Supply Chain Digital - December 2017 by Supply Chain Digital

www.supplychaindigital.com

December 2017

THREE BILLION

KILOMETRES & COUNTING

TOP 10

Biggest Container Vessels

SENDLE’s Co-founder & CEO, James Chin Moody inspires passion for parcels and logistics

SPECIAL REPORT

Measuring procurement’s leading companies with AT Kearney

FOREWORD HELLO AND WELCOME to the last Supply Chain Digital issue of what has been a highly eventful year. Adorning the cover of December’s is none other than James Chin Moody, the CEO and Co-founder of courier service Sendle, which is staking a claim in the Australian market. Although just a few years old, the company is challenging the sector’s established players and is the country’s highest rated courier service, posting impressive month-on-month growth figures averaging 20% over the last two years. In an exclusive interview, Moody reveals his hopes for rapid expansion down under, followed by international expansion. Turn to page 10 to begin reading. This month, Supply Chain Digital also follows up on AT Kearney’s recent ‘Mobilising for excellence in supply chain management’ report, speaking to one if its authors Mike Hales. A partner at AT Kearney, Hales outlines the main takeaways from the report, and speaks about how companies can break out from the pack in the supply chain market and establish themselves as one of the industry’s leading lights. Also featured this month is a run-down of the world’s top 10 biggest container vessels. Turn to page 30 now to begin the countdown. A number of companies feature prominently this month, as Supply Chain Digital looks to shine a light on business transformations and innovations that are setting the bar in the supply chain and procurement sectors. Okada Manita, Gulf Health Council and A123 Systems are just a few of the blue-chippers featured this month. We’ll be back again in the New Year with 2018’s first issue of Supply Chain Digital. If there’s anything you’d like to discuss in the meantime, please do join the conversation on Facebook, Twitter and LinkedIn.

Enjoy the issue! 3

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F E AT U R E S

INTERVIEW

THREE BILLION

KILOMETRES & COUNTING

16 24 TOP 10 INSIGHT

MEASURING THE HAVES AND HAVE NOTS IN PROCUREMENT

BIGGEST CONTAINER VESSELS 5

C O M PA N Y PROFILES

Europe

Accord Healthcare

Migros-Genossenschafts-Bund

Bollore Logistics

Deutsche Bahn

Asia

Europe

54 92 Difi

Europe

Okada Manila Asia

172

A123 Systems

USA

114

URBAN REVIVO Asia

188 124

RM2 SA USA

American University of Beirut Middle East

140

Gulf Health Council

200

Millstone Medical USA

Middle East

160

Tetra Pak Group Middle East

210

The Guthrie Clinic USA

THREE BILLION

KILOMETRES & COUNTING SENDLEâ&#x20AC;&#x2122;s Co-founder and CEO, James Chin Moody, inspires passion for parcels and logistics Writ t en by TO M WA D LOW

INTERVIEW

“I NEVER ENVISAGED developing a passion for parcels and logistics,” muses James Chin Moody, Co-founder and CEO of Sendle, a courier services provider which has just passed 3bn kilometres of parcel delivery. “I am an electrical engineer by trade, which is nothing to do with Sendle at all. But this is an amazing industry – we’re affecting real people for the better.” Moody has the statistics to back this up. Sendle, still just a few years in existence, is now Australia’s 10

December 2017

highest-rated courier service and has been growing by 20% each month for the last two years. It has thousands of small business clients relying on its network to reach customers right across the country. September represented another milestone in the form of a partnership with DHL eCommerce, a move which will allow Sendle’s customers to deliver door-to-door in 220 countries and territories. All of this, somewhat remarkably, has been achieved with zero carbon footprint and in a way

that allows Sendle to undercut Australia Post, the market monopoliser, by as much as 40%.

“In Australia we have a monopoly provider in Australia Post, and they own a huge slice of the small business market. We are introducing competition competition which is much-needed” JAMES CHIN MOODY Co-founder and CEO, Sendle

From satellites to Sendle So how did electrical engineer Moody move from satellite development at Australia’s national research agency (CSIRO) to starting his own delivery firm? “I wanted to get back to building something, and when we first started we were not actually Sendle,” he explains. “We were a giving marketplace, where people could give things they no longer wanted to each other for free, only paying for delivery. It sort of flipped the Amazon model on its head, and it took off very quickly.” In fulfilling these initial delivery requirements, Moody quickly discovered the difficulty in delivering single packages door-to-door en masse. “What we realised was that there are big logistics networks in Australia that we could leverage, particularly in cases when trucks would be returning from a destination empty or with spare capacity,” he continues. “We approached these companies and offered to fill their trucks, allowing 11

INTERVIEW us to charge small rates which was crucial to the whole concept working.” Concept proven, it was in 2014 when Moody and his team realised the scale of demand for affordable delivery. Customers were using the giving marketplace as a means to fulfil their own delivery obligations for items they had sold, going to considerable lengths to play the system. Following a serious re-think, Sendle was born and quickly dwarfed Moody’s initial giving marketplace venture, which consequently closed so he could fully focus on providing affordable delivery services for small Australian businesses. A numbers game What allows Sendle to undercut the likes of Australia Post so markedly is its leveraging of capacity within existing couriers’ networks. “It is about really deep integration with our partners,” Moody says. “In the courier world, it’s a volume and numbers game, and it is vital to do things as efficiently as possible. We can offer access to markets and customers by helping with billing, onboarding and the like, and at the same time help to fill their trucks.” 12

December 2017

For Sendle’s customers, it grants them access to a delivery infrastructure that may previously have been too complex or expensive to exploit. “We want to level the playing field for business in Australia,” Moody adds. “We are seeing the landscape change hugely, and this will only continue with Amazon arriving. In the short term, it will get many more people buying online and will benefit consumers and small sellers. In the medium to long term, this is where we will see expectations change around delivery time, and we have to make sure we help sellers keep up with those expectations.” Green growth Sendle, thanks to its innovative business model, is not only the highest-rated delivery service in Australia, but also the first to be carbon neutral. This was always at the forefront of Moody’s mind when establishing the business, and operating in such a way from the outset permitted sustainable, responsible growth. “You see billion-dollar businesses committing to erasing their carbon

3bn+ 220 40%

Number of kilometres covered by Sendle deiveries

Number of countries DHL serves

Potential savings using Sendle vs Australia Post 13

footprint, which absolutely they should, but it can be a massive task in such large organisations,” he says. “We have found it is far easier to do it from the beginning.” This sustainable ethos, etched into the fundamentals of the business, saw Sendle scoop yet another accolade, this time being certified as Australia’s first technology B Corporation. Similar to what Fair Trade accreditation means to food and drink organisations, B Corporations are recognised for using the power of business to make positive 14

December 2017

social and/or environmental impacts. But does this responsible, sustainable growth have a ceiling? Is there enough spare capacity within partner networks to facilitate Sendle assuming a major market share? “We don’t see any signs of stopping,” Moody answers. “In Australia we have a provider in Australia Post, and they own a huge slice of the small business market. We are introducing competition – competition which is muchneeded. There is a lot room for us to

INTERVIEW

move into, and we are here to give Australia Post a run for its money.” Enter DHL Indeed, Sendle is now in a position to compete with Australia Post in the international delivery space after announcing a massive distribution agreement with DHL eCommerce in September. “What we’re doing with DHL is just as big as when we launched Sendle itself,” Moody says. “By 2022, 20% of all ecommerce will

be cross-border. This is a huge opportunity for small businesses, who will be able to export to an enormous audience. DHL has the reach, and we know Australian businesses.” Set to launch in Sydney by the end of the year, the DHL-Sendle service – again promising to undercut Australia Post – will be rolled out fully across Australia during the course of 2018. “There are two major factors currently preventing Australian SMEs from exporting,” Moody points out. “The first is complexity, and any help we can offer in regards to customs and other obligations will go a long way. The second factor is cost, and the viability of shipping door-to-door internationally in small quantities. What excites me the most is that we can grow the Australian export market by making things easier and more affordable for businesses.” Next year will no doubt be the most exciting and significant in Sendle’s relatively young existence, and Moody’s aim is for the company to become the go-to for smaller enterprises looking to reach all corners of Australia and beyond. “We’ve already come a long way and we’ve had tremendous fun doing it,” he concludes. 15

TRACKING PROCUREMENT’S LEADING COMPANIES AT Kearney’s recent ‘Mobilising for Supply Chain Excellence’ report found less than one in ten companies could be considered supply chain leaders, with many more toiling away for little or no return Writ ten by: JAMES HENDERSON

TECHNOLOGY

TECHNOLOGY SUPPLY CHAIN LEADERS and executives that are failing to excel in the area of external spending – which typically makes up 30% of revenues for service companies and half of revenues for manufacturing firms – could be driving their firms into the clutches of its completion or even onto the business scrapheap. That’s the verdict from a recent study by AT Kearney ‘Mobilising for Supply Chain Excellence’ found that just 7% of companies can be considered to “demonstrate excellent supply chain capabilities”, delivering around $13 for every $1 spent on supply chain management assets. At the other end of the scale, more than a quarter (27%) of firms are barely covering their costs, returning $1 or less for every $1 spent on supply chain management assets. Between the two ends of the spectrum, 55% dubbed ‘the pack’ are adding value, but not transforming fast enough, while 11% are producing solid results and are making significant strides to becoming leaders. Speaking to Supply Chain Digital, Mike Hales, a partner in A.T. Kearney’s Operations Practice and one of the report’s authors says that teams and 18

December 2017

execs that have proven the value of efficient, effective and innovative procurement operations have found themselves catapulted into rarefied air in the world of business, leaving their struggling counterparts in the distance. “It used to be that purchasing was purely a clerical transactional thing, and for some companies it’s really advanced to being a strategic function where the head of procurement directly reports to the CEO – they’ve got a seat at the executive table. But for the majority of the companies, they just haven’t really grabbed a hold of the potential,” he comments. “It’s really hard to be great if you’re not excellent at managing your largest cost. It’s like competing with both arms tied behind your back. When you look at that last quarter (27%) of companies, they’re don’t even pay for themselves, they’re returning a dollar or less a value for the dollar they cost the organisation. So, they could disappear and it wouldn’t impact the company’s bottom line in a negative way. “If you really want to be successful as a company, you have to be great in this area because it will drive your EBIT, you P&L which will drive your share price It can impact your earnings per

“It’s really hard to be great if you’re not excellent at managing your largest cost. It’s like competing with both arms tied behind your back” MIKE HALES AT Kearney

Case study: Talent management as a driver of competitive advantage A leading beverage manufacturer needs to attract top talent and offer those individuals exceptional opportunities to succeed and grow within and outside supply management. Although supply management is not initially on the radar for most MBA candidates from the top tier schools, the company has found success in attracting these talented people by marketing its supply management brand and displaying the range of opportunities that its scale and championship competitor culture offers to prospective employees. These include signature opportunities to negotiate hundred-million to billiondollar deals with suppliers. It also provides transformative opportunities to make

big changes happen, such as working with suppliers to help them greatly reduce costs while simultaneously introducing new products, and reducing environmental impacts. And it means giving the team entrepreneurial opportunities to be creative, especially in less-developed markets, where market structures, cultures, and political realities require new ideas and new business solutions. A key approach to talent management is to focus resources on high-leverage activities and make those results visible and celebrated. Tactical activities are automated and centralized, and the resulting savings are reinvested in acquiring and developing higher-calibre talent to drive tomorrowâ&#x20AC;&#x2122;s strategies.

It invests heavily in people, with the focus as much on category expertise as it is on business knowledge and teamwork skills. Plus, the company moves talent fast, recognizing high achievers and giving them additional responsibilities and challenges. This helps keep the environment challenging and rewarding for talented team members. The talent management strategy of this organization has given the company a unique advantage by bringing the best talent on board, providing opportunities and developing capabilities to deliver a wide range of value from the supply markets, and injecting that talent throughout the rest of the enterprise. Source: AT Kearney â&#x20AC;&#x2DC;Mobilising for Supply Chain Excellenceâ&#x20AC;&#x2122;

share, your working capital, and so on.” Whereas in some industry sectors, the secret to success can be a challenging puzzle to solve, AT Kearney’s study found that the leading companies shared a number of common synergies: building and managing high-performance teams; managing categories; and managing suppliers. Hales continues: “We found that three-quarters of the leaders were able to move 70% of their employees that were in the procurement group from transactional to strategic activities. Most of the typically position 30% of their procurement team on strategic and 70% still stuck in transactional and tactical activities. That’s a really important benchmark for companies to aspire to.” The report found that the leading lights have embraced digital technology to automate away some of the labour intensive transactional activities, freeing up their best procurement experts to work on strategy and work towards integrating emerging technology into their day-to-day operations. Hales reveals: “We made an effort this time to identify a range of hot topics or emerging investment areas

AT Kearney’s report found that leaders “do not rest on their laurels” and are at least two times more likely to invest in areas such as: • Positioning procurement as a strategic partner • Transforming procurement by leveraging digital technologies, such as blockchain, machine learning and automation# • Attracting and retaining high-performance talent • Improving risk management capabilities • Driving innovation with suppliers • Measuring procurement’s contribution to the business • Reducing structural total cost of ownership for companies that would try to understand whether companies were going to do anything about block chain, and if they were what level of resourcing were they going to put against it. So again, we were able to show that the leaders were like two or three times more likely to be investing 21

TECHNOLOGY

“We see the role of procurement soaring in the M&A area because it’s a unique opportunity to combine strands of companies and take them to market in a shortened period of time” MIKE HALES AT Kearney

and putting resources and expecting a high impact in those areas that were going to lean more to innovation and understanding the impact of technology on procurement and their enterprise. Those companies clearly have a very forward-looking view. Continuing the theme, Hales comments: “So many procurement groups still think their mission is done when they get a contract signed. But the leaders realise that they need to monetise and improve that full life 22

December 2017

cycle with the supplier. Not just sign the contract, but then making sure to get compliance to it, and then driving a value beyond what you signed up in the contract because the contracts just represent the minimum of what you want from that agreement. “Three years from now the leaders are expecting innovation to be a more important performance metric within the cost. So currently, cost is more important than innovation, but three years from now, most of

the leaders are saying innovation is going to be more important than cost. And you’re only going to get that if you find a way to work with suppliers. You can’t compete your way to innovation with the suppliers because you won’t have that trust.” In addition, those companies struggling to provide return on their supply chain spend could become targets for acquisitionallyminded competitors or private equity firms, Hales says.

“There is a lot of private equity activity and mergers and acquisition (M&A) going on; companies that don’t improve that ratio are likely to be on the wrong end of some of those deals,” he comments. “We see the role of procurement soaring in the M&A area because it’s a unique opportunity to combine strands of companies and take them to market in a shortened period of time. Part of the playbook of private equity firms is invest in strategic sourcing as soon as they’ve bought a company. It’s a really quick win for them.” The best way for CPOs in companies with under-performing procurement operations to drive change is to attempt to prove the returns that can be achieved to their CEOs and CFOs, Hales adds. “Companies in that lower quartile are not intentionally hurting themselves, it’s just that the leadership is not prioritising procurement enough,” he says. “The path for them [CPOs] is to find a way carry out a focused strategic sourcing programme to really demonstrate that they can return more than $1 for every $1 spent. Once that is proven, they can begin to implement a real step-change.” 23

TOP 10

BIGGEST CONTAINER VESSELS Written by OLIVIA MINNOCK

Supply Chain Digital runs the rule over the largest container vessels in the world, based on their twenty-foot equivalent unit (TEU) capacity The Empire State Building is four floors (or decks) shorter than the largest container vessel in the world. Today, more than 5,000 comparable container ships travel the oceans of the world, transporting the majority of the global populationâ&#x20AC;&#x2122;s consumer products from their manufacturers to their intended markets. These mighty vessels are arguably the driving force behind the global economy, but just 60 years ago they did not exist. In 1956, Malcolm McLean changed the cargo shipping industry forever by introducing the idea of container shipping. Since then, the arms race to build the biggest ships has been raging on, driving the shipbuilding industry to create the biggest ships allowed by science and the boundaries of physics. Today, the worldâ&#x20AC;&#x2122;s largest container ships are easily the biggest vehicles ever constructed. Here is our countdown of the ten largest container ships operating today. 25

TOP 10

Emma Maersk Launched in 2006, the Emma Maersk was the worldâ&#x20AC;&#x2122;s largest container ship in 2010. Along with seven sister vessels, the ship was part of the largest container fleet at the time. The vessel has a total TEU capacity of 14,770, a tonnage of 170,794 and usually carries a crew of 13-30 people. The Emma Maersk is operated by A. P. Moller-Maersk Group. The Emma Maersk was the first E-class container ship and marked the end of massive container ships able to approach 30 knots as manufacturers began to value carrying capacity over speed.

December 2017

9 CMA CGM Vasco De Gama CMA CGM (which translates as “French Maritime Freighting Company – General Maritime Company”) originally intended to name this Explorer class ship after the American politician Benjamin Franklin. However, the organisation decided shortly before its launch to give it a name in keeping with the theme of historically significant explorers of the region which began with the naming of the Marco Polo. Propelled by a single shaft, screw propeller, the Vasco De Gama travels at a top speed of 22.9 knots. With a TEU capacity of 17,859 and a tonnage of 178,228, the ship’s current port of registry is London, England.

CMA CGM Benjamin Franklin Christened in 2015, CMA CGM’s Benjamin Franklin finally took the coveted name that its predecessor was denied. At a length of 399.2m, this Explorer-class vessel was declared the world’s largest container ship in December of 2015. Like the Vasco De Gama, the Benjamin Franklin is driven by a single shaft, screw propeller and is capable of traveling at 22.9 knots. The vessel has a tonnage of 178,228 and a capacity of 18,000 TEU. It carries a crew of 27 people. 27

Madison Maersk (EEE)

This Triple E class vessel was built by South Korean shipbuilder, Daewoo Shipbuilding & Marine Engineering and boasts an impressive 1,800 reefer plugs. The Triple E class of ships was designed around innovations boosting economy of scale, energy efficiency and ecological impact. It achieves this using two MAN engines which drive the ship at a cruising speed of 16 knots. It represented such a step forward in cost of ownership that 31 ships of its kind were subsequently planned for construction. The vessel has a TEU capacity of 18,200 and tonnage of 165,000. It is operated by A.P. Moller-Maersk.

MSC New York This American vessel boasts a length of 399m and a height of 54m. Currently sailing under the Panamanian flag, the New York has a gross tonnage of 176,490 and bears the classic white, black, and red colour scheme. The New York, operated by MSC, can carry 18,270 TEU.

December 2017

TOP 10 CMA CGM Marco Polo In November 2012, the UK-registered Marco Polo officially became the worldâ&#x20AC;&#x2122;s largest container vessel. It is an Explorer-class vessel owned by CMA CGM. Its reign as the largest container ship was cut short just three months after its launch by the Maersk Triple E (EEE), which comes fourth on this list. With its single shaft, fixed-pitch propulsion, it is capable of traveling at 25.1 knots: a speed that its heavier successors can no longer achieve due to their extreme size and carrying capacity. The vessel has a tonnage of 175,343 and 18,270 TEU. It is operated by a crew of 27.

4 Magleby Maersk (EEE) The largest Triple E class ship, the Magleby Maersk is owned and operated by A. P. Moller-Maersk â&#x20AC;&#x201C; which earned the distinction of being named the largest container ship organisation in the world. With its eye-catching sky-blue profile, the ship benefits from the signature innovations of the Triple E class which make it an especially economical vessel to operate. The vessel has a TEU capacity of 18,340 and a tonnage of 165,000.

MV Barzan

The Barzan is the first in a planned series of six ships of its kind, and was completed in July 2015. Its current home port is in South Korea. It was built by Hyundai Samho to have the lowest per-container ratio of carbon emissions. Indeed, this impressive ship boasts a much lower emissions rate than the Maersk Triple E, making it a significant accomplishment in this regard. With a crew of 35, the ship carries 18,800 TEU and a tonnage of 195,636. It is operated by the United Arab Shipping Company (UASC). 30

December 2017

TOP 10 CSCL Globe MV CSCL The first of five ships in its class, the CSCL Globe was built to run Asia-Europe trade routes. The Globe was launched in November 2014, with a record-breaking max capacity of 19,100 TEU. Built by Hyundai Heavy Industries in Ulsan, South Korea, the ship was completed in nine months. Currently operated by the China Shipping Container Lines (CSCL) and manned by 37 people, the vessel has a tonnage of 195,630.

TOP 10

December 2017

MSC Oscar MSC Oscar and its two sister ships, the MSC Zoe and the MSC Oliver compose the largest fleet of three ever to sail, period. Oscar was recognised as the worldâ&#x20AC;&#x2122;s largest container ship in January of 2015. Powered by a 11S90MW-C diesel engine, Oscar is capable of a top speed of 22.8 knots. This magnificent ship gets her name from the son of the president and CEO Diego Aponte. Originally intended to support 18,400 TEU, Oscar turned out to have a much greater capacity on completion and can now carry up to 19,224. It also has a tonnage of 197,636 and is manned by a crew of 35, under the Mediterranean Shipping Company.

ACCORD HEALTHCARE AGILE SUPPLY IN A CROWDED MARKET Written by Dale Benton Produced by Richard Durrant

Following a major acquisition of another leading generic pharmaceutical company, Accord Healthcare looks to carry on supplying the medicine industry in greater volumes

EUROPE

or any company, undergoing a major merger or acquisition can be disruptive, often challenging and in some cases, can even break apart a client or customer base. After all, if a leading conglomerate swallows up a smaller company, will that smaller company and its smaller operating model and attitudes continue to exist? This is the question facing Accord Healthcare, a subsidiary of Intas Pharmaceuticals, born out of the acquisition of Actavis UK and Ireland ltd in January 2017. The goal of Accord? To become the best supplier of generic medicines in the UK and Ireland. Heading up the company’s supply chain operations is Brandon Turk, Director of EU Supply Operations. Brandon brings with him more than 20 years’ experience operating in the supply chain space across a number of sectors, before joining Actavis back in 2015. In fact, it is this diversified experience across multiple sectors that allows Brando to steer this ambitious company towards that goal

of being a leading European player. “I very much view supply chain as a toolset that you can take with you from company to company,” he says. “If you understand how things are made, you can apply that logic and best practice supply chain processes to pretty much any industry.” Accord is very much a growing company and in the generic medicines space, this can present a challenge in trying to establish a solid footing in a crowded market. Prior to the merger, Actavis was already a leading supplier of generic pharmaceuticals in the UK, with a portfolio that supports more than 85% of pharmacists dispensing needs. Intas Pharmaceuticals is among the top 10 Indian pharmaceutical companies and is the largest privately held pharmaceutical company in India. With the coming together of two leading pharmaceutical players, where then does that leave Accord? Is it an extension of what’s come before or is it a new entity altogether? “It’s one of the fastest growing pharmaceutical companies in

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A C C O R D H E A LT H C A R E

“We spend a lot of time every year building up strong, responsive, strategic partnerships with suppliers who can be as responsive and as agile as we are and as we need them to be” BRANDON TURK Director of EU Supply Operations

Europe,” says Brandon. “Through the acquisition of Actavis, we have a very strong pipeline of new generic medicines coming to the market, a significant investment into R&D and a constant desire to grow the business rapidly.” Brandon notes that in the pharmaceutical space, remaining competitive is a continuous challenge as consumers and pharmacists aren’t just choosing products based on the packaging; rather the key drivers are the quality of the product, the reliability of the service and most importantly, availability. This is where Accord differentiates itself, as the company prides itself on its consistent level of service and its agility. In the pharmaceuticals market, agility, it seems, is king. “Pharmaceuticals is a very, very dynamic market,” says Brandon. “It’s commodity driven, so when a branded player or another generic supplier goes out of stock, that’s where the we

December 2017

THE NUMBER OF COUNTRIES THAT ACCORD’S MARKETING AND DISTRIBUTION NETWORK COVERS

EUROPE

have to be very agile and have that responsive supply chain.” That’s exactly what Brandon is trying to do with Accord, developing and cementing an agile and responsive supply chain in order to ensure that Accord’s products are on the shelves when patients need them. “It goes back to what I said earlier, putting those practices in place so that Accord can build a reputation

as a reliable supplier,” he says. In order to be an agile supplier, Brandon cannot stress enough the importance of market intelligence, forecasting and almost predicting the gaps that will emerge in the market. Accord achieves this through strategic relationships with key partners and suppliers. “We have a very structured account management organisation between managers, buyers and suppliers, and through this there is an exchange of data, which means we don’t sit and wait for an order – we are proactive,” says Brandon. One key relationship is with the Department of Health (DOH), the governing body on healthcare throughout the UK. Accord maintains regular links with the DOH which enables the company to, in Brandon’s words,

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A C C O R D H E A LT H C A R E

“keep an ear close to the ground”. “It’s all about making sure that we are aware of what’s going on in the market and we work hard on our relationships in the market so that we know that when there is a gap in supply, we are there, we are agile and we can fill it,” he says. As Accord continues to grow, the company is continuously expanding its portfolio. Launching more and more products in larger quantities, Brandon seeks out suppliers that can respond to the changing pace of demand that runs alongside this growth. “We spend a lot of time every year building up strong, responsive, strategic partnerships with suppliers who can be as responsive and as agile as we are and as we need them to be,” says Brandon. One such example of this is Essentra packaging, the principal supplier of the packaging components used to blister, label, leaflet and carton their products. Essentra has demonstrated the same level of agility that we strive for, responding to business opportunities at short notice and offering a flexible yet reliable service offering. Brandon explained that Accord packs large volumes and very quickly, thus relying on high quality components from its’ suppliers that perform consistently. The two organisations have spent many years building this partnership across not only the procurement function but also the artwork, regulatory and importantly quality sectors. Key staff retention during acquisitions is

December 2017

“Through the acquisition of Actavis, we have a very strong pipeline of new generic medicines coming to the market, a significant investment into R&D and a constant desire to grow the business rapidly” BRANDON TURK Director of EU Supply Operations

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“Accord is continuously diversifying its portfolio, launching new products into new markets, so really we are only at the beginning of our journey” BRANDON TURK Director of EU Supply Operations

EUROPE

critical to protecting your business continuity and with many of these projects under it’s belt Accord has a great track record. “In pharmaceuticals, people are very conscious of what it is they’re supplying. Whereas in other industry supply chains, you understand what the product is and sometimes where it’s going, it’s different for pharmaceuticals,” says Brandon. “We believe in High Performing teams across the Accord network, through our culture of behaviours, our real aim is to attract grow and retain great people. “We’ve actually been very good at retaining these people because they see what we do, the difference that we can make to patients as well as plenty of development and progression opportunities throughout the company.” Accord has lofty ambitions and at the rate at which the company is growing, equipped with the best supply chain practices and an experienced and passionate workforce, Brandon can look beyond being a leading player. “You can make it into the top 10, but you want to be number one,” he says. “Accord is continuously diversifying its portfolio, launching new products into new markets, so really we are only at the beginning of our journey. Who knows where we’ll go from here.”

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DEUTSCHE BAHN and the journey to a digital future Written by Catherine Sturman Produced by Richard Durrant

DIRK KLEINOW, HEAD OF IT SYSTEMS IN DEUTSCHE BAHN’S PROCUREMENT DIVISION, DISCUSSES HOW THE COMPANY IS WORKING TOWARDS A DIGITAL FUTURE

nvesting approximately €1bn in a number of digitisation projects, Deutsche Bahn has become heavily focused on transforming its service delivery over the last five years. With an additional venture capital totalling up to €100mn, its ambitions have seen its overall operations and transport infrastructure overhauled, as well as adopting an enhanced ‘customer-centric’ attitude along the way. Obtaining positive financial results in 2016, Deutsche Bahn has continued on its digitisation journey and has placed significant emphasis on guaranteeing positive customer experiences. “Since I started working at Deutsche Bahn, we have placed a greater focus on customer satisfaction. We see procurement as an integral part of the business, where collaboration between different departments has become vital,” explains Dirk Kleinow, Head of IT Systems.

December 2017

â&#x20AC;&#x153;We see procurement as an integral part of the business, where collaboration between different departments has become vitalâ&#x20AC;? DIRK KLEINOW Head of IT Systems, Procurement

DEUTSCHE BAHN

An example of Deutsche Bahn’s pilot programmes has seen the implementation of autonomous and semi-automatic vehicles in its logistics operations

Working within Deutsche Bahn’s procurement division for over 10 years, Kleinow has seen the company strenuously work to strengthen its partnerships with suppliers through the adoption of new, data-driven business models in order to become a leader within the transportation sector. New technologies Utilising an ERP system to support its supply chain management operations, Deutsche Bahn has also begun to implement cloudbased services to not only simplify its procurement processes across

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its global base, but factors into its long-term ambitions to obtain industry-leading procurement. “When we moved to the cloud, we had a depression in our pricing systems,” observes Kleinow. “Nonetheless, we have become more flexible in deploying these systems, and not just in Germany. Since we are now on the cloud, we are more linear and are able to deploy our systems within different countries. The time to invent and implement systems within different countries is getting shorter and shorter. “We are continually trying to

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Case study of DB Schenker’s CarryPick automated online order fulfillment and returns handling solution for Lekmer.com, Scandinavia’s largest online toy retailer.

renew the system and get more outside information into our supplier management systems, which will support the procurement team to find better sources of supply. We think it is a good place to look at for the future.” To this effect, the company is also undertaking a number of pilots surrounding robotic process automation to further support data sharing on different platforms. Not content with solely digitising its supplier management procurement operations, Deutsche Bahn’s logistics operations have also been overhauled. The implementation of autonomous and semi-automatic vehicles is currently something which the business is working towards, which will ultimately drive long-term benefits. “At the end of the day we are a logistics support company and we try to look at what the trends are and how we can participate in these trends or even get a lead in these trends,” comments Kleinow. “We are also looking at artificial intelligence, but at the moment the maturity grade of AI is not at the level that we can apply it to our systems. I’m thinking three to five years and this will be a field where you will definitely see growth.” Customer benefits So, how are customers benefiting? Throughout its digitisation, Deutsche Bahn has been committed

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I CAN SPOT TROUBLE FROM 18,600 MILES DOWN THE TRACK. With IBM Cloud and Watson IoT, railway COOs can spot potential issues before they have a chance to cause a problem. By tracking data from thousands of sensors in real time, they can deliver a smoother customer experienceâ&#x20AC;&#x201D;every mile along the way. Find out more at ibm.com/you This is transportation to the power of IBM.

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to ensuring service quality remains concerns within its service delivery exceptional and consistent across its operations. “The two throughout. Since the start of 2017, words translate to ‘the future of rail’,” Wi-Fi, TV and films are all now freely says Kleinow. “We are looking at available on all of the company’s rail getting more information out of our services, highlighting the company’s systems, which we feed back to the commitment to listen to customer responsible divisions. It also covers demand. All rail customers are also the sourcing of materials so that all able to take advantage of Deutsche rolling stock is ready in time. Bahn’s ICE portal, which “Sustainability is provides detailed travel also a big issue for Number of information and us,” continues employees at electronic newsletters Kleinow. “Our Deutsche Bahn to inform and entertain industry initiative, customers on their Railresponsible, journeys. Listening concerns the green to customers has delivery chain for become intrinsic to the our goods which we very fabric of Deutsche Bahn, are receiving into the where it understands that customer company.” Launched back satisfaction has become key to its in 2015, the initiative focuses on innovation and continual success. improving sustainable practices However, none of this would have and efficiencies across the been possible without Deutsche railway supply chain, promotes Bahn’s quality programme Zukunft transparency and enables capacity Bahn. Launched in 2016, Zukunft building with industry suppliers. Bahn enables Deutsche Bahn to listen Its members include Deutsche better to customer requirements Bahn, Abellio, Alstom, Arriva, and eradicate any bottlenecks or Bombardier and many more.

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The future of rail Deutsche Bahn has been strengthening its rail infrastructure in Germany, with the long-term ambition to support the development of smart cities. Its new rail line running from Berlin to Munich opens in December, which will reach speeds of up to 300 km/h. “It will link the capital with Munich in less than four hours, which is quite quick for 600km, which is around 325 miles,” comments Kleinow. “We are trying to get more people

“Innovation will change our way of working, but it will also change how we gather information and improve the speed of our services” DIRK KLEINOW Head of IT Systems, Procurement

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onto the rail, and attract customers with better prices and more availability within all of our trains. If we have more trains running more frequently, people will easily be able to change from using the car to utilising the rail.” The company’s continued focus on delivering not only quality services, but also building strong partnerships with suppliers, will see it continue to go from strength to strength. Its long-term ambitions to remain a leading employer in

Customer service is a key focus area for Deutsche Bahn

Germany will also see it continue to innovate alongside the development of the market. “Innovation will change our way of working, but it will also change how we gather information and improve the speed of our services,” Kleinow adds. “I think that the procurement department will change its way of negotiating contracts; it will come to be the facilitator of ‘the sourcing event,’ put it that way,” concludes Kleinow. “We’ll gather all the information, bring all the parties together, and create collaborative teams. This, I feel, is the future of procurement.”

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Agency for Public Management and eGovernment

DIFI: DIGITISING PROCUREMENT Written by Catherine Sturman Produced by Richard Durrant

The Agency for Public Management and eGovernment (Difi) discusses its work in transforming the public procurement sector in Norway

igitisation is transforming the way in which businesses operate. From personalising services for its customers through enhanced data analytics to automating the supply chain, the procurement sector has become a significant area of focus for businesses and governments worldwide. Creeping financial pressures amidst an ever-changing customer demand has led both the public and private sector to look at ways to unlock further savings to deliver value for money, whilst collaborating with suppliers in order to transform traditional procurement processes. Back in 2008, the Norwegian government saw the need to transform its long-established business models and further support the procurement industry through

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its digital transformation. The Agency for Public Management and eGovernment (Difi) has since been behind the Norwegian government’s ambitions to establish not only the capacity to unlock value within procurement, but to adopt and implement e-procurement at both a central and local level. “Dag Strømsnes became the Director of the Department and I was in charge of the taskforce surrounding e-procurement,” explains André Hoddevik, Head of the e-Procurement unit at Difi. “I have been responsible for Norwegian government e-procurement efforts since 1999, also before Difi was established in 2008.” Following on from the establishment of the Pan-European Public Procurement On-Line (PEPPOL) four-year, large-scale

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“Norwegian PEPPOL based e-invoicing has grown from 100 invoices per month, to 5,000,000 transactions in September 2017 alone” André Hoddevik Head of e-Procurement at Difi

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“If we’re going to invest in more innovation, improve service delivery and experiences, suppliers need to be more involved and work to be better service providers as part of the procurement process” Dag Strømsnes Chief Procurement Officer 58

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pilot project in 2008, Difi has played an essential role within the ongoing management and delivery of the project, which resulted in the growth of a new European technological infrastructure. Co-funded by the European Union and 18 government agencies, the project enabled businesses to exchange electronic procurement documents with other organisations and suppliers, and simplified the overall purchase-to-pay process. After the successful completion of the PEPPOL project in 2012, Difi took a leading role in establishing the member-based international nonprofit association OpenPEPPOL to maintain services and ensure long term sustainability of the PEPPOL project results. André Hoddevik, Project Director of PEPPOL, had been the elected Secretary General of OpenPEPPOL since the start. “As part of the project, we utilised PEPPOL for national purposes,” observes Hoddevik. “The most important effort was to use PEPPOL as a basis for Norwegian e-invoicing,

first of all for legislative work, and from 2011 it was mandatory for all central government entities to have the capability to receive invoices in a PEPPOL based national format (EHF). “From 2012, Norway had a change in its regulations in that it became mandatory for all central government entities to require e-invoicing from their suppliers. From there onwards, Norwegian PEPPOL based e-invoicing has grown from 100 invoices per month to 5.2mn transactions in September 2017 alone. “We have also grown from being initially a few hundred public sector entities in the network to having 90,000 recipients coming from both the public and private sector,” continues Hoddevik. “It has become a national infrastructure which supports public sector needs but also the needs of the private sector.” Unlocking value Each invoice placed on PEPPOL will now save each recipient around

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10 minutes of work. Although not a lot of time, with approximately 50mn transactions the last 12 months, such high volumes have created 4.2bn Norwegian kroner (NOK) in socioeconomic savings, reducing the overall time taken for thousands of recipients in both the public and private sector. “Protection costs are one of the most important things to work on,” adds Dag Strømsnes, Chief Procurement Officer at Difi. “We need to work hard to reduce this.

We know that especially for small and medium-sized enterprises (SMEs), they have said how difficult it is to take part. It is essential for us to simplify the rules and regulations, and the government understands that in terms of the national procurement and European Union thresholds.” To this effect, Difi is set to open its national programme for partfinancing a number of digitisation projects in next financial year to support a large number of SMEs.

Difi keeps workers and clients up to speed on the latest key trends

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“Our aim is to support the whole public sector and provide guidance to the supplier side, but our main focus is on the government and public sector” André Hoddevik Head of e-Procurement at Difi

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The NOK 120.9mn co-financing scheme will further support business growth in the public sector and provide a number of advantages for SMEs against bigger players in the market. Supplier relationships With the changes in legislation, calling on all central government entities to receive invoices electronically in Norway, Difi has been committed to supporting the market through utilising open source software for connectivity. Additionally, the organisation has built essential validation tools and toolkits regarding its current invoicing processes, which will also work to help simplify the e-procurement process. “Our aim is to support the whole public sector and provide guidance to the supplier side, but our main focus is on the government and public sector,” says Hoddevik. Such changes have also filtered down to its supply chain management processes. The success of PEPPOL has resulted in a growing number of e-invoicing suppliers within the e-procurement space, all of which offer Software-as-a-Service (SaaS) in Norway. One such company is Norwegian international company Capgemini IBX, which has been acquired by cloud-based business Tradeshift. Hoddevik explains that the business currently has a contract on delivering e-procurement

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Commerce for All Tradeshift ‘Doubles’ Commitment to Norwegian Public Sector The central agreement between Norway’s Diﬁ (Agency for Public Management and eGovernment) and Capgemini will expire and not be renewed in May of 2018. This has many in Norway wondering what will happen next. Fortunately, the ability of organizations to practice e-commerce will only improve in the aftermath, and so will the ability of IBX Business Network (now Tradeshift) to support its clients’ interests. In early May 2017, Tradeshift completed its acquisition of IBX to create the world’s largest business network, consisting of 1.5 million businesses in over 190 countries. With its beginnings rooted in the delivery of technology to the Danish government and its instrumental role in both the development of Pan-European Public Procurement Online (PEPPOL) and e-document standards, Tradeshift is no stranger to public procurement. Once the agreement between Diﬁ and Capgemini expires, the services that organizations associate with it will remain while the freedom of choice expands through providers of open networks, such as Tradeshift. Though Ehandelsplatformen as a central agreement will end,

the Elektronisk handelsformat (EHF) format will ensure that business in Norway is conducted on an open network. By standardizing document exchange, the EHF format allows both suppliers and buyers to connect to their partners more easily. The result is an open network in which organizations can select whichever service provider ﬁts them best without having to worry about how the decision will impact their ability to reach their partners. “We entered into a partnership with IBX (Now Tradeshift) already in 2001, when the e-commerce market was very immature,” said André Hoddevik, Head of eProcurement at Diﬁ. “Together with IBX [Tradeshift] we have been working to increase the spread of e-commerce during this period and see a strong maturation of the market especially in the last four years. Now, with common standards (EHF) and an open messagesharing infrastructure [i.e., PEPPOL], e-commerce services can be delivered by a wellfunctioning market. New players have arrived and we see even more on their way in, so we are keen on how the market - where Tradeshift will still be an important player - will develop in the future.”

www.tradeshift.com

Fortunately, this change does not require IBX customers to find a new PEPPOL access point. Tradeshift (and IBX) already has a certified PEPPOL access point, meaning that all of its customers are already PEPPOL compliant. Furthermore, Tradeshift and IBX have extensive experience working with the EHF format, providing a unique ability to support transitions onto the PEPPOL network without disrupting business processes. IBX Business Network offers 16 years of experience working with electronic procurement in Norway in addition to 7 years as a PEPPOL access point. This experience, combined with Tradeshift’s 7 years as a PEPPOL provider, makes the combined company a uniquely knowledgeable option as an access point ready to connect you to the PEPPOL network and enhance your procurement process with an eye towards the future. The future of procurement in Norway is exciting in large part because of the changes that will result from the end of the Difi central agreement. Tradeshift looks forward to guiding the future of procurement as the market becomes more mature and open.

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SaaS services in the Norwegian opportunities in the public sector public sector and “have played within the different categories an important role in the roll-out of on the service, which details all e-ordering and e-catalogue tools competitions, bids and contracts to more than 300 public sector with a value of more than NOK 1.1mn. entities in the Norwegian market”. “If we’re going to invest in more “However, on a separate note, we innovation, improve service delivery have also seen a significant growth in and experiences, suppliers need startups dealing with support parts to be more involved and work to of the procurement be better service process, such as providers as part supporting suppliers of the procurement and public-sector process,” adds entities with invoicing Strømsnes. “The solutions,” continues key thing is more Hoddevik. “We see involvement; The year this spreading to for contracting that Difi was e-capital investments authorities to founded and into the full have more market procurement knowledge before chain. Suppliers they send out therefore need to step up their tender documents, understand game and offer value at the highest suppliers and how competition level, and that’s the challenge should be established to get the we are giving to the market.” most value out of suppliers.” For all tender notifications, Difi has implemented tender service Doffin, Risk management which works to simplify the process Housing a high number of for suppliers and contracting stakeholders which utilise authorities. All parties can see all Difi’s procurement division,

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Strømsnes explains that the Norwegian government has great ambitions in relation to corporate social responsibility. “Many workers, especially from Eastern Europe, do not receive the required salary,” he says. “To increase the number of suppliers, it is important that people are given the right salary. We also work to improve considerations relating to work completed in the developing world. The procurement of uniforms

is an example. We look at working conditions as children have been involved in producing these textiles. “We developed a risk matrix for certain categories related to textiles, to computers, to more physical work, but also from which country the production takes part in,” Strømsnes continues. “There are some projects related to countries where alarm bells ring, and you need to work with ones which are a higher risk to secure responsible procurement.”

Developing skills is essential if Norway is to continue digitising procurement practices

André Hoddevik Head of e-Procurement at Difi

December 2017

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“If medical kits are made in a third world country like Bangladesh, it is a high-risk product that needs to be followed, detailed and monitored,” supports Hoddevik. “An awareness is then built and buyers in the public sector have the required tools to follow up and handle these risks responsibly for these types of products.” Future potential Although digitisation is providing

a multitude of advantages for the procurement sector, it also continues to present a number of challenges for Difi. A number of industries continue to lack the resources and expertise required to support the digitisation of procurement, as well as house engaging managers and leaders. “We also see the lack of strategic ICT skills which could be used to improve our processes,” comments Hoddevik. “This is an obstacle which we will seek to address

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DIFI

Difi ap mo

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fi is hoping parliament pproves plans to spend ore on digital projects

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in the upcoming years.” From a Norwegian perspective, we rely on the market to deliver these solutions, and the market lacks some incentives and is prevented from offering shared services.” However, Strømsnes adds that it remains vital for an increased awareness of the strategic potential related to public procurement. “In the budget proposal for next year, the government aims to strengthen Difi in a number of areas related to digitalisation,” adds Hoddevik. One of the areas where the government would like to invest more money in the next few years is the digitisation of public procurement process. Hoddevik concludes: “The budget has been put forward and if approved by Parliament this autumn, it will give a significant increase of resources available for digitalisation of public procurement from 2018 and onwards. Priority is given to support the full rollout of integrated eTendering processes, but continued growth in eOrdering, eInvoicing and payment initialisation and use of statistics to improve procurement practices is also very important.” Watch this space…

Agency for Public Management and eGovernment

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Superheroes of the sustainable Swiss supermarket supply chain Written by Fran Roberts Produced by Richard Durrant

Migros is Switzerland’s largest retail company, its largest supermarket chain and largest employer. In 1926, the company built its first store in Zürich and its second store, in Ticino, presaged the future as it was founded as a cooperative. Now, almost a century later, the company is pioneering once more as it looks to reduce energy consumption within its supply chain

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We are a cooperative with over two million members so nearly every household in Switzerland is an owner of Migros. Our core business is to sell food in our supermarkets but then we also have a wide range of non-food products,” remarks Sandro Glanzmann, Sustainability Specialist for Non-Food Products. “What’s also special is that the Migros Group has its own industry [M-Industry] in which we produce a large portion of our food assortment. Also, we have our own industry, which produces cosmetics and washing detergents for Migros. We have our own factories which produce these products.” Migros was founded in 1925 in Zürich as a private enterprise by Gottlieb Duttweiler, who had the idea of selling just six basic foodstuffs at low prices to householders. At first, he sold only coffee, rice, sugar, pasta, coconut fat and soap from five lorries that went from one village to another. His strategy to cut the intermediate trade and their margins was met by broad resistance from his competitors, who goaded the producers to boycott him. As a

reaction to this threat, Migros started creating its own line of goods beginning with meat, milk and chocolate. Today, as one of the 40 largest retailers in the world, Migros has greatly expanded the number of goods it creates for itself. “Our own industry delivers about 80% of the food products that the Migros Retail company sells,” reveals Manfred Bötsch, Head of Sustainability at Migros Retail. With its 25 Swiss companies and seven foreign businesses, M-Industry produces over 20,000 high-quality food and non-food products, making it one of the biggest own-brand producers in the world. Reducing impact As such a large producer, Migros has committed to reducing energy consumption within its supply chain. “Two years ago, we adopted a new sustainability strategy. In this strategy, we designed the main topics we thought Migros needed to take action on in terms of sustainability. Unsurprisingly, one area of action was that we wanted

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to reduce our impact was regarding the use of natural resources. We decided that we want to continually increase resource efficiency, to minimise the use of non-renewable resources, reduce total resource consumption and avoid creating waste,” Glanzmann comments. “We’re therefore setting goals to take action to reduce energy and water use, and emissions in this area. In the meantime, we realised that our main environmental footprint is not at Migros itself. In many cases it lies in the production of our products – they are much more relevant in terms of energy use or water use than the stores. I think a core point of the strategy is that we look at the whole value chain of products and see then

where the biggest impacts are in terms of energy or water use or emissions.” The setting of strategic goals is key to the plans at Migros for measuring energy consumption – they give the company something to work towards. “In the end, strategies are one thing, the other is having concrete measures to really reduce it and we have a goal,” continues Marcus Dredge, Head of Energy Efficiency and Climate Change. “There’s a lot of detailed work going in there because in the end, the reduction on the energy consumption and climate gas emissions is done within all different little pieces at each individual plant. Of course, it’s also in the retail stores and we try to do the same thing there and emphasise energy efficiency as much as possible.”

“In the end, strategies are one thing, the other is having concrete measures to really reduce it and we have a goal” MARCUS DREDGE Head of Energy Efficiency and Climate Chage

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Migros has been serving customers for almost 100 years

Least possible energy consumption To many people, the idea of production conjures up images of factories with plastic, metal and wooden objects being manufactured. Yet of course, all of our food is produced. “At the end of the day we want to sell to our consumers a chicken or fish with the least possible energy consumption along the value chain,” explains Bötsch. “So, we work on the agricultural level, we work on industrial levels and we work also on the logistics in between. Of course, there is the topic of packing

materials, which is also an energy topic, so we also work on that issue.” Dredge, too, notes the importance of looking along the whole value chain. “The energy efficiency or greenhouse gas potential is not always just an issue about doing it in your own plant - it’s also about the whole supply chain. If you use a little bit less material, this is a big lever in the whole supply chain,” he comments. Food production is water and energy-intensive, accounting for 70% of global water use and 6% of global energy use, according to the IHE Delft

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Institute for Water Education. “On the sustainability. These topics have been farm level, we have developed a barn completely integrated in the corporate to produce chickens and this is also strategies, with actions, investments a barn which has a self-sufficiency in and supplies carefully selected, taking energy consumption,” reveals Bötsch. into account every environmental Many in the industry have been and social aspect related to them.” positive about working with Migros on its goals. “We were very surprised that Minimising hotspots at least one of our main suppliers Within the non-food sector, the were themselves eager to business has launched a know where they are scheme to reduce energy The year compared to others,” usage. “We analysed that Migros explains Bötsch. our assortment to Genossenschafts “For example, in see what are the Bund was founded certain value chains resources or the raw we have calculated, materials that we’re fully integrated using the most. In the and undertaken life non-food assortment, cycle analyses for those we’re using a lot of wood, products and they actually cotton, metal and we’re using want us to create a differentiation plastics,” Glanzmann notes. “For these potential for those raw materials.” raw materials, we analysed the whole Such positivity is not confined only to supply chain to see where we have the the food sector, as Domenico D’Angelo, biggest impact in terms of environment CEO at Sofidel, illustrates: “Sofidel or social issues and then asked how wanted not only to fulfil the growing we can minimise those hotspots.” requests from markets and regulators, Bötsch continues: “In the paper but be recognised as a leader in social sector, with towels and tissue paper, responsibility and environmental we have created a pilot project

1925

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“We want to sell to our consumers a chicken or fish with the least possible energy consumption along the value chain” MANFRED BÖTSCH Head of Sustainability at Migros Retail

alongside one of the biggest producers for us. With them we have really tried to have a benchmark on the energy consumption of paper and cellulose products. This is just an example and we’ll actually roll this out to all our topmost energy consuming industries. Logically, in our own industry it’s easier to do with farmers but we are quite far along in this respect. It’s even more complicated to go in the value chains where we don’t have our own industry – for example paper and cellulose – but it’s important for us that we really also champion these topics.” The pulp and paper industry is one of the most energy-intensive sectors of the EU, with average energy costs around 16% of production costs, and in some cases up to 30%, according to the European Commission. “We chose the paper sector because we wanted to start with a well-developed supplier and to learn from them and then spread the findings over to maybe less-advanced industries. We analysed,” explains Glanzmann. With this in mind, Migros chose to partner with Sofidel on this project, having shared a commercial relationship for over 15 years. “Sofidel is delivering to Migros paper produced with a lower energy consumption than in the past and with a higher content in renewable energy,” advises D’Angelo. “Sofidel believes that in the coming years product innovation will be necessarily linked to sustainability. In the period 2013-2016 Sofidel invested

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€52mn for energy efficiency, combined generation of heat and power, and renewables. Our average specific water consumption for paper manufacturing is the lowest in the paper sector.” Understanding the situation Migros asked them what they have to measure to benchmark the environmental performance of its suppliers. We then adopted 10 key performance indicators, which we asked the suppliers to give us the data on. Then we“We want to understand first the actual situation with respect to the environment-relevant points in the processing and the production of the

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products, and then afterwards we want to collect data from the processing stage for these paper products to find out if it is feasible to get that data from suppliers” explains Glanzmann. “We wanted not only to collect environmental data for our direct suppliers, but we also asked what are the relevant steps in the whole supply chain in terms of this environmental data. We go even further back in the supply chain than only our direct suppliers.” Migros intends to expand this pilot scheme to other industries – such as metal production – in spring 2018. “We really have a programme to improve resource efficiency because we not

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only talk about energy, but also water, for example. We are impressed with these companies in cellulose and paper and were surprised that they already had some KPIs. Most surprising for us was that they also had KPIs from their pre-produce,” Bötsch observes. “That gives us the impression that, in certain areas at least, the management is very caring about it and we can really work together to bring all these advantages, improvements and innovations to the front and to the consumers.” Producing more efficient products While Migros is working on the paper pilot with Sofidel, one of its

“We want to collect data from the processing stage for these paper products to find out if it is feasible to get that data from suppliers” SANDRO GLANZMANN Sustainability Specialist for Non-Food Products

main suppliers, M-Industry, also has non-food producers within it that are looking to reduce energy consumption. One such producer is Mifa, which creates homecare products for Migros. “We’re working on reducing the energy consumption during the washing cycle. Our focus is on the washing temperature not in production,” comments Michael Lang, Head of R&D at Mifa. “If you look at the lifecycle of detergents, the biggest chunk of the energy consumption is during the use of our products. Previously, you had to produce them by mixing one hot substance with one cold substance.

MIGROS GENOSSENSCHAFTS BUND

Today you are able to mix those substances at low temperatures so you are more efficient in producing those detergents. The second step is then the use of this detergent in the washing cycle – you can wash your clothes at a lower temperature than before and have them as clean as you had them years before where you had to really heat them up. Producing more efficient products can help the customers wash their clothes more efficiently. There are various ways we can help customers to be more efficient.”

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Pressing issues Looking ahead, Migros remains focused on sustainability. “It’s a long walk and we are not doing it on our own,” observes Dredge. “We’re doing it together with a lot of other companies and individuals that try to go in the same direction. I think that climate change is one of the most pressing issues worldwide so we have to do it.” And he is not alone in this view: “I agree with Marcus because sustainability is a journey, it’s not a destination. You also have a

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“We’re working on reducing the energy consumption during the washing cycle. Our focus is on the washing temperature not in production” MICHAEL LANG Head of R&D at Mifa

vision of where you want to go,” Bötsch observes. “I have this vision that on a scientific level but also from a production level, Migros is one of the top players in recycling and sustainability.” Indeed, Migros is looking to play to its strengths in order to increase sustainability throughout its operations. “We have a train connection on our site and Migros has to maximise the transport of goods by train. We’re looking for international customers or warehouses with a connection where we can use our advantage also their advantage,” explains Lang. Sofidel is one company that has already taken advantage of this. “For most of the products shipped to Migros, Sofidel has chosen the railway as the preferred means of transport, which gives an additional energy saving if compared with the traditional transport made with lorries,” D’Angelo observes. Migros is the largest rail transporter of goods in Switzerland. “It’s only a small part but now we are looking at putting a good focus on that – we try to avoid road transport,” Lang concludes.

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BOLLORÃ&#x2030; LOGISTICS Putting Vietnam on the logistics map Written by Nell Walker Produced by Charlotte Clarke

Marc Moeschlin, Managing Director of Bolloré Logistics Vietnam, describes the ways in which the business is taking advantage of market growth in Vietnam by expanding the business footprint and investing in the country

olloré Logistics, with its headquarters in Puteaux, France, has been active in Vietnam since 1989. It has since firmly made its mark in the country, serving some of the most high-profile brands in the world and providing the keys to managing the supply chains of its customers in this dynamic high growth market. With over 30 years of experience up his sleeve, gained mostly in Asia, Managing Director Marc Moeschlin has sat at the helm of Bolloré Logistics Vietnam for the last two years with a desire to take advantage of a thriving industry. Marc Moeschlin started working in logistics in Switzerland in 1986 for a medium-sized international German Logistics company, immediately after completing his degree at EPCI/ESSEC

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Business School in France. Overcome with a desire to travel and discover Asia, he took a year off to fly to Hong Kong and travel throughout China and across the world before returning to the same company he first worked at – this time based in Singapore – in 1990. Thus began a career of management-level freight forwarding and supply chain roles in various Southeast Asian countries, building up a wealth of experience before joining Bolloré Logistics two years ago. As Managing Director, Moeschlin oversees all activities in Vietnam, freight, warehouse and logistics, projects, supply chain management, covering the full pallet of services provided by the company. “It’s an interesting role in an exciting country,” says Moeschlin, and what

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Marc Moeschlin Managing Director

Marc Moeschlin started working in logistics in Switzerland in 1986 for a medium-sized international German Logistics company, immediately after completing his degree at EPCI/ESSEC Business School in France. Overcome with a desire to travel and discover Asia, he took a year off to fly to Hong Kong and travel throughout China and across the world before returning to the same company he first worked at â&#x20AC;&#x201C; this time based in Singapore, in 1990. Thus began a career of management-level freight forwarding and supply chain roles in various Southeast Asian countries, building up a wealth of experience before joining BollorĂŠ Logistics as Managing Director two years ago.

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makes Vietnam so thrilling for Bolloré Logistics is its fastgrowing market on both the export and import side. “We are present in Hanoi, Danang and Ho Chi Minh City; but the latter - formerly named Saigon - is the biggest city and also where our head office is located,” Moeschlin explains. “The challenge in this country is to take full advantage of the growth happening. Vietnam is experiencing over 6.5% GDP growth right now, and looking at the still growing foreign investment, these growth levels are here to stay for several years to come. We’re benefitting from an increased demand in the footwear and clothing sector, which has been transferring a lot of orders from China, and the high tech and telecom sectors have seen major manufacturing investments, especially in the north of Vietnam where one of the biggest mobile phone factories in the world is located.

“Also, we have a growing middle class here in Vietnam, increasingly wanting to source and buy international brands,” he adds. “Earlier entries like Zara and more recent entries like H&M are getting a lot of attraction here, due to Vietnamese women having an increasingly high rate of employment and therefore their own buying power. Luxury is also a great sector for us to develop as the market in Vietnam grows. “A challenge here is the development of new airport infrastructure,” Moeschlin continues.

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“Ho Chi Minh City is actually building a new airport for 2025, but the question remains on how we will manage the cargo volume growth at the existing airport until then.” How, indeed, when the local market is thriving to such an extent? Online shopping is a constantly-flourishing industry in Vietnam. More and more, consumers are opting to buy via their personal devices, meaning a huge surge in e-commerce; which

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generates increased domestic and international cross-border flows. “We are seeing the business model changing rapidly because of this, and we’re tailoring our offer to support this industry as much as we can,” says Moeschlin. “Thanks to our logistics hub in Singapore, we can serve the region, including Vietnam. Alongside this, we work with strategic partners who can provide the last-mile delivery service so that we can offer

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a country wide end-to-end service.” Besides e-commerce, Vietnam offers a wide range of opportunities. On the manufacturing side, Vietnam has become a good addition to China, and businesses have begun to realise that the balance is shifting, creating opportunities for Vietnam. This is further enhanced by various Free Trade Agreements (FTAs) that Vietnam has signed or is on the verge to implement. Being a leader on the FranceVietnam trade lane and ranking in the top 5 logistics companies in Europe – one key trade where Bolloré Logistics has some major advantages is between Vietnam and Africa. Vietnamese telecom companies have successfully sold their network equipment and technology to some countries on the continent, and there has been a great deal of soft commodity business between Africa and Vietnam; in which Bolloré Logistics already plays a major role in Africa, thanks to its leading market position there. “We see Africa becoming more of

“The challenge in this country is to take full advantage of the growth happening” MARC MOESCHLIN Managing Director a consumer nation in the future,” says Moeschlin. “Mobile phones, footwear and garments especially are growing markets there and commodities like cashew nuts and cotton are moving in increasing volumes.” With an unmatched network in Africa, Bolloré Logistics is in a good position to let its customers in Vietnam leverage and develop trade sustainably, with full visibility and control from end-to-end – even to landlocked countries. However, as Moeschlin explains, partnerships begin within the business. “In order to satisfy our customers, our key partners are actually our staff,” he says. “It’s essential for us to have a

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“Bolloré Logistics is a family-owned business, and we are bringing that family spirit down through every level of the business” MARC MOESCHLIN Managing Director

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stable and well-educated work force in a high growth market such as Vietnam. Bolloré Logistics is a family-owned business, and we are bringing that family spirit down through every level of the business. This unique DNA and the efforts put into staff development ensure that we have quite a low staff turnover compared to the rest of the market, allowing a consistently good quality of service, which is a strong point in satisfying our customers.” Bolloré Logistics Vietnam offers extensive training and development possibilities to its staff - the company holds an edge in the sense that it is a pioneer. It was the first international logistics organisation to receive the license to operate in Vietnam, and the ongoing success story of Bolloré Logistics is something which attracts the needed talents in this competitive market. The business is also doing its part to fill the skills gap by partnering with education services and developing a work-study programme in which students can work towards their degree by also spending time in the workplace. The company does, of course,

keep local partners close as well, and due to its status, Bolloré Logistics is able to pick and choose precisely which companies have the quality processes and standards it demands. “We have to actively coach them and bring them up to standard, which we are doing with a very active vendor management program. That enables us to provide the kinds of service our international customers are expecting,” says Moeschlin. To support its strong partner relationships, technology is also a key enabler. For one particular aerospace customer, the company applied a solution called Link Mobile for item tracking whereby the recipient of the cargo signs on the trucking partner’s mobile device. This proof of delivery (POD) is instantly uploaded and visible in the corresponding tracking and tracing application. Similarly, other customers are making use of Bolloré Logistics’ e-booking tool, reducing data input. While these may be small steps, they make a big difference in terms of business efficiency. Moeschlin and his team are working towards a

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more integrated way of working, with algorithm-based decision-making becoming the norm for the Bolloré Logistics Vietnam operators to make the best choices for the customers, optimising their experience. “The intention is to make this data much more useable and better in predicting where the capacity will have to be and where prices will go in the future,” he explains. “We very often take a bet on the future,

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and we need to be able to read the market better than the competitor.” Bolloré Logistics also works hard on innovation with the B. Lab – an innovation community within Bolloré Logistics that aims to create new products, services and processes that tie into the digital revolution. Its responsibility as a company also encompasses social and societal aspects by integrating the expectations of stakeholders and

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playing its part in developing the local economy. In terms of sustainability, for example, Bolloré Logistics is able to provide details of a customer’s CO2 emissions based on shipment data, enabling them to see their impact on the environment and adjust accordingly. Bolloré Logistics Vietnam has several corporate social responsibility (CSR) programs in place locally, and recently supported local communities by donating

its old IT equipment to a nongovernmental organisation training underprivileged students in Danang. Bolloré Logistics Vietnam’s consideration for CSR is part of what makes the business unique, and the future looks brighter than ever for Moeschlin and his team.

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A STORY OF SUPPLY CHAIN TRANSFORMATION Written by Catherine Sturman Produced by Charlotte Clarke 93

VICE PRESIDENT OF SUPPLY CHAIN LISANNE BOGLE DISCUSSES HOW THE TEAM THINKS ‘OUTSIDE THE BOX’ IN THE DELIVERY OF OKADA MANILA’S PROCUREMENT SOLUTIONS IN THE PHILIPPINES

kada Manila is a US$2.4bn development that is the largest and most expensive property in Entertainment City, in Manila, Philippines. Set in 44 hectares of prime land, it is positioned as an integrated resort with features that cater to different kinds of people, yet it mainly stands for one thing: entertainment. While it has a casino and gaming area— the largest in the country in terms of size and gaming options—it has a rich array of unique and world-class amenities that truly spoil its guests with choices on how they would like to spend their time, from relaxation to shopping to dining and other kinds of entertainment. Its most iconic feature is the US$30mn The Fountain, which brings select music to life through a fantastic choreography of light and water. Aimed to become Manila’s main tourism icon, this fountain is designed and developed by WET, the same team

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Lisanne Bogle, VP of Supply Chain.

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behind the world’s most popular water features in Las Vegas and Dubai. Okada Manila is also home to the country’s first-ever indoor beach club and nightclub, Cove Manila. Enclosed in a glass dome, 100m in diameter and 30m in height, Cove Manila features artificial white sand and can host up to 3,000 guests. Okada Manila is being built against a backdrop of how the Philippines has become a hotbed for investment and one of the fastest growing economies in the world. The government’s sixyear “Build Build Build” construction and infrastructure initiative is set to further attract new and upcoming services here, such as the launch of integrated resorts that contain hotels, retail outlets, spa and leisure facilities, traditional gaming services and much more. Moreover, developers are now catering to an increased

consumer desire to seek a complete experience, rather than spend money on one area of entertainment. “The different kinds of tourists, such as families, are not going to be encouraged to come here if there is no variety of exciting and worthwhile things for them to do,” explains Lisanne Bogle, Vice President of Supply Chain for Okada Manila. “That’s why integrated resorts give an all-encompassing answer: they provide something for everyone. “There are four integrated resorts in Manila: Resorts World, City of Dreams, Solaire and Okada. Traditionally, gaming has been popular with tourists from various Asian countries and Las Vegas used to be the draw. With the advent of gaming in Macau and southeast Asia, the number of tourists to these destinations has increased, especially VIP guests who provide

“Integrated resorts give an all-encompassing answer: they provide something for everyone” LISANNE BOGLE VP of Supply Chain for Okada Manila

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a strong backbone to the entire industry of entertainment and travel. “The region’s economy has grown and expanded in the last several years, which also means an increase in disposable income. Citizens from many countries are able to travel more and explore many sought-after destinations.” Changing attitudes Operated by Universal Entertainment Corporation subsidiary Tiger Resort,

The Deluxe Twin suite at the Okada Manila Resort

Leisure and Entertainment Inc., Okada Manila houses a number of diverse food and beverage outlets, retail, leisure, sports and spa facilities and, of course, traditional gaming services which are open 24-7. Although it is mostly complete, there is still some ongoing construction, and Okada Manila’s procurement team faces a number of challenges in its daily operations. Its vast team is split into three areas to cater for these demands:

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business processes, procurement Thinking outside the box and strategic sourcing, and “We’ve been gradually adding more warehouse, receiving and logistics. real estate to our operations, so In order to ensure competency in we’re in a very hybrid situation,” all areas of the business, there is an Bogle continues. “Not only are we increased need for versatility in both processing the fit out requirements thought and action, as Bogle explains: for the hotel and restaurants, “All members of the procurement team but we are managing the daily need to understand each step in the operational requirements for the procure to pay process and the existing operations.” impact of logistics; whether With such complexity, it is the customs clearance ‘thinking outside of process, the specific the box’ has become items that require the norm for Okada The number paperwork for Philippine Manila. When of integrated Amusement and Gaming ordinary software resorts situated Corporation (PAGCOR) lacked the adaptability in Manila approval and also those required to satisfy its items that have been approved everyday needs, the team by the Philippine Economic Zone looked at alternative solutions. Authority (PEZA) and what additional The implementation of hospitality documentation may be needed once software RedRock has become the order has been placed. There is a essential within its procure-to-pay need for speed, urgency and a lot of solution, which also manages communication to ensure shipments Okada Manila’s growing inventory are not delayed. A small misstep could and is supported by Microsoft result in a delay in handover of an area Dynamics AX for the financials. or a direct offer program not meeting With a campus of this size, the expectations of the guests.” efficiency is important and Okada

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Manila maintains onsite warehousing for over five hundred items, including operating supplies and also food and beverage items. The warehouse team manages over 500 SKUs, many of which have different weights and expiration dates. “We’re dealing with many products that do not have a fixed case weight,” Bogle says. “As these cases go into inventory, we need to be able to record the actual incoming weights, the costs and subsequently the average inventory cost to

The Retail Area at the Okada Manila Resort

correctly and accurately calculate the food costs and the recipes. “When we order beef, it doesn’t necessarily come in a fixed case weight, but in an average case weight. However, we get charged by the kilogram, not by the case. You may say that a case is an average of 25kg, but there are times we receive 24.7kg, then the next time we receive 25.3 kg. We have to have a system that manages the ability to calculate the true cost, and also to manage

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WE HELP PEOPLE BE THEIR BEST IN THE MOMENTS THAT MATTER Motorola Solutions is a global leader in businessto-business communications and technology solutions for emergency services and commercial organizations, encompassing both hardware equipment and software applications. As a high-tech company with a global history of 89 years, Motorola Solutions has 14,000 employees in over 60 countries, including the Asia Pacific region where we have been present over the past 40 years with 31 offices in the region including Philippines. Today, our solutions are being deployed throughout the Philippines in sectors including public safety, transportation, oil and gas and hospitality. With innovation ingrained in our DNA, our advanced technology can help organizations to service clients with reliability and security, keep industry workers safe as well as enable hotels and retailers to provide guests with memorable experiences. “Although you won’t always see our technology in the foreground, it’s always in use, helping

emergency services and commercial organizations to work more safely, as well as increase productivity and efficiency,” says Jane Coo, Country Manager, Motorola Solutions Philippines. Okada Manila, an integrated resort covering over 44 hectares of prime land has recently implemented Motorola Solutions TETRA digital two-way radios and WAVE work group communications to connect employees working across diverse operations, such as security, food and beverage outlets, retail, leisure, sports and spa facilities, and 24/7 traditional gaming services. “Digital radios help our staff to enjoy clear, crisp and uninterrupted communication over our vast premises. With such extensive operations, connectivity is crucial to ensure that we provide quality service to our customers. In addition, WAVE helps to link up employees using two-way radios with colleagues at desktop machines, mobile phones, tablets or any other communication device to enable wider coverage”, says Lisanne Bogle, Vice President of Supply Chain, Okada Manila.

www.motorolasolutions.com

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our inventory based on what we call catch weight variances,” she adds. “Most large ERP solutions have not been successful in providing a solution for this specific requirement. Additionally, we now utilise a new bolt-on solution to RedRock that has allowed us to increase the efficiency of our supplier registration and accreditation via an electronic supplier portal. Initially, the use of that portal is for our vendors to undergo vendor registration and accreditation. Vendors are provided with a username and password and a link to access the portal. They complete an online application providing us with required information on their company, and

they upload pertinent licenses, permits, insurance documents and financials. The business process team will then verify for authenticity, work with risk management on the financial assessments and conduct background investigations. This online portal has saved us a significant amount of time reducing the process from nearly three weeks to a matter of days. Then, the second part of this solution will allow us to do electronic RFIs, RFQs and RFPs, as it actually ties in with RedRock. All processes within one framework reducing the volume of excel spreadsheets and tender documents and paper files.” “Identifying the right software

“Identifying the right software solution is never an easy task; ensuring it meets the operations’ requirements is key. Technology should work for us, and not the other way around” LISANNE BOGLE VP of Supply Chain

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solution is never an easy task; ensuring it meets the operations’ requirements is key. Technology should work for us, and not the other way around.”

across multiple outlets where possible. This has consequently become vital to restaurant operations to ensure food costs are controlled without endangering the quality and uniqueness of each menu. “We may Reducing product costs use pork belly in multiple restaurants, As more restaurants open, food and and each chef is likely to ask for a beverage requirements increase different specification – bone-in, dramatically. In addition to skin-on, skin-off or boneless preparing meals for more or a combination,” Bogle than six thousand says. “By standardising team members on the specification, we are a daily basis, each able to ensure that we The year that kitchen under Okada have the right volume to Okada Manila Manila prepares its leverage negotiations was founded own menus for its with suppliers. restaurants. The number “Cost reductions come of ingredients slowly grows in many forms, however, we and the specifications become can only take so much cost out of varied. Okada Manila’s Supply Chain the product, so we get creative in is now tasked with not only sourcing looking at different ways of procuring all of these different products but products. Maybe we reduce the also managing costs. Optimisation number of deliveries; the vendor of product specification is an saves on freight and logistics approach that has led the company cost and we can then share those to dive deep into all specifications savings. It’s really thinking outside and work with the F&B department the box and collaborating with in discovering synergy of product vendors; understanding how they

2016

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The Executive Suite at the Okada Manila Resort

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do business, how we do business, and how we can work to eliminate some of that excess cost that is added into the cost of goods.” Systematic processes The integrated resort sector in the Philippines is still in its infancy and that means that experienced resources are sometimes limited. Training is key, and finding the right individuals with the right attitude and potential is the starting point at

Okada Manila. As a result, it continues to be committed to undertaking an ongoing talent development drive and deliver extensive training across its operations. “We spend a lot of time working with our teams, whether it be on an individual basis or whether it be in a group setting, to really get them up to speed,” Bogle explains. “If you clarify why things are done, you then get the support which in turn brings a better result.”

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“It’s really thinking outside the box and collaborating with vendors; understanding how they do business, how we do business, and how we can work to eliminate some of that excess cost that is added into the cost of goods” LISANNE BOGLE VP of Supply Chain

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In addition to training, ensuring transparency is something that Bogle stresses is of utmost importance within Okada Manila’s procurement functions. Transparency of vendor selection, the tender process, the award are all non-negotiable. Processes and controls are also vitally important to the success of Supply Chain within the organisation. “We educate our BUs on our SOPs, we are constantly evaluating our SOPs as the business changes to ensure that we are covering all angles,” Bogle notes. “We do not want to strangle the operation, but we need to ensure that all processes are adhered to. Accountability, visibility and responsibility are buzzwords for the supply chain team. Strict regulations have also ensured that compliancy continues to be an essential area of focus within Okada Manila’s procurement team.”

Red Spice at the Okada Manila Resort

Long-term growth There are more exciting times ahead for Okada Manila and the Supply Chain team. Nonetheless, despite the challenges, Bogle is enthusiastic about the growth of integrated resorts and Okada Manila’s long-term potential. “Our guests are not looking to sit at a table for 24 hours nonstop. They’re looking for entertainment,” she concludes. “They’re looking for that experience, and that is something that we will give them.”

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Written by Fran Roberts Produced by Charlotte Clarke

The journey to a superfast supply chain 115

Founded in 2006, Urban Revivo is a fastfashion brand specialising in contemporary clothing and accessories for men, women, and children, selling accessibly priced fashion targeting 15 to 40-year-olds. Ethan Zhong, Vice President of Supply Chain, explains more about the company’s superfast supply chain

“

Urban Revivo is a fast fashion company and it was built 11 years ago. The founder of Urban Revivo visited Zara in Japan and then he came up with this idea in China – we didn’t have a fast fashion company,” reveals Ethan Zhong, Vice President of Supply Chain. “Urban Revivo is a successful company; it’s grown very fast. It has grown by 50% every year, and now it has around 200 stores in China, and our sales revenue is close to RMB3bn [US$452mn].” Brands such as H&M and Zara were said to be among the very first fast fashion retailers. When the latter opened its first US store in 1990 – having first launched in Spain in the 1970s – it announced

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that it would only take 15 days for a garment to go from concept to completion. As Urban Revivo expands internationally – first to Singapore, with the UK in the pipeline for 2018 – there is increased pressure on the company’s supply chain to achieve such short turnaround times. “Actually, it’s a super big challenge for the whole supply chain because we launch more than 20,000 kinds of new products every year. We have a huge timetable and a superfast supply chain. To compare with a traditional fashion company, we launch new products every week. So, our suppliers, we require them to supply those products to us, within around 15 days to 30 days,”

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â&#x20AC;&#x153;I got my Master Degree in computer science at Vaxjo University in Sweden. I served Nokia, Lenovo and Mars Confectionary and now I am the Supply Chain VP at Urban Revivo. I am familiar with sales and operation planning, procurement, production, quality, industrial engineering, logistics and so on. I enjoy transferring the supply chain management skills from one industry to another and have rich experience of improving the whole supply chain including cost saving, shortening the lead time, upgrading the quality KPI and so on.â&#x20AC;? ETHAN ZHONG VP of Supply Chain

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“As part of the supply chain transformation, my key focus is to develop our suppliers” Ethan Zhong VP of Supply Chain The Supply Chain and Product team

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Zhong reveals. “We need to prepare some raw materials in advance. We have around 100 small suppliers that have high self-authority and they can support our short lead time. We also use a huge timetable to manage the cross functions and to launch new products every week on time.” SUPPORTING SUPPLIERS The company announced it would be expanding worldwide when it celebrated its 10th anniversary last year, adding that it had ambitious plans to open around 400 stores globally by 2020, with stores set to follow in Europe as well as more across

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Urban Revivo supplier conference Asia outside China. As Urban Revivo develops, so must its suppliers. “Most of our suppliers are really small suppliers, because Urban Revivo was growing quite fast in the past. So now, in the future, as part of the supply chain transformation, my key focus is to develop our suppliers,” Zhong observes. “We do our best to support them. We consider them as our key business partners.” It is not just suppliers that Urban Revivo views as key partners. “For the logistic part we also work with Jingdong,” Zhong notes. “Jingdong, also known as JD.com, is one of the two largest B2C online retailers in China by transaction volume and revenue and a member of the Fortune Global 500. Such a strategic partnership is certainly indicative of Urban Revivo’s growing clout. “Jingdong is a very big e-commerce company and from this year it wanted to launch its new

FACTS • Founded in 2006 • It has grown by 50% every year, and now it has around 200 stores in China, and our sales revenue is close to RMB3bn [US$452mn]. • More than 20,000 kinds of new products every year • We have around 100 small suppliers • Ambitious plans to open around 400 stores globally by 2020

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“Because we have a lot of small suppliers, the IT system is very important for us to speed up our supply chain and also cut down the labour cost” Ethan Zhong VP of Supply Chain

2017 winter campaign for men’s clothing

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business of logistics services. Jingdong has very strong capability in its logistics – it’s famous for its speed, for its e-commerce platform. In the past, Jingdong Logistics only served its own website, and now they are open to other customers. We have strategic operations with Jingdong this year, and next year they will support all of our logistics service, including the transferring and warehousing,” Zhong advises. “This is the first year Jingdong opened up its logistics, so they also want to have a strategic partner to have a test case to show to other customers in the future. They give a lot of support to us. We support each other. We grow together.”

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2017 winter campaign for women’s clothing INVESTING IN AUTOMATION According to the Ministry of Human Resources and Social Security of the PRC, the urban unemployment rate in China was 3.95% in Q2 2017. With the employment rates so high, recruiting enough top talent has been a challenge for Urban Revivo as it has expanded. “This year we faced one big challenge. In the peak season, it’s quite difficult for our recruitment. We upsized our salary for the casual workers by around 20%, but still we have a labour shortage problem. So now, to be more efficient, we’ve needed to invest in some robots for our warehouse that can help to save the cost,” Zhong notes. “That’s the biggest invaestment

$452

million The annual revenue for URBAN REVIVO (US dollars)

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Above: A management team building activity Right: Urban Revivoâ&#x20AC;&#x2122;s top management team

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information and communicate this to our suppliers daily, by phone or online support,” Zhong observes. “But now we are working with the IT suppliers to see if we can build an IT platform system to help to monitor the order information and transfer the order information automatically.”

for our supply chain in 2017.” Naturally, Urban Revivo is looking to make further technological investments. “Now we plan to upgrade our supply chain IT system. Because we have a lot of small suppliers, the IT system is very important for us to speed up our supply chain and also cut down the labour cost. We have a lot of associates to collect the order

GLOBAL GROWTH Whilst Urban Revivo has achieved much in a short space of time, the company certainly shows no signs of slowing down. “For the next five years we want to grow to more than RMB10bn [US$1.5bn] sales revenue every year. That’s our mission,” Zhong states. “And we hope we can break even in the global market two or three years later because this is our first year entering the global market. We’re at the beginning; we still need to learn about the global market – what’s their fashion taste? What’s their weather like? We’re learning about their behaviours all the time.”

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Procurement transformation at Lebanonâ&#x20AC;&#x2122;s oldest university Written by Fran Roberts Produced by Heykel Ouni

The American University of Beirut (AUB) has been a pioneer for over 150 years. AUB became a co-educational institution in 1924, some 50 years before Harvard, Yale, or Princeton University. Today, one of its alumna, Hanan Itani Ramdan, is helping to drive transformation within the university’s procurement operations

he American University of Beirut is the oldest university in Lebanon and one of the oldest in the region. Founded in 1866, it bases its educational philosophy, standards, and practices on the American liberal arts model of higher education. It is a teaching-centred research university with around 800 instructional faculty staff and a student body of around 8,000 students. “I joined AUB in 1989 as an Assistant Director of Purchasing

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MIDDLE EAST

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AMERICAN UNIVERSITY OF BEIRUT

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with no experience in the field. It was difficult for the team to accept me as their supervisor being a young, inexperienced female,” explains Hanan Itani Ramadan, Director of Procurement and Contracts Administration. “However, I was able to prove myself by revamping the procedures and practices and introducing efficiencies into the process. As a result, I gained the trust and respect of the team, users and suppliers.” Despite this challenging start, Itani became an expert in her field. In 2002, she was promoted to the position of Director of Purchasing. “I played an important role in adopting the latest technologies to automate the transactional process and was able to keep up the performance of the department. In 2013, I started driving the transformation and restructuring process of the department and was promoted to Director of Procurement and Contracts Administration,” she reveals.

The ultimate goal The role that Itani and her department

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THE NETWORK.

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play is integral to the operations at the department, Itani has witnessed AUB. “As a department, our ultimate how procurement has changed at goal is to provide a centre of expertise, AUB over the years. “Purchasing provide superior value to our university as a function was perceived as users and optimise the performance an accessory component in the of the organisation. Today we are university and was merely playing engaged with the users and the a servicing role,” Itani comments. faculty members from the initial Since early 2013, major changes have phases of when they identify their been introduced to the department needs,” Itani advises. “We are to address the challenges, providing to them guidance such as the need to and support through manage and control The American University all the phases of the the large database of Beirut is the oldest purchasing process.” of the suppliers university in Lebanon and Indeed, the and cope with the one of the oldest in the concept of optimum rapidly changing region. It was founded in value for money has technological become embedded advancement in everyday decisionin the field of IT, making management consolidate and centralise for all aspects of AUB contracting activity, and expenditure. “Our focus shifted develop a customer service section. towards improving the quality and “In order to address all these timeliness of our services, installing needs, we decided to restructure best practices, and increasing the organisation of the department,” awareness and use throughout Itani explains. The transformation the university,” remarks Itani. started by changing the name of the department from purchasing Major changes to procurement and contract With 28 years’ experience within administration. “The change

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AMERICAN UNIVERSITY OF BEIRUT

“It was difficult for the team to accept me as their supervisor being a young inexperienced female. I was able to prove myself through revamping the procedures and practices and introducing efficiencies into the process” – Hanan Itani Ramadan, Director of Procurement and Contracts Administration properly reflects the expansion of functions, evolution in the roles of the transactional base, and a more customer-focused type of operation,” she adds. “Later on, in early 2014, the first reports that were produced showed a positive impact on the sourcing process in terms of cost saving and in terms of timeliness of the operation.”

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The increased customer focus has certainly been of core importance to the department’s operations. “One of the key elements in improving our cost saving margin is innovation. Learning about users’ needs early in the process helps us better understand the requirements and research the market for economical alternatives,” explains Itani.

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Investing in training To achieve such transformation in procurement, significant investments have been made in the department’s staff. “In the department, we’re always investing in training and upgrading the skills of the team because we depend on the communications, knowhow and expertise of the team in procurement,” explains Itani. There are 22 employees within the team, spread across five units – supplier risk management, compliance and customer support, international sourcing, local sourcing, and contracts administration. Such investment in the team helps

to make AUB an attractive employer to the best candidates within the field. AUB has been ranked as one of the most attractive employers in the world by the 2018 QS Graduate Employability Rankings, due to its excellent reputation, benefits, and motivating work environment. AUB was also ranked the top university in the Arab region by the international QS University Rankings for the year 2017/18. “I would like to emphasise the importance of the leadership’s attention to and support of our vision and talent as a department,” states

Hanan Itani Ramadan

Director of Procurement and Contracts Administration Hanan Itani Ramadan is the Director of Procurement and Contracts Administration at the American University of Beirut. Over the past 28 years she has assumed various roles of increasing levels of responsibility in procurement, having started as Assistant Director of Purchasing in 1989, promoted to Director in 2002, and then Director of Procurement and Contracts in 2013.Currently, Itani manages a team of 22 members responsible for all procurement activities, strategic sourcing, contracting, and supplier management. While at AUB, Itani played an essential role in streamlining the procurement processes and implementing an e-procurement system where 90% of the transactions have been automated. Itani first earned a Bachelor Degree in Environmental Health, followed by a Masters Degree in Health Care Administration from the American University of Beirut in 1987, and received her CIPP in 2015. She serves on several administrative committees at AUB and is a NLPA member.

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Itani. “This played a major role in the success of the transformation. If we didn’t have the leadership, attention, and support we would not have been able to achieve this transformation.”

A bold future Having celebrated a major milestone last year, AUB as a whole is already focusing on the future. “This year, AUB launched a campaign called the Boldly AUB Campaign. This campaign looks ahead to the next 150 years because last year we celebrated our 150-year anniversary and now we’re looking ahead, we’re planning for the next 150 years. We have a long list of plans, expansions, and investments,” Itani notes. The five main components of the campaign are education and research, healthcare, innovation and entrepreneurship, community relevance, and sustainability. “AUB looks forward to creating new micro-economies, contributing to the flourishing of SMEs in Lebanon and the region,” she concludes.

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Narrowing the gulf in healthcare procurement Written by Fran Roberts Produced by Heykel Ouni

2016 marked the 40th anniversary of the first meeting of the Gulf Health Council, in Riyadh, Saudi Arabia. Today, regular meetings are held to discuss the health issues of concern in the states. Part of the Council is Gulf Joint Procurement programme, which ensures the standardisation of the medicines directory and medical supplies of all specialities across the GCC

he Gulf Health Council is a regional technical specialised organisation with its membership restricted only to the Cooperation Council States, plus Yemen. Within this organisation sits Gulf Joint Procurement programme. “The Council enjoys a legal impartiality and financial and administrative independence,” advises Fatthi Alkathiry, Director at Gulf Joint Procurement. The Health Council of the GCC aims to develop cooperation and coordination among member states in the preventive, curative and rehabilitative health fields, as well as other mutually beneficial activities. The idea of the joint procurement for medicine began in February

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1976, when the Ministers of Health of the GCC states requested that the Council form a technical committee among the states. The committee’s main objective was to study the possibility of member states benefiting from direct control, like the processes in Saudi Arabia and Kuwait. A second key objective was to standardise the purchase of certain medicines. “The set objective at that time was to study the development of a unified system for the registration and control of medicines and the development of a guide for medicines in the GCC states,” Alkathiry explains. “The Gulf Health Council for Joint Procurement seeks to standardise the directory

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Fatthi Alkathiry Director

A leading Procurement Director, currently working with in Gulf Joint Procurement for Gulf Health Council, Mr Fatthi AlKathiry focuses on developing the vision, mission and operational plans for Gulf Joint Procurement. Providing leadership, strategic planning and assurance for procurement administration, AlKathiry acts as the vendor management partner for all the business units, ensuring all relationships are strategically, culturally, and ethically aligned with GHCâ&#x20AC;&#x2122;s mission and values. Throughout his career with GHC, AlKathiry has continuously enhanced the organisationâ&#x20AC;&#x2122;s sourcing, procurement and performance management capabilities by attracting public and private hospitals to become participants in Joint Procurement. With a proven ability to develop, maintain and execute procurement policies, Al Kathiry consistently supports the Joint Procurement mission and meets the stakeholder requirements, facilitating a seamless implementation and adoption of solutions.

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“The Gulf Health Council for Joint Procurement seeks to standardise the directory of pharmaceutical devices and medical supplies throughout the Gulf Joint Procurement programme” –Eng. Fatthi Alkathiry, Director, Gulf Joint Procurement

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of pharmaceutical devices and medical supplies throughout the Gulf Joint Procurement programme, with the controls in place across the GCC member states.”

High-quality medicines With vast potential to impact the lives of others, the Gulf Health Council takes very seriously putting the interests of citizens in the Gulf countries above all considerations. With a growing population in the region, healthcare is set to become even more important. The GCC healthcare market is projected to grow at a 12.1% compound annual growth rate (CAGR) from an estimated US$40.3bn in 2015 to US$71.3bn in 2020, according to Alpen Capital. “The mission of the Gulf Joint Procurement programme is the development of a unified directory for medicines and medical supplies for all specialities, and the provision of high-quality medicines, medical supplies and devices to member states and participating hospitals, to the right location, at the right

time, and from the manufacturers registered with the Central Registration Programme, at fair prices. The ambition of Gulf Joint Procurement programme is to be the benchmark in the provision of standardised procurement services, based on global procurement standards,” reveals Alkathiry. In order to adhere to global procurement standards, Gulf Joint Procurement programme coordinates the process of selection, standards specification, and quantity of pharmaceuticals, medical supplies, and equipment required by Ministers of Health in member states, as well as standardising the preparation of tenders.

Ensuring safety The most prominent services that indicate the extent of progress and modernisation in a country are those services that concentrate on sustained health welfare and safety of the people. To this end, Gulf Joint Procurement programme ensures that all of the medicines it procures meet the highest safety

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standards. “We supervise the process of receiving samples and ensure the safety of their use, storage and preparation during the tender stage,” states Alkathiry. The tendering services offered by Gulf Joint Procurement programme are possibly the most integral ones to the success of achieving its mission. “We receive tender documents, and source and prepare schedules of comparison between tenders. Also, we plan, coordinate and prepare meetings of the joint procurement committees,” reveals Alkathiry. “We follow-up on the recommendations of the executive committee and decisions issued by these committees and coordinate with the member states as to the combined quantities required. Finally, we announce the results of the purchase decision and recommendations, and we receive, verify and study complaints and objections concerning tenders, and refer to the supplementary commentaries.”

The factor of time Many may not know that time is

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“THE AMBITION OF GULF JOINT PROCUREMENT PROGRAMME IS TO BE THE BENCHMARK IN THE PROVISION OF STANDARDISED PROCUREMENT SERVICES, BASED ON GLOBAL PROCUREMENT STANDARDS” –Eng. Fatthi Alkathiry, Director, Gulf Joint Procurement w w w. s u p p l y c h a i n d i g i t a l . c o m

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Eng. Fatthi Alkathiry, Director, Gulf Joint Procurement, taking part on a discussion panel for a healthcare forum the most important factor in the procurement process. “The most important reasons for the success of Gulf Joint Procurement programme is committing to the time of tendering over the next 40 years. The whole tendering process takes around four months, starting from the directory updating meeting and preparation for tender until the tentative notice of award,” explains Alkathiry. “This attracted several bodies, other than the health ministries in the member states, to apply for participation in the Gulf Joint Procurement programme.”

Upgrading the health sector In order to achieve such success, Gulf Joint Procurement programme collaborates with a number of other key players. “Our partners are the ministries of health in the GCC. We have six countries there – Saudi Arabia, Kuwait, United Arab Emirates, Oman, Bahrain, and Qatar. They are members of the Gulf Health Council. Also, we have more than 20 public hospitals like King Fahad Medical City, King Faisal Specialist Hospital in Riyadh, and King Abdullah Medical City in Mecca,” states Alkathiry.

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Fatthi Alkathiry, Director, Gulf Joint Procurement “All suppliers from our programme are our partners also. We have about 18 categories of materials. “The mission of the Health Council is to promote and upgrade the health sector in member states by providing constructive initiatives and responding to the regional and global health issues. We challenge and support the decision-making process, and the health policies with the aim to strengthen the cooperation and integration between the member states, the health sector and among

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that, achieve the Council objectives. Its values are accountability, professional leadership, continuous development, evidencebased decisions, creativity and innovations, quality, cooperation and coordination, integrity and ethics.” Such partnerships and values have been key to the success of Gulf Joint Procurement programme. “I think we’re not successful without three main key factors – coordination, collaboration and integration,” Alkathiry comments. “Without these

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“THE AMBITION OF THE GULF JOINT PROCUREMENT PROGRAMME IS TO BE THE BENCHMARK IN THE PROVISION OF STANDARDISED PROCUREMENT SERVICES, BASED ON GLOBAL PROCUREMENT STANDARDS” – Eng. Fatthi Alkathiry, Director, Gulf Joint Procurement

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three main factors, the 40-year old Gulf Joint Procurement programme would not be successful.”

business, so if you don’t encourage your people to innovate, you are wasting your resources, I believe.”

Encouraging innovation

Automation for the people

Out of 50 employees within the Health Council, seven employees are serving in the Gulf Joint Procurement programme. Alkathiry strives hard to attract and retain the best staff to ensure the continued success of Gulf Joint Procurement programme. “I create a workspace where every employee is engaged by the work they do and inspired by who they work for. Without good staff you will not achieve your goal. The management structure achieves this by encouraging everyone to innovate. “It doesn’t have to be earthshattering. It can be a small change, but innovation equals improvement. Innovation must streamline, must enhance, must endure. Innovating our business by looking for ways to reduce expense, speeding up or streamlining processes, improving customer interactions and experience, making our products or services better. Innovation drives

Such innovation is central to Gulf Joint Procurement’s future plans. “I’m working now with my team to automate our processes. There are plans in the future, to implement a new system for the Gulf Joint Procurement programme. Currently we have requirement to automate our process, and link with the GCC countries and the suppliers to make quotations align, and to organise everything historically. The second thing - there are plans for expansion of the service procurement to market our services to the private hospitals to join in our programme,” Alkathiry concludes.

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The Tetra Pak

IMPACT Written by Nell Walker Produced by Craig Daniels

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With innovative technology, sustainability, and a focus on people, Tetra Pak is thriving in Saudi Arabia. Managing Director Niels Hougaard elaborates on why

he name Tetra Pak is synonymous with innovative packaging solutions and processing technologies for food and beverages around the globe. In the early 70s, Tetra Pak started its major installation in Jeddah, Saudi Arabia. Today, the converting factory delivers around 10bn packaging products to food and beverage companies a year. Overseeing the business is Niels Hougaard, Managing Director of Tetra Pak Arabia Area and Cluster Leader, Sales Management Greater Middle East and Africa (GME&A), Having worked in the company 22 years, in roles from Product Manager to Sales Director and beyond, Hougaard is well-placed to take the helm at Jeddah, where key business drivers are end-to-end

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customer service and innovation. “Tetra Pak has built its business model around three different services: providing packaging materials, providing packaging and processing equipment, and providing technical services to support those,” says Hougaard. “These are the three pillars of our business, and we are building the food industry in this region by providing this service. “In Tetra Pak Arabia, we focus on driving innovation together with our customers; we are the first in the world at many things we do, bringing new ideas and solutions to our customers to support their growth as well as investments to our factories. Tetra Pak’s large footprint in Saudi Arabia ensures that its impact on the industry is heavy-hitting, and that it is ahead even of many of

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the company’s other international facilities. In 2015, the Saudi factory was fortunate enough to become certified by the Japanese Institute of Plant Maintenance (JIPM), one of the top manufacturing standards in the world. It was also awarded the Factory of the Year achievement in 2013, and is certified to ISO 14001 standards for its sterling work in sustainability and energy management. “We kept applying for certifications at higher and higher standards,” Hougaard explains. “We’ve reached a level of manufacturing excellence that sets us apart even in a global Tetra Pak has the largest aseptic packaging factory in the region

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context, thanks to a high level of expertise and the passion of our team. It differentiates us in the region.” This arm of Tetra Pak boasts the largest aseptic packaging factory in the region and Tetra Pak’s largest straw factory in terms of volume produced, and in the nearly 50 years of existence Number of in Saudi Arabia, the nationalities working packaging produced for at Tetra Pak’s the food industry also Jeddah facility been used in Europe, parts of the Americas, and the Far East. The company specialises Specialising in dairy, drinks, and in packaging for dairy, liquid foods, Tetra Pak packaging is drinks and liquid foods light and economical, offering high levels of protection and ease of use. Tetra Pak looks to industry trends for working out new ideas, and a current project is looking at more convenient packaging solutions. Hougaard says: “We are now providing young consumers with new

50+

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developments of packaging that are environmentally friendly and easy to carry on-the-go. Not just dairy or juice, but light meals too, to open and consume immediately without the need to refrigerate. The market is moving towards convenience, and we are ready to provide the technology that meets the customer demand. “We’re always keen to bring in new ideas to push the value of continuous innovation,” Hougaard continues. “We bring new solutions to the market at global and local levels. Recently, we have adapted our factory

“We’ve reached a level of manufacturing excellence that sets us apart from other factories, thanks to a high level of expertise” – Niels Hougaard - Managing Director of Tetra Pak Arabia Area

T E T R A PA K G R O U P

in Jeddah to meet new and even more consumer-friendly packaging solutions, based on technology that we used to import from Turkey. With this technology update we can produce it here. With this we became more effective in serving our local customers in a faster and cost-effective manner. So, itâ&#x20AC;&#x2122;s always about bringing in new ideas and bringing new concepts to work â&#x20AC;&#x201C; for our customers, the

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10bn+ packs approximate volume of food and drink packaging units made by Tetra Pak each year

MIDDLE EAST

Arabian consumers and for ourselves – to be able to perform better.” Tetra Pak’s innovation is as much about technical solutions as packaging solutions. One of the company’s latest innovation is HoloLens, which allow our technical experts to work remotely with customers on diagnostics and repairs. Service engineers use Microsoft’s HoloLens devices to guide customers

along the process, ensuring positive relationships and a technological edge. “We work with our customers as partners,” says Hougaard, “and we always seek to grow together with them. We provide them with leading edge technologies to help them maintain their competitiveness, and at the same time we develop ourselves and

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keep Tetra Pak Arabia an exciting place to work. Of course, it is through our Tetra Pak’s people we make it happen. With around 15 nationalities working together at the Jeddah facility, the company’s motto is ‘diversity is our strength’, and it believes that the right people with the right qualifications are best suited to grow with the business as it does. Working with partners also extends to Tetra Pak’s collaboration with the Forest Stewardship Council (FSC), the only internationally recognised standard-setting organisation for responsible forest management. The company just celebrated a decade of this certification to emphasise its commitment to maintaining best practices in handling trees throughout the entire supply chain of its operations. Hougaard adds: “Apart from our technology investments, we work to help achieving the Saudi National Transformation Plan 2020 on two pillars; Developing the Tetra Pak Technical Training Academy to equip local talents with knowledge required for their job roles. Secondly, working on empowering women by hiring more females into important jobs into our facility.” Manufacturing is, after all, an integral part of Saudi Arabia’s 2030 Strategy. It is Tetra Pak’s responsibility to help accelerate that and be an example for smaller industry players, supporting economic development and continuously improving from within. “We remain excited about our long-term presence in Saudi Arabia, and for our contribution to innovation and making food safe and available in The Kingdom,” Hougaard concludes.

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“We’re always keen to bring in new ideas to push that core value of continuous innovation” – Niels Hougaard - Managing Director of Tetra Pak Arabia Area

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Energizing the

supply chain Written by Nell Walker Produced by Denitra Price

Troy Zerbe, SVP Global Supply Chain & Quality at A123 Systems, describes the companyâ&#x20AC;&#x2122;s ambitious growth plans and the support provided by an everevolving supply chain infrastructure

A123 SYSTEMS

ne of the jewels in Michigan’s vast manufacturing crown, A123 Systems has brought battery and energy storage expertise to the market since 2001 – and the business hasn’t stopped innovating since. Following a string of high-profile collaborations to create bigger and better lithium-ion solutions, the business is blossoming, and currently has plans to grow between three and five hundred percent. This ambition led Troy Zerbe, SVP Global Supply Chain & Quality, to find himself drawn to the business by the opportunity to be, in his own words, “part of something great”. The role was a perfect match for Zerbe’s background, allowing him to start making impactful changes to the business right from the beginning. On stepping into his role, he discovered that he was becoming part of a passionate, dedicated team that was ready to drive the substantial growth A123 was forecasting. Zerbe set about transforming and streamlining the company’s supply chain, which was no small task, but first he had to fully understand the entire company’s processes. “We touch everything from nose to toe,” he explains. “We start with R&D, which we’re very involved in with regards to technology development and new battery cells – it’s a very IP-rich environment. During the cell development especially, it’s important to have the right suppliers engaged, so we have purchasing experts and commodity experts involved in R&D, with

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“THE SUPPLY TEAM IS AN INTEGRAL PART OF THE BUSINESS AND WE ARE ENGAGED IN ALMOST ALL ASPECTS OF OUR OPERATIONS, MANAGING THE QUALITY, TECHNOLOGY, COST, AND DELIVERY OF OUR SUPPLY BASE” – Troy Zerbe, SVP Global Supply Chain & Quality

the purchasing team and suppliers coming in to help develop the technology needed for our products.” The concept of a ‘flawless launch’ is taken very seriously by A123 and Zerbe, so the business utilizes every type of expert at its disposal, as well as tracking the execution of the development of programs to ensure all quality checks are in place, both from a supply chain standpoint and a material supply standpoint. A commodity management team

oversees procurement – including supplier strategy, sourcing, negotiation, and contract management – which is another aspect of the business where A123 expects perfect parts with zero defects. “We also manage all our lean logistics and material handling, so we really are involved from beginning to end,” says Zerbe. “The supply team is an integral part of the business and we are engaged in almost all aspects of our operations, managing

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the quality, technology, cost, and delivery of our supply base.” While it is truly impressive that A123 is so involved in every single aspect of its own operations, this in-depth and far-reaching approach can only work with every affected party’s involvement. Knowing this, Zerbe put together an executivelevel supplier council shortly after joining the company, which reached all the way to the A123 CEO. “We get together quarterly and the items that we talk about are key supplier strategies, who are the suppliers that can help us along the way, and how they can help us with our growth strategies,” Zerbe explains. “We talk a lot about commodity pricing – such as the costs of cobalt, nickel, copper, and aluminum – and risk mitigation plans, putting in place strategies around how we manage that to minimize financial risk to the business. We also discuss the KPIs I’ve put in place because it’s important for the leadership team to understand them. That illustrates the continuous improvement we’re achieving month over month.”

This level of communication is vital for A123. “Nobody likes surprises,” Zerbe says, and ensuring the team is aligned is the best way of staying on course. That open dialogue also extends through the supply chain to vendors and suppliers; it is essential to keep them close too, due to the complex nature of A123’s technological products, as well as them being vital to the business accomplishing its goals.

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“We’re making sure we have the right people with the right training, and the right development in the right locations of our growth,” he explains. “We’ve done some adjusting. The majority of the electronic component requirements today are in China, so we’re making sure we are staffed up appropriately there. We’re growing significantly in Europe and are building a team there with a Michigan expert to lead the supply chain operation. We’ve also done a lot of internal alignment around engineering, procurement management, cells, and operations.” This is also where Zerbe’s KPIs fully come into force, to track a baseline of how A123 is performing and what continuous improvements need to evolve or be implemented. Many procedures have been introduced to ensure perfect execution and better development of supplier relationships. Suppliers, partners, and staff form A123’s most valuable commodity – people – and are the most important element of the business. “I’m a strong believer that supply chain is a team sport,” says Zerbe. “We have to continue to work

“I’M A STRONG BELIEVER THAT SUPPLY CHAIN IS A TEAM SPORT” – Troy Zerbe, SVP Global Supply Chain & Quality

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Pursue for Quality Excellence Guangzhou Tinci Materials Technology Co., Ltd is a professional manufacturer that is concerned with design, development and production of lithium-ion battery material, personal care ingredients and silicone rubber. p With the advantage of integrated production of electrolyte and its main raw material LiPF6, Tinci has developed into a leading electrolyte enterprise in China.

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internally with engineering and procurement management to make sure that we’ve got a cohesive team working on all supply chain initiatives. Of course, we also have to continue collaborating with our suppliers, developing them and having them help us achieve what we want to achieve.” Michigan is swimming with technological and engineering talent, fortunately for A123, and the business has close relationships with higher education facilities to ensure a skilled pool of workers for years to come. With product development and supply chain evolution constantly improving and in flux, fresh eyes in and on the industry are vital. It is part of what enables A123 to stay nimble.

“We have to be flexible to what’s going on in the market,” says Zerbe. “We’re a nimble and quick company because we’re fairly young, so we can react quickly to industry needs. What that means for us, from a supply chain point of view, is that we have to continue developing our team, working with our supplier base, and making sure those suppliers

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A123 SYSTEMS

Hybrid Bus Application

want to collaborate with us and help us develop the technology we need to be competitive.” The swift time to market practiced by A123 gives the business an edge when it comes to customer demand – something that changes and increases constantly. Expectations are higher than ever, especially in the demand for higher density batteries with more energy, and a lot of innovation has to be poured into that.

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So how does the future look for A123? “We’re working very closely with several suppliers on innovation and technology developments around anode and cathode powder, for example,” says Zerbe. “Separators and electrolytes are also a key ingredient in our formulations, so we’re working closely with them. Electronics are a significant portion of our buy and we’re aligning ourselves globally so we

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A123 Systems Year founded

2001

have a worldwide supply base, and this is all set to create a need for faster-to-charge, more powerful, lighter products. Innovation requirements are going to be high for the next few years.” With all the natural advantages A123 has as a fast-growing group of experts in a competitive market, suffice to say it’s been a rewarding year for the business, and Zerbe is deeply proud of what has been accomplished.

“We have made significant improvements on KPIs; the dedication to improving our systems and processes has been something that we’ve really focused on, as well as collaborating globally with the A123 group in making sure we’re behaving as a global team, and continuing to nurture those close relationships with suppliers,” he concludes.

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MAKING PALLETS

SMARTER IOT WITH

Written by Laura Mullan Produced by Denitra Price

By harnessing the Internet of Things (IoT), RM2 International S.A. has introduced a connected smart pallet in the supply chain. With its cuttingedge design and technological innovation, this pallet is helping to improve quality in supply chains, achieve sustainability goals and control costs

RM2 SA

very day billions of items, from fresh foods to mobile phones, move through complex supply chains all across the world. At some point or another, many of these goods rely on shipping pallets; a simple, unassuming tool, but one which has helped to revolutionize supply chains and encourage e-commerce growth since they were first introduced. Now, with the help of RM2, it seems that shipping pallets are revolutionizing the industry once more. With its cutting-edge BLOCKPal™ pallet, RM2 has established itself as an innovator in pallet design, manufacture, supply and logistics management. Boasting a more reusable, durable design, and harnessing the Internet of Things (IoT), the BLOCKPal pallet is helping to enhance supply chains by making them more sustainable, cost-effective, and traceable. Using leading expertise and technological prowess, RM2 is transforming how we ship items, and it seems that the company’s innovative ethos is at the heart of its success. “At its core, I would characterize RM2 as a research and development

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company,” explains Paul deRoulhac, EVP of Global Supply Chains at RM2. “We spent the early years of our existence really focused on material engineering and the manufacturing process, and the result of that was a shipping pallet that was head and shoulders above everything else that had ever come into the market.” Durability and strength Comprised of state-of-the-art composite materials, the company’s flagship BLOCKPal pallet offers remarkable strength that goes far beyond anything else in the material handling Supply Chain. This durability not only reduces product damage, worker compensation, and system downtime, it also ensures that the pallet has a longer life cycle and is more cost-effective. “Virginia Polytechnic Institute and State University conducted extensive tests on the BLOCKPal pallet,” notes deRoulhac. “According to the Center for Packaging and Unit Load Design at Virginia Tech, the BLOCKPal pallet outperforms industry standards and can sustain upwards of 150 rugged

S U P P LY C H A I N

RM2 is transforming the way items are shipped and tracked

trips* before requiring maintenance or repairs, resulting in an ISO 8611 and ASTM 1185 accredited pallet.” “To put that in perspective, one-way traditional wooden pallets last approximately three to five trips, whereas the unique modular design of the BLOCKPal pallet makes it easy to repair,” he adds. “Combined with

the ability to track and trace which eliminates loss, the RM2 pallet has the potential to become an infinite asset.” Helping to achieve sustainability goals Wooden pallets are a critical building block of modern-day supply chains, with billions currently in circulation.

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RM2 SA

“Our objective is to drive actionable intelligence that can help drive efficiency in the supply chain” – Paul deRoulhac, EVP Supply Chain Solutions

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Broken or damaged pallets often end their life cycle in landfill sites and so the BLOCKPal pallet not only offers a cost-effective alternative, it also helps customers achieve sustainability and environmental goals. “Our BLOCKPal pallet is also about 25% lighter than a comparable block pallet and this really promotes fuel savings and efficiency from a weight standpoint,” comments deRoulhac. “The process of moving pallets around is also much more efficient because we can get 630 unloaded pallets into a truck versus standard block pallets where there can only be about 540 in a load. In this way, we’re reducing weight, the number of trips, the number of deliveries, and the number of trucks on the road, which is having a positive environmental impact.” The connectivity of the RM2ELIoT Smart Pallet to the AT&T LTE-M network unlocks the benefits of the reusable BLOCKPAL pallet. Pure Strategies, a US sustainability consulting firm, conducted a peerreviewed life cycle assessment comparing the environmental impacts of the BLOCKPal pallet to those of

a standard multi-trip wooden pallet. Utilizing this data, AT&T has conducted a case study on the RM2 Smart Pallet called ‘Unlocking the Potential of Connected, Reusable Pallets This study concluded that the connectivity of the RM2ELIoT Smart pallet enables the user to potentially avoid 640 metric tons of CO2 per year, which is equivalent to 72,000 gallons of gas for every million pallet trips. Based

RM2 Founder Matthew Gilfillan at ATT press conference

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RM2 SA

Booth of team members at Pack Expo

on this study, if just 5% of the estimated 10bn worldwide pallets switched to the reusable RM2ELIoT pallet, it could drive a reduction of 7.3mn metric tons of CO2 or 818mn gallons of gasoline per year.

Health and safety From retail to the pharmaceutical industry, the BLOCKPal pallet is suitable for many major operations. One Supply Chain where the pallet is particularly useful is the food and beverage industry. As a result, the

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company is keen to address one of the industry’s most pressing concerns - health and safety. “Designed from FDA and USDA approved material, the pallet is completely impermeable to water as well as bacteria,” says David Kalan, RM2’s VP of Marketing and Business Development. “From a hygiene standpoint, this reduces contamination risks as bacteria can’t penetrate the material plus the pallet can be easily cleaned with a basic industry wash process. I would say our pallet is a vast

S U P P LY C H A I N

‘REUSABLE PALLETS ARE UP TO 20% MORE COSTEFFECTIVE THAN NON-REUSABLE ALTERNATIVES’ improvement over wood variations. In this way, hygiene and cleanliness are a huge selling point for our platform.” “Based on the nature of the materials that we’re using, it’s also fire retardant, which is a factor in the pallet space,” adds deRoulhac. With Dow as a key partner to RM2, the company is able to operate at the cutting edge of material science to evolve the RM2 pallet and further enhance the customer’s experience. With full access to the Dow product portfolio and their continual

assistance in RM2’s R&D program, using cutting-edge composite research is redefining the global standard for logistics innovation. The smart pallet The BLOCKPal pallet boasts a range of admirable qualities but perhaps its most impressive feat is that it is embedded with a RM2ELIoT, a wireless device that communicates to the Internet of Things, turning it into a smart pallet. Working closely with AT&T, the company has

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S U P P LY C H A I N

developed an Electronic Link to the Internet of Things, commonly known as RM2ELIoT. This is a track and trace monitoring device which aims to advance pallet and supply chain security, all whilst meeting the demands of the fourth industrial revolution. By responding to industry trends such as IoT, the company has remained ahead of the curve, offering a pallet which allows shipments to be tracked precisely from point A to point B. Through this innovation, RM2 is helping to drive actionable intelligence which will encourage efficiency in supply chains. Knitted into the very fabric of the BLOCKPal pallet, the ELIoT software is completely maintenance free, dynamic, and flexible. “The pallet triggers a signal through the AT&T network - an IoT signal - that’s composed basically of five data elements: latitude, longitude, date, time and pallet ID,” deRoulhac explains. “Those data elements are transmitted when a pallet starts moving, if it’s delayed in transit, and when it arrives at its final destination. That gives you a very granular view of everything that has happened between the two traditional data points that you

used to get - shipped and received.” As well as this, the pallet also captures shock events and temperature, which offers visibility and transparency to supply chains. “If the pallet experiences a shock event, you’ll know the exact date, time, and physical location of when it happened,” says deRoulhac. “Therefore, you can ascertain who was in possession of the pallet at the time and you can react accordingly. It gives much more visibility into events that were, up until this point, probably binary.” Easy application Pallets may seem like an unassuming tool, but at RM2, the team is helping to revolutionize the industry by harnessing the potential of new technologies such as the Internet of Things. However, whilst this technology may transform the supply chain discipline for the better, it doesn’t need to overhaul a company’s internal infrastructure. Indeed, one the most surprising aspects of this innovation is its easy application. “I think one of the key attributes that we’re bringing to the market is that it’s really a turnkey solution, in that

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RM2 SA

“At its core, I would characterize RM2 as an innovative research and development company” – Paul deRoulhac, EVP Supply Chain Solutions

S U P P LY C H A I N

If a company managing 1mn one way wooden pallet trips per year were to fully implement BLOCKPal pallets equipped with RM2ELIoT connectivity, that company could reduce emissions by 640 metric tons of CO2 every year

there’s no additional infrastructure required,” explains deRoulhac. “The pallet is basically self-contained, the communication is self-contained, and we can very easily make that level of data available to our customers. We’re really replacing something that already exists within the supply chain today, a shipping pallet, and able to deliver an IoT solution with no upfront implementation costs or infrastructure expense. By embracing technological trends and cutting-edge design, RM2 has proved that although shipping pallets may seem like a simple tool, they can have a significant impact if utilized effectively. “With this technology, our objective really is to drive actionable

intelligence that can help drive efficiency in the supply chain,” deRoulhac says, “I think, ultimately, that’s what our pallet solutions are doing.” Total pallet management RM2 is not just delivering a smart pallet, it also provides a total pallet solution through a comprehensive logistic network. Programs are designed to meet the individual company’s needs which include both internal and external loops. With the support of logistics partners such as SCR Air, who is constantly striving to provide the best in class service while delivering the best possible cost, RM2 is able to deliver a nationwide logistics network that supports its clients’ solutions. w w w. s u p p l y c h a i n d i g i t a l . c o m

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Millstone Medical

DRIVING FORWARD MEDICAL SUPPLY CHAINS Written by Fran Roberts Produced by Denitra Price

MILLSTONE MEDICAL

Millstone has over 15 years’ experience in organizing outsourced supply chains. With an unparalleled focus on quality and safety throughout its operations, the company is now working towards the next big step in its international expansion

“M

illstone started in 2000 as a non-sterile packaging company,” states Tom Williams, General Manager, Fall River. “We have since grown to provide multiple medical device services. We employ just over 500 people at three sites. Our major milestones? In 2008 we expanded to our distribution facility in Memphis, Tennessee. In 2009, we expanded into a new facility in Fall River, Massachusetts, to increase our clean room capacity. In 2014, we expanded our Fall River facility to add a second clean room and we also expanded to a 150,000 sq ft distribution facility. We’ve also invested in developing a package testing laboratory in house.” Brad Schwarz, General Manager, Olive Branch, adds: “We increased our space in Olive Branch in

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2015 by adding another 125,000 sq ft to our facility, increasing our total to 276,000 sq ft.” Such facilities are key to the services that Millstone offers today. “In our Fall River facility, we do postmanufacturing services. We can conduct packaging validations. We can inspect clean and sterile package medical devices, so as to ensure our customers’ products are getting to market as safely and efficiently as possible,” Williams advises. Focus on quality Millstone offers clean room packaging, medical device specific warehousing, finished goods distribution, loaner kit management, advanced inspection and after-market services – all with an unparalleled focus on quality. “I’d say we have a highly developed quality

S U P P LY C H A I N

“WE’RE PROUD OF THE INITIATIVES THAT WE’VE TAKEN WITH THE QUALITY SYSTEM” – Tom Williams, General Manager

Tom Williams General Manager

Tom joined Millstone in 2008. Prior to joining Millstone, Tom was Regional Director for Challenger Sports Corp., responsible for sales and marketing in the North East USA. Tom received a Bachelor of Science degree from the University of Wales in Cardiff, UK and a Masters in Business Administration from Babson College.

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Peter Huie VP Supply Chain & Facilities Peter joined Millstone in 2016. Prior to joining Millstone, Peter held various senior operational and business management positions with divisions of Medical Specialties Distributors, Aramark Corporation and RedcatsUSA. Most recently, he served as Senior Vice President of Operations and Logistics for Medical Specialties Distributors, the nation’s leading alternate site patient supply chain solutions provider in the United States. Peter brings over 25 years of supply chain operations and logistics experience to Millstone. He received a Bachelor of Business Administration from Merrimack College and completed advanced studies in Supply Chain Operations from Massachusetts Institute of Technology.

system,” Williams notes. Backing this up are a number of registrations and certifications, including FDA registration, ISO 13485 registration and VAWD (Verified-Accredited Wholesale Distributor) accreditation. “We’re proud of the initiatives that we’ve taken to improve Millstone’s overall quality system that truly considers the customer in all phases

of the business. We’ve recently completed a fully electronic quality control system throughout the entire supply chain,” explains Peter Huie, VP Supply Chain and Facilities. Such a strong commitment to quality has clearly been key to Millstone’s success over the years. “Our ability to be nimble, is number one. We are able to create processes,

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MILLSTONE MEDICAL

Brad Schwarz General Manager

Brad joined Millstone in 2008. Prior to Millstone, he served as Materials Manager at Innovative Spinal Technologies and was responsible for managing operations from forecasting to procurement through distribution and loaners. Before IST, Brad spent 15 years with Smith & Nephew Endoscopy, where he managed operations in the instrument/implant manufacturing groups. In addition, Brad managed the Product Service Group for Smith & Nephew, which included returns, repairs, and loaner programs. Brad recently completed The Tuck Executive Program at Dartmouth College in July 2015.

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MILLSTONE STARTED IN 2000 AND EMPLOYS JUST OVER 500 PEOPLE AT THREE SITES

Millstone - Memphis

and quality processes, quickly,” advises Williams. “And our focus on quality has definitely been the biggest driver of our success, the fact that our customers can come into our facility and understand immediately that we match their commitment to quality.” Alongside quality sits a commitment to customer service that has helped Millstone to achieve such success. “I think one of the things we like to pride ourselves on as well is that Millstone has never lost a major customer. So, I think that’s a tribute to our culture of quality and our

culture of customer service being our number one priority,” Huie enthuses. This culture within Millstone drives everything that the company does. “We are a relatively flat organization, where we empower individuals to make the right decision, and the right decision, ultimately, is what is right for the patient,” Williams advises. “The products that we touch on a daily basis impact the lives of patients, and we ensure that our culture drives decision making but ensures that we are living up to our obligation to service that patient.”

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MILLSTONE MEDICAL

“WE EMPOWER INDIVIDUALS TO MAKE THE RIGHT DECISION, AND THE RIGHT DECISION, ULTIMATELY, IS WHAT IS RIGHT FOR THE PATIENT” – Tom Williams, General Manager A strategic approach In order to maintain such high standards, Millstone relies on its workforce, and in turn has put in place measures to help attract the best candidates. “We’ve recently invested in a senior level human resources person. We’re taking a

more strategic approach where we’re approaching schools, colleges, to get a pipeline of qualified, competitive candidates,” comments Williams. “So, our approach is to get the best possible people early in their career and help them develop.” Millstone’s trained industry

Millstone - Fall River

Millstone offers quality critical inspection cleaning and packaging solutions to the medical device industry 208

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S U P P LY C H A I N

personnel, state-of-the-art equipment and effective processes and protocols provide an all-encompassing solution for medical device manufacturers. “We can manage the entire back end of a client’s supply chain, meaning we can do all of their distribution needs, from finished goods to loaner kits. Loaner kits being the instruments that are used to deliver the implants. We can turn those around, bring those in, inspect them, replenish them, have them ready for another surgery within 24 hours, and ship those out,” advises Schwarz. “We can also bring in field returns. As the field compiles inventory, they can send them back to us and we can inspect it, repackage it if necessary and put it back in the inventory. And we can also do mechanical

inspection of brand new products, so right from the manufacturer, do a full mechanical inspection, and then package them up again and have that ready to go out for surgeries.” EU expansion Already supplying domestically and to Canada, Millstone plans to expand its footprint in the future, targeting the EU within the next 18-24 months. “The plan is to expand internationally, as well as expand the service offerings that we’re providing. We’re concentrated in orthopedics, today, and our plan is to explore different verticals which require the same high levels of quality and process controls that we deliver today,” Williams concludes.

Millstone has 15000 square feet of class 10000 ISO7 rated operating space

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Well-established and respected in its region, The Guthrie Clinic is set to expand even further thanks to the transformative supply chain strategies laid out by VP Procurement Grace Jackson and her team Written by Nell Walker Produced by Denitra Price

BUILDING A HEALTHY

SUPPLY

CHAIN

THE GUTHRIE CLINIC

hat began as a dedicated medical group in 1910, The Guthrie Clinic, now an entire health system known as Guthrie, has stamped its mark on northern Pennsylvania and southern New York with over a century of high quality care – but like any longrunning business, Guthrie requires the occasional transformative update. Enter Grace Jackson, VP Procurement – Supply Chain for the business, who is perfectly placed as someone with a long history of roles in the medical business to take on this task. On stepping into her role, Jackson set out to rethink, reshape, and restructure Guthrie’s supply chain. The goals: heightening efficiency, driving down costs, and improving customer care, all of which can be achieved through a combination of technological advancements, better processes, and the human touch. The main stumbling block became apparent almost as soon as Jackson became involved just over a year ago; like most healthcare organizations, Guthrie was holding onto some legacy systems and outdated

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processes that required a full overhaul. Fortunately, Jackson and her team were prepared to tackle this issue. “We had multiple disparate systems, manual processes, and a lot of status quo going on,” she explains. “We really needed to be able to raise the importance of the supply chain to a strategic level.” Standardization is an ongoing project. “We have a lot of systems in place, but they’re not really integrated; they don’t talk to each other. So, we wanted to achieve a number of things in terms of automation and integration, better visibility with regards to business intelligence, and improved reporting across the organization.” Jackson identified exactly what was needed, starting from the top down. Making management understand the importance of creating a supply chain strategy was a priority, before a vision could truly be defined and articulated. Guthrie now has this vision in place, with a series of goals specified, but a lot of ongoing work needs to be done. “We want to use the technology as an enabler,” says Jackson. “We didn’t want to just go out and seek

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“If we continue at the pace we’re going, Guthrie will become a household name” – Grace Jackson, VP Procurement – Supply Chain

all the new technology and lay it on top of bad processes. There was a lot to do in terms of our operational performance and processes, taking the waste out of the system, and really trying to focus on those valueadded services we’re providing. Then – and only then – can the technology be layered on top as an enabler.” The challenge for Jackson and

her team was the concept of doing business in a different way, and the accompanying change management required. The focus on improvement meant that the vision has stayed the course regardless, as Jackson continued to implement lean methodologies around the supply chain, and use evidence-based workflow on the clinical side to bring

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THE GUTHRIE CLINIC

logistics and medicine together. collaboration. Historically we’ve “We are certainly seeing looked at ourselves [in supply chain] improvements,” Jackson states. as a support team – we’re here to “We’ve been able to standardize support the clinicians and physicians. across systems and across all our As part of this transformation, in entities so that we’re following the rethinking our place in the business same protocols as they relate to we’ve positioned ourselves not supply chain. For example, each of just as a support team, but equal our entities had a separate process partners. We have to work very just for our equipment request closely with medical professionals process, using different to understand how they’re forms – some manual, using the products and some automated to understand how it ties – but now we’ve to clinical outcomes. developed a committee “At first, their attitude – year the where everybody is was ‘Yes, we’re behind Guthrie Clinic participating together you,’ and I replied ‘I’d rather was founded and submitting have you beside us’.” requests through one The strictly-regulated executive-level team.” world of medical care means Value analysis has also been a both high levels of control and strong, focus, looking not just at product trustful relationships with partners. pricing but at utilization and variation Jackson specifies that the vendors of care. This is where the evidenceGuthrie utilizes must align with the based workflow comes in, feeding company’s vision, as well as bringing into the company’s ability to deliver their own value-added services. quality care. It is vital for Guthrie Guthrie relies heavily on its partners, that medical professionals are and some systems on this side of involved with this, says Jackson. logistical operations are not yet “You can’t do it without that integrated, making communication

1910

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Joseph A. Scopelliti, MD President and Chief Executive Officer of Guthrie

He joined Guthrie Clinic, Sayre, PA in 1984 and today is both the CEO and a practicing gastroenterologist at Guthrie. He has served in many roles within the Guthrie Clinic and Guthrie Healthcare System, including President of the RPH Medical Staff, Chair of the Quality Committee and Vice-President for Clinical Affairs for the Guthrie Clinic. He serves as a Clinical Instructor with the State University of New York Upstate Medical University at Syracuse, N.Y. and since 2005, he has also been associated with the University of Rochester, Rochester, N.Y., as an Associate Clinical Professor of Medicine

THE GUTHRIE CLINIC

Guthrie and Mayo Clinic Care Network

“We really needed to be able to raise the importance of the supply chain to a strategic level” – Grace Jackson, VP Procurement – Supply Chain all the more important when it comes to acquiring the intelligence and analytics required to inform decisions. “They must understand what their role is,” Jackson explains. “We can’t be working on goals that are misaligned.”

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Jackson and Guthrie wouldn’t have the communication skills necessary to so effectively handle its partners if not for the people at the source – the company’s staff. The journey towards gaining the required level of skilled employees has run

USA

Dr. Meyers Office Visit

parallel to the transformation of the supply chain, and as the largest employer in the region, Guthrie invests heavily in local talent. “We really had to come in and put together an entire strategy around people management and how we were going to attract, retain, and develop the talent available to us,” Jackson says. “Developing the talent includes getting the supply chain team we have in place on board with the new vision, and implementing the objectives and goals to manage their performance around that. It’s

no longer about time in service, but about performance to the standard and the strategies in place.” Short-term, Jackson and her team are in the midst of a three-year journey. That will, of course, evolve as healthcare and technology do the same, and the supply chain will alter accordingly. Integration continues, and eventually Guthrie will have all the technology resources to become self-sufficient without having to rely on third party services. “We’ve made tremendous progress,” says Jackson. “What

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“We can’t be working on goals that are misaligned” – Grace Jackson, VP Procurement – Supply Chain

Guthrie and Mayo Clinic Care Network Commercial we want to do is expand nationally. Guthrie is known for the great services they provide, so being able to expand to other communities is really what we’re trying to accomplish. Before that, we need to improve our speed and lower costs; at that stage, we can grow.” For as long as Jackson and her

team are excited about the escalation of this project and the growth of the business, it’s sure to thrive. “We’re drawing people from all regions and it’s just tremendous what’s been accomplished in the last year,” she concludes. “If we continue at the pace we’re going, Guthrie will become a household name.”

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Our energy source for the future: APPRECIATION.

THIS IS CLARIANT: SPECIALTY CHEMICALS CREATING VALUE We engage with the issues of the future. This approach is deeply rooted in our brand: we focus on appreciation – in all areas in which we are active. The result is innovative solutions to lower emissions, reduce raw material consumption, and create sustained added value. This is precious to us.