Manufacturing Global - Feb 2021

FEBRUARY 202 1

manufacturingglobal.com

AI & AUTOMATION: HUMAN-TECH AUGMENTATION

DIGITAL FACTORIES

SAP: INDUSTRY 4.NOW

SUN BASKET: CUSTOMIZABLE, SUSTAINABLE, DELICIOUS

ACCENTURE’S INDUSTRY X

REIMAGINING the CONNECTED FACTORY Accenture’s Industry X practice Lead - Maddie Walker - explains how Industry X is driving a new era of smart connected manufacturing

MOTOR OIL

IMI CRITICAL ENGINEERING

BAYER

ARCHROMA

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FOREWORD

W

Welcome to the February 2021 edition of Manufacturing Global.

This month’s cover features Accenture’s Industry X practice Lead, Maddie Walker, who explains how Industry X is driving a new era of smart connected manufacturing.

“Industry X is the future of making ‘things’. It’s about reinventing product and delivery processes so that they’re smarter, safer, more connected, more profitable, more relevant and more sustainable” Other leaders that feature in the magazine include Rocky Subramanian, Senior Vice President and Managing Director of SAP, discussing the benefits of human and tech augmentation in the manufacturing industry; Sun Basket’s Mike Wargocki and Michael Thompson discussing the company’s unique approach to delivering healthy, customizable, and delicious food.; and SAP Digital Supply Chain’s Mike Wade, on the company’s mission to accelerate the adoption of Industry 4.0 and to help customers transform their manufacturing business.

Elsewhere in the magazine, we speak to Naiyer Hussain, Supply Chain

Director of Aljazierah Home Appliances, to discuss digitalisation of supply chain operations during the COVID-19 era; Michele Palumbo, Head of Supply Chain Management at Bayer Italy, detailing the challenges of COVID-19 and the way technology is shaping the future of the supply chain; and IMI Critical Engineering’s Aidir Parizzi, Director of Global Supply Chain on COVID-19 and digital disruption.

“The fundamental reason to digitise is speed. It’s no longer only about making the right decisions, but about making them in the shortest possible time. We need to understand the impact, real or potential, of commercial risks and opportunities, faster than our competition and before it cascades to our customers.”

Finally our Top 10 this month ranks our top digital factories.

Do you have a story to share? If you would like to be featured in an upcoming issue of Manufacturing Global, please get in touch at georgia.wilson@bizclikmedia.com Enjoy the read! ma nufa c t uri nggl o b a l. com

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PUBLISHED BY

EDITOR-IN-CHIEF

Georgia Wilson DEPUTY EDITORS

Rhys Thomas Laura Garcia EDITORAL DIRECTOR

Scott Birch CREATIVE TEAM

Oscar Hathaway Sophia Forte Hector Penrose Sam Hubbard Mimi Gunn Justin Smith

PRODUCTION DIRECTORS

MANAGING DIRECTOR

Georgia Allen Daniela Kianicková

Lewis Vaughan EXECUTIVE ASSISTANT

PRODUCTION MANAGER

Jordan Hubbard

Owen Martin Philline Vicente

James White

MEDIA SALES DIRECTOR

VIDEO PRODUCTION MANAGER

DIGITAL MEDIA DIRECTOR

Kieran Waite

Jason Westgate

DIGITAL VIDEO PRODUCERS

CHIEF OPERATIONS OFFICER

Sam Kemp Evelyn Huang Matthew Evans

Stacy Norman PRESIDENT & CEO

Glen White

MARKETING DIRECTOR

Kayleigh Shooter PROJECT DIRECTORS

Karl Green James Richardson ma nufa c t uri nggl o b a l. com

10

How COVID-19 has Driven Motor Oil’s Digital Transformation

THE TOP 5 CHALLENGES FOR CIOS IN 2021

48

26

38

INDUSTRY X:

REIMAGINING THE CONNECTED FACTORY

The Benefits of HUMAN-TECH AUGMENTATION in Manufacturing

58

DIGITAL FACTORIES

76

88

Pelion

SAP

106

138

Archroma

118 Sun Basket

Bayer

154 172 IMI Critical Engineering

Bombardier Transportation

198 McPherson’s Consumer Products

184 Aljazierah Home Appliances

10

WRITTEN BY

LEILA HAWKINS PRODUCED BY

KRISTOFER PALMER

FEBRUARY 2021

11

How COVID-19 has Driven Motor Oil’s Digital Transformation ma nuf a c t uri nggl o b a l. com

MOTOR OIL

Nick Giannakakis, Group CIO at Greece’s Motor Oil, discusses accelerating digital strategy, digitising manufacturing processes and the customer experience

I

n the months since the Covid-19 pandemic began, numerous industries have reported a fast acceleration in terms of

moving to digital processes. This certainly rings true for Motor Oil, an oil refinery based in Greece 12

that is one of the largest in Europe.

“In the last two months we’ve seen two years’ worth of acceleration,” its Group Chief Information Officer Nick Giannakakis says. It has also been a complex endeavour, as Giannakakis describes the company as “one of the biggest, most complex manufacturing refineries in Europe”.

Motor Oil has a strong export branch, with 78% of its operations coming from export sales that need to be facilitated via loading ports and vehicles.

As well as being an oil refinery they have a large retail operation, with hundreds of petrol stations selling non-fuel products as well as petrol, making up a large part of the business.

A key aspect of the acceleration caused by COVID was ensuring employees could continue

FEBRUARY 2021

13

ma nuf a c t uri nggl o b a l. com

MOTOR OIL

“ In the last two months we’ve seen two years’ worth of acceleration” — Nick Giannakakis, Chief Information Officer, Motor Oil

decided to not stop any of its investments in technology, which meant much of its digital programme could

to perform their daily duties remotely.

continue and it also ensured a good,

“We had to address the end user com-

continued relationship with their part-

puter experience for staff, to make sure

ners. That also meant it didn’t have to

they could still work collaboratively

delay its digital transformation.

from home and get the best possible performance,” Giannakakis says.

14

While the pandemic of course brought challenges, Motor Oil

FEBRUARY 2021

Giannakakis is a believer in resilience in the face of adversity. To handle the challenges of COVID to the business, he says Motor Oil

E X E C U T I V E P R O FILE :

Nick Giannakakis Title: CIO

Company: Motor Oil

Industry: Oil & Energy

Nick Giannakakis has over 20 years of experience working in IT. Throughout his career he’s worked for Richemont in Switzerland, British American Tobacco in the UK, and in his native Greece for the Coca-Cola Hellenic Company. His current role is at Motor Oil, where he’s based in Athens.

He describes his style of management as being both a mentor and a team member, commenting that he prides himself on a daily basis of being able to combine these two aspects. He believes in the importance of being able to influence decisions working with senior executives.

He’s also a big believer in diversity. “We try to encourage everyone to bring a difference to everything they do,” he says. “When you are leading a tech department, and I have been on this journey for years and years now, you need to be able to focus on diversity. When I say diversity I also mean in the way of thinking, combining a more agile way of thinking and understanding the power of prioritisation.”

Giannakakis is collaborative, always a team player, and always keen to learn. “I don’t want to be left behind in this new reality, and I always try to bring new ideas to the table” he adds. ma nuf a c t uri nggl o b a l. com

15

ABOUT OTE GROUP OTE Group is the largest technology company in Greece and a member of Deutsche Telekom AG. It is one of the top three listed companies, with respect to capitalization, in the Athens Stock Exchange and is also listed in the London Stock Exchange.

OTE Group offers a wide range of services, under the unif ied brand COSMOTE: f ixed and mobile telephony, broadband services, pay-TV and ICT solutions. In addition, the Group in Greece is also involved in maritime communications and real estate.

In the f ield of System Integration, OTE Group has developed diverse capabilities and constitutes a leading partner of choice for businesses seeking innovative solutions in the f ields of Data Centers, Cloud, Information Security, Networking, Big Data and IoT. Leveraging strategic partnerships with IT market leaders and thanks to its large IT & Network workforce, it has delivered large scale and complex ICT projects, offering managed services to customers in Europe.

WE EMPOWER. YOU LEAD Focusing on continuously developing innovative solutions and building strategic partnerships with global IT leaders, OTE Group stands out to be a trusted technology partner for large business customers. By modernizing its IT infrastructure, as well as maintaining operational and people excellence, OTE Group delivers and supports sophisticated tailor-made projects.

The state-of-the-art services and solutions offered by OTE Group enable businesses dynamically to the new digital era and ensure their business continuity and efficiency.

The strategic partnership with Motor Oil for the implementation of an SDWAN (Software Defined-WAN) solution acts as an accelerator of the company’s digital transformation journey through a robust technology strategy.

Motor Oil is one of the leading players in Greece and the eastern Mediterranean region in the areas of crude oil refining and petroleum products. The company has large campuses all over Greece with distinct connectivity and communication needs. Some of the installations are in remote areas, where as others need to operate uninterrupted 24/7. At the same time, these installations need to have independent and safe access to the Internet and to cloud services, with an extremely high SLA, regarding both network and services as well as applications.

OTE has provided Motor Oil with a turn-key solution to modernize its corporate network with a Software

www.cosmote.gr

Defined-WAN implementation. The SD-WAN solution provides a virtual WAN architecture, with users controlling and managing the entire system via software running on a central platform. One of the main advantages of this approach is that it can offer a combination of communication technologies (MPLS, dedicated broadband Internet and LTE), to safely interconnect a company’s point of presence, while improving overall user experience and increasing productivity.

The Motor Oil project includes 30 sites all over Greece. OTE Group has selected Cisco Meraki SD-WAN services in order to provide Motor Oil a complete solution that includes the necessary connectivity, hardware equipment, a management platform and all the SLA agreements needed.

With the implementation of the SD-WAN project, Motor Oil will have achieved a simplified, fully secured network, with high availability and scalability. Both user experience and productivity will have improved. The company’s IT department has now more agility, being able to integrate new points of presence whenever needed and much faster. Also, the project provides better management of capital, as well as operational expenses.

Holistically looking at Motor Oil operations, OTE Group aims to empower our customer’s vision for having a leading role in the crude oil ref ining and marketing of petroleum products sectors in Greece. ma nuf a c t uri nggl o b a l. com

MOTOR OIL

showed great resilience. They demonstrated this by creating new solutions.

“At the peak of the crisis we developed a digital planning tool that allows our employees to perform their daily business,” says Giannakakis. “When you have an organisation that needs to communicate by making hundreds of calls on a daily basis and do their jobs from home, having the same quality in terms of communication is a very important aspect.”

For the retail side of the business 18

the company used advanced analytics to deep dive into sales models, identifying relevant models that could predict future sales. This helped them develop solutions to scale up, such as a new pay at pump service which eliminates the need for customers to step inside a shop to pay.

Another change he has seen is the way the customer experience is framed. “Some say we’re living in the age of the customer, but I think we are beyond that,” he says. “Before COVID we were in the age of the platform, and COVID has brought the necessity of this platform because of the importance of having collaborative activities.

FEBRUARY 2021

“ It’s an industry that needs to change and with COVID this has been magnified and accelerated” — Nick Giannakakis, Chief Information Officer, Motor Oil

“Customer interactions through

In terms of manufacturing, Motor

these platforms continue to be at the

Oil developed the concept of a smart

top of our priorities. We have seen

factory. Giannakakis explains this is

changes, and with a change in focus

focused on five pillars: digital engi-

sales have significantly increased, and

neering; digital production, where the

we want to be able to react to that cus-

remote operation centre is the north

tomer experience. I would say that now

star; digital asset management; digital

customer-centricity along with data is

workers and equipping them with the

the new priority for our business.”

relevant tools so they can perform their tasks; and the digital optimisation of processes.

“Everything to do with the smart factory is classified in those five pillars,” he says. “With the help of our partner ecosystem working in each of these pillars allowed us to achieve increased production, reduced downtime, reduced production cost, and focus on product optimisation.”

Giannakakis says that although COVID-19 has certainly accelerated all these processes, the need to do this already existed. “The challenges in the energy and oil and gas industries were already there. It’s an industry that needs to change and with COVID this has been magnified and accelerated,” says Giannakakis.

“At the same time you have two frontiers: you have to keep the ma nuf a c t uri nggl o b a l. com

19

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1970

Year founded

5,000 Number of employees

business going with the new reality,

good for us to be able to go with a swift

while not losing time regarding the

pilot to learn and have a partner at

digital transformation.”

the same time ready to scale it up. We

Strong partnerships have been vital

need to be able to combine the value

for this. “I’ve always been a big believer

offering from International and Local

in having relevant partner ecosystems,”

partners in order to be able to maxi-

he says. “Companies like ours, who are

mize the impact.”

manufacturing and retail companies,

From the International field SAP is

cannot focus on technology ourselves,

an important partner for Motor Oil.

because it’s not part of our mandate.

“They help us with all of our transac-

We need to have a partner ecosystem

tions, whether it’s on the customer

around us to help us scale up and pro-

side or the manufacturing side. Every

vide us with the relevant innovation in

inventory and every shipment lives in

the areas and the priorities that we set.

SAP, so it’s a no-brainer for us to look

It’s exactly what we have done both

to SAP to also help us innovate.”

before and during the crisis.”

One of the largest local players

He explains that having partners in

is OTE. OTE has provided Motor Oil

various sectors help them to have the

with a turn-key solution to modernise

right focus and pilot new systems. “It’s

its corporate network with a Software ma nuf a c t uri nggl o b a l. com

21

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“ Whatever is good for the environment is good for the business too” — Nick Giannakakis, Chief Information Officer, Motor Oil

Defined-WAN implementation. The

23

“I think we are going to live in a new

SD-WAN solution provides a virtual WAN

reality where our priorities and our digital

architecture, with users controlling and

transformation will be accelerated, but

managing the entire system via software

also I think the traditional model was

running on a central platform.

always focused on two pillars: innovation

With the implementation of the

of the business model, and the opera-

SD-WAN project, Motor Oil will have

tional side,” concludes Giannakakis.

achieved a simplified, fully secured net-

“Now we’ve added sustainability into the

work, with high availability and scalability

mix too. It’s a strong directive from the

to improve both the user experience

European Union but also from across

and productivity.

the sector. Whatever is good for the envi-

Looking ahead, Giannakakis believes

ronment is good for the business too.”

the major oil players will all adapt to new ways of working post-COVID. ma nuf a c t uri nggl o b a l. com

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D I G I TA L F A C T O R Y

INDUSTRY X:

REIMAGINING THE CONNECTED FACTORY WRITTEN BY

GEORGIA WILSON

26

FEBRUARY 2021

Accenture’s Industry X practice Lead - Maddie Walker - explains how Industry X is driving a new era of smart connected manufacturing

P

icture a scene in which the convergence of multiple technologies such as artificial intelligence (AI), edge intelligence, analytics and

extended reality are driving a new era of manufactur-

ing that advances mass customisation, in real time, with smart connected products. This is Accenture’s definition of Industry X. Speaking to Maddie Walker, Industry X

“ As we start the new year with a lot of uncertainty and unknowns, there’s one thing businesses can be sure of: they’ll need to adapt at any given moment” — Maddie Walker, Industry X Practice Lead, Accenture (UK)

Practice Lead at Accenture (UK), she explains to Manufacturing Global that “Industry X is the future of making ‘things’. It’s about reinventing product and delivery processes so that they’re smarter, safer, more connected, more profitable, more relevant and more sustainable – all things necessary for organisations’ next level of growth.”

In order to achieve this next level of growth, Walker continues to explain that “embedded intelligence sits at the heart of this reimagined manufacturing process, which spans two key areas: how to digitally transform operations, and how to transform the product itself. But data-driven intelligence doesn’t just underpin these two processes, it also applies to ma nufa c t uri nggl o b a l. com

27

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a business’s way of thinking, fuelling their entire strategic vision both for now and for the future so that the technologies they implement collectively ladder up to their objectives.

“In that sense, Industry X is much more all-encompassing than Industry 4.0. It’s about what’s coming next, ensuring that every single aspect of the product and manufacturing cycle is future-focused

Giving an example of this kind of

– whether that’s a future we can prepare

innovation in a product development

for or must pivot to.”

environment, Walker adds that “By applying data-driven insights to the

TRANSFORMING THE MANUFACTURING INDUSTRY WITH INDUSTRY X

to key audiences will be far greater,

When asked how the manufacturing

ultimately resulting in higher sales. In the

industry will transform as the adoption

manufacturing process, these insights

of Industry X takes hold worldwide,

can ensure the factory is set up to

Walker details that by embedding

best effect, whilst adjusting processes

intelligence into all stages of the

accordingly in real-time to result in maxi-

manufacturing and product lifecycle,

mum productivity and minimum costs

machines, workers and networks

for R&D and service operations. This

become connected, generating data

also enables products to be released to

that can be shared and collectively

the market faster so that they’re always

interrogated in real-time. “It’s this

ahead of the curve with the latest capa-

intelligence that will transform the

bilities. And by streamlining the path to

manufacturing sector across multiple

delivery, organisations can then move

fronts, whether that’s resilience, sus-

on to creating and delivering the next

tainable credentials, rate of innovation,

product, meaning they’re always the

or productivity.”

frontrunners for product innovation.”

conception of the product, its relevance

ma nufa c t uri nggl o b a l. com

29

D I G I TA L F A C T O R Y

Welcome to Industry X | Accenture CLICK TO WATCH

|

1:35

30 Whilst Walker provides an example

that the Industry X strategy is under-

for product development, she explains

pinned by the overall business objectives

that “this intelligence can be scaled to

and goals, and that the Industry X

numerous industry challenges – whether

strategy lines up with those ambitions,”

it’s identifying opportunities to create

comments Walker, who continues to

a more sustainable manufacturing and

explain that “before any technology is

supply chain network, or producing

rolled out, businesses must think about

products in a much safer way – as we

the desired outcomes and how they can

look to the future, the possibilities of

be developed and scaled over time. This

Industry X will be almost endless.”

must look beyond broad outcomes such as ‘digitisation’ – they must get specific

GETTING THE MOST VALUE OUT OF IMPLEMENTING INDUSTRY X

and think about what that digitisation

With any Industry X implementation, “the

streamlined delivery, or enhanced prod-

most important factor is to make sure

uct relevance.”

FEBRUARY 2021

can achieve, whether it’s improved ROI,

“ A vastly scaled back workforce has accelerated the use of manufacturers applying technology to improve the safety, productivity, experience and resilience of the industrial workforce” — Maddie Walker, Industry X Practice Lead at Accenture (UK)

Whilst Industry X capabilities can be broken down into two key areas - digital manufacturing and operations, and intelligent products and platforms – Walker says that “the best strategies almost always integrate both. This helps to iron out data silos and allows product and delivery processes to inform one another so that the resulting product meets desired objectives to the best effect.”

Walker does however emphasise that “Industry X is not just a technology

ACCENTURE’S TOP THREE INDUSTRY X TRENDS

1. Digital Plant – connecting all the lines and materials in a plant together. For example, using IoT and Edge Computing in industrial environments, as these technologies enable machines and networks to ‘talk’. It’s this connectivity that provides the data for artificial intelligence, as well as allowing these insights to be relayed back to the network autonomously.

2. Connected Worker – using augmented realities and wearable capabilities. Combined, these technologies can be used to gain context and understanding of remote locations in real-time.

Experts can then relay over the

shoulder coaching and problem solving remotely – either for machines or for human workers – ensuring maximum productivity and safety.

3. Artificial Intelligence & Machine Modelling – how we use and shape the data are a fundamental Industry X trend as they provide the crucial insights that underpin every step of the product development, manufacturing, or supply chain process. Whether it’s shaping a strategic vision, modelling product conception, or improving manufacturing operations, AI is what ensures Industry X processes are entirely future-proofed.

ma nufa c t uri nggl o b a l. com

31

D I G I TA L F A C T O R Y

“ Industry X is the future of making ‘things’.

It’s about reinventing product and delivery processes so that they’re smarter, safer, more connected, more profitable, more relevant and more sustainable”

32

organisations get caught up in thinking about the tech they want to use first and foremost, they may well find it doesn’t offer any ROI at all. There’s almost always a technology that can be applied to a specific macro challenge, it’s about finding the right one and applying it to deliver maximum business benefit.”

— Maddie Walker, Industry X Practice Lead at Accenture (UK)

THE IMPACT OF COVID-19 FOR THE MANUFACTURING INDUSTRY

solution, it’s about understanding the

has faced significant challenges as a

business challenges first and the tech-

result of COVID-19, in particular the

nologies to be implemented second. If

pandemic has “shone a light on the

FEBRUARY 2021

Like most industries, manufacturing

need for greater investment in digital

lockdown and the high-tech industry

and data,” comments Walker who

was hit hard due to their reliance on

details three emerging challenges:

their global supply chains.”

1 | Resilience and Maintenance

2 | Volatility of Demand

of the Supply Chain

“Certain sectors saw a complete drop in

With the outbreak of COVID-19,

demand and have had an oversupply of

“almost every aspect of the supply

materials, whereas other sectors, such

chain was affected – whether fore-

as consumer goods, were not able to

casting demand, sourcing enough

keep pace with demands”.

materials to meet demand, or orchestrating production and delivery across

3 | Keeping people productive

numerous components of the chain.

and safe

The first place this became visible was

One of the biggest challenges manu-

in February when China went into

facturers are facing is the restrictions

ma nufa c t uri nggl o b a l. com

33

D I G I TA L F A C T O R Y

TOP INDUSTRY X PRIORITIES FOR MANUFACTURERS IN LIGHT OF COVID-19

COVID-19 has shone the light on manufacturing, infrastructure and product development and accelerated many businesses on their digital transformations.

As they navigate the upcoming opportunities and challenges, there are four key areas manufacturers need to focus on:

34

1. Local, advanced manufacturing: Despite a shift to offshore manufacturing several years ago, robotics and other new approaches drive down costs, enabling manufacturers to consider running operations closer to home, which can prove to be more effective.

2. Protecting workers: Increased automation of some activities can help protect workers in a socially distanced context so it’s something manufacturers should consider.

3. Supply chain diversification is key: Even if in the short term a bigger choice of suppliers increases complexity and cost, a diverse ecosystem is a must. Manufacturers have learned that reliance on one or two locations must go and be replaced by a range of resilient options.

4. Connecting sites as a global portfolio: Digital can provide a view of capacity, demand, production and maintenance downtime across all sites globally. This is vital to boost resilience and enable dialling up or down of production in certain locations. And analytics must be at the core of managing locations collectively as a portfolio, interconnected and able to flex to changing localised conditions and prevent undue reliance at the site level.

on proximity of people. “sites that

With these challenges in mind, “there is

were used by dozens of engineers

no question that the industry has had to

were stripped back to skeleton teams.

adapt quickly due to COVID-19,” com-

Remote working is challenging enough

ments Walker. However, she adds that

for an office environment – rolling this

“with a resolute focus on the following

out to the production line requires even

three areas, manufacturers will see

more digital prowess.”

bright spots on the horizon.”

FEBRUARY 2021

35 1 | Offshore/ onshore resiliency

2 | Agile manufacturing

With the manufacturing industry

With enforced restrictions imple-

experiencing a profound change, if

mented around the world as a result

businesses are to thrive, they must

of COVID-19, “manufacturers fun-

accelerate the digital transformation

damentally had to reshape their

of their end-to-end operations”. Take

production lines to stop the develop-

the UK as an example, which currently

ment of certain products and develop

only makes 62% of required goods, less

different products instead – for exam-

than any other comparable European

ple, we saw many companies from

nation,” reflects Walker. “The pandemic

fashion brands to breweries making

and Brexit are set to change this as

masks and hand sanitiser. This proved

businesses look to build resilience and

that manufacturers can be smart,

create a better balance of nearshore

resilient and agile to meet changing

and offshore manufacturing as they

market demands when embracing

bring some plants back on home turf.”

digital technology,” adds Walker. ma nufa c t uri nggl o b a l. com

D I G I TA L F A C T O R Y

3 | The digital worker

can prepare for them before they

“A vastly scaled back workforce has

even become an issue. And for those

accelerated the use of manufacturers

challenges that even AI cannot predict

applying technology to improve the

– such as COVID-19 – it still goes a long

safety, productivity, experience and

way in helping businesses to adapt to

resilience of the industrial workforce,”

them quickly.

comments Walker. With the use of

36

“It’s this agility that has been key this

augmented reality, IoT and advanced

year; businesses amongst some of the

analytics, manufacturers have been

hardest-hit sectors have remained

able to automate and streamline work

resilient by quickly and intelligently

in their factories. “These digital work-

pivoting to the challenges thrown by

forces use smart IoT-enabled devices

the pandemic. As we start the new year

to achieve increased levels of personal

with a lot of uncertainty and unknowns,

safety and operational performance,

there’s one thing businesses can be

which is important both during the pan-

sure of: they’ll need to adapt at any

demic and beyond.”

given moment.”

When asked to reflect on the future for Industry X, and the role that it will play in mitigating the challenges of COVID-19 and other potential global threats in the future, Walker concludes that, “agility, resilience and embedded intelligence is one of the core tenets of an Industry X driven businesses – it informs anything and everything they do. When operations become intelligent and agile, businesses can successfully forecast challenges that humans alone cannot, meaning they FEBRUARY 2021

“ Embedded intelligence sits at the heart of this reimagined manufacturing process, which spans two key areas: how to digitally transform operations, and how to transform the product itself” — Maddie Walker, Industry X Practice Lead at Accenture (UK)

37

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A I & A U T O M AT I O N

38

The Benefits of HUMAN-TECH AUGMENTATION in Manufacturing WRITTEN BY

OLIVER JAMES FREEMAN

FEBRUARY 2021

Rocky Subramanian, Senior Vice President & Managing Director of SAP, talks us through the benefits of human and tech augmentation in the manufacturing industry

O

ver the years, many have espoused that the

future of manufacturing is augmentation.

That may be the case when it comes to cop-

ing with the volumes of product that manufacturers must now produce to meet exponential demand in

an increasingly globalised world, but in reality, the artificial intelligence behind automation capabilities is enabling something that we’ve never seen before, and that enhances the existing workforces natural ability: human augmentation. For some, it’s a worrisome iRobot-esque term, but for others, it’s the polar opposite, emphasising the incredible potential of technologies that, if implemented correctly, can enhance human productivity and capabilities beyond the previously known limits of our mammalian existence.

Where, though, could the concept of human augmentation really take us in the manufacturing industry? Fortunately, Rocky Subramanian, Senior Vice President & Managing Director of SAP, was willing to sit down and talk us through that very question: “Data-driven analytics is highly versatile and capable of fulfilling different roles for different ma nufa c t uri nggl o b a l. com

39

Security threats have evolved.

Manufacturers need to adapt.

41%

of manufacturing companies suffered a mobile-related compromise*

50%

of manufacturing executives indicated they lack confidence that their company’s assets are protected from external threats*

The manufacturing industry remains one of the primary targets for mobile attack due to its highly valuable intellectual property.

With mobile phishing attacks on the rise, you need to adopt a zero-trust security model to ensure your data is secure.

Find out more at info.lookout.com/Manufacturers * Verizon Mobile Security Index 2020 *Deloitte Cyber risk in advanced manufacturing

Augmented Manufacturing CLICK TO WATCH

|

1:05

41 business needs, whether serving

industry’s inherent weaknesses when

as an advisor, supporter, validator,

confronted with sudden workforce

partner, or even a manager. In manu-

shifts. Looking ahead to 2021 and

facturing, we’re increasingly seeing

beyond, it’s not necessarily the tech-

analytics playing the role of “partner.”

nology itself that will make the biggest

An AI-powered co-bot, for example,

impact on manufacturers, but rather

can offer a safety layer, keep employ-

how well organisations deploy and

ees on track, help maintain efficiencies,

manage their digital assets. In short,

and ultimately solve for some of the

the success of a manufacturer’s digital

industry’s fundamental risks.

investments hinges on the organisa-

While manufacturing leaders have

tion’s larger people strategy: recruiting,

routinely increased their tech invest-

retaining and reinventing talent as

ments with an eye toward more speed

Industry 4.0 unfolds.”

and efficiency, COVID-19 only accelerated this momentum by exposing the

One of the biggest worries of those among us who aren’t so keen on ma nufa c t uri nggl o b a l. com

A I & A U T O M AT I O N

“ THE GOAL OF TECH MODERNISATION IS NEITHER TO REPLACE EMPLOYEES NOR TURN WORKERS INTO ROBOTS -- BUT TO MAKE HUMAN WORK MORE MEANINGFUL” — Rocky Subramanian, Senior Vice President & Managing Director, SAP 42 technology and the way it seems to

Smart business cases for automa-

encroach upon our daily lives is the

tion are built on driving efficiencies

idea that we will one day be expected

– NOT on headcount reduction.

to physically integrate with artificial

Automation omits the need to digest

intelligence. The idea might be daunting

data manually, enabling employees

but according to Rocky, “We’re certainly

to refocus their time on interpreting

trending in that direction, but the way

trends and counselling leadership --

I see it, the goal of tech modernisation

areas where humans have a leg up on

is neither to replace employees nor

technology. The primary goal of dig-

turn workers into robots -- but to make

itisation is to “redeploy” the workforce

human work more meaningful. So long

for more strategic tasks -- many

as technological innovation is handled

of which do not yet exist.”

with care, I am confident that future

“While improved efficiency, produc-

advancements will continue to drive a

tivity, and worker safety are massive

culture of greater professional fulfilment.

benefits of AI and automation -- not to

FEBRUARY 2021

current human workforce into a Star Trek-inspired character, the is a great advantage to the concept of augmentation. “At their core, augmentative systems are tools that enable greater worker efficiency, safety and productivity. Augmentation technologies are quite versatile and can range from biometric sensors that alert workers to potential danger, to data aggregation tools that help relieve an employee’s workload. With that in mind, I’d argue that augmentation technologies are already essential to meet growing demands on manufacturers. mention the corresponding impact to

Consider the last ten months, for

manufacturers’ bottom lines -- another

example. When having employees

key advantage is this reinvention

on-site — whether at factories or ware-

of the employee experience. Again,

houses — suddenly became a safety

while technology may replace jobs as

issue in light of COVID-19, manufactur-

employees currently know them, it will

ers were forced to contend overnight

ultimately open roles up to more mean-

with the reality of managing operations

ingful work. But this is just the first step.

remotely or risk shutting down. After

As true automation takes hold, we will

a rocky few months, many have suc-

see new jobs and opportunities crop up

cessfully executed their return-to-work

– just like all the other paradigm shifts

strategies, but the road to recovery

throughout history,” Rocky added.

highlighted the enormous opportunity

However, it should be noted that

that advanced analytics tools -- and

while the ambition of big tech com-

other augmentative technologies --

panies isn’t necessarily to turn the

hold for their business long term.” ma nufa c t uri nggl o b a l. com

43

A I & A U T O M AT I O N

For a few years now, there’s been

must take a measured approach cen-

an ethical side to this debate, with data

tred on investing in employee training

ethicists and tech evangelists looking

to elevate workers beyond their cur-

to ensure that human augmentation

rent roles; implementing experience

remains beneficial and is not exploited

checkpoints to drive seamless adop-

in its infancy. When I asked Rocky

tion; and identifying where humans

what he feels about the ethical side of

and automation dovetail to ensure the

the pairing, the industry-leading SVP

best possible ROI -- across both HR

said that while it’s a complicated ques-

and tech investments.”

tion to answer, “I’d like to highlight the

Ethical debates and historic

role technology should play in enabling

thoughts aside, Rocky said that as

a more meaningful employee experi-

we look towards 2030 and where

ence. So often businesses preach “the 44

customer is king” – but an effective customer experience is not possible without a stellar employee experience.

Business leaders must ensure employees are not only happy, passionate, and feel valued -- but also that they’re equipped with the technologies and tools needed to meet expectations.

Because employee empowerment is rooted in access to meaningful data, smart systems are no longer a ‘nice to have’ but a ‘need to have!’

On the other hand, throwing more tech at the problem is not the full answer. If manufacturers transition too rapidly, and their workforce isn’t ready, productivity still suffers. Employers FEBRUARY 2021

human-tech augmentation will be, “the area that’s top of mind for me is talent acquisition in manufacturing.

Deloitte projects that while nearly 3.5 million manufacturing jobs will open up over the next decade, 2 million will go unfilled due to a widening skills gap.

Manufacturing is frequently linked to repetitive tasks and traditional workflows -- when, in reality, automation and modernisation are disrupting

“ AT THEIR CORE, AUGMENTATIVE SYSTEMS ARE TOOLS THAT ENABLE GREATER WORKER EFFICIENCY, SAFETY AND PRODUCTIVITY” — Rocky Subramanian, Senior Vice President & Managing Director, SAP

the industry’s culture and creating 45

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A I & A U T O M AT I O N

46

“ ORGANISATIONS MUST PRIORITISE DIGITAL TRANSFORMATION IN THE HOPE OF CREATING RESILIENCE ” — Rocky Subramanian, Senior Vice President & Managing Director, SAP

top candidates, drawing from the ripe talent pool resulting from the COVID19 fallout. Attracting the right mix of young and established workers now is vital to securing and advancing an organisation’s digital future.”

“The global pandemic has highlighted weaknesses in business processes, making the path forward clearer than ever before: organisations must prioritise digital transformation

new roles for highly skilled workers.

in the hope of creating resilience. We

Manufacturing leaders are looking at

know that brands with a higher degree

an enormous opportunity to recruit

of digital maturity were less impacted

FEBRUARY 2021

47

by the pandemic – the foresight ended

ever before. At SAP, we believe that

up protecting them from disruption.

these two ideas – corporate evolution

And so now we are at a pivotal moment

and corporate responsibility – do not

in time for tech adoption: the compa-

need to be at odds with each other.

nies that embrace innovation will thrive

Indeed: we can make sustainability

in this new economy.

profitable, and profitability sustain-

But even with this urgency, we’re

able. We are tackling this challenge

also living amidst a shift in consumer

in our own business practices, and

and stakeholder expectations in

we’re working with our customers

response to global challenges like

now to help them on their journeys.

social inequality, resource depletion

From the beginning, we have part-

and waste, and the growing climate

nered with our customers and led

crisis. What it means to be a corpo-

every evolutionary stage of their busi-

rate citizen holds more weight than

ness – and we will keep doing that.” ma nufa c t uri nggl o b a l. com

M A N U FA C T U R I N G C I O S

THE TOP 5 CHALLENGES FOR CIOS IN 2021 WRITTEN BY

LAURA V. GARCIA

48

O

h, where to begin. The challenges facing CIOs today are monumental. As a global pandemic has businesses worldwide mak-

ing the transition to remote work, Industry 4.0 continues to revolutionise the production floor with even more urgency. And the face of consumerism slowly recovers from an extreme makeover, CIOs have a lot to concern themselves with.

Adding insult to injury, the threats of cybersecurity loom larger than ever before, as the power of the dark web fuels eCriminal groups and

government-backed allies. As Greg Foss, senior cybersecurity strategist at VMware Carbon Black says, “Criminals never let a good crisis go to waste.”

Once perhaps lacking attention, CIOs have suddenly grabbed a seat at the head of the table.

Let’s review, and not underestimate, what they’re facing.

FEBRUARY 2021

49

ma nufa c t uri nggl o b a l. com

sustain peak performance.

Benchmark your actual process and asset performance data against your expected performance with Honeywell Forge for Industrial, for better decisions that impact reliability, safety and profitability.

For more information, please visit: www.honeywellprocess.com/iiot

51

1 HOME NETWORK SECURITY

• 7.5x more likely to have at least

Although remote work brings safety

five distinct families of malware.

from COVID-19 and the joys of working

• Common families of malware are

in sweatpants, home networks have

extremely prevalent, including

made organisations more vulnerable

Mirai, which is observed 20x more.

to cyberattacks. Here are some statis-

frequently, and Trickbot, which is

tics to help put it into perspective.

observed 3.75x more frequently.

• More than 25% of all devices have

From a sample size of 41,000

one or more services exposed on

US-based organisations, found

the internet.

that remote home networks were:

• Almost 1 in 7 WFH-RO IP (work

• 3.5x more likely than corporate net-

from home- remote office)

works to have at least one family

addresses have exposed cable

of malware.

modem control interfaces. ma nufa c t uri nggl o b a l. com

M A N U FA C T U R I N G C I O S

2 SUPPLY CHAIN CYBERSECURITY Tom Kellermann, head of cybersecurity strategy at VMware Carbon Black says the recent findings suggest a significant renaissance in cybercrime, which he believes is leading to a new era of agile organisation and sophistication.

“The disruption caused by COVID-19 has created a massive opportunity for criminals to restructure their businesses,” he says. “Traditional criminals are flocking online in a newly shifted 52

digital-first world, fueling the expansion of cybercriminal cartels.”

What’s the Impact of COVID-19 on Cyber Security?

CLICK TO WATCH

FEBRUARY 2021

|

7:06

Carbon Black— As eCrime groups grow more powerful, counter incident response is now seen in 82 per cent of attacks, with island hopping occurring 55 per cent of the time—where an attacker infiltrates an organisation’s network launch attacks on others along its supply chain.

3 THE CUSTOMER EXPERIENCE-

REDESIGNING YOUR DIGITAL BUSINESS STRATEGY According to Acquia, since the beginning of the pandemic: • 74% of consumers report their digital

“ THE DISRUPTION CAUSED BY COVID HAS CREATED A MASSIVE OPPORTUNITY FOR CRIMINALS TO RESTRUCTURE THEIR BUSINESSES” — Tom Kellermann, Head of cybersecurity strategy, VMware Carbon Black

experience with brands has changed • 84% of consumers used digital channels more in 2020 The customer experience is one of the most defining aspects of business today. In 2021 and likely beyond, the CIO must work collaboratively with the CMO to co-design a friction-free customer experience. Many organisations continue to struggle with achieving the digital experience that today’s consumers demand.

ICOs must address Inadequate or outdated approaches to how ma nufa c t uri nggl o b a l. com

53

M A N U FA C T U R I N G C I O S

customers engage with your brand.

From real-time engagement to supporting customers through third-party devices such as Google and Alexa, customers today expect a seamless, multichannel approach.

4 BIG DATA Big data is a big buzzword doing big things. Making sense and putting to use complex sets of data is a must for enterprises today. In fact, a GE and Accenture report says that 88 per cent 54

of organisations said Big Data analytics is a top priority.

Big data and data analytics can be leveraged to lessen supply chain disruptions, improve forecasting and provide insights-driven procurement and sales and ops planning. Part of Industry 4.0, big data merges with AI to predict and prevent machine failures and increase uptime.

Organisations can also gain a competitive advantage by using datadriven insights to better engage with their customers. Big data can provide valuable insights so you can identify growth opportunities and improve the efficacy of buyer-facing interactions.

FEBRUARY 2021

“ THE VALUE OF DIGITAL CHANNELS, PRODUCTS AND OPERATIONS IS IMMEDIATELY OBVIOUS TO COMPANIES EVERYWHERE RIGHT NOW” — Sandy Shen, Senior Director Analyst, Gartner

55

For example, chatbots not only offer

a wish list, as many companies

cost-effective around-the-clock cus-

struggle with profitability, increased

tomer service, but they can also be

downtime due to supply chain disrup-

a gold mine of growth opportunities,

tions, and labour shortages due to

such as identifying customer issues

Covid-19, creating a digital transfor-

and revealing barriers to purchase.

mation roadmap floor has quickly moved up the list of priorities.

5 INDUSTRY 4.0- INCREASING

Smart factories boost production

EFFICIENCIES

revenue and increase efficiencies, but

CIOs are a critical part of driving profit

they also present massive challenges.

improvements through innovative

CIOs must lead the way. However,

technologies. Once perhaps merely

the talent gap of highly skilled IT ma nufa c t uri nggl o b a l. com

M A N U FA C T U R I N G C I O S

56

“ CRIMINALS NEVER LET A GOOD CRISIS GO TO WASTE” — Greg Foss, senior cybersecurity strategist, VMware Carbon Black

FEBRUARY 2021

specialists may be yet another challenge. Therefore, CIOs are advised to start filling their talent pipeline if they haven’t already.

“The value of digital channels, products and operations is immediately obvious to companies everywhere right now,” says Sandy Shen, Senior Director Analyst, Gartner. “This is a wake-up call for organisations that have placed too much focus on daily operational needs at the expense of investing in digital business and long-term resilience.

Businesses that can shift technology capacity and investments to digital platforms will mitigate the impact of the outbreak and keep their companies running smoothly now, and over the long term.”

CIOs hold a grand opportunity to support a more agile and efficient supply chain and a smoother, more connected customer experience through digital transformation initiatives. And yet, they must do it all while battling the evils of the dark web. It is, indeed, a mighty challenge. May you go forth and conquer.

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57

T O P 10

58

FEBRUARY 2021

DIGITAL FACTORIES 59

WRITTEN BY

SCOTT BIRCH

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T O P 10

60

10

Bayer Pharmaceuticals $51.8BN 2020 REVENUE IN USD

Bayer’s plant in Garbagnate, Italy, piloted the company’s Advancing Digital transformation initiative back in 2017 and has never looked back.

They deployed machine learning and analytics to increase operational efficiency, a digital twin for employee scheduling, and AR devices to reduce changeover times when switching product lines.

Data scientists digitized Bayer’s plant by developing the algorithms that turned data into useful insights to enable more efficient production (output increased 40%) of life-saving drugs.

FEBRUARY 2021

09

HP $56.6BN 2020 REVENUE IN USD

Hewlett Packard Enterprise (HPE) believes so much in Factory 4.0 that it opened a dedicated Smart manufacturing Applications and Research Centre (SMARC) in Singapore, dedicated to exploring the possibilities of 3D printing, advanced robotics and data analysis.

HP says the convergence of manufacturing operations and IT technologies and digital replications of physical plant environments make it possible to capture, analyse and act upon data when and where its insights are most needed.

The campus brings together engineers and technicians to explore today’s challenges and tomorrow’s solutions.

61

HP 3D Printing and Partners Deliver Critical Parts to Help Contain COVID-19 | 3D Printing | HP CLICK TO WATCH

|

2:08

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6 Ways Inventory Management Fuels Supply Chain Explore How Inventory Management Enables Supply Chain to Reach Its Fullest Potential For most businesses, the supply chain is not only the primary cost centre but one of the most challenging aspects of running a profitable operation.

This ebook examines the role of inventory management in each step of the supply chain and share best practices for how businesses can use inventory management to optimise and run a more profitable operation.

Download Ebook Now

08

PepsiCo $67.1BN 2020 REVENUE IN USD

The crispness of a single chip in a bag of Frito-Lay’s, produced by PepsiCo, is just one example of how Machine Learning (ML) is revolutionising the production process.

The food and beverage giant quickly realised that ML and Artificial Intelligence (AI) is now a business need, rather than a technology investment which used to give a competitive edge.

Students at the University of the Pacific are just some of the customers who benefit from these advances with five robots, known as snackbot’s, delivering some of PepsiCo’s Hello Goodness products from SunChips to Baked Lays to more than 50 spots across the campus.

The Snackbot represents the solution to the needs of busy students and their preferences identified through PepsiCo’s research.

The company is also harnessing technology to work alongside a vision system to predict the weight of potatoes and is currently ML to determine the ‘peel percentage’. Speech recognition, augmented data analytics and big data also being used by PepsiCo within their factories.

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07

Procter & Gamble $67.7BN 2020 REVENUE IN USD

The Rakona factory in the Czech Republic for Procter & Gamble developed a web-based analytics model for improvements in the supply chain. These allowed P&G to improve time to market, inventory efficiency and, ultimately, customer satisfaction.

Staff at the factory were all given skills in analytics, smart robotics and additive manufacturing to startling effect – in three years productivity increased 160% and plant costs dropped by 20%.

FEBRUARY 2021

06

Boeing $76.6BN 2020 REVENUE IN USD

The Boeing Everett Factory in Washington State is the largest in the world, covering 398,000 square metres. However, size isn’t everything, and Boeing gains a foothold in the Top 10 thanks to its super-smart plants including the US$1 billion Composite Wing Center in Everett, Washington built in 2016. Boeing works smart across its facilities, with innovations including 3D printing, wearable tech for employees, IIoT sensors to streamline production and maximise efficiencies – the list goes on.

65

Upskill and Boeing Use Skylight to Reinvent Wire Harness Assembly CLICK TO WATCH

|

2:51

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Unlock Your Problem-Solvers’ Superpowers with TwinThread.

Find out how: twinthread.com

67

05

Johnson & Johnson $82BN 2020 REVENUE IN USD

Johnson & Johnson DePuy Synthes factory in Cork, Ireland, specialises in producing replacement hip and knee joints and has adopted IoT technology to create real-time digital twins of old physical machines to gain insights, reduce costs (by 10%) and improve maintenance (5% drop in downtime).

What is especially impressive is the fact that the factory showed the value of incorporating Factory 4.0 technology into an existing plant rather than starting afresh at greater expense.

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04

Nestle $92.1BN 2020 REVENUE IN USD

The Swiss giant is the world’s largest food and beverage company, 68

best known for its chocolate brands (Kit Kat), coffee (Nescafe) and bottled water (Perrier). With global operations, digital is key to the company’s continued success, and it has transformed operations by digitalising supply chains and manufacturing.

More recently, Nestle has been creating a competitive edge through data, artificial intelligence, automation, and predictive analytics. More than 100 of their factories are equipped with collaborative robots, for example, as facilities are scaling up IIoT with remote-sensing technologies and autonomous vehicles (60 of the warehouses are automated).

Nestle says this helps them “generate efficiencies, create agility and provide new platforms for growth. The shift towards agile manufacturing also helps deliver faster innovation and supports personalisation.”

It also has a Global Digital Hub in Barcelona allowing it to use AI, and a Silicon Valley Innovation Outpost to source new ideas and drive digital innovation.

FEBRUARY 2021

03

Siemens

$97.9BN 2020 REVENUE IN USD

The digital factory is nothing new to Siemens – the German company started digitising its own manufacturing plant in Amberg back in 2010. In the following decade, that factory moved from being 25% digital or automated to 75%. The result? Productivity rose by an incredible 1400%.

Previously, the Amberg plant could manufacture five products. Within 12 months, that number had risen to 1,300 different products, and 9,000 in total.

By focussing on optimising the entire process or multiple processes rather than on individual products, such leaps forward are possible. Instead of having specised machines performing a single operation, smart factory robots complete multiple processes, all directed by the digital twin that decides what will be made each day.

It sounds cunningly simple, but of course it is a feat of digital excellence and vision.

“Any product can go on any journey through the factory interacting with any combination of machines and people,” said Alastair Orchard, vice president of digital enterprise for Siemens Digital Industries Software.

“The product can interact with one machine, 10 machines, 15 machines. We have introduced a completely new paradigm.”

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The Website and Magazine for Global Procurement Executives Join now for notifications about the upcoming launch and never miss an issue...

LAUNCHES:

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T O P 10

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WATCH | AT&T and Samsung Explore 5G Possibilities in Manufacturing CLICK TO WATCH

FEBRUARY 2021

|

2:19

02

Samsung Electronics $197.7BN 2020 REVENUE IN USD

You would expect tech giant Samsung to innovate when it comes to digital factories, and the South Korean company does not disappoint.

The pioneering Samsung Networks Smart Factory, regarded as the birthplace of innovation when it comes to telecommunications equipment, is now fitted with a commercial 5G network that is providing additional gains in manufacturing flexibility and productivity.

Working in conjunction with Korea Telecom (KT), Samsung deployed an end-to-end 5G solution – a private network that means data does not need to travel to the data centre, thereby increasing speeds and security, with all traffic kept ‘in-house’.

Samsung has expanded this 5G network to a factory in the US, allowing the implementation of the latest artificial intelligence, robotics, IIoT and mixed reality to boost efficiency and innovation.

More than 70% of the manufacturing process is automated, with deep learning and AI technologies monitoring quality control and accurately detecting any defects. All data is sent in real-time through the 5G network.

IoT sensors look at temperature, humidity and dust levels to ensure that factory conditions are ideal for production line equipment and Automatic Guided Vehicles (AGVs) deliver materials to work stations or transport completed products to storage.

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T O P 10

74

Volkswagen Automated Car Factory of the Future CLICK TO WATCH

FEBRUARY 2021

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14:23

Volkswagen Group $282.7BN 2020 REVENUE IN USD

Encompassing cars as diverse as Skoda and Lamborghini, the Germany automotive giant is a family of 12 brands from 7 countries, operating 125 production plants in 31 countries worldwide, backed by 671,205 employees. It is also the largest manufacturing company by revenue in the world.

No wonder VW is benefitting from digital factories and implementation of leading-edge technology. Take the Data:Lab for instance – VW’s own artificial intelligence and machine learning centre of excellence that makes day-to-day work easier and more efficient throughout the value chain.

On the factory floor, VW is making digital leaps as part of a five-year strategy to implement smart manufacturing to create a more agile production base based on cloud computing, big data and machine learning.

The ambitious aim is to increase productivity by as much as 30%.

From inspecting welds automatically with ultrasound to increasing collaboration between humans and robots in headlamp alignment, those efficiencies are already being implemented at 15 VW factories after being piloted in 2019.

The Group aims to invest €33 billion by 2024 (including the ordering of 2,200 new robots) on converting plants in its bid to become the market leader for electric vehicles.

VW is also using ‘Computer Vision’ to increase manufacturing efficiency, finding solutions that it can roll out across its plants. VW says this saves ‘several minutes’ for every vehicle on the production line – significant when you are making 10 million vehicles a year.

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DIGITAL TRANSFORMATION IN A MATERIAL WORLD: In Conversation with Niall Strachan

76

FEBRUARY 2021

WRITTEN BY

OLIVER JAMES FREEMAN PRODUCED BY

GLEN WHITE & CAITLYN COLE 77

ma nuf a c t uri nggl o b a l. com

PELION

NIALL STRACHAN, HEAD OF PRODUCT STRATEGY AT PELION, TAKES THE SUPPLY CHAIN DIGITAL HOT SEAT TO DISCUSS DIGITAL TRANSFORMATION AND SUPPLY CHAIN RESILIENCE.

I

n a world that seems to grow increasingly volatile with every passing day, companies are becoming dependent on technological

means to maintain their pre-COVID-19 dominance in the marketplace and meet the ever-evolving demand of hungry consumers. Many companies faltered and subsequently fell during the ongoing periods of lock78

down, while others have successfully managed to thrive amongst the turmoil, gracefully traversing the rock path that Mother Nature created in the very beginning of 2020.

As it happens, I had the opportunity to sit down and chat with Niall Strachan, Head of Product Strategy at Pelion - a man, and a company that has clearly, with his team, created a strategy that provided resilience in the face of this year’s adversity. To begin with, we discussed exactly what Pelion is and what they bring to the table; “So Pelion is a connected device platform.

It’s our recent spin-out of Arm that brings our connectivity and device management capabilities directly to the IoT market, which was previously run under the umbrella of Arm Holdings.” Essentially, the team who ran Pelion are flying the nest, Niall shared.

“We’re now standing alone as our own brand, with our FEBRUARY 2021

79

“That’s where our superiority really is; it’s in our ability, as one vendor, to provide customers with a full suite of services. Not many companies can say that” — Niall Strachan, Head of Product Strategy, Pelion

ma nuf a c t uri nggl o b a l. com

PELION

“ If a company features a truly multi-region or even multinational deployment, they want to understand all of this data that they collect. They want to know what the code is truly saying to them. At Pelion Connectivity Management, we are able to provide that understanding”

80

— Niall Strachan, Head of Product Strategy, Pelion

own product story, outside the umbrella of Arm, where it is clear that the market is ready for the launch of our capabilities as a standalone entity. Within Arm previously, we had a lot of benefits of being within part of such a large organisation, but that also came at the cost of agility and having the market understand our true capabilities.”

“So coming out and standing alone, we provide a connected device platform that also has specific discreet products.

These products range from connectivityenablement for deploying IoT devices to generate insights for enterprise products; connecting into networks, and providing connectivity from cellular operators.

We also have a device management layer, which is all about helping people manufacture their own devices whilst simul­taneously understanding and managing the firmware, security, and software that’s running on them,” Niall added.

We delved into where Pelion’s offering to the market is prevalent, and where their current customers implement the available software. “It’s an excellent product that can run on ultra-constrained low power devices, even something as small as the RFID

FEBRUARY 2021

Pelion Launch Video CLICK TO WATCH

|

0:27

81 systems on pallets; or it can be imple-

“If they can manage that, then their

mented in a very feature-rich system

data will become valuable and also

such as an edge gateway, process-

more secure.” That’s a hard ask, of

ing myriads of data in private networks.”

course, and that’s where Pelion’s true

Looking for some elaboration on Pelion’s

value shines. “Our value is in simpli-

edge capabilities, given that it’s a hot

fying the layer between the physical

topic currently, Niall told us that “edge

hardware and the application that

capability is something that we’re focus-

companies are trying to integrate

ing heavily on. The larger story is that our

and leverage. We provide the tools

customers have private networks, fac-

in the middle to help people deploy,

tories, delivery depots and other such

connect, and manage the devices in

assets that have edge networks within

their life cycle. Then they can really

them, and they desperately need their

focus on the data and they, in theory,

data to be processed effectively and effi-

won’t have to worry about the security

ciently locally at the edge.”

or costs of their assets and devices, ma nuf a c t uri nggl o b a l. com

PELION

because we’re already looking after

focused on data and data analytics.

it all for them.”

They want to harvest the data from all

On the topic of supply chain opera-

of their organisation’s interconnected

tions and the digital transformation

devices to both improve efficiency and

journey of many leading companies,

to keep an eye on where their goods

Niall was willing to walk us through the

and services are at any given time so

wants and desires of leading compa-

that they can mitigate risk, avert any

nies, from his own experience dealing

potential issues, and ensure customer

with them. “Our customers and part-

satisfaction.” Now, when it comes to

ners who are moving into specific

data and data analytics, it’s a heady

verticals in the supply chain are usu-

subject, we all know that, and that’s

ally, as you might expect, heavily

where Pelion comes in. “If a company

82 E X E C U T I V E P R O FILE :

Niall Strachan Title: Head of Product Strategy Company: Pelion Pelion was originally founded as an incubation unit within Arm, the world’s leading designer of key technologies at the heart of computing. Now a wholly-owned subsidiary of Arm, Pelion is forging its own path in the IoT revolution, building upon a solid foundation of connectivity and device expertise and a 500-enterprise strong customer base.

With a unique combination of global IoT connectivity and device management from a single vendor, Pelion breaks down barriers to IoT adoption for anyone looking to transform their industry.

FEBRUARY 2021

“ You’ll pivot your way along the road before you, to ensure that you’re following the star; occasionally you’ll meander, but as long as you’re roughly heading in the right direction, you’ll always reach it in the end, and that’s the best thing for the business” — Niall Strachan, Head of Product Strategy, Pelion

83

features a truly multi-region or even

is the concept of having a ‘flagship’.

multinational deployment, they want to

If you think about mobile devices for a

understand all of this data that they col-

moment, technology giants like Apple

lect. They want to know what the code

and Samsung battling in the arena with

is truly saying to them. At Pelion, we are

their industry-leading, cutting-edge

able to provide that understanding; this

smartphones released yearly, will likely

creates a level of transparency across

spring to mind. At Supply Chain Digital,

the data space and gives companies

we always like to ask which flagship

previously-unforeseen insight and vis-

product our interviewees’ company pro-

ibility into exactly what they should or

vides, and why it puts them ahead of their

should not be doing in their daily supply

competitors. When I put this question to

chain operations.”

Niall, he answered openly and honestly,

Something that has become increas-

by stating that every company would

ingly important in the global, slightly

say that “our product is the best for this

oversaturated, technology marketplace,

or that reason or has the killer feature” ma nuf a c t uri nggl o b a l. com

PELION

84

The Head of Product Strategy then went

a strong position in the market, so our

on to say that the real golden-nugget

capabilities, expertise and functionality

for Pelion is “the understanding of how

have essentially been inherited from the

devices are manufactured and the smart

legacy of that business.”

decisions we can help our customers

“Being a subsidiary of Arm gives us

make in this space which comes from our

a unique position that allows us to work

heritage, being part of Arm. Arm’s core

with almost any device that our cus-

background, within the Silicon IP space,

tomers want to be manufactured - ultra

helps people manufacture devices;

constrained, feature-rich, whatever it

they’ve been around for a long time, and

may be. But then because we have all

they’ve trailblazed all the way. They have

these capabilities that don’t touch the

FEBRUARY 2021

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Pelion helps Sensize deliver full supply chain visibility CLICK TO WATCH

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2:05

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PELION

“ If our business is going to continue to be successful and our teams are engaged in what they’re doing, believe in what we’re doing, and enjoy getting the job done, this is exactly where I would like to be” — Niall Strachan, Head of Product Strategy, Pelion 86

FEBRUARY 2021

physical hardware or the application stack, we can work with a real ecosystem of, pretty much, anybody. So, for example, at Pelion, we can work with different hardware manufacturers or different systems integrators or different application providers. This allows us to provide a service that acts as a one-stop-shop for all of the solutions that our customers need.” End-to-end, if you like a feature that wouldn’t necessarily be possible without the influence and power of Arm, because, as Niall says, “it really does take an ecosystem of people to manufacture the very best devices, and get services deployed. You can’t do it alone, and it’s very difficult for companies to get on top, without standing on the shoulders of giants.”

“So that’s where our superiority really is; it’s in our ability, as one vendor, to provide customers with a full suite of services. Not many companies can say that.”

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88

SAP Industry 4.Now: it’s NOW time for Data-Driven Business Processes WRITTEN BY

GEORGIA WILSON PRODUCED BY

GLEN WHITE & CAITLYN COLE

DECEMBER 2020

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SAP SE

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FEBRUARY 2021

“ The time is now,” says SAP Digital Supply Chain’s Mike Wade, on SAP’s mission to accelerate the adoption of Industry 4.0 and to help customers transform their manufacturing business.

M

ike Wade’s career in the supply chain industry began “rather by accident” he reflects.

“I started in air freight and logistics, so that’s

how I got into the big world of supply chain. Then I was a manager and the Regional General Manager for a third-party logistics business in the UK. I then changed direction slightly and moved into a UK headquartered global Retail organisation (The Body Shop International) as a distribution manager. This exposed me at that point to the combination of distribution management, supply chain planning, supply chain execution, and manufacturing. In 1998, I then made what felt like a radical change and moved into a supply chain technology business.”

Today, Wade is the Head of Digital Supply Chain in South Europe, Middle East & Africa at SAP Digital Supply Chain (DSC), where he still finds his varied experience in the sector very helpful when talking with customers “because I have empathy with them in operations, running their businesses”.

“When I look back, I can recall some of the experiences I had running those supply chain organisations ma nufa c t uri nggl o b a l. com

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SAP SE

“ It’s a great time to be in the world of supply chain” — Mike Wade, Head of Digital Supply Chain in South Europe, Middle East & Africa, SAP Digital Supply Chain (DSC)

profile changed massively seeing huge increases. “I’ve talked to multiple CEOs, and I’ve talked to some who have been given by their chairman or board open cheques to secure the supply source for their business. On the other hand, I talked to customers who were told to close their doors for three months during the peak of COVID – their busi-

92

or supply chain operations,” he contin-

ness was closed. We see both ends

ues. “I’ve been in this role for three and

of the scale. And what this has really

a half years, but I have been with SAP

focused on is resilience. Resiliency in

nine. It’s a great time to be in the world

supply chain operations and supply

of supply chain. The focus is higher now

chain planning is critical.”

than it ever has been, and the good news,

With resiliency now more than ever

even in this world that’s accelerating and

being a critical requirement in supply

adopting new innovation, is that there

chain operations, Wade explains that

is still absolutely – and probably more

“a new lens has focused organisations

than ever – a need to focus on the supply

in a different way, making companies

chain. So it’s a good place to be.”

ask the questions: how agile are the

With the increased focus on the supply chain industry experienced over the last eight to nine months, Wade comments that “supply chains have been a focus like never before, we felt the impact of that in the early days of COVID.” When supply sources were put under pressure at the outset, Wade reflects on his discussions with others in the industry, whose demand FEBRUARY 2021

Mike Wade - Head of supply Chain EMEA South, Middle East and Africa at SAP CLICK TO WATCH

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1:03

93 systems supporting my supply chain?

has been so high, and we’ve seen the

How reliant are we on outsource manu-

pressure that this has put on omnichan-

facturing? I read recently a Bain report

nel fulfilment operations. So companies,

that shows how many companies are

in general, have had to reassess their

now considering onshoring versus

supply chain planning capabilities to

offshoring when compared to perhaps

manage and plan their way forward.”

two or three years ago, and the potential change is incredible.”

However, “trying to balance supply

INDUSTRY 4.0: INNOVATION AND TRANSFORMATION

and demand has never been more diffi-

Being a founding member of the ‘Industry

cult or challenging,” adds Wade, who has

4.0 Alliance’ established in Germany,

seen online retail accelerate their adop-

“SAP has been at the forefront of industry

tion of digital transformation by many

4.0 for some time,” comments Wade.

years. “They have pulled forward that

The alliance brings together like-minded

transformation because the demand

organisations to drive the agenda and ma nufa c t uri nggl o b a l. com

SAP SE

94

common standards across industry 4.0.

placed to help our customers navigate

“I’m pleased to say that that Alliance is

from the idea to the realisation of value,

accelerating the nature of industry 4.0,

which can be either at the manufacturing

which essentially calls for technology to

level – so the shop floor level in an organi-

connect business processes and physi-

sation – or enterprise-wide, and the

cal assets,” adds Wade. “SAP is ideally

focus is to drive competitive advantage.”

FEBRUARY 2021

“ It’s the combination of SAP, the company, the digital supply chain solutions and the people that make us different to our competitors and enables us to deliver real value for our customers” — Mike Wade, Head of Digital Supply Chain in South Europe, Middle East & Africa, SAP Digital Supply Chain (DSC)

Three of the top trends that Wade is currently seeing in the industry when it comes to industry 4.0 are centred around: business performance, personalised products and a combination of product excellence and intelligent products.

Breaking down each trend in more detail, Wade explains that, “if we look at business performance, the World Economic Forum launched an initiative called the Global Lighthouse Network (GLN). This community of manufactures shows leadership in

E X E C U T I V E P R O FILE :

Mike Wade Title: Head of Digital Supply Chain – South Europe, Middle East & Africa, SAP Digital Supply Chain (DSC) Mike serves as the General Manager of the Digital Supply Chain business across South Europe, Middle East & Africa region at SAP. Mike is responsible for the go-to-market of SAP strategy for the Digital Supply Chain & Industry 4.0 solution portfolio and how this delivers and drives value to its customers across the region through the SAP ecosystem. Mike supports and works directly with many of SAP’s customers across the region as well as leading a team of sales specialists who operate in the specific markets across this geography of 75 countries and six time zones. ma nufa c t uri nggl o b a l. com

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SAP SE

Mike Wade Explain industry 4.0 CLICK TO WATCH

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1:18

96 using Industry 4.0 technologies to transform factories, value chains and business models, for compelling financial and operational returns. Together with McKinsey, they have identified that unprecedented efficiencies are available when adopting industry 4.0 innovation at full scale; the numbers are big, and these companies are showing the way forward for the majority of businesses that are stuck in what is termed ‘pilot purgatory’.

“Number two, personalised products to meet customer demand. We all know of course – and some of us may have FEBRUARY 2021

actually tried – the example of Adidas where you can personalise your own shoes to order. However, the consumer then expects that order to be available immediately. They’ve taken the time to customise their order, to take advantage of personalised products and they want the order immediately. So now you see a link between manufacturing and fulfilment, and the agility that is required there in that link. The third area of focus is product excellence and intelligent products. So as consumers, we expect high quality, and this is putting pressure on creating shorter innovation cycles in design and manufacturing, and all of this, of course, has to be done and to drive the circular economy.”

With these trends in mind, when it comes to SAP’s capabilities to help organisations transition to Industry 4.0,

“ With SAP Industry 4.Now, we can help companies translate their vision into reality now” — Mike Wade, Head of Digital Supply Chain in South Europe, Middle East & Africa, SAP Digital Supply Chain (DSC) ma nufa c t uri nggl o b a l. com

97

SAP SE

98

Wade deep dives into the four key com-

The second area that SAP helps its

ponents of the Industry 4.Now strategy.

customers in is intelligent assets. “This

Starting with intelligent products, Wade

is the ability to links the physical assets

explains that “this is where SAP provides

with its digital twin and to share a sin-

the bridge between engineering and

gle common view between the assets

manufacturing. This handoff has to be

operator, the manufacturer, and the

seamless and fully connected. It’s crucial

service providers that combined

to ensure that the manufactured product

with Machine learning, Predictive

meets – in full – the customer demands.

Algorithms and IoT technology can

Having a fully connected engineer-

help drive operational efficiency and

ing and manufacturing environment

improve maintenance activities.”

means that a company can, for exam-

Number three, intelligent factory – or

ple, accommodate late-stage changes

what we sometimes refer to as the smart

to an order.”

factory – is an agile and adaptable

D2O | 00 | Highlight Video Design 2 Operate CLICK TO WATCH

FEBRUARY 2021

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4:38

S A P C U S T O M ERS HARN ESSI N G I T S I N D U ST RY 4. 0 SO LU T I O N S

De’Longhi Group Headquartered in Italy, De’Longhi is “a very well-known and famous householder appliance manufacturer,” comments Wade.

“De’Longhi has adopted industry 4.0 technologies from SAP in their manufacturing operation using IoT technologies and connecting all of their manufacturing assets.”

In providing its services to De’Longhi, Wade explains that as a result, De’Longhi has reduced its order to dispatch time. “This is a critical customer service metric and also a very important metric for most manufacturing vice-presidents,” comments Wade, who adds that SAP’s services have “also helped

De’Longhi implement new production lines, in rapid time.

I’ve talked about the ability of manufacturers to pivot during the times that we’re in. This is important because they may want to pivot into new areas as we move forward.”

Faurecia “Faurecia is one of the world’s largest automotive suppliers,” comments Wade, who details that the company is using SAP’s manufacturing solutions to connect all of its manufacturing lines and production machines to deliver innovation inside the operations.

This, in turn, delivers innovation to its automotive customers.

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SAP SE

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“ When intelligence systems give people the data to make informed decisions, the human aspect is further enhanced” — Mike Wade, Head of Digital Supply Chain in South Europe, Middle East & Africa, SAP Digital Supply Chain (DSC)

FEBRUARY 2021

D2C | 00 | Highlight Video for Design 2 Consume CLICK TO WATCH

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3:54

101

factory environment, which is also elastic, and if we think about what’s happened during these times of COVID, manufacturing has had to be flexible and elastic and pivot to produce new products to deal with multiple scenarios.

This type of factory is fully connected and uses real-time data to drive performance and link manufacturing and logistics together to ensure that the customer demands are met,” adds Wade.

The final area which SAP helps its customers to develop is the human aspect “Empowered people”. “People have often ma nufa c t uri nggl o b a l. com

SAP SE

Mike Wade explains the process of SAP CLICK TO WATCH

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1:20

102

1972

Year founded

€27.63bn Revenue

101,450 Number of employees

FEBRUARY 2021

asked: the adoption of industry 4.0, what

Summarising SAP’s role in customer

does it mean for me? What does it mean

journeys, Wade reflects that “here at

for my people?” Wade says. “The great

SAP, we can help companies translate

news about industry 4.0 is that as we

their vision into reality. It’s our job. We

deploy those technologies, we move the

can help move companies beyond

people to a more empowered environ-

what I referred to earlier as “pilot

ment by adopting AI, artificial intelligence,

purgatory” into full-scale adoption of

and connecting all the assets involved

Industry 4.0 – or as we say here in SAP

in manufacturing. The demand from

Industry 4.Now – because the time

the customer allows people to focus on

is NOW. We have an Industry 4.Now

real value. When intelligence systems

team, which is a worldwide team oper-

give people the data to make informed

ating across our regions where we can

decisions, the human aspect is further

bring them alongside customers to

enhanced,” says Wade.

translate vision into reality.”

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SAP SE

104

Whilst Wade states that he may be

connected digital supply chain. In fact,

slightly biased, he believes there are

the digital supply chain is, by definition,

many reasons why SAP is different

fully connected. It has to be, and the

from the competition, the first being

analysts rank us as number one in the

that “SAP Digital Supply Chain has

market. So this is all very good, but

the broadest process and solution

actually, I think, more importantly, it’s

coverage in the industry, from Design

the people that make us different. We

to Operate. We also cover the fully

are, of course, confident in the SAP

FEBRUARY 2021

Launching Industry 4.Now Hub

by Thomas Saueressig 105 CLICK TO WATCH

|

3:37

solution capability, but unless we can

the people that make us different

translate customer demands, customer

to our competitors and enables us to

needs and customer strategy into a

deliver real value for our customers.”

solution vision, then it’s meaningless.

We have deep subject matter experts that allow us to do this. So for me, it’s the combination of SAP the company, the digital supply chain solutions and ma nufa c t uri nggl o b a l. com

Archroma: the journey towards digital transformation

WRITTEN BY

WILLIAM SMITH PRODUCED BY

LEWIS VAUGHAN

106

FEBRUARY 2021

107

ma nufa c t uri nggl o b a l. com

ARCHROMA

We take a closer look at the technologies that have been powering the specialty chemicals company Archroma since its inception

A 108

rchroma is a global colour and specialty chemicals company headquartered in Basel, Switzerland. The firm was cre-

ated out of chemicals company Clariant’s textile, paper and emulsions business in 2013, a move that is crucial to understanding the company’s structure as of today, which has become more lean, more agile, more flexible and more direct.

The separation from Clariant was particularly focused on building an independent company. with best-in-class technology, expertise and people and was completed in less than a year.

Having since made a number of acquisitions, including BASF’s textile chemicals business in 2015, the company today has some 3,000 employees across more than 35 countries, operating 25 production sites. In Asia, Archroma has 1,200 employees, with Singapore being

FEBRUARY 2021

109

ma nufa c t uri nggl o b a l. com

Hi, we’re Salesforce. We help companies unify marketing, sales, service, commerce, and IT on the #1 CRM platform, so you can give every customer the personal experiences they love. Visit salesforce.com/eu/learnmore.

the global headquarters of the textile

manufacturing into line with the

chemicals business. Archroma’s

company’s wider ambitions to bring

Asia operations consist of all coun-

customers into the process at an

tries in the regions of South and

earlier stage. This focus on using

Southeast Asia, China, Korea, Japan

technology to improve the customer

and Oceania, with employees and

experience goes beyond manufactur-

manufacturing capabilities in almost

ing, with a web page where designers

all major countries.

can choose from over 4,000 colours

As part of the separation the company’s internal systems were

to use in their designs.

Archroma’s digital transformation

moved to the cloud, while crucial

journey has been supported by the

manufacturing technology is also

assistance of a number of partners.

being upgraded, with an emphasis

Salesforce has provided customer

on digitalisation. The goal is bringing

systems that are allowing Archroma

Archroma: Corporate video CLICK TO WATCH

|

2:22

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ARCHROMA

“ As industry leader, we have the responsibility to keep on addressing the climate challenge” 112

— Heike van de Kerkhof, CEO, Archroma

to explore, for instance, ecommerce.

Supporting that process was integration partner Accenture, while IT organisation Everis delivered support services alongside advice. With Infosys, meanwhile, Archroma has worked from the start to develop a sturdy foundation of technologies.

By focusing on customers, and with the help of technologies such as improved manufacturing techniques, Archroma is pioneering a sustainable approach to the industry.

Backing up that pledge, the company FEBRUARY 2021

113

2013

Year founded

3,000 Number of employees

ma nufa c t uri nggl o b a l. com

NAVIGATING THE DIGITAL NEXT FOR CHEMICAL INDUSTRY Infosys is helping chemical manufacturers in Accelerating digitization for services, ecosystems, experience and value

Enabling mergers & acquisitions

Facilitating de-globalization and creating a flexible supply chain

Participating in circular economy

Building digital backbones with cloud, data lake, AI and API gateways

With over three decades of experience in managing the systems and workings of global enterprises, we can help navigate you towards opportunity with AI-powered Core Agile Digital at Scale Always-on Learning The journey to digital has so many nexts.

Navigate your next with Infosys.

www.infosys.com

A Tale of Two Cities: Transforming the Fashion Industry with more Sustainable Colors & Effects CLICK TO WATCH

|

9:33

115

recently topped the Institute of

challenge our suppliers in terms of

Public & Environmental Affairs (IPE)

safety, health and environment, and

list of industrial chemical companies

to go even beyond our own strict

driving supply chain transparency.

policies and processes.”

In a press release, Heike van de

It also recently joined the Together

Kerkhof, CEO of Archroma, said: “As

for Sustainability (TfS) global initia-

industry leader, we have the respon-

tive for sustainable chemical supply

sibility to keep on addressing the

chains. In another press release,

climate challenge, and to do every-

Andreas Wester, Chief Procurement

thing we can together to reduce our

Officer at Archroma, said: “As an

impact on the environment. This is

industry leader, we have the respon-

where the approach of the Institute

sibility to do everything we can to

of Public & Environmental Affairs

reduce our impact on the environ-

supports us. They encourage us to

ment. This is why we are very proud ma nufa c t uri nggl o b a l. com

ARCHROMA

Consulting, transformation, technology and operations everis an NTT DATA Company is a multinational consulting firm that offers business and strategic solutions, development and maintenance of technological applications and outsourcing services. The company, which operates in the telecommunications, financial, industrial, utilities, energy, public administrations and health sectors, reported 1.43 billion Euro in turnover last year.

It currently employs more than 25,500 professionals at its offices and high performance centers in 17 countries.

Learn More everis.com/global

117

“As an industry leader, we have the responsibility to do everything we can to reduce our impact on the environmen”

to work with TfS and its members towards fostering sustainable sourcing in our respective supply chains.

This in turn allows us to offer safer and more sustainable solutions to our customers for manufacturing daily-use products in areas such as e.g. textile & fashion, packaging & paper, and paint & construction.”

— Andreas Wester, Chief Procurement Officer, Archroma

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118

CUSTOMIZABLE SUSTAINABLE DELICIOUS

WRITTEN BY

HARRY MENEAR

PRODUCED BY

JAMES BERRY

FEBRUARY 2021

119

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SUN BASKET

Mike Wargocki and Michael Thompson discuss Sun Basket’s unique approach to delivering healthy, customizable, and delicious food

T

he COVID-19 pandemic has had a dramatic impact on the way we all live, work, spend money and eat. Forced inside by wide-

spread lockdowns and social distancing measures, people are increasingly turning to online services to secure their basic needs. At a stressful time like this, 120

the value of healthy, convenient, sustainable food is more apparent than ever. For California-based meal kit delivery service Sun Basket, 2020 has been a year of unprecedented challenges and opportunity.

“Our business essentially doubled in three weeks during that initial spike,” says Michael Thompson, Vice President of Supply Chain and Business Integration at Sun Basket. “We basically found ourselves in a position where we suddenly stopped being a convenience and became more of an essential service for a lot of our customers.”

Sun Basket was founded in 2014 by award-winning chef Justine Kelly and Adam Zbar, Tyler MacNiven and George Nachtrieb – a trio of tech entrepreneurs looking to marry the convenience of on-demand, subscription-based food delivery with restaurant-quality cuisine tailored to suit every diet.

FEBRUARY 2021

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ma nuf a c t uri nggl o b a l. com

Stafni that momov just-in-timo with you We rebuilt temp stafng to reliably yex with your business. With our nationwide network of 600,000 pre-vetted workers, get the labor you need, even on short notice.

Trusted by thousands of businesses like © 2020 Instawork. All Rights Reserved.

Talent acquisition in trying times: T:e Cnsta9or8 met:oNology ike Bohnett, VP of Sales and Partnerships at Instawork, and Mike Wargocki, VP of Manufacturing at Sun Basket, discuss its staffing partnership.

At a time when workforce reliability, workplace safety and job security are all being afected by COVID-19, companies are starting to feel the pressure. Addressing these problems through technology that is revolutionising talent acquisition, Instawork ofers a centralised platform that connects businesses with proven professionals in real-time.

“Instawork is a yexible stafng solution for warehouse manufacturing, food production, and hospitality-based workers,” explains Mike Bohnett, Vice President of Sales and Partnerships. “At heart, we re a tech company that is aiming to rebuild how stafng works, to better meet the needs of both companies and today s hourly workforce.

Fundamentally, we believe that stafng g and speci+cally temporary stafng is broken. hrough the Instawork platform, workers can easily pick up shifts and get paid quickly afterwards, and they receive reviews from employers, which ups their credibility for any other potential gigs.”

An excellent example of Instawork in action is the company s close collaboration with Sun Basket, the San Francisco-based subscription meal delivery service. hey needed extra warehouse labour and found Instawork. Subsequently, Instawork was able to onboard Sun Basket in a matter of days and provide a 90% +ll rate for its warehouse staf, with an average worker quality score of 97%.

M

Mike Wargocki, VP of Manufacturing at Sun Basket, contextualised that happens then operations teams are understafed and that proolems it can causee “ he frst thing it causes are mistakess hat’s a serious issue oecause, as te’re making orders for our customers, the key is making sure that quality remains as high as possioles. With understafng resulting in employees having to perform several roles simultaneously, people can quickly oecome exhausted and more susceptiole to illness, a core concern that Sun Basket, particularly during the pandemic, is diligent to avoid.

Despite that Wargocki calls the “uneven torkfot. of the company, even as demand in gret, he says that Instatork has alloted Sun Basket to meet its stafng challenges tith aplomos “ he Instatork team has oeen amazing oecause of the quality of torkers, as tell as the consistency of the fll ratess.” “ sing the Instatork platform, Sun Basket has counter intuitively lotered their overall stafng costs,. adds Bohnetts “By using a platform like Instatork, Sun Basket is actively empotering its frontline teams tith tools to make informed decisions, thich aggregates into a high return on investment I/ across the companys&

“Tht Insaawork atam has bttn amazing btcaust of aht qualiay of worktrs, as wtll as aht consisatncy

Learn More

of aht fll raatss.”

- Mike Wargocki, VP of Manufacturing at Sun Basket

instawork.com

SUN BASKET

124

“ We have lots of great relationships with the farmers near us, particularly the organic operators, since 99% of the vegetables we buy are organic certified” — Michael Thompson, VP, Supply Chain and Business Integration, Sun Basket

FEBRUARY 2021

“Sun Basket is a delivery-based meal subscription business, and our goal is to provide healthy food options to our customers using that model,” explains Mike Wargocki, Sun Basket’s VP of Manufacturing. “Whether our customers are eating gluten-free or vegan, or are on a Mediterranean diet, we find creative, delicious and healthy solutions for them.”

CREATIVE, DELICIOUS, HEALTHY “We like to think of ourselves as the Whole Foods of the meal kit industry; we’re offering a more specialized,

EX EC UTIV E PROFILE:

Mike Wargocki Title: VP, Manufacturing Company: Sun Basket

higher end and high-quality service,” Wargocki continues. Sun Basket’s premium, health-focused offerings extend across a staggering range of dietary requirements that make for a very broad, highly-customizable menu. Customers can choose from meal plans including Paleo, Carb-Conscious, Gluten-Free, Lean & Clean, Diabetes Friendly, Chef’s Choice, Vegetarian, Pescatarian, Mediterranean, or Quick & Easy. These meals are a part of a weekly rotating menu developed

by Chef Kelly and her team and shipped to tens of thousands of customers on

Mike brings 20 plus years of food manufacturing, quality and operations experience. In his current role, he is responsible for production and equipment buildout within the SunBasket manufacturing facilities.

Previously, Mike was the VP of Operations for DelMonaco Foods, a high end kettle cooking company.

Mike was also the Director of Operations for Penford Food Ingredients, running the food starch manufacturing facilities in the US and co-manufacturing operations around the world and prior to that the Quality Management Director for Penford Corporation overseeing global quality operations.

a regular basis. The meal kits arrive ma nuf a c t uri nggl o b a l. com

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SUN BASKET

“ One of the major benefits of the meal kit subscription business model is that the amount of food waste we create is so much lower than, say, a grocery store”

126

— Michael Thompson, VP, Supply Chain and Business Integration, Sun Basket

cold-packed with instructions for the customer to prepare a two or four serving meal, sometimes in as little as 10 - 20 minutes.

In addition to its core meal kit offering, Sun Basket is working to broaden its scope across what Wargocki describes as its ‘share of stomach,’ branching out into snacks, lunch items and more.

“We provide the meal kits as our core product, but we’ve also launched our Fresh and Ready meals, which are readymade and just need to be heated up,” he says. “We’ll be further expanding those offerings in 2021, which is very exciting, as well as having a marketplace, which is a way of presenting a curated selection of snacks and juices to our customers.”

Thompson notes that, as far as a secret sauce goes, Sun Basket’s ability to combine quality, a large range of products and a high level of customizability is key to its success.

“We really want to personalize the experience for our customers. Some of our competitors will just offer two options - a basic and a vegetarian. We have 11 options to meet the different needs of different groups,” he notes.

FEBRUARY 2021

What do you love about Sun Basket?

CLICK TO WATCH

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0:19

127 “We work hard to offer an ever-

EXECUTING ON THE VISION

changing menu every week. We take

Between them, Wargocki and Thom-

pride in providing a lot of variety to

pson oversee the operational side of

our customers, and many of our meals

Sun Basket. “Everything inside the

are made with unique components

four walls of the building, like labor,

like sauces that we develop ourselves.

manufacturing and packaging, that’s

We’re not just buying, for example, a

all Mike,” Thompson explains. He, on

romesco sauce off the shelf from a

the other hand, is responsible for the

third party. We’re making that romesco

company’s operations outside its prem-

sauce ourselves.” So, in addition to

ises. “Everything beyond these four

customization, quality and a broad

walls is my responsibility, from logistics,

range of options, sometimes Sun

procurement and supporting services

Basket’s secret sauce is also literally

like corporate IT, to food safety and

a secret sauce.

some of the other functions that enable

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SUN BASKET

E X E C U T I V E P R O FILE :

128

Michael Thompson Title: VP, Supply Chain and Business Integration Company: Sun Basket Michael brings over 25 years of operational expertise with consumer product and subscription companies, building Direct-to-Consumer supply chain solutions. In his current role, he is responsible for procurement, inbound freight, last-mile delivery, food safety and corporate services for Sun Basket.

Previously, Michael was CSCO for NatureBox, transitioning the subscription service into an omni-channel food brand – servicing home delivery, office locations, food service partners, airlines and on-shelf retailers. Michael was also VP Operations for Bare Escentuals (cosmetics) where he managed North American Operations to support massive revenue growth and created an internal Program Management organization for strategic initiatives.

FEBRUARY 2021

FROM FARM TO TABLE – A UNIQUE SUPPLY CHAIN In order to deliver on its promise of a rotating weekly menu that caters to all manner of dietary preferences and needs, the procurement function of Sun Basket’s business is all about smart, sustainable sourcing.

“We work with the company’s test kitchen about eight weeks before a menu goes out for delivery to make sure we’re taking into account the time of year and the ingredients that are in season,” Thompson explains.

From there, Thompson’s goal is to ensure that Sun Basket is sourcing the freshest possible ingredients in the right quantities. “We’re working to ensure we’re delivering as close as the work that Mike does within the

possible to a farmer’s market fresh

business’ premises. We work together

experience,” he says, adding that

on lots of different projects.” Together,

there are two major factors to con-

Wargocki and Thompson have the

sider when sourcing produce for Sun

unique challenge of sourcing, manu-

Basket’s meals: time and temperature.

facturing and distributing Sun Basket’s

“We’re trying to figure out how quick-

meal kits and other products across

ly we can shorten the time from harvest-

the United States, tackling extreme

ing a vegetable to delivering it to a

levels of customization in a way that’s

customer’s table. We’re fortunate

not only effective, but environmen-

enough to be sitting here in the mid-

tally sustainable.

dle of California, right next to the ma nuf a c t uri nggl o b a l. com

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SUN BASKET

biggest produce-growing valley in the country. We have fantastic relationships with many farmers here, particularly the organic operators, since 99% of the vegetables we buy are organic certified,” says Thompson.

“These relationships with big farms and smaller scale operations all across the country mean that, when we can, we buy as locally as possible.” All of Sun Basket’s meal kits delivered to the East Coast, for example, utilize organic corn grown by the company’s supplier close 130

to its New Jersey facility when it is in season. Thompson notes that, “We do as much as possible to reduce the time between a vegetable coming out of the ground and coming out of the customer’s meal kit when they go to make dinner that night.”

Dealing with temperature is a uniquely difficult proposition. Sun Basket’s cold chain is an essential element of ensuring that produce not only reaches the manufacturing plant in the best possible condition, but also that the resulting meal kits arrive in the customers’ hands as fresh as they can possibly be. Thompson explains that, using individual temperature gauges on each pallet of produce FEBRUARY 2021

“Whether our customers are eating gluten-free or vegan, or are on a Mediterranean diet, we find creative, delicious and healthy solutions for them” — Mike Wargocki, VP, Manufacturing, Sun Basket

131

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SUN BASKET

“ We like to think of ourselves as the Whole Foods of the meal kit industry; we’re offering a more specialized, higher-end and highquality service” — Mike Wargocki, VP, Manufacturing, Sun Basket

132 received, his team can monitor the entire

When the finished meal kits leave Sun

journey of a piece of produce from the

Basket’s facility, ice packing plays an

supplier to Sun Basket’s loading dock.

important role. “We also try to be smart

“When that product arrives, I have

with how we pack out our products in

access to a complete readout of the

terms of ice, insulation and box size, tak-

temperature of that product over the

ing into account the length of the journey

course of its entire journey. I can see

and the temperatures at the destination,”

if a product that’s supposed to be held

Thompson says. “If you’re sending a

at 38 degrees was held for an hour at,

box to Phoenix, Arizona, where it’s 95

say, 55 degrees, and be able to know

degrees outside, you’re going to need

therefore that it isn’t going to hold up,”

a very different packout solution com-

he explains. “We use that information in

pared to, say, Chicago in the wintertime.”

addition to our quality inspection pro-

Using a sophisticated algorithm, Sun

cess to sort through our produce and

Basket’s fulfilment team can account for

ensure we’re only using products that

travel time, environmental conditions and

live up to our customers’ standards.”

the contents of each individual box.

FEBRUARY 2021

have 25,000 different iterations in a 30,000-box run. We could conceivably have a situation where every single one of our customers orders a completely different combination of meals in their box. It’s really been interesting to work on developing our technology to allow for that level of customization,” says Wargocki, explaining that his own role focuses on finding the most efficient, highest-speed production options that are designed to support regular changeovers and refits with the least amount of downtime possible.

“We have a different ice configuration

“If we’re shipping those 30,000 boxes,

for, in theory, every single zip code in the

they’re going to contain 100,000 individ-

country, which gives me quite a fun chal-

ual meals, which means approximately

lenge,” laughs Wargocki.

300,000 individual ingredients. When you think about the touches that go into

EXTREME CUSTOMIZATION

that, it’s more than a million touches

The sheer level of customization that

every week that are completely unique

Sun Basket offers its customers cre-

to that cycle,” he explains. “Seven days

ates a uniquely complex challenge from

later, the whole process starts again

a manufacturing standpoint as well.

with entirely new products.”

“The big challenge from a manufactur-

Using advanced customer analytics,

ing point of view is how customizable

the Sun Basket team can predict with

Sun Basket’s service is. A lot of our

increasing accuracy which foods their

competitors might send out 30,000

customers will buy each week. “We

boxes in five or six different iterations.

know eight weeks in advance what

Sun Basket, on the other hand, might

we’re going to put on our menu and we ma nuf a c t uri nggl o b a l. com

133

SUN BASKET

INST AW ORK

134

“Instawork is one of our suppliers of temporary laborers,” says Wargocki. “As the business grew, we needed a fair amount of people very quickly. Instawork is a tech-based solution to that problem that gives us a huge amount of flexibility.

“We have a very high demand for our products over the weekend, and then for the rest of the week we have a more level, predictable workload.

On the weekends, I need to be able to have a large enough team to ensure that all of our production and fulfillment gets done. Instawork is great for that.”

FEBRUARY 2021

Instawork uses a web-based network of contractors that can sign up for particular shortterm jobs. “We can give priority to contractors we’ve had positive experiences with before,” enthuses Wargocki, adding that, “it also provides our contractors with a really good training process. We can upload our training materials, food safety and GMP requirements - everything those employees need to become certified to come in and work for us. It saves a lot of onboarding time for new temporary staff.”

use our analytics to predict how much

notes, is packaging. “Each individual

of each of those meals our customers

ingredient needs packaging, and then

are going to want. We can predict vol-

all those ingredients are put in a package

ume and location based demand, as well

together, which goes in a bigger box with

as which specific meals and diets people

ice and other insulation for shipping,” he

are going to order, and we can get very

explains. While the issue is a hard one to

granular in terms of one ingredient vs

get away from, Thompson adds that Sun

another,” says Wargocki, adding that

Basket has taken some significant steps

this is essential, not only to ensuring the

towards mitigating those issues.

company can meet demand, but also its sustainability goals.

“All of our packaging is either recyclable or compostable,” he says. “It makes our job a little harder, because

SUSTAINABILITY AT SCALE

sometimes it’s difficult to find recycla-

There are a number of factors unique to

ble and compostable solutions that

the subscription-based meal kit delivery

meet our needs regarding keeping

business model that impact sustainable

food cold, but we really stand by our

practice. “One of the major benefits of

commitment that while it is necessary

the meal kit subscription business model

to have a fair amount of packaging,

is that the amount of food waste we

we do as much as we can to reduce its

create is so much lower than, say, a

environmental impact.” Wargocki adds

grocery store,” says Thompson. “We

that, from a manufacturing perspec-

track our wastage for each week and

tive, finding ways to use recyclable and

it’s in the low single-digit percentage of

compostable materials in the manu-

our total food purchase, which is really

facturing process continues to be an

low. We try not to throw anything away

interesting challenge.

that’s still usable. If we don’t manage to sell something to a customer, we’ll

ONWARDS AND UPWARDS

donate it to a food bank.”

Thompson reflects that, had things

Where meal kit companies across the industry run into problems, Thompson

been different, the 2020 COVID-19 crisis could have gone in an entirely ma nuf a c t uri nggl o b a l. com

135

SUN BASKET

different direction for Sun Basket.

“We were growing very fast, like a lot of companies in the subscriptionbased food delivery space,” he reflects.

“Then, in 2019, the company made the decision to slow down a little bit and really make sure the economics of the business were sound. You can grow, pump more money into marketing, attract more and more customers, etc.

But if those customers aren’t staying for the long run as you had hoped, your company is going to burn itself out.”

136

Sun Basket spent 2019 shoring up its business model. This year, the results have been spectacular. “Those efforts

“ We have a different ice packing configuration for every single zip code in the country” — Mike Wargocki, VP, Manufacturing, Sun Basket FEBRUARY 2021

put us in a really strong position coming into 2020, when COVID-19 started to happen and being in the business of sending food to people’s houses suddenly became a very good industry to be in,” Thompson recalls. “Had we not gone through all that work the year before to make the economics sound, we wouldn’t have been in such a good position to be able to help our customers and grow as much as we did.”

Now, Sun Basket is looking to broaden its offerings even further, finding new

137

ways to take its core strength of

and diverse in terms of new ways to

making delicious, healthy food and

bring new foods to new customers at

find new channels to deliver it to its

all different times of the day, whether

customers. “2021 is going to be about

that’s lunches, dinners, breakfast or

taking those new offerings to a wider

snacks. The challenge for us is making

market through new channels,” says

sure that we not only do a lot of different

Thompson. The company is growing

things, but that we do all of those things

rapidly, with deals on the horizon to

well. Everything that we’re doing is to

sell Sun Basket’s food through partner-

figure out how to grow the breadth of

ships with on-line retailers, as well as

our offering while never compromising

some brick and mortar locations.

our quality standards.”

In closing, Wargocki adds that, “We’re looking to become very broad ma nuf a c t uri nggl o b a l. com

Bayer Italy’s Supply Chain Transformation WRITTEN BY

LEILA HAWKINS PRODUCED BY

138

GLEN WHITE

FEBRUARY 2021

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BAYER

Michele Palumbo, Head of Supply Chain Management at Bayer Italy, discusses the challenges of COVID-19 and the way technology is shaping the future of the supply chain

T

he arrival of the COVID-19 pandemic sent shockwaves through global supply chains this year, with plant closures and

supply shortages leading to major disruptions. This 140

led many organisations to rethink the way they operate, choosing digital solutions to enable more visible, and easier to manage supply chains.

In the case of Bayer Italy, their Head of Supply Chain Management Michele Palumbo explains that COVID-19 led to a digital acceleration that normally would have taken them 10 years, but they instead achieved in little under 10 months.

“It sounds crazy to say this is ‘thanks’ to COVID, but I believe there is always something positive to come out of even the most negative of things,” he says.

Bayer Italy’s digital transformation actually began in 2010 as they strived to move from software to a collaborative ecosystem.

“You can have the best algorithm that you could imagine, but no algorithm is able to predict what will happen in the future, so we were dealing with FEBRUARY 2021

141

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BAYER

“ It sounds crazy to say this is ‘thanks’ to COVID, but I believe there is always something positive to come out of even the most negative of things” — Michele Palumbo, Head of Supply Chain Management Italy, Bayer

some business disruption risks related to invoicing software,” says Palumbo.

“We took this as an opportunity to think about how we could connect with our partners while integrating them into the legacy system that we had.”

To do this, he says they needed to move beyond the concept of an interface. “It was too expensive and too difficult for small companies that were our partners,” he says. “We had to find a solution that could talk every kind of IT language, and at the same

142

time get information from every kind of data source.”

FEBRUARY 2021

E X E C U T I V E P R O FILE :

Michele Palumbo Title: Head of Supply Chain Management Italy Location: Milano, Lombardy, Italy Since 2017 Michele Palumbo has been Head of Supply Chain Management Italy at Bayer S.p.A. He started working for Bayer in 2010 to source logistics and distributive services for the group in Italy and he implemented important strategic and more operational projects in the remit of the life science industry.

Summa graduate from Bocconi with a research empirical thesis on circular economy and majored at Polytechnics of Milan in industrial management, he joined the SDA Bocconi faculty where he designed and coordinated managerial logistics training for the technology and production department.

After collaborating with some management consulting companies, he took on the role of innovation and logistics manager in the business services department of the pharma-chemical group, Hoechst, in Italy. Then he was responsible for central logistics services in one of the leading pharma wholesalers in Italy, Comifar-Phoenix Group.

He is Adjunct Professor in Operations and Supply Chain Management at the Catholic University of Milan and faculty member of Il Sole 24 Ore Business School.

“A serial innovator”, as a manager and academic, he offers a multifaceted perspective able to create value in different contexts thanks to technologically advanced, sustainable and efficient solutions.

Empathic and altruistic, intellectually curious and a visionary, he has a large family and ever since he has been involved in charitable initiatives. He is a board member of the Italian Food Aid Foundation. ma nuf a c t uri nggl o b a l. com

143

TESISQUARE.COM

BAYER’S DIGITAL TRANSFORMATION JOURNEY In 2010 Bayer Italy undertook the challenge for a transparent supply chain. The need to change the software for pre-invoicing transport costs offered the opportunity to challenge the scope: to embrace partners and customers in a collaborative ecosystem. The first step was to grant a fully automated Transport Management System (human intervention only for exception) able to calculate costs for 200,000 deliveries per year to about 20,000 customers in a widespread network of 300 wholesalers, over 11,000 pharmacies and parapharmacies, 3,500 hospitals, laboratories and nursing homes, 3,000 retail outlets. Once the first goal was attained, Bayer moved to an extended solution, beyond the concept of interface: a collaborative cloud platform able to dialogue natively with external actors, whatever IT language would have been used. At that time, this was a breakthrough in “track & trace” systems: Bayer moved from paper documents to digital Delivery Documents and Proofs of Deliveries tackling every kind of issue in the between.

Cybersecurity was not affected by the adoption of a cloud solution, since the legacy system let in only defined information following a stringent exchange protocol granted by an information security 3rd party.

THE FOUR BENEFIT AREAS We can say Bayer has identified four benefit areas: the first benefit is referred to a full automated transportation costs calculation; with this system 1 person can handle about 20.000 customers and 200.000 deliveries per year, without it about 7 employees would be needed and we’d have however a lower level of accuracy. The second benefit is that, together with the track & trace of deliveries, this system also allows to detect exceptions and to send an automatic alert to the right person. Third benefit: this system is multichannel and multicompany -– Bayer Group has different companies operating in different fields and a wide range of suppliers – and enables collaborative practices through the supply chain. Finally, the fourth benefit is a business intelligence dashboard to check performances together with the possibility to simulate different distribution scenarios, e.g. moving a warehouse or increasing/reducing the number of warehouses, considering the impact in terms of costs and service level.

LEARN TO BUILD YOUR COLLABORATIVE ECOSYSTEM WITH TESISQUARE ma nuf a c t uri nggl o b a l. com

BAYER

Bayer: Who We Are CLICK TO WATCH

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6:12

146 Working with TesiSquare, the

the possible synergies in coordinat-

answer was to build a cloud-based

ing the goods - like a calendar with

platform where every actor in the

bookable slots - enabled the use of a

process is able to connect in real time

barcode or QR code to grant a free

and provide useful information, issuing

pass to the carriers coming from

alerts only to the owner of the relevant

whichever country.

part of the process, and not sending multiple emails to numerous people.

This enabled an ecosystem where real-time connections among the actors activated forms of collabora-

“This prevents huge queues from forming, and you can also plan the resources that are required for receiving or dispatching goods,” he says.

Moreover, the control tower doesn’t

tion previously unimaginable. As an

just offer business intelligence and

example, the collaboration was also

advanced analytics features, but also

extended to the competitors working

allows them to plan how many ware-

in the same LSP warehouses since

houses are needed, and where. Via

FEBRUARY 2021

€43.5bn Full-year sales

€5.3bn

Investment in research & development

103,824 Number of employees

87

Countries

a simulation module, it’s possible to move, close and increase LSP sites, to see what would happen in terms of costs, as well as service levels on the basis of ‘what if?’ analysis based on real data referred to the timeframe.

Palumbo believes the supply chain of the future will be PAL - personalised, automated, and local – a view shared by transformation change expert and author Sean Culey.

“We want to be able to cope with the service level requirements of the customer of the future. They will have a minimum acceptable level, which is the Amazon one, and if we are delivering drugs the expectation is to have a

ma nuf a c t uri nggl o b a l. com

147

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HIGH LOAD CAPACITY

TAILOR-MADE

“ We want to be able to cope with the service level requirements of the customer of the future” — Michele Palumbo, Head of Supply Chain Management Italy, Bayer

“This helps to identify what the pallets are carrying, and they’re also great in terms of the Falsified Medicines

higher service level than if you’re deliv-

Directive (FMD) that will be in place in

ering a pair of shoes (with due respect

Italy from 2025, helping to track goods

to shoes).”

along the supply chain and provide

Their next challenge was to make sure the supply chain was transpar-

visibility in real time to relevant authorities,” says Palumbo.

ent. Palumbo says they had blind 149

spots when it came to proof of delivery to the customers.

“This is crucial for pharmaceutical providers, because we’re dealing with a very long list of things like changes in temperature, humidity, geolocation, lead times, regulatory and quality compliance, security and sustainability, among others.”

Their solution, which they developed with Murata ID Solutions, was to apply disposable RFID (Radio-frequency identification) tags on the shipping cartons and embed permanent ones into the pallets – a technology that enables data to be transmitted cheaply and easily. ma nuf a c t uri nggl o b a l. com

BAYER

150

On top of that, the pallets used

The idea was simple, he says.

are not the regular ones, and the

Bayer began working with Valsir

company found a way to reduce the

to take the most polluting plastics

number of pallets they were losing

which would normally find their way

along distribution lines. “We realised it

into landfill or the world’s oceans

was possible to create a closed circle

and instead create a granule that

reusing the same pallets for distribu-

can be used to make plastic pallets.

tion,” Palumbo says.

By doing this they are able to operate

FEBRUARY 2021

151

with 4,000 reusable pallets made

“The Green Pallets are practically

from recycled plastic, instead of

fireproof, washable, are not affected

75,000 single-use pallets each year

by mold or bacteria, are difficult to

made from wood. As well as saving

break, and easy to repair. If they

money, and reducing waste, they are

do become damaged, the plastic

generating an additional €250,000

can be reused as raw material for a

euros by selling the wooden pallets

new pallet. They’re light and easy to

they no longer need.

dismantle, are stronger than wooden ma nuf a c t uri nggl o b a l. com

BAYER

pallets, and are stackable,” he says.

This particular initiative has won numerous awards from Environment Authorities and Logistics councils.

Palumbo says that the whole process has been dramatically simplified.

“We send the order of dispatching goods to the logistics service provider.

They print the labels, arrange transportation units, and ship the carton boxes on the Green Pallets. If something is missing during the shipping phase, then we can activate an inventory con152

trol that tells us where it is. This works not only because the box isn’t visible, but also because acoustically it emits a different noise with a different frequency and volume depending on how close you are to it.”

The advantages of their new system have not just been financial. “There have been benefits in terms of service levels, because from a real time point of view, we are automating a lot of activities which before were manual, so we’re gaining time. Also, service quality – can you imagine the amount of products we were losing because they were missed, misdirected or damaged? Now we have real-time visibility, with greater security.”

FEBRUARY 2021

“ T here have been benefits in terms of service levels, because from a real time point of view, we are automating a lot of activities which before were manual, so we’re gaining time” — Michele Palumbo, Head of Supply Chain Management Italy, Bayer

153

Even though their journey to go digital began before COVID entered the picture, this new way of working

actors, then people start collaborating,” he says.

“This is a powerful means by which

seems tailor-made for current proto-

you can optimise processes and

cols, as it’s entirely contactless and

leverage synergies that were com-

makes social distancing in the ware-

pletely unknown before because you

houses possible with only one person

didn’t have the broader view of oth-

required on the shop floor.

ers. Together, we can solve problems

Palumbo emphasises how impor-

this way.”

tant working with partners has been to make this possible. “We have a great collaborative approach. If you connect people, and you connect ma nuf a c t uri nggl o b a l. com

154

COVID-19, Digital Disruption, and Supply Chain Operations: The IMI Perspective WRITTEN BY

OLIVER JAMES FREEMAN PRODUCED BY

GLEN WHITE

FEBRUARY 2021

155

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IMI CRITICAL ENGINEERING

Aidir Parizzi, Director of Global Supply Chain for IMI Critical Engineering, discusses COVID-19 and digital disruption.

IMI Critical Engineering is a leading provider of specialised valves for oil, gas, chemical and petrochemical industries, globally. ‘Flow control technologies’ for the sake of conciseness. The company has a myriad of subsidiaries around 156

the world and employs over 4,000 professionals across different regions. Like any ‘big business’, in the looming shadow of the COVID-19 pandemic, IMI had to adapt to the new normal while still prioritising their clients’ needs and adapting their own staff setups to remain resilient in trying times.

At Supply Chain Digital, we wondered how a multinational company that provides crucial parts to industries across the globe dealt with the challenges presented by the pandemic; how technology influenced them, and what strategies they put in place to ensure their business success.

Fortunately, Aidir Parizzi, Director of Global Supply Chain at IMI, took the time to chat with us about maintaining business operations in the face of adversity.

FEBRUARY 2021

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IMI CRITICAL ENGINEERING

“ From a business continuity aspect, what gave us the time and resources to focus on PPE, logistics and resourcing needs was the fact that we were well-prepared for an event of this magnitude” — Aidir Parizzi, Director of Global Supply Chain, IMI Critical Engineering 158

“While we kept as many people as possible working from home, the majority of our sites kept operating and serving our customers, following guidelines set by different governments around the globe. The first concern was regarding personal protection equipment (PPE). We have mobilised Supply Chain teams in Asia, the Americas and Europe to provide our employees with the necessary protection equipment. Around 100 thousand masks were acquired – not medical masks, but here we’re referring to FFP2 and FFP3, which provide enhanced protection. In addition, we procured thermometers, gloves, thousands of litres of hand sanitiser and thermal imaging devices for each site.

We also had to deal with increasing import/export obstacles that came gradually – country restrictions, logistic issues, and licences required, for example.

From a business continuity aspect, what gave us the time and resources to focus on PPE, logistics and resourcing needs was the fact that we were well-prepared for an event of this magnitude”.

FEBRUARY 2021

IMI Corporate Video - 2020 CLICK TO WATCH

|

1:45

159 For IMI Engineering, though COVID19, specifically, wasn’t necessarily expected, “pandemics, like other envi-

data analysis required to react quickly and efficiently to unexpected events.”

All of these measures are, of course,

ronmental, geopolitical or commercial

dependent on digitalisation: a con-

disruption, of regional or global mag-

cept that has been sweeping across

nitude, are almost always inevitable,

every industry for decades, now – but

but at the same time highly predict-

in a more driven manner, recently,

able. Our Strategic Sourcing Process

with the adoption of new, futuristic

created three years ago, includes risk

technologies and capabilities. “The

management measures that, in spite

fundamental reason to digitise is

of a significant supplier base reduc-

speed. It’s no longer only about making

tion in the last three years, provided

the right decisions, but about making

us with the diversified dual sources we

them in the shortest possible time.

needed, the strong long-term supplier

We need to understand the impact,

relationship, agreements and reliable

real or potential, of commercial risks ma nuf a c t uri nggl o b a l. com

ANUFACTURERS CUSTOMERS TOGETHER MANUFACTURERS

Salesforce helps you connect channel partners, sales, service, and marketing teams on a single platform. So you can synchronise how, when, and who you engage with, from online channels to the factory floor. Be a relationship maker.

Learn more at salesforce.com/MFG. We bring companies and customers together.

The Salesforce Solution: In Conversation with John Kelleher John Kelleher joins Supply Chain Digital to discuss the ongoing partnership between Salesforce and IMI Critical Engineering, and the reasons behind it.

Recently, I had the pleasure of meeting — albeit virtually — John Kelleher, the Area Vice President of Enterprise Sales UK, at Salesforce. The leading VP took the Supply Chain Digital hot seat and openly discussed Salesforce’s business model, the company’s partnership with IMI Critical Engineering, and the ways that digital transformation has affected global supply chain networks.

now support other areas of capability and are working closely with IMI to extend the relationship further.

IMI continues to develop capabilities on the Salesforce platform, and we are working with them on key strategic pillars such as Customer Satisfaction and Commercial excellence to support IMI’s sales and customer services pre-and-post sale.” End-to-end, if you like.

“Back in ‘99, Salesforce was one of the pioneering companies that took cloud-based technologies into businesses. Our initial area of capability was focussed on CRM, Customer Relationship Management, where we supported our customers to establish a customercentric approach to their business models, enabling them to better connect to their customers and visibility across their sales processes. Fast forward twenty years and Salesforce has built a complete 360-degree suite that has extended the capabilities of classic CRM into customer service, marketing, and eCommerce — both B2C and B2B.” More recently Salesforce has made major acquisitions in the areas of integration and analytics with the respective acquisitions of Mulesoft and Tableau. Both maqui brands, they are enabling us to support customers maximise their existing technology investments and optimise cross-functional processes, whilst maintaining customer-centricity.

John added that “The relationship is very much based on traditional Salesforce CRM. The reliability is there, and the partnership continues to grow, which suggests we’re delivering value for IMI and how they manage their processes. Due to COVID-19, reps that were out on the street – as it were – have been brought in-house easily because their front office estate is built on cloud-based capabilities like Salesforce.

The company was able to adapt to the new sales environment far quicker than they would have, had they been constrained by more on-premise, in-agile technologies. So it’s a traditional starting point, but with modern technology, we’ve been able to help IMI Critical Engineering adapt quickly in a highly volatile world.”

On Salesforce’s partnership with IMI Critical Engineering, John was willing to share his insight. “[Salesforce has] got a long-standing relationship with IMI. Whilst our initial engagement was around core CRM, we have built a richer 360-degree relationship with them and

IMI CRITICAL ENGINEERING

162

and opportunities, faster than our com-

regions, working without colours and

petition and before it cascades to our

stripes, as a single company, and we’ve

customers. An end-to-end Supply Chain

made significant progress in that regard”,

planning also involves all functions and

Aidir stated.

FEBRUARY 2021

When I asked Aidir about the widely-

was created to evaluate Brexit impact,

spread claim that digital transformation

and then expanded to other events. It

has undergone a ten-year evolution,

helped us immensely to quickly react

courtesy of the pandemic, he suggested

to the effects of the pandemic.”

that it had sped up the process, but IMI

“Beyond Supply Chain, the digital

were already evolving their supply chain

transformation effort had to be accel-

norms long before the global event.

erated to cover all aspects of the

“As a British company, in addition to the

operation, including relationships

pandemic, we have been focused on

with customers and suppliers, remote

potential disruption, delays and cost-

customer assistance, inspections,

related issues related to Brexit. Our

and last but not least, how our prod-

Supply Chain Digital Twin, for example,

ucts must adapt in a digital world.

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E X E C U T I V E P R O FILE :

Aidir Parizzi Title: Director Global Supply Chain Industry: Mechanical Or Industrial Engineering Aidir Parizzi has over 25 years of extensive experience in Engineering and Supply Chain Management, with a strong track record of Supply Chain performance improvement in global businesses. He has worked internationally with global leaders in the Automotive and Oil & Gas industries, always focused on building and consolidating Global Procurement & Supply Chain effective teams and processes.

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IMI CRITICAL ENGINEERING

That journey is long and full of pivoting points, but our teams have the talent and motivation to get it done. I don’t think there’s a single formula that serves all companies, and the concept of digitalisation itself keeps evolving rapidly. Each company will have to find its own solution,” Aidir added.

A lot of companies, after the initial shock of COVID-19, having watched as their global supply chain networks were torn apart, their balance books inked with red figures, and job losses 164

across the board, have openly stated that they wish they could have done things differently. Many would have done things differently on the run-up to the pandemic, had they known what was around the corner. On this, Aidir told me that IMI is “now looking at several measures to better prepare us for these events, but while we didn’t have a crystal ball, we put in place several actions in recent years that helped us in this period.”

“Having a truly global team with people in all continents creates an invaluable collaboration network, which was crucial for us this year. Two aspects we continue to FEBRUARY 2021

“ The fundamental reason to digitise is speed. It’s no longer only about making the right decisions, but about making them in the shortest possible time.

We need to understand the impact, real or potential, of commercial risks and opportunities, faster than our competition and before it cascades to our customers” — Aidir Parizzi, Director of Global Supply Chain, IMI Critical Engineering improve are reinforcing or empowering our Category Management team and further investment in Cost Engineering tools,” the Global Director added.

As supply chain networks continue to expand, just like IMI’s, resiliency is becoming increasingly important.

Yet, for such a popular term, it’s proving itself to be elusive, and difficult to actually grasp – this was a predictable problem when you consider that ma nuf a c t uri nggl o b a l. com

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IMI CRITICAL ENGINEERING

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“ We need to make sure the company continues to grow and innovate, in spite of current adversities. The best way to do it is to work in partnership with customers and suppliers. We’re confident we have the right people, technology and energy to continue delivering breakthrough technology for a better world” — Aidir Parizzi, Director of Global Supply Chain, IMI Critical Engineering

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IMI CRITICAL ENGINEERING

“ The digital transformation journey is long and full of pivoting points, but our teams have the talent and motivation to get it done. I don’t think there’s a single formula that serves all companies, and the concept of digitalisation itself keeps evolving rapidly. Each company will have to find its own solution” — Aidir Parizzi, Director of Global Supply Chain, IMI Critical Engineering 168

FEBRUARY 2021

IMI Critical Engineering - Retrofit3D Brand Video CLICK TO WATCH

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2:10

169 the majority of companies have rigid global, interdependent networks. In response to this idea, Aidir shared that “[IMI Critical Engineering] has ca. 850 direct material suppliers,” down from over 3000 just three years ago, “with virtually no sole sources. Resilience is an integral part of our supplier onboarding process, and we also focus on regional resilience, meaning that we aim to have dual sources within the regions and avoid financial losses in case of disruption. China and India as an example of dual sources.”

Aidir warns that, in the pursuit of ma nuf a c t uri nggl o b a l. com

IMI CRITICAL ENGINEERING

170

supply chain resilience, many com-

internally only or work on technical

panies who are looking to adopt all

aspects without customer input. It’s

of the latest technologies need to be

something we strive to keep in mind

wary. Regardless of whether you’re

all the time.”

investing in Analytics, Automation,

At the very end of the interview,

Cloud, Cybersecurity, IoT, or any other

I asked Aidir about the future outlook

product, “[the] technology must stay

for IMI Critical Engineering and for the

focused on our top priority, which is

supply chain as a whole, his answer

to make us the supplier of choice to

to which was both a poignant and suc-

our customers. There’s always a risk

cinct answer, “Digitalisation is a key

of losing that focus when you prioritise

aspect, but also flexibility, from a Supply

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171

Chain and operations point of view. We

with customers and suppliers. We’re

need to be able to manufacture and

confident we have the right people,

service our products wherever the

technology and energy to continue

customers are. The answer now is very

delivering breakthrough technology

similar to what it was last year, but the

for a better world.”

speed and motivation to act has been greatly increased.

We need to make sure the company continues to grow and innovate, in spite of current adversities. The best way to do it is to work in partnership ma nuf a c t uri nggl o b a l. com

BOMBARDIER TRANSPORTATION

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FEBRUARY 2021

BOMBARDIER TRANSPORTATION: DRIVING SUSTAINABLE MOBILITY WRITTEN BY

GEORGIA WILSON PRODUCED BY

LEWIS VAUGHN

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BOMBARDIER TRANSPORTATION

A reflection on Bombardier transportation history and how the organisation is striving to develop sustainable mobility solutions

F

ounded in 1942, Bombardier Transportation has 78 years of history in the rail and sustainable mobility industry. With a belief that

in today’s world it is “essential to offer high-quality, sustainable, safe and comfortable public transpor174

tation solutions to meet the capacity challenge,” Bombardier Transportation has more than 100,000 trains operating daily, that it is constantly investing into to drive sustainable mobility and the adoption of digital technologies.

Bombardier Transportation provides integrated solutions to provide substantial benefits and safety for operators, passengers and the environment, digital technologies the company is harnessing include driver assistance safety systems, alternative propulsion, predictive maintenance and high-performance signalling technology.

Operating in 200 cities in 60 countries, Bombardier Transportation’s vision is to move “people and goods in and between cities: safely, reliably and comfortably”. The company is committed to developing

JE F AB N RU UA AR RY Y2 20 02 21 1

175

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Innovation is about doing more good We are an international group providing engineering services to design and implement technology-based solutions in many fields of application.

Read more about us today

177 and delivering innovative solutions that advance economic growth, foster inclusivity and protect the ecology in communities.

“Working with our customers, we strive to create holistic, high-quality mobility solutions that anticipate the needs of tomorrow and maximize value for customers and passengers already today.

As a team, we never stop moving to keep ideas, people and goods in motion.

Combining technology and performance with empathy, we serve as a trusted and strong local partner all over the world,” comments Bombardier Transportation.

“ As a team, we never stop moving to keep ideas, people and goods in motion.

Combining technology and performance with empathy, we serve as a trusted and strong local partner all over the world” — Bombardier Transportation ma nuf a c t uri nggl o b a l. com

BOMBARDIER TRANSPORTATION

Bombardier Transportation’s six smart sustainable mobility solutions “At Bombardier Transportation, we’re tackling these challenges head on.

Our smart mobility solutions combine energy-conserving technology with optimal safety, reliability and cost efficiency”

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1. Converting to full batterypowered mobility

2. Fast construction with minimal environmental impact

With increasing numbers of railway companies and governments seeking clean alternatives to diesel. Bombardier Transportation provides its customers with battery technology for electromobility that can be used on nonelectrified lines. Currently the company is striving to eliminate diesel power on France’s rail network by converting its regional fleet into an eco-friendly battery propulsion operation.

Ensuring fast construction and minimal environmental impact, Bombardier Transformation’s driverless INNOVIA monorail system is equipped with technology for carbon neutral, emissionfree operations. The system is designed with urban application in mind to drive efficient and cost effective mass transit.

“Our most recent battery project is the TALENT 3 battery-electric multiple unit (BEMU), the first modern regional battery-powered train to enter passenger service in Europe. The battery train is emission-free and sets the standards for smart mobility, with a highly efficient propulsion system and a high degree of recyclability.”

FEBRUARY 2021

3. Reduce energy consumption by up to 15% with optimised driving In addition to its battery power technology to drive eco-friendly energy, Bombardier Transportation’s EBI Drive 50 technology is designed to help vehicle drivers conserve energy by helping to optimise their driving. “The system dynamically calculates track topography and vehicle performance and compares it with the train’s route and position,”

4. Reduce your vehicle’s weight “Safety, efficiency and flexibility are guiding principles in Bombardier’s product development,” comments Bombardier Transportation, with this vision driving its innovation, Bombardier Transportation helps its customers to reduce their vehicle weight with its ‘lightweight FLEXX Eco bogie’. The technology is said to ensure smooth and safe journeys for travelers in cities, due to its specific design features.

5. Automated vehicle inspection system for sustainable performance To provide its customers with a solution to improve efficiency and operation by forecasting key components and alerting to maintenance needs before they arise, Bombardier Transportation has developed an Automated Vehicle Inspection System (AVIS) to combat these challenges.

6. Reduce your energy consumption by to 35% with silicon carbide converters Striving to continuously innovate in the sustainable mobility industry, Bombardier Transportation’s latest energy saving technology enables its customers to further advance their sustainable urban transit systems with lower energy consumption and noise levels.

“We are very proud of the great strides we are making in reducing energy consumption and are thankful for the strong collaboration with our partners that made this achievement possible. It’s not only evidence of our deep local engagement in Sweden, but it also illustrates how Bombardier Transportation is committed to innovating a greener and more sustainable transportation systems.”

Integrating proven optical image and laser technology to capture key asset conditions with ORBITA, “Bombardier’s state of the art predictive asset management toolset, and the depot’s maintenance management system to deliver seamless automated, intelligent maintenance instructions to a technician.” ma nuf a c t uri nggl o b a l. com

179

That’s why railway leaders partner with us to develop and test their systems, ensuring they meet the highest industry safety standards.

What about you?

181

“ We are very proud of the great strides we are making in reducing energy consumption” — Bombardier Transportation

SUSTAINABILITY IN MOBILITY In 2009, Bombardier Transportation launched its ‘Climate is Right for Trains’ initiative. The initiative was launched with ambitions to reinforce the advantages of low-emission rail transport. ”Today, this declaration is truer than ever,” notes Bombardier Transportation. “It’s no ma nuf a c t uri nggl o b a l. com

BOMBARDIER TRANSPORTATION

182

“ Safety, efficiency and flexibility are guiding principles in Bombardier’s product development” — Bombardier Transportation

FEBRUARY 2021

secret that the world is undergoing a period of dramatic change.

Population is booming and it’s estimated that by 2050 the planet will be supporting 9.8 billion people. At the same time, demographic shifts mean that over half of them will be gravitating to urban spaces with projections showing that by 2030 there will be 43 global megacities of over 10 million inhabitants each. This is all occurring in a context of dwindling resources and environmental uncertainty.”

To address these global challenges, Bombardier Transportation alongside its initiative ‘the Climate is Right for Trains’ not only deliver holistic solutions to combat these challenges, they are committed to continuous development of eco friendly mobility solutions that drive opportunities and prosperity, as well as driving the planet towards a sustainable future.

BOMBARDIER

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183

184

FEBRUARY 2021

DIGITALISATION OF SUPPLY CHAIN OPERATIONS DURING A PANDEMIC WRITTEN BY

OLIVER JAMES FREEMAN PRODUCED BY

GLEN WHITE

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185

ALJAZIERAH HOME APPLIANCES

Naiyer Hussain, Supply Chain Director of Aljazierah Home Appliances, takes the time to discuss digitalisation of supply chain operations during the COVID-19 era

W

hen you consider the new norms and values established in 2020, I don’t doubt that you consider COVID-19 to have been the dicta-

tor that defines them; and, it’s certainly the case that 186

the global pandemic has been an influencing factor, but we would be amiss to claim that it is the only one.

In fact, the true defining factor of this year has been the genius of human innovation and adaptability - especially when it comes to supply chain operations. It’s the collaborative efforts between individual humans at different stages of the supply chain that truly made the difference as the world stood in the looming shadow of adversity.

A man who knows all about that unity through collaboration is Naiyer Hussain, the Supply Chain Director of Aljazierah Home Appliances, manufacturer & retailers of Home Appliances & HVAC equipment ranging from water coolers and heaters to refrigeration units and freezers across Saudi Arabia and the Middle East.

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ALJAZIERAH HOME APPLIANCES

“ Digitalisation in supply chain is required for improved decisionmaking capabilities, which allows companies to bridge the gaps across endto-end supply chain.”

— Naiyer Hussain, Supply Chain Director, Aljazierah Home Appliances

Although Aljazierah was the first manufacturer of its kind in Saudi Arabia and the Middle East, it’s no longer alone in its particular marketplace - in fact, it has global competition. To the question of, “what put’s Aljazierah ahead of its competitors,” Naiyer succinctly stated that “the leadership and vision of the CEO, CFO, and Vice President are all vital to Aljazierah’s success in our respective markets, and those three individuals underpin the reason why we’re ahead of the competition, right now. As it stands,

188

“Aljazierah was started in 1968 by the

we’ve successfully nurtured strong part-

late Mohamed bin Abdulaziz Al Rajhi,

nerships with both our customers and

a visionary entrepreneur. It was the

our suppliers, which ensures that both

very first factory of its kind in the Middle

ends of our businesses supply chain

East to produce home appliances.

remain on-top. As a company, we also

Today, Aljazierah has nine production

have a tendency to explore options and

facilities for water heaters, water cool-

find multiple solutions to the problems

ers, evaporative coolers, gas cookers,

that we may face; we treat each problem

refrigerators, washing machines and

as a case study and the executive arm

plastic components. Our products are

of the organisation put in the hours to

well known in Saudi Arabia, and we are

brainstorm and come up with probable

now exporting products to almost all of

solutions together, as a team.”

the Middle Eastern markets. We have

When it comes to the supply chain

also expanded into the African markets,

operation of any organisation with the

through the use of one production

size and scope of Aljazierah, many

factory in Sudan,” Naiyer told Supply

industry-leading companies choose to

Chain Digital.

either use one supplier that can provide

FEBRUARY 2021

189 E X E C U T I V E P R O FILE :

Naiyer Hussain Title: Supply Chain Director Company: Aljazierah Home Appliances Industry: Home Appliances Location: Riyadh Naiyer is a senior leader possessing vision and skills to design, develop and monitor E2E supply chain. He performs comprehensive projects around supply chain, digital supply chain transformation and change management strategies to improve visibility across supply chain to achieve reliable, responsive, agile & cost-efficient supply chain including operational excellence. He managed global procurement of CAPEX & OPEX in most modern manufacturing plants. He directed supply chain re-engineering for a paradigm shift from production-driven to a demand-driven business model, leading to a higher percentage of sales and production with high inventory turnover. He participates and speaks in supply chain conferences & seminars across GCC. ma nuf a c t uri nggl o b a l. com

ALJAZIERAH HOME APPLIANCES

FP ABOUT US Aljazierah Home Appliances FEB 2021 CLICK TO WATCH

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1:14

WE DO IT BETTER

Made

in

Italy

Leader in safety valves for electric storage water heaters w w w. r i t m o n i o . i t

“ It has been important to recognise the reality of the situation and acknowledge that all companies have limitations - even ours.”

— Naiyer Hussain, Supply Chain Director, Aljazierah Home Appliances

March 21st, onwards. Considering the fact that the pandemic had been rife in China since December of last year, Aljazierah was already on high alert with the intention of mitigating any supply chain risks.”

“We started moving inventory to regional warehouses to balance the risk, and we also made arrangements within factory premises for the rest of the workers to work in regulated, safe

all of their goods and services, or they go

conditions, so protect each individual

the other route and use several, work-

whilst also preventing the spread of

ing in unison. In Aljazierah’s case, Naiyer

infection throughout our labour force,”

told us that “we are made up of several

the Supply Chain Director added. It’s

interdependent global partners. All our

clear that Naiyer, just like every other

suppliers are highly skilled and profes-

leader in the field, didn’t want to lose

sional in their areas. They keep the high

human resources to the virus, given

value of partnership agreements, and

that “expected shortages of materials

continuously work on product innovation

and services were already the biggest

and process optimisation, for the sake of

challenge - and a major pressure for me,

our customers.”

personally. Aljazierah had to ensure the

On the subject of COVID-19 - the

safety of our people whilst also maintain-

elephant in the room, really - it often

ing a constant flow of goods so that our

seemed that Asia, Europe, and the

stocks didn’t bottom-out. We oversaw

Americas were hit hardest by the virus.

a reduction in work timing from 18 hours

Naiyer revealed that “Saudi Arabia also

to just six hours for logistics and ware-

had COVID-19 cases and the govern-

housing projects. It was a challenging

ment implemented curfews and highly

time, but, again, good teamwork and col-

restricted everybody’s movement from

laboration got us through it.” ma nuf a c t uri nggl o b a l. com

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ALJAZIERAH HOME APPLIANCES

“ The team here makes each crisis into a case study and, together, through collaboration, we fix it so that the next time a similar situation occurs, we are prepared to tackle it.”

— Naiyer Hussain, Supply Chain Director, Aljazierah Home Appliances

You’ve most likely heard the claim before, but many professionals across the supply chain industry and its subsidiaries, have been suggesting that digital transformation accelerated by approximately a decade in 2020 alone, due to the innovations that had to take place to ensure business continuity and survival at the height of the pandemic.

To this, Naiyer told us that he “absolutely agrees with the notion that COVID has accelerated the digitalisation process in almost all sectors. Prior to the pandemic, there was already a conceptual shift

FP COMPETITION Aljazierah Home Appliances FEB 2021 CLICK TO WATCH

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193

towards digital, but when the world went

unavoidable. To ensure that we provided

into isolation, the pace of that digital

our customers with our essential ser-

transformation accelerated ten-fold so

vices, we obtained permits and licenses

that companies could adapt to a world in

from the Saudi Arabian government, so

lockdown. Without digital tools and tech-

that we could continue operations dur-

nologies, it would have been impossible

ing the lockdown, and we had to obtain

to continue running the show.”

police permits for the transportation of

“In truth, we were not fully prepared

goods and workers - we even relocated

at Aljazierah. We lacked many tools, but

to areas outside of containment zones,”

our team used their experiences and

Naiyer added.

skills to work under abruptly changing

Naiyer shared that Aljazierah would

environments. We made many decisions

be looking to implement any of the tools

to reduce the impact of the pandemic on

and technologies that the company was

our business - but minimal damage was

previously lacking and emphasised the ma nuf a c t uri nggl o b a l. com

ALJAZIERAH HOME APPLIANCES

1968

Year founded

Riyadh Location

500+ Number of employees

194

FP DIGITIZATION Aljazierah Home Appliances FEB 2021 CLICK TO WATCH

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195

importance of them when he told us that

though. At Aljazierah, as with every

“digitalisation in supply chain is required

other company around the world, they

for improved decision-making capabili-

also need to embrace the technology,

ties, which allows companies to bridge

“because it makes our business process

the gaps across end-to-end supply

easier, and we can then replicate our

chains. Also, micro-segmentation with

goals into digital advancement and repo-

digitalisation increases the overall profit-

sition the tech for remote handling. This

ability of operations across the chain by

must also collaborate with our business

allowing for more actionable, targeted

model, reduce cost, and save time.”

choices that will - theoretically - have

In the coming years, if the world

a positive effect on the overall supply

continues to struggle with unexpected

chain management experience.”

viruses and natural disasters, it’s likely

The Director was quick to add that it

that the new norms of 2020 will remain.

isn’t only about implementing the tools,

Now, at the height of lockdown, global ma nuf a c t uri nggl o b a l. com

ALJAZIERAH HOME APPLIANCES

supply chain networks struggled with the spike in demand for products purchased through eCommerce - a problem that will potentially continue into the New Year and further. Naiyer told us that “eCommerce sites alongside traditional sales channels and showrooms have made the supply chain more complex and, due to the convenience of the amalgamation, we now have to deal with higher customer expectations for faster deliveries.

Managing customer expectation is the biggest challenge that we will all face 196

moving forward - an additional step that increases the complexity for upstream and downstream partners along our networks.”

Naiyer’s final comment to Supply Chain Digital provided some wisdom that the many C-Suite executives could do with following; to the question of leadership and managing a company through a time of volatility and uncertainty, he said, “I am trying to keep calm during this crisis. I still sometimes get stressed during a period of crisis, as you might expect, but if you can keep a cool head, you can strategise around the negatives.

Aljazierah intends to keep production running, avoiding stoppage and FEBRUARY 2021

“ As a company, we also have a tendency to explore options and find multiple solutions to the problems that we may face; we treat each problem as a case study and the executive arm of the organisation put in the hours to brainstorm and come up with probable solutions together, as a team.”

— Naiyer Hussain, Supply Chain Director, Aljazierah Home Appliances

FP CHALLENGE Aljazierah Home Appliances FEB 2021 CLICK TO WATCH

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197

minimising downtime; while doing so, it is important to recognise the reality of the situation and acknowledge that all companies have limitations. The team here makes each crisis into a case study and, together, through collaboration, we fix it so that the next time a similar situation occurs, we are prepared to tackle it.”

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McPherson’s Consumer Products’ Supply Chain Transformation 198

WRITTEN BY

ANTHONY CARUANA PRODUCED BY

GLEN WHITE

FEBRUARY 2021

199

McPherson’s Limited, established in 1860, is a leading supplier of Health, Wellness and Beauty products in Australasia and China ma nuf a c t uri nggl o b a l. com

MCPHERSON’S

“ Our business cannot function without the right people. I firmly believe the well-worn statement ‘culture eats strategy for breakfast” — Mark Brady, Global Supply Chain Director, McPherson’s 200

FEBRUARY 2021

Mark Brady, Supply Chain Director for McPherson’s Consumer Products, tells us about how great people, sound methodology and tools, and meeting customers where they are is the key to successful digital transformation.

Mc

Pherson’s Consumer Products (MCP) is the embodiment of a business that has adapted to

changing times. From manufacturing the nuts and bolts used to build the iconic Sydney Harbour Bridge, to making the railway spikes that link Sydney to Perth by rail, to now becoming a marketing and distribution company that delivers products that are found in the bathrooms and kitchens of homes across all their markets, MCP has adapted to hundreds of challenges over the years.

With customers ranging from major supermarkets such as Also ALDI, Coles, Metcash and Woolworths, through to small, independent pharmacies, and big pharmacy groups such as Chemist Warehouse, Priceline Terry White etc, Mark Brady, Supply Chain Director for McPherson’s Consumer Products, says the secret to MCP’s success is people. ma nuf a c t uri nggl o b a l. com

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MCPHERSON’S

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FEBRUARY 2021

1860

Year founded

$22.1m Revenue in AUD dollars (FY20)

600

Number of employees

“Our vision is to be bold, be brave, be better. It’s about being audacious & stretching.

And being able to make mistakes in safety” — Mark Brady, Global Supply Chain Director, McPherson’s

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MCPHERSON’S

A look inside The MCP warehouse...

CLICK TO WATCH

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0:27

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E X E C U TIVE P R O FILE :

Mark Brady Title: Global Supply Chain Director Industry: Marketing and Manufacturing Location: NSW, Australia

Mark has led the Global supply chain area for McPherson’s for the last seven years, after being promoted from his role driving continuous improvement and quality across the organisation.

Mark has been able to lead the organisation’s supply chain through structural and operational change and efficiency improvement, enabling sustainability and growth with McPherson’s. With 20 years of experience across operations and supply chain, Mark has worked within a number of industries – including pharma, FMCG, food grade manufacturing, electronics and services delivery.

As an engineer by education, Mark has a robust analytical approach coupled with qualifications in continuous improvement methodologies, including Lean, Six Sigma and World Class Manufacturing.

McPherson’s has performed well through COVID with the support of strategic partners in supply, logistics and of course directly with our customers.

Our staff remain safe and well and the entire supply chain team functions as a whole through these unprecedented times led by Mark.

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MCPHERSON’S

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“ I f I can ensure people can see their value, know their place and have line of sight to how that value deliveries for the broader business goals & strategy– that’s the ideal” — Mark Brady, Global Supply Chain Director, McPherson’s FEBRUARY 2021

“Our business cannot function without the right people,” says Brady. “I am so very fortunate to have the right people around me, both in supply chain and other functions in the business. I firmly believe the well-worn statement ‘culture eats strategy for breakfast’.”

One might think that a business that has been able to evolve would be a hot-bed of employee turnover as the business looked for new ideas and innovative approaches. But that’s not the case. Brady is a relative newcomer to the business, having been there for

A look inside The MCP warehouse...

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about ten years. The average tenure of personnel in his supply chain team is 19 years with three team members marking over 40 years of service.

“High calibre and functional expertise is multiplied by creating the right environment for everyone to succeed,” says Brady.

He says that comes by questioning and listening to everyone. While Brady has a Black Belt in Six Sigma and Lean methodologies, he says through enga­ gement and leading by example he knows that when he’s not there on a night shift that everyone from the cleaning crew to warehouse staff are doing the right thing because they trust each other and the systems they have created. Being prescriptive with

“ High calibre and functional expertise is multiplied by creating the right environment for everyone to succeed.”

— Mark Brady, Global Supply Chain Director, McPherson’s

a methodology or set of tools is not always the answer. Rather, success comes from taking what works and listening to people.

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You see a shipping terminal.

We see the missing container that will shut down production.

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