available with an off-road FX4 package. It has a maximum payload of 1,860lbs and a maximum towing capacity of 7,500lbs.

Chevrolet The update of the GM HD twins includes the upgraded Duramax 6.6L diesel that now makes 445hp and 910 lbs-ft of torque. It is also paired with a new 10-speed automatic transmission. The truck is larger, stronger and offers many new electronic driver assist features. There is also a new gas engine option, a 6.6L V8. The maximum towing capacity is 35,500lbs.

Meanwhile, the Chevrolet Silverado 1500, a half-ton, was all-new last year and introduced a new 2.7L turbo engine and a Dynamic Fuel Management system. This year though is a new small diesel. The 3.0L is an in-line six design and it makes 277hp and 460 lbs-ft of torque. It’s also said to be the leader in fuel economy. It has a max payload of 2,500lbs and towing capacity of 12,200lbs.

Toyota The 2020 model is a carryover year for the Tacoma. The current powertrain remains (3.5L Atkinson V6 with either the five-speed manual or six-speed automatic). What is new is Toyota’s promotion of the TRD and TRD-Pro offroad versions of the truck—that and limited edition colours. Its maximum payload is 1,500lbs and maximum towing capacity is 6,500lbs. The Tundra is due for its seven-year update. However, Toyota is very secretive and won’t let anything slip on what’s to come. Still, there are rumours—mostly about powertrain updates. Frankly, new and more engine options are exactly what the Tundra needs. It will be next winter before we really get a look. The Tundra has a maximum payload of 1,710lbs and towing capacity of 10,000lbs.

Nissan There are changes coming to the Titan XD next year. The only one we know about for sure is the discontinuing of the 5L Cummins engine option.

It will be Christmas before we get a look at the new sheet metal and get a sense of where Nissan is taking the Titan XD. The payload and towing capacity are unavailable. Meanwhile, what happens to the larger XD will no doubt apply to the half-ton Titan but only time will tell—the current model’s maximum payload is 1,610lbs and the towing capacity is 9,390lbs.

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By Michael Power

Tips for staying safe and warm on the roads Colourful leaves, pumpkins on porches and frosty temperatures can only mean that winter is close. For fleets, preparing for winter driving starts in the autumn.

Kaitlynn Furse, manager of public relations at the Canadian Automobile Association, offers tips for before winter hits.

Batteries: Drivers often forget about their vehicles’ batteries, but Furse stresses keeping them top-ofmind as colder weather approaches.

Even fully charged batteries can stop working when it gets cold.

It pays to test batteries in the autumn. “We’ve seen battery calls at the CAA in the Southcentral Ontario region increase about 25 per cent over the last two years alone,” Furse says. “We’re seeing a lot more batteries dying, largely because of extreme weather swings. But also because of the increase in entertainment systems and things that draw on the battery in more modern cars.”

Breaks: Clearly an important safety feature, Furse advises to check breaks and have them regularly serviced. Listen for squealing or grinding noises when applying breaks.

Tires: Install four matching winter tires, preferably before November 15 if your insurance company provides a discount. Otherwise, pay attention to the weather and change tires when the temperature gets around 7 degrees Celsius or lower for a week or two. “People might think, well it’s not snowing yet, but it’s really more of a temperature thing that you want to think about,” Furse says.

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Air pressure: While changing to winter tires is routine for many, it’s easy to neglect the air pressure of those tires. Check the pressure every month, Furse advises. Tire pressure goes down as the temperature drops which can be a problem since decreased tire pressure can affect steering.

Visibility: Check that windshield wipers are functioning properly and ready for the winter. Also ensure that windshield wiper fluid is topped up.

Drive to conditions: Trips may take longer in inclement weather, so preventative planning can go a long way, Furse says. Completely remove snow from your car before driving. It’s important for your own visibility as well as so that other motorists’ visibility isn’t limited by snow flying from your vehicle.

Also, make sure to warm up your vehicle before driving.

Plan your route: Stay on main

roads as much as possible to help get you to your destination as quickly and as safely as possible, Furse notes. Main roads tend to be better ploughed and sticking to them helps to keep motorists out of unexpected situations.

Electronics: Keep a phone charger in your car. Having a fully functioning mobile device makes it easy to call for help if necessary. When on the road don’t use overdrive or cruise control. “It’s really a matter of keeping complete control of the vehicle, driving according to those weather conditions and making sure you’re focused on the task at hand,” Furse notes.

Exercise caution: Drive slowly in the colder months and stay well back of both snow ploughs. As well, slow down and move over for emergency vehicles.

In the vehicle: Review your vehicle emergency kit and ensure it’s fully stocked, Furse advises.

2

©123RF.COM/ TRENDOBJECTS

Winter wheels

In the winter, travel with a shovel (collapsible, if possible), scraper, snow brush, flashlight as well as extra clothing like hats, mittens, scarves and a blanket. Have a basic first aid kit, along with food that won’t spoil and some extra water bottles. While water can freeze in the winter, it’s still a good idea to be prepared for any situation, Furse says. Also try to ensure that there’s some sort of light, flare or something else to help make the car and its occupants more visible if there’s a need to pull over.

Roadside: If you pull your vehicle to the side of the road and don’t feel it’s safe to get out, stay inside with your seatbelt on until help arrives, Furse advises. If you do have to get out of the vehicle, exit on the side away from traffic. “If you’re looking under the hood, try not to stand directly in front or behind the vehicle because it’s a bit of a blind spot,” Furse says.

“It’s actually much harder for people to see you. Stay as visible as possible.”

Be prepared: Keep an eye on local weather and news stations before a trip, Furse says, and check maps and routes in advance. Not only does this help you avoid collisions, bad weather and other delays but can also help to save gas—always a consideration for fleet drivers.

Winter and cold-weather driving means special considerations for Canadian motorists. But with some planning and knowledge, fleet drivers can keep themselves safe and warm on the roads as the temperature drops.

For more information from CAA on winter driving, visit https://bit.ly/2zB2bEf. FM/SP

FM/SP SUPPLY PROFESSIONAL

2019-10-09 4:45 PM

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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.

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Fleet Management

By Kate Vigneau

The right fit Having a right-sized fleet is key to fulfilling the mission of your organization. Whether you are a small landscaping business with 20 vehicles or a large municipality with 5,000, understanding and achieving fleet optimization should be at the core of rightsizing initiatives. The size of your fleet directly impacts the ability to complete your mission and has a significant impact on your organization’s financial bottomline. Too few vehicles and you can’t get work done. Too many vehicles and you’re burning money needlessly. The key is to have the “right” utilization when it comes to your fleet.

What is a right-sized fleet? Ed Smith, president of Agile Fleet, has been involved with fleet right-sizing initiatives for almost 20 years and has worked with many types of fleets. While he acknowledges that every fleet has some unique characteristics that change the importance of each component of utilization, he has concluded that the quantity and use of vehicles is not the only variable to focus on. Smith believes there are four key components of a rightsized fleet, namely: 1. The right quantity – Do you have the right quantity of vehicles, in other words not too many and not too few?

2. The right location – Are the vehicles available where they are needed? If you have vehicles yet they are not affordably accessible at the location where the work or the 36 OCTOBER 2019

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Kate Vigneau, CAFM is director of professional development, NAFA— Fleet Management Association.

Not only the overall fleet, but every vehicle in it, must be right-sized for the task.

drivers are located, then vehicles are effectively not available.

Alternatively, if a seldom-used class of vehicle is accessible just a short distance away, perhaps that class of vehicle is not needed at each fleet location. This is also where we can take asset criticality into account. There are some pieces of equipment that are so critical to supporting an organization, that they are needed at several locations, regardless of use (think of a firetruck or other emergency response equipment).

3. Right type/class – Do you have the right type or class of vehicle? If I have 10 box trucks available yet have a need for more small passenger vehicles, I really haven’t fulfilled the need for small passenger vehicles. NAFA Fleet Management Association agrees that not only the overall fleet, but every vehicle in it, must be right-sized for their primary task.

When procuring a new asset, you should ask: Is the engine large enough to perform the recurring tasks but not oversized? Can the task be accomplished with a twowheel drive vehicle instead of a four-wheel drive vehicle? Can we get by with four radio speakers instead of six? Can we use the treadplate platform on the liftgate instead of the extruded aluminum?

A component of right sizing is choosing the right class of vehicle and upfitting just enough vehicles to do the job.

4. The right time – Do drivers have access to vehicles when they are

needed? Are vehicles available after hours or on weekends? If access to vehicles requires access to a motor pool office or an outside rental office that is closed, needs go unfulfilled. Your drivers need access to vehicles at the time the job needs to be done.

Knowing you want to optimize your fleet is one thing, actually doing it requires information and resources. Gathering baseline metrics is a good place to start and can be done in a variety of ways: • Manual observations of parking lots, odometers, et cetera; • Motor pool systems; • GPS (odometer, trip data; • Fuel records (odometer, fuel consumed) • Work orders (odometer, maintenance costs); and • Online expense and trip reporting records.

While the answer to how to best optimize your fleet will vary by organization, the following initiatives are proven optimization strategies: 1. Implement vehicle sharing technology or services 2. Disband unwarranted “sub-fleets” 3. Implement GPS to provide better oversight of vehicle use 4. Improve your understanding of utilization 5. Analyze reimbursement for use of personal vehicles 6. Identify options to fulfill peak demand for vehicles 7. Enhance fleet policy Vehicle sharing is generally a solution that results in savings that are greater than any other type of FM/SP SUPPLY PROFESSIONAL

2019-10-09 4:45 PM

©123RF.COM/ DMITRY KALINOVSKY

Fleet optimization through right sizing

solution that can be introduced to a fleet. If you can create an environment where the number of vehicles in the fleet is aligned with the total number of vehicles actually needed in the fleet, you would need fewer vehicles. Vehicle sharing does just that. Assigned vehicles are effectively consumed by an individual or department whether or not they are being used.

Motor pools offer the ability to provide vehicles on demand. In doing so, the ratio of drivers-tovehicles can grow. And the size of a fleet can dramatically decrease while offering the following benefits to drivers:

©123RF.COM/ DMITRY KALINOVSKY

Access to more vehicles – A misconception of motor pools is that vehicles may not be available when needed. In practice, the opposite is true. Pooling helps eliminate situations in which a sub-fleet may have peak demand (run out of vehicles) yet another sub-fleet has vehicles sitting idle.

Motor pools help even out the average demand and provide the

additional vehicles needed to meet peak demand.

Access to more vehicle classes – Another benefit of a pool is that the pool can contain a variety of vehicles. A vehicle such as a cargo van that is seldom used within a sub-fleet may be available via a motor pool for those occasions that one is needed.

Transitioning the administrative and maintenance functions from non-fleet staff – Typically nonfleet staff do not enjoy taking care of administrative (insurance, registration, et cetera) tasks related to a fleet. Administrative tasks, maintenance and other fleet-related tasks take time. When vehicles are transitioned to pools that are overseen by fleet staff, these tasks are shifted away from non-fleet staff. This is often a welcomed improvement.

Reducing costs to the end department or organization – “Pay as you need it” is generally a much

cheaper option than “pay all the time.” Paying an hourly or daily charge for a motor pool vehicle only when it is needed can reduce costs significantly.

Operating small, geographically co-located sub-fleets in most environments can be one of the least efficient ways to operate a fleet. That’s because you generally plan for worst-case scenarios when it comes to the size of a department fleet. For example, if a university admissions department has peak demands that require eight passenger vehicles for a few months out of the year, that department would have a fleet of at least eight vehicles. At other times of the year, their peak demand may be closer to three vehicles. At the same time that the admissions department needs eight vehicles, another department sharing the same parking lot may have five idle vehicles. Yet another department may have three vehicles not in use.

The peak and low demands for vehicles across departments most likely average out. By pooling,

fewer vehicles are required to fulfill the mission for the organization as a whole.

Implementing GPS technology can be a great start to a vehicle right-sizing initiative. GPS technology, when used with vehicle sharing, is a great resource for understanding utilization. GPS tracking systems can tell when vehicles are in use and when they are away from their home location and therefore not available to other departments. This type of data is key to understanding utilization.

Use of personally owned vehicles (POVs) often impacts fleet utilization because it decreases demand on the fleet.

Use of POVs makes sense in some circumstances. However, reimbursement for their use is often such a financial windfall for drivers that the privilege is abused. With just a few minor adjustments this problem can be overcome.

Plan to understand, and revise, your fleet policy. You will need policy in place to implement changes resulting from your utilization studies.

Fleet optimization through right sizing is one of the hottest topics in fleet. Why? We have the manual and automated tools to access data to confirm our intuition regarding fleet size. We can prove that a given fleet is too large, or not the right composition. We can then take the actions outlined here to make the necessary change to optimize our fleet, resulting in improved efficiency and ultimately, save money. FM/SP *Contains excerpts from Fleet Utilization & Achieving a Right-Sized Fleet http://blog.agilefleet.com/vehicleutilization-a-challenge-get-our-new-indepth-guide

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FLEE T C HA L L E N G E S S O LV E D

5 fleet investment decisions to boost your brand

BY CHRIS HURREN, EXECUTIVE VICE PRESIDENT AND CFO, HOLMAN ENTERPRISES. Chris is an experienced automotive finance professional, serving in senior roles for both domestic and foreign OEMs in Canada as well as previously serving as ARI Canada’s Vice President of Finance.

It’s time to consider the intangible ways your fleet spend is tied to your business objectives.

Reducing costs, raising efficiency, and improving safety are all critical. But so is your brand image and the relationship your customers have with it.

What is your fleet worth? Sure, you can calculate the value of your vehicles as tangible assets, but this question isn’t really about a dollar figure on a financial report. The actual worth of your fleet is tied to driving a positive connection with your customers and supporting business success. What is the value of your employees arriving on time and ready to deliver your products or services? And since your name appears on all of your vehicles, what’s the value of your drivers’ appearance and behvaiour?

What’s the cost of the impression they leave on customers?

Investing in your brand The ways in which you invest in your fleet can have a profound impact on your company’s image. Here’s a look at five important areas that can affect your brand.

1. Financial strength Strong brands come from financially strong companies, so the amount of money your company allocates to the fleet is fundamental. This includes how your fleet budget will impact both short- and long-term strategic goals. Remember, the capital investment includes the initial acquisition expense and the full term of the lease or loan payments.

What is the most effective way to allocate your capital?

Fleet investment decisions have a direct correlation to your company’s overall ROI, so consider all of the possible options – cash purchase, lease, and financing.

2. Looking good Perception is reality, which is why investing in the appearance of your vehicles is so important. You want the sight of them to make a lasting and positive impression. That means making sure your vehicles always look their best, paying attention to wear and tear, and promptly replacing vehicles in bad shape.

You can promote a positive brand image by applying a consistent, annual replacement strategy rather than replacing vehicles solely based on their age and mileage. Also relative to your financial strength, this strategy helps avoid age and mileage expenses that can drive budget forecast swings of 10 to 15 percent. You don’t want to diminish the public’s faith in your commitment to quality. If it looks like you don’t care about your image, why should your customers care about you?

3. Driver performance You’re keenly aware of the tangible costs of driver behvaiour when it comes to vehicle wear and tear, and how it ultimately impacts your balance sheet in the short-term. Make sure you’re also mindful of how driver performance can potentially impact the long-term value of your brand. Your employees’ driving behvaiour has an even greater influence on public opinion than your vehicles’ appearance. If they are thoughtless or careless on the road, the lasting negative impression is tied to your company’s name. Even behvaiours like idling reflect your priorities.

When you invest in driver training and driver policy enforcement, you strengthen your company’s culture and enable your employees to be strong brand advocates.

4. Efficient maintenance Your vehicles have to show up to meet your customers’ needs, but that can’t happen if they’re not well-maintained.

A common mistake is postponing routine fleet maintenance to support business schedules or to create short-term savings. In the long run, vehicle expenses actually increase due to component failures. Also, costs related to lost work and revenue will resonate across your entire company.

Investing in vehicle maintenance is critically important to your brand. This includes complying with preventative maintenance schedules that keep vehicles in working order.

It also requires having a trusted network of repair vendors who can get your vehicles back on the road ASAP. 5. Reputation for innovation Where do you stand among your peers and competitors in terms of innovation? Investing in technology is important to any company seeking market leadership. For fleet management, that means integrating vehicle and driver data. Adding telematics is a game changer in terms of creating actionable data related to both costs and risks that you can address immediately.

Telematics technology paired with predictive analytics play a huge role in helping you avoid detrimental trends, identify opportunities to implement savings and efficiencies, and enhance your image in the minds of your customers.

For your biggest return on investment, you should be managing your fleet beyond just short-term capital and operating expenses. When you partner with ARI, you’ll never overlook all the ways your fleet spend is tied to your brand and your business objectives. We can help you establish a financial strategy for your fleet to serve as a tool that builds your brand and contributes to the long-term growth of your company.

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2019-10-09 4:45 PM

Fleet Management

By Stephanie Wallcraft

Tread tips

Getting the most from tires throughout their lifecycle Tire management on the scale required for fleets demands careful planning, proper upkeep and effective communication with operators, with the reward adding up to significant cost savings.

“It’s a large operating cost for a fleet, typically second only to fuel,” says Keith Willcome, application engineer for Bridgestone Americas.

“Taking care of those tires will really save fleets money in the long run.”

Efficiencies can be found at every point in a tire’s lifecycle, from choosing and purchasing to ongoing maintenance and determining optimal pull points.

Select the right tire

“Whether a customer is happy with their tire through the life of the tire is really going to start with whether they’ve purchased the correct tire for their application,” Willcome says. “If it’s a passenger car and they need long life and low noise, they’re going to choose a different tire than if it’s an SUV where they need to do some mild off-road.”

Tire suppliers can recommend the best tires for varying uses.

Chris Foster, manager of fleet management services for ARI, says that establishing a national account with a supplier partner that matches your fleet’s geographic footprint brings multiple benefits.

“Partnering with a national account vendor who provides coverage that aligns with your operating footprint allows you to take advantage of volume pricing and also ensures consistent pricing across the board, eliminating the 40 OCTOBER 2019

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need to monitor each individual transaction,” Foster says.

All of Quebec and most of British Columbia require drivers to use winter tires with the mountain-snowflake logo on the sidewall during colder months of the year.

With two sets of tires to manage for every vehicle, this increases expenses for fleet operators. Vince Boldrini, Truckserve supervisor for ARI, says the new class of all-weather tire, a winter-rated tire that shows reduced wear in summer conditions, may be appropriate in certain situations.

“All-weather tires have improved significantly and in many applications there is no longer a need for snow tires,” he says.

“Today, most fleet operators only opt for snow tires in extreme applications and in those jurisdictions that mandate their use.”

Willcome adds the type of vehicle and tire being considered can affect this decision. “The only exception I would say is on the (Firestone) Destination line (all-weather tires for SUVs and light trucks),” he says. “Those are all-terrain tires, so if a fleet customer (wants) something that’s going to be ultra-quiet on the highway, that’s the only application where I would not recommend those tires.”

Matthew White, director of tire service for the Tire Industry Association, suggests that if there’s any doubt of whether a tire type under consideration will work for an entire fleet, a smaller trial can reveal a great deal. “If I have any doubt, I’ll experiment and find out

what’s best before I change the whole fleet,” he says. “You’d turn the whole fleet over for $1 million and it turns out that type of tire is not the right one.”

Ensure proper maintenance

Checking tire pressures on an ongoing basis helps to preserve their longevity. The vehicle manufacturer ratings for original equipment tires can be found inside the driver’s side door jamb, although White says that frequent use under higher load weights can necessitate

Tires should be examined as part of the vehicle’s regular maintenance schedule, and rotations should be performed at approximately every 10,000km.

varying from the listed pressures.

The more frequent the checks, the better, Willcome says.

“If a professional driver (is) going to be operating that vehicle every day, they should check it out visually every morning before they start their day,” he says. “But if that’s not practical, then at least a monthly PSI check would be recommended.”

White adds that, when equipped, tire pressure monitoring systems take the work out of observing tire pressures. These systems have been required in the US since 2007, so many vehicles ship to Canada with them equipped despite not being required here by law.

Tires should be examined as part of the vehicle’s regular maintenance schedule, and rotations should be performed at approximately every 10,000km. This, plus checking wheel alignment regularly, helps to encourage even tire wear. At these checks, tires should also be inspected for damage.

“Check with a penny or tread depth gauge to verify that treads are in good shape,” Willcome says.

“Checking for sidewall damage or any other damage, cuts, blisters, bulges, things like that. If you do see anything, have that tire checked out by a professional.”

Know when to retire

Setting parameters around pull points reduces the potential for confusion or misuse by operators.

The minimum tread depth that’s considered safe in ideal conditions is 2/32”, but Willcome explains that fleets may decide to pull tires earlier depending on their needs.

“Especially going into the winter season, they may pull at 4/32” or put new tires on in the fall,” he says. “That’s at the fleet’s discretion as to what works for them and what their drivers feel comfortable with.”

ARI’s experts recommend establishing a fleet-wide tire policy.

This outlines expectations around which tires are to be purchased for a given asset, acceptable minimum tread depths, which vendors to use for purchases and maintenance, service cycles and other important information. FM/SP FM/SP SUPPLY PROFESSIONAL

2019-10-09 4:45 PM

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SUPPLY CHAIN’S BETTER WORLD ASCM 2019 CONFERENCE DRAWS ABOUT 2,000 DELEGATES. Supply chain professionals from around the world gathered in Las Vegas from September 16 to 18 for the Association For Supply Chain Management (ASCM) 2019 Conference. The event, which hosted about 2,000 attendees, featured seminars, speakers and keynotes along with networking opportunities.

During the conference, Supply Professional magazine spoke with Abe Eshkenazi, ASCM’s CEO, to discuss the organization’s focus, the supply chain field’s direction and more.

The ASCM, formerly known as APICS, has 60 years of history and has transitioned over the years, Eshkenazi said. Previously, its focus has been purely on the supply chain professional. But that has changed as companies now view their supply chains as an integrated activity rather than several disparate parts.

It’s now companies that promote workforce development, rather than just individuals.

“It has really challenged us to ask the question, ‘who do we represent and what is the outcome of our efforts as an organization?

What our value proposition to the companies?’” he said.

To represent professionals and their companies from an end-to-end supply chain perspective, APICS began several mergers and 42 OCTOBER 2019

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consolidations with other associations starting in 2010 and 2011. But since launching ASCM last year, the organization has realized it’s actually at the beginning of its journey, rather than the end. It must now focus on the impact that supply chains have on people, economies and patients.

“We truly believe that we can make a difference in the world through supply chain, that we can have a better world through supply chain,” Eshkenazi said. “Our focus right now is to use supply chain to drive positive results for consumers and patients across the globe.”

The supply chain field has changed during that time, Eshkenazi said. Previously, technical competency and subject matter expertise were enough. Now, he says, that’s the price of entry.

Other skills, such as advanced management skills, collaboration ability and developing cross-functional relationships are the keys to advancement.

Academia, businesses and industry associations must now work together to address issues such as the skills shortage, which Eshkenazi said involved not only the competencies that supply chain professionals need but the number of those in the field. As well, the fact that supply chain has multiple entry points into the field with no one career

path to leadership is both a benefit and a challenge.

“This is a rewarding career, but the awareness is just not where it needs to be in terms of job opportunities, leadership opportunities and making a difference in an organization,” he says. “I think we have a significant challenge.”

The ASCM has also partnered with Supply Chain Canada, Eshkenazi said. Such partnerships give an opportunity to leverage the resources that organizations like Supply Chain Canada have, which can benefit both sides.

It also affords the chance to co-develop, and perhaps even co-sponsor, events or research studies, he noted.

There are also several trends currently challenging supply chains, Eshkenazi noted.

These include sustainability, which goes beyond just the environment to cover other factors like geopolitical unrest that threaten organizations’ ability to continue their supply chains. It’s difficult to prepare for circumstances when there’s little clarity into what the impact of those circumstances will be.

“Organizations are taking the necessary steps to mitigate their risk of disruption to their operations, through a variety of different strategies—whether technology or through disparate manufacturing or sourcing, we’re seeing a greater response to that,” he said.

Talent development and the skills shortage is another challenge, with ASCM anticipating a gap in supply chain of about two million people by 2025. While there are more graduates, their competency and capabilities aren’t consistent with what employers are looking for. They must therefore spend time and effort training new employees in fundamentals they should have learned during their education.

Still, ASCM is excited about supply chain’s role in making a difference in the world, Eshkenazi said. “We’ve found our true north as an organization, and that’s connecting the supply chain professionals as well as the companies to the impact that they’re having on SUPPLY PROFESSIONAL

2019-10-09 4:46 PM

PHOTOS BY DOROTHY JAKOVINA

ASCM’s chief executive officer Abe Eshkenazi.

Supply chain risk management is the intersection between supply chain management and risk management, said presenter Gregory Schlegel.

people, on patients, on economies across the globe,” he said. “We can grow the organization and we can make a difference in the world.

PHOTOS BY DOROTHY JAKOVINA

RISK MANAGEMENT The conference featured several education seminars, including one focused on supply chain risk and resiliency, presented by Gregory L. Schlegel, founder of the Supply Chain Risk Consortium and executive-in-residence at Lehigh University in Pennsylvania.

Schlegel began his session with a definition of supply chain risk and resiliency, which he noted is “the implementation of strategies to manage every day and exceptional risks along the supply chain through continuous risk assessment with the objective of reducing vulnerability and ensuring continuity.”

He also encouraged the seminar’s several hundred attendees to think of supply chain risk management as the intersection between supply chain management and risk management.

Schlegel discussed a 21st-Century supply chain risk maturity model, a four-stage approach with visibility as the first stage. The second

We truly believe that we can make a difference in the world through supply chain, that we can have a better world through supply chain.

stage is predictability, which involves digitizing the supply chain in order to do planning and what-if scenarios. The third stage is resiliency and the fourth is sustainability. Each step in this process is about two-and-a-half to three years, although they may take longer depending on the organization. “Throughout this journey, you have to constantly think about identifying, assessing, mitigating and managing risk,” Schlegel said.

As supply chain maturity grows, the risk decreases although never disappears, Schlegel said. The supply chain risk management landscape is large, and organizations must know where they are. He also shared Allianz’s top-10 risks for 2019, which includes cyberattacks, geopolitical unrest, market volatility and, at number one, business interruptions. “That’s us, folks,” he told the audience about the numberone spot. “Good, bad or indifferent, we’re at the top of the food chain when it comes to chief risk officers’ concerns.”

Schlegel defined risk appetite as what level of risk a company is comfortable experiencing or embracing. Risk appetite is tied to company

culture, so it’s important to understand that culture relative to how much change it can handle and how it embraces change.

Schlegel also noted five cognitive biases related to risk from a McKinsey & Company report, which include: action-oriented bias, prompting people to take action with less thought; interest bias, arising from incentives within the organization that tend to be conflicting and misaligned; pattern-recognition biases, causing people to see non-existent patterns in data; and confirmation bias, meaning to see patterns that support existing beliefs. As well, stability bias is a tendency towards inertia in uncertain environments; and social bias comes from our preferences for harmony over conflict.

Risk is also a matter of perspective, Schlegel said, highlighting four perspective archtypes commonly used to look at risk: maximizers (who don’t consider risk to be as important as profits); conservators (who view increasing profit as not as important as avoiding a loss); managers (who are careful to balance risks and rewards); and pragmatists (who avoid commitments and keep options open).

There are also four strategies that tend to align with the four perspectives: loss controlling, favoured by conservators, which looks to identify and mitigate the firm’s most significant risks; risk accepting, which is favoured by the maximizers; risk steering, favoured by academics and consultants in which decisions go through rigorous analysis; and diversifying, meaning exposure is spread among various risk classes to avoid concentration in the same class (favoured by pragmatists).

Looking at these factors helps to increase awareness of risk appetite, Schlegel said. He quoted management consultant and author Peter Drucker, who said that “culture easts strategy for breakfast.” Risk is all about culture and tends to be a very emotional arena, he added.

“We’re trying to give you some firepower and ammunition if you’re going to move into that arena,” Schlegel said.

Schlegel also focused on resiliency, noting that a resilient enterprise can overcome disruptions and transform itself to meet changing needs and expectations of customers, shareholders and stakeholders.

Schlegel also discussed a PWC study from 2016 discussing resiliency and agility, which covered almost every major industry sector.

The company asked questions about where respondents fell on agility and resiliency maturity curves. Agility is proactive and better prepared for supply chain risks, while resiliency is reactive and more responsive to those risks.

The ASCM 2020 Conference takes place in New Orleans, September 13-15. For more information, visit https://bit.ly/2Boaenk. SP SUPPLYPRO.CA 43

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2019-10-09 4:46 PM

BY MICHAEL POWER

STARS OF CANADIAN DIVERSITY CAMSC CELEBRATES 15-YEAR MILESTONE AT BUSINESS ACHIEVEMENT AWARDS GALA The annual CAMSC Business Achievement Awards Gala 2019 gave attendees plenty to celebrate the night of September 26 as suppliers, diversity advocates, corporations and others gathered at Toronto’s Liberty Grand. Each year, the event honours suppliers and corporate partners across Canada in their roles as supplier diversity leaders.

This year marked the Crystal Celebration for CAMSC as it celebrated its 15th anniversary along with recognizing its partners, supporters and diverse suppliers.

The gala event was hosted by Brandon Gonez, reporter and anchor with CP24 news in Toronto.

CAMSC president and CEO Cassandra Dorrington told the audience that the progress the organization had made over that 15 years wouldn’t have been possible without support the support of others.

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“CAMSC does not stand by itself,” Dorrington said. “Our growth and our successes are the culmination of the work we do with you and for that, we thank you for playing a role in assisting and supporting CAMSC as we drive the mandate of inclusive procurement across Canada.”

When the organization was incorporated in 2004, the term “supplier diversity” was unknown in Canada, she said. Since then CAMSC has built the business and by 2009 the organization had gained traction and supplier numbers and corporate members were growing. “The business case for supplier diversity was actually starting to gain hold,” Dorrington said. “We were starting to see some real successes.”

But supplier diversity in Canada still faces challenges, she added. Making the business case and convincing decision makers to implement supplier diversity and procurement policies remain critical, Dorrington said.

And yet, supplier diversity continues to gain traction, she added. At the end of 2018 spend with CAMSC certified Aboriginal and minority-owned suppliers had exceeded $5 billion.

“While that’s only one of the many metrics that indicates success, it’s one which we are very proud of,” Dorrington said.

The winners of the CAMSC Business Achievement Awards Gala 2019 are: SUPPLIER OF THE YEAR Champion Products won the Aupplier of the Year award.

The company began in Windsor, Ontario selling shopping bags to supermarkets and expanded to become a diversified product distributor selling over 9,000 products to thousands of customers.

Champion Products represents over 300 suppliers, operates 250,000sqft of warehousing, maintains a fleet of delivery trucks and employs

150-plus people full time. It has locations in Toronto, Windsor, Alberta and Detroit.

PROCUREMENT BUSINESS ADVOCATE OF THE YEAR Elizabeth Auceda, Sodexo’s Canadian manager for supplier diversity, took home the Procurement Business Advocate of the Year award. She joined Sodexo in 2009 and was appointed lead for the company’s supplier diversity in Canada in 2017. She advances supplier diversity and, through strategic planning and unique value propositions, has strengthened the program’s growth. She works to ensure that all areas of supplier diversity are captured and moving forward, building a strong impact through networking and mentoring.

SMALL BUSINESS OF THE YEAR Drug Intelligence, an information provider about treatment for serious and complex diseases, won the Small Business of the Year Award. The company updates and integrates datasets to challenging commercial, medical, access and compliance demands of speciality medicines used to treat those conditions. Drug Intelligence provides context for its clients, who must navigate the treatment landscape, so they can prioritize their efforts and optimize their business.

TECHNOLOGY INNOVATION AWARD Trinity Tech Inc. won the Technology Innovation Award.

The company is an automotive quality service provider for the North American and global automotive markets. Since 2009 it has worked with Fortune 500 companies and has completed over 10,000 projects. Trinity Tech works on quality assurance issues related to software, electrical, electronics engineering, new technology testing, launch and GP12 support, project management and manufacturing support. It provides services to over 300 companies.

COLLABORATION AWARD The Nova Scotia-based Black Business Initiative (BBI) took home the Collaboration Award.

The organization supports blackowned businesses and communities in that province, working to enable economic independence. For 23 years BBI has worked with and supported Nova Scotian black entrepreneurs and youth through training, business counselling, mentorship, advocacy, financing and other support activities.

TIER 1 CHAMPION OF SUPPLIER DIVERSITY Flex-N-Gate won the Tier 1 Champion of Supplier Diversity award. The minority-owned business has created a culture of inclusion and believes diversity provides richer experiences for its associates and stronger solutions for customers. It attends procurement trade fairs for minority, women, Aboriginal and veteran-owned businesses across North America.

CORPORATION OF THE YEAR Accenture, winner of the Corporation of the Year award, champions change and empowers communities with practices like its Supplier Inclusion & Sustainability Program, which reaches 18 countries. Another program, the Diverse Supplier Development Program, develops relationships with businesses owned by ethnic minorities, women, people with disabilities, LGBT community members, veterans and others.

The program matches Accenture executive mentors with diverse supplier protégé companies.

PRESIDENT’S AWARD Fiat Chrysler Automobiles (FCA) won the President’s Award. The company provides opportunities for diverse suppliers and since 1983 has purchased nearly $80 billion from minority, women and veteran-owned companies. In 2018, FCA US spent $9 billion with over 300 diverse suppliers also provides advocacy and consulting services to certified LGBT-owned and disability-owned suppliers. SP SUPPLY PROFESSIONAL

2019-10-09 4:46 PM

IN THE FIELD—BY BRAEDON WOROBETZ

NEGOTIATION LEVERS UNDERSTANDING THEM CAN HELP SHAPE NEGOTIATION OUTCOMES Every day, supply chain professionals from various industries and backgrounds apply their skills, knowledge and expertise to the complex art of negotiating. While negotiation strategies continue to evolve and mature, at its core, negotiation remains relatively simple in nature.

The main controls that regulate the negotiating process function collectively like mechanical levers.

These levers encompass all aspects of the negotiation including the eventual outcome.

UNDERSTANDING LEVERS Imagine you walk into a negotiation room and instead of people you find several mechanical levers on the wall. Each lever is labelled with central pillars such as cost, quality, delivery, service, as well as others relevant to the particular good or service you are procuring. Some labels will be easy to read and identify while others will be hidden in the shadows.

These levers are the foundation on which a successful negotiation is built. It is up to you, as the buyer, to identify and understand all levers present.

MANIPULATING LEVERS Still in the negotiation room, you survey the positions of the levers and seize the opportunity to gain the upper hand. Racing over to the wall you pull down the cost lever as hard as you can. To your surprise it moves and instantly the price becomes cheaper. Well, that was painless, wasn’t it? Unfortunately, no. At the same time cost was adjusted, the quality and delivery levers also moved down. Reacting, you race over to correct the two levers simultaneously, but they won’t budge. Abandoning quality, you try delivery on its own and it starts to rise but the service lever

on the other end of wall drops.

Exhausted, you step back to reassess. It appears that the levers are connected somehow but you’re unable to see behind the wall.

LEVER METHODOLOGY By utilizing the following key strategies, where appropriate, you will be able to effectively and efficiently navigate through all phases of the negotiation lever process.

1. GATHER RELEVANT INFORMATION Ensure that the proper environmental scans and market analysis are completed ahead of time. This will aid in framing what is reasonable, in terms of outcomes, to all potential stakeholders.

2. MANAGE INTERNAL EXPECTATIONS It is unlikely that everyone within the stakeholder group will understand how negotiation levers operate. Work with them to create a deeper understanding of the levers and keep them informed throughout the process.

3. BUILD TRUST If reciprocal trust can be built or increased, a door may open to see behind the wall of levers. It is here you will see firsthand the interconnectedness of each lever and understand where adjustments can be made to produce the desired result.

4. ANTICIPATE The levers will be set to a specific position from the start. Usually, this is done by the supplier but can be done by you, the buyer, if expectations—whether through a competitive process or not—are laid out from the start. You will be able to enter the negotiation room

with a visualization of where the levers should already be set to.

5. UNCOVER INTANGIBLE AND LOW RESISTANCE LEVERS It is important to remember that some levers are intangible features such as the account rep assigned to your company. A seasoned account representative versus a new customer service agent could play a huge factor in the overall delivery of the good or service.

Additionally, some levers can be adjusted with little or no effect on others. One example of this might be extending payment terms.

6. AVOID MINIMIZING Do not overlook or discount certain levers on the basis that they are not important to you or your company at the time. These levers will often play a significant role in accomplishing the desired outcome.

Braedon Worobetz, MBA, SCMP, is a supply chain professional based in Edmonton.

“ Suppliers need to make a profit in order to stay in business.

You need to have a vested interest in their business and work towards a mutually beneficial relationship.”

7. EMPATHIZE Put yourself in the supplier’s shoes.

Suppliers need to make a profit in order to stay in business. You need to have a vested interest in their business and work towards a mutually beneficial relationship.

If not, the likelihood of decreased performance will go up as the supplier tries to recuperate costs and keep their bottom line intact.

8. MONITOR Levers should be continually monitored through key performance indicators, service level agreements, and proactive contract management.

Although procuring a good or service at the lowest cost, highest quality, fastest delivery and white-glove service sounds great, this combination rarely exists. If somehow it is initially obtained

what follows in the days, weeks, months and years ahead are regular, often uncommunicated, price adjustments, quality issues tied to inferior materials, late deliveries and decreased service levels. By understanding the levers pertaining to each particular negotiation, and utilizing the approach methodology described above, a sustainable longlasting result can be achieved. SP SUPPLYPRO.CA 45

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2019-10-09 4:46 PM

THE LAW—BY SUSAN LAWSON

A DIFFERENT BALLGAME RFPS IN THE PRIVATE SECTOR I would wager that the first thing we tend to think of when the topic of requests for proposal (RFPs) comes up is contract A/contract B, and that is about where the conversation ends. RFPs and their complexities are not for the faint of heart. But this article isn’t about the many rules that apply and what you need to watch out for—it’s about the risk that the RFP may become an ineffectual tool in the private sector.

In the public sector the RFP, with its scary contract A, makes sense, at least in principle. In the public sector the rigour of the RFP process is the best way we have figured out to make sure, or at least do our best to make sure, that suppliers have equal access to public spending. That is likely something we can all get on board with and roll up our sleeves and do our best to procure within the complex rules and duties that are in place to get us as close as we can to that fairness.

But the private sector does not share that goal. There is no obligation in the private sector to ensure that all suppliers have a chance at supplying companies with goods and services. The obligation in the private sector is a different one—if a private sector company issues an RFP they have to follow all the rules. That seems fair, doesn’t it?

And then things get complicated.

THE BEST PRICE A couple of issues that tend to come up in interpreting and applying an RFP (because no matter what you call it, if it has certain key elements then it is an RFP) in the private sector are: none of the suppliers can do what we want; or their price is way too high, they can do better. In the private sector the goal, in its simplest form, is to get the best price for the good or service—and 46 OCTOBER 2019

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for that the RFP is perfect.

One of the purposes of an RFP is to forego the need for negotiations with several suppliers (in the private sector that is a matter of choice). The purchaser issues the RFP and the suppliers (whoever is asked to compete) are all vying for the work and they do what they are supposed to do in this circumstance—the suppliers submit their very best price because it’s their one-and-only chance to impress the purchaser and win the work.

And we all know that is what is supposed to happen, because when an RFP is issued the purchaser and the supplier have to comply with the rules. The potential suppliers submit their best pricing and in return the purchaser follows the rules they have set out in their contract A, chooses a supplier and issues a contract for the work (contract B) and if they don’t follow the rules of contract A the purchaser risks being sued.

And that is where the RFP story starts to unravel in the private sector.

If the purchaser is going to set the RFP rules and follow them then the supplier needs to provide their best offer or risk losing the work.

Or, if the supplier knows that the purchaser is likely going to negotiate with them, RFP or not, the supplier provides a price with room to negotiate built in.

And you can see how the RFP story in the private sector comes undone because if one purpose of issuing an RFP is to forego negotiations then negotiating with respondents risks making the RFP tool completely ineffective in the private sector. If suppliers do not submit their best pricing then the benefit of the RFP process is lost and private sector purchasers are left with an ineffective tool.

And maybe that is the end of the RFP story for the private sector. Maybe the RFP and all its complications belong in the public sector and the private sector should start looking for its own tool. SP

Susan Lawson is a lawyer and owner of the law firm Supply Contracts Simplified.

“ In the public sector the rigour of the RFP process is the best way we have figured out to make sure, or at least do our best to make sure, that suppliers have equal access to public spending.”

LEGAL THREATS The threat of a lawsuit is a reality in the public sector. But in the private sector it may be assessed as a risk, a low risk that a disgruntled supplier may go to court and sue a potential purchaser for not following the rules they said they would.

You can likely see how the RFP story begins to unravel in the private sector because if that supplier takes the purchaser to court, they are likely litigating themselves out of any future work with that purchaser. In the private sector you don’t have to deal with a supplier who has sued you.

So, instead of using the courts to make sure RFPs are fair it is left up to suppliers to know and understand the private sector purchaser they are dealing with.

SUPPLY PROFESSIONAL

2019-10-09 4:46 PM

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