www.supplychaindigital.com
Ja nu a r y 2 017
MSF : SUPPLYING A SOUTH SUDAN EMERGENCY MEDICAL CAMP
Top 10 Supply Chain events in Q1 and Q2 2017
CIPS
Setting the standard for procurement
HOW ZTE IS TRANSFORMING ITS SUPPLY CHAIN How chinese tech giant ZTE is reaping the benefits of a supply chain transformation
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EDITOR’S COMMENT
NEW YEAR, NEW EVENTS HELLO AND WELCOME to the first Supply Chain Digital of 2017. Make sure you keep your diary up to date with the biggest and most important supply chain events of H1 by taking a look at our Top 10. We have a special diary feature from the frontline of a medical camp in South Sudan, written by Anup Ravi, Supply Logistics Manager for Medicins Sans Frontiers. The camp has swelled to more than 100,000 people seeking crucial medical aid and supplies, and Ravi is the man responsible for what is a unique and extraordinary logistical challenge. From the extraordinary to the everyday supply chain decision making, our profile on CIPS explains how the organisation offers support and guidance to CPOs around the world. We take a look at the organisation’s history and what it offers today. John O’Hanlon asks what lies in store for the supply chain of one of the biggest household names in media. Also featured this month is Victoria University and BraunAbility. I hope you enjoy the read. As ever please continue the debate at @SupplyChainD.
Enjoy the issue! Tom Wadlow Editor tom.wadlow@bizclikmedia.com
3
20 of the 20 Top Supply Chains
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SUPPLY CHAIN DIGITAL Official Media Partners | 2017
ORACLE
Modern Supply Chain Experience February 13 - 15, 2017. San Jose, CA / Convention Center Business expectations have changed, and supply chain professionals need to prepare for the cloud amidst a quickly changing industry. Oracle’s largest conference dedicated to supply chain solutions, Modern Supply Chain Experience 2017 (February 13-15, 2017 in San Jose, California), will prepare more than 2,800 supply chain professionals for the cloud and the future of supply chain through discussions on innovation, best practices, and strategies to modernize the supply chain for a strategic advantage. Designed for business leaders responsible for end-to-end supply chain solutions and supply chain professionals with a focused supply chain expertise, Oracle’s 5th annual conference will showcase more than 150 sessions across seven focused solution areas and feature important industry announcements. The premier conference will include discussions on innovations such as the Internet of Things, machine learning and artificial intelligence, including a keynote from Oracle’s Rick Jewell, SVP of supply chain applications development, on how supply chain leaders can use adaptive intelligence to enable every enterprise application to learn from interactions with an enterprise’s data to predict customer needs before they arise. Other industry visionaries set to speak at Modern Supply Chain Experience include:
• • • •
Cal Ripken, Jr., Major League Baseball All-Star, motivational speaker John Gattorna, consultant, author, and adjunct professor George Young, founding partner at Kalypso Stuart Whiting, SVP of logistics and network design at Schneider Electric
With valuable insights into supply chain advances, informational product demonstrations and special programs ranging from a Supply Chain of the Future exhibit with digitally enabled technologies to the Future Supply Chain Leaders Program that invites a select set of promising college students to participate in the conference, don’t miss the opportunity to attend Modern Supply Chain Experience. Register now and save $100 off the current rate by using the code 2017SCD. This discount cannot be combined with other offers or discounts.
CONTENTS
F E AT U R E S
PROFILE
CIPS: Setting the
10
standard for procurement TECHNOLOGY
Top 10 SUPPLY CHAIN EVENTS in Q1 and Q2 2017
20
A diary from
THE FRONTLINE 6
January 2017
LIST
26
34 ZTE Corporation
C O M PA N Y PROFILES
Asia
48
Al Ghurair Investment Middle East
68
Victoria University Australia
58
BraunAbility USA
28 - 30 March, 2017 // Mövenpick Hotel. Amsterdam
Transforming Chemical Supply Chains. Together Europe’s Leading Chemical Supply Chain Event
BE INSPIRED. Miguel Gonzalez Director - Global Logistics Dupont
Thomas Foerster Supply Chain Director BASF
Spo
www.logichemeurope.com
logich
20% OFF USE CODE: SCDD20
m
r.
. LEARN FROM:
r
Jan Roed
Head of Global Logistics Borealis
Joris Jellema
Global Head of Supply Chain Givaudan
onsors:
hem@wbr.co.uk
+44 (0) 207 368 9588
CIPS
CIPS: Setting the
standard for procurement The Chartered Institute of Procurement & Supply works around the clock and the globe to ensure that CPOs are equipped with the knowledge needed to lead supply chain operations Writ te n by : A L ICE YOUNG
CIPS
THE CHARTERED INSTITUTE of Procurement & Supply (CIPS) exists to “promote and develop high standards of professional skill, ability and integrity among all those engaged in purchasing and supply chain management”. CIPS is a professional body, working with organisations around the world to achieve excellence in both procurement and supply chain management. As a not-for-profit organisation, CIPS reinvests all of its income in advancing global best practice for the public good. The organisation operates under the mantra “thinking globally, operating locally” and this is evident in the volume of members, partners 12
January 2017
and people actively engaging with the organisation on a daily basis. CIPS as a community of over 115,000 people in over 150 companies. The organisation provides support and guidance through 200 study centres, 269 exam centres, 64 branches and networks worldwide all serving well over 360 clients in the public, private and third sectors. The numbers don’t stop there either, CIPS also holds more than 800 events per year reaching well in advance of 32,000 procurement professionals. Needless to say, CIPS represents a key player in the global procurement and supply industry.
CIPS PROFILE
'IN 1992, CIPS WAS AWARDED A ROYAL CHARTER IN RECOGNITION OF THE ORGANISATION'S LEADING ROLE IN SUPPORTING AND FURTHERING THE INTERESTS OF THE INDUSTRY' Royal standard In 1992, CIPS was awarded a Royal Charter in recognition of the organisation’s leading role in supporting and furthering the interests of the industry. A Royal Charter is only awarded by Her Majesty The Queen to a professional body that demonstrates excellence in certain key areas. For CIPS, the Royal Charter represented a definition of company objectives that would truly embody everything the organisation stands for. “To promote and develop for the public benefit the art and science of purchasing and supply and to encourage the promotion and development of
improved methods of purchasing and supply in all organisations; “To promote and maintain for the benefit of the public high standards of professional skill, ability and integrity among all those engaged in purchasing and supply; “To educate persons engaged in the practice of purchasing and supply and by means of examination and other methods of assessment to test the skill and knowledge of persons desiring to enter the Institute.” But an objective is all well and good in writing, what does it mean in practice? How will CIPS incorporate this into its offering? 13
CIPS
Educational excellence Through the charter, CIPS focuses on how theory and practice of purchase and supply can be improved for the benefit of the public, encourages promotion and development of improved purchasing and supply in all organisations, promote and maintain high standards of professional skill, ability and integrity among professionals, provide tailored educational opportunities and develop a portfolio of rigorous assessments through examination and other methods to test the skill and knowledge of anyone who wishes to join the institute. Education and assessment is one of the most significant ways in which CIPS serves the industry. The qualifications that professionals can earn through CIPS are designed to meet the highest standards, ensuring that the profession can claim consistently high levels of workforce competence. CIPS qualifications are governed by the CIPS Awarding Body, which in turn is regulated by Ofqual in England and Northern Ireland. All CIPS qualifications are recognised by the Qualifications and Credit 14
January 2017
Framework (QCF), or the National Qualifications Framework (NQF). Despite its UK base and governance, CIPS’ qualifications are recognised all around the world. With more than 200 study centres, professionals can access tuition, study and training programmes from qualified experienced professionals. Following the completion of the education and training programmes, and through an assessment period, professionals will be recognised as a member of CIPS (MCIPS). Being an MCIPS is recognised globally as the highest standard for those practicing in procurement and supply. MCIPS certification allows a professional to be recognised for their procurement proficiency, while also giving them a career advantage due to their high standard of work. For Jo Toon, Principal Category Manager, Ministry of Social Development, Wellington, her MCIPS qualifications have helped her significantly. “The qualifications have given me the confidence to explain complex procurement issues to both nonprocurement and procurement colleagues, the skills to progress
CIPS PROFILE
in my career and given me the tools and techniques I need to get the best value for money for the organisation that I work for,” she said.
New leadership In November, last year, CIPS announced that Sam Walsh would take over as the organisation’s Presidency. Walsh, previously known for his role as CEO of the international mining giant Rio Tinto for 25 years, succeeded the outgoing president Richard Masser.
THE CIPS SUPPLY MANAGEMENTAWARDS ARE RESPECTED AS ABENCHMARK FOR EXCELLENCE, WITHOVER 1000 PROCUREMENT PROFESSIONALS ATTENDING THE PRESTIGIOUS AWARDS CEREMONYEACH YEAR 15
CIPS
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January 2017
CIPS PROFILE
Walsh will be in post for the next 12 months as he looks to increase the influence of procurement profession all over the world. “Procurement has always been an area of great interest and importance for me. As CIPS President, I’m hoping to use my profile to raise interest in the profession and increase awareness among company CEOs of the benefits a dependable purchasing organisation can bring,” he said on his announcement. “In order to effectively tackle challenges in modern supply chains, such as cyber-security and modern slavery, trained purchasing professionals are invaluable,” he said. Walsh is no stranger to CIPS, he is in fact a fellow of the institute and was awarded the CIPS Supply Management Award for CEO Champion in 2013, so the institution is in good hands. The CIPS Supply Management Awards are respected as a benchmark for excellence, with over 1000 procurement professionals attending the prestigious awards ceremony each year. The awards celebrate both the individual, the
professionals who really drive the supply and procurement industry as well as the businesses. Previous winners have included Primark, in the ‘Best Contribution to Corporate Responsibility” category as well as jaguar Land Rover, Heathrow Airport and the DVLA. For any organisation, the work an organisation does for the industry goes without saying, but the work that a company does for communities, for charities, that cannot be underestimated. For CIPS it’s no different. The institute runs and operates the CIPS Foundation, a registered charity designed to help anyone, anywhere in the world get into the procurement profession. This specifically relates to those who face challenges, be it through illness, political unrest or even discrimination. Through the foundation, CIPS donates up to 25 percent of its net surplus to the foundation as well as providing some administrative support. The foundation has helped people from all over the world, ranging from Lincolnshire in the United Kingdom to Kenya in East Africa. 17
S & O P I N N O VAT I O N S U M M I T
Aparna Singhal, Director of Sales Operations at Google
APARNA IS A recognized thought leader in sales operations, supply chain, finance and transformational change. She leads a team that performs as catalyst leaders in transforming business decisions and processes for Google Cloud. Focusing in ways to optimize the business, Aparna’s team builds consistent, scalable and comprehensive processes while applying bestpractice change leadership. Aparna also manages the vendor strategy, data and systems strategy, and functional budget including planning, forecasting and reporting. Aparna’s remarkable reputation as a strategic cross-functional partner has earned her a high degree of confidence
Supply Chain Digital Officia among her peers and associates. Aparna’s goals in life and work will always involve seeking new experiences, challenges, and growth. We sat down with her ahead of her presentation at the S&OP Innovation Summit, taking place in Las Vegas on January 25-26 2017. Q: How did you get started in your career? A: I got started in my career by working in a rotation program that allowed me to work in 4 different disciplines over two years. This taught me the importance of seeing many areas of an organization and how they are all dependent on each other. Most teams work mainly in their silos with their own objectives, but we need them to plan with joint objectives. Q: S&OP has undergone something of a resurgence in recent years, what do you think has been behind it? A:I believe the resurgence is due to companies having more of a focus on costs and the impact the G&A functions have on the bottom line. S&OP’s role in the ability to prioritize resources and funds to allow for greater customer success is more understood. Q: Is IBP a progression of S&OP, or is it just an issue of semantics?
al Media Partners | 2017 A: IBP to me is an extension of S&OP. It is somewhat of a natural progression but leads to more holistic planning. Q: What do you think are the main benefits of S&OP? Where do think some companies fall down? A: The main benefit is the end to end view. Companies can make strategic decisions while considering the supply chain as well versus only the product features or sales cycle. Companies fall down when they don’t implement a long-term planning process and try to force fit short term needs. This occurs mainly when they lose the discipline. Q: What do you consider the most important aspects of an effective S&OP strategy? A: To me, the most important aspects of an effective S&OP strategy is the connection between engineering, sales, finance and operations. It allows for the ability to hold teams accountable and be aligned to common goals. Q: Which technologies do you see as having a major impact on S&OP in the future? 3In a way, there are too many technologies that try to solve S&OP for organizations. Since the way each company is run has so many of its own nuances, a standard off the shelf technology may not meet the goals
of that organization. There is also data and data refresh that can impact decision making. The more we can have integrated planning tools across organizations that show revenue objectives all the way to customer support, the higher the success. Q: What will you be discussing in your presentation? A: In my presentation, I will discuss how data quality is critical to the impact and success of your S&OP process and the concept of master data management in your S&OP process. You can hear more from Aparna, along with other industry leading S&OP practitioners, at the S&OP Innovation Summit. To register your interest, click here, and quote SCD20 to get an exclusive 20% discount.
Elliott Jay | Global Events Manager | Innovation Enterprise | +1 415 800 4713 | ejay@theiegroup.com
SPECIAL REPORT
A diary from THE FRONTLINE Medecins Sans Frontieres’ camp in South Sudan has swelled to more than 100,000 people seeking crucial medical aid and supplies. Anup Ravi is the man responsible for what is a unique and extraordinary logistical challenge
W r i t t e n b y : A N U P R A V I , S U P P LY L O G I S T I C S M ANAGE R FOR MS F IN SOUTH SUDAN
IT’S JULY 2015 and I am sitting in a Cessna caravan plane 5Y- ZBX, flying to Bentiu in the north of South Sudan along with a bunch of supplies like medicines, mosquito nets and food for the project. Looking out of the window, I see the beautiful lush green South Sudan below me. It looks so peaceful from up here. I remember the last time I sat in this plane, the same seat but a very different flight. We had to frantically drive four Land Cruisers from our compound to the air strip in Leer
after our team experienced an armed robbery. I remember the urgency, the smell of fear and tension in the air. But as a logistician and a humanitarian aid worker, I had to tell myself these things happen and I have to crack on with my work. I coordinated the landing of two Cessna caravans and carry out the evacuation of our international staff that day. And suddenly the scene through the window changed. I could see a massive camp for people who’ve been internally displaced, one of 21
SPECIAL REPORT the biggest in the world. It brought me right back to the present. This time I was going to be a supply logistician in Bentiu. I can see that the monsoon is setting in and see the camp is flooded. I can see the Médecins Sans Frontières (MSF) hospital, the office and accommodation compound. We touchdown on a very familiar red dusty air strip. Welcome to Bentiu. An exhausted, but very friendly, expat and South Sudanese driver greet me. I was evacuated with the driver last time I was here in Bentiu. I’m extremely happy to see this man alive and we both hug each other so tight, knowing exactly how happy we are to realise that we both are alive and healthy. After a three day handover from the current Supply Logistics Manager we say goodbye to each other. I’m scared, excited, confident and doubtful if I can pull this off all at the same time. In the first meeting with my supply team I get a feeling that these guys are brilliant, amazing human beings. I’m happy this is my work force. I’m informed that the size of the camp has increased rapidly in the last three weeks. There’s now more than 22
January 2017
100,000 people in the camp and every organisation present is overwhelmed. The MSF team had to prepare for a big expansion of the hospital and it had to be quick. My time in South Sudan was going to be hectic, extremely wet and very challenging. To help with this expansion my first job was to find a new location for our central pharmacy (currently housed within the medical warehouse) and it had to be done asap. This wasn’t going to be easy because space was
DIARY FROM THE FRONTLINE
a huge constraint in the compound and the famous black cotton soil of South Sudan as well as the fact it was monsoon season added to the complexities of making this possible. It seemed to me that organising the storage spaces wasn’t a big priority for many but I knew this was going to be absolutely essential for us to have a strong foundation from which to deliver medical supplies to the teams. Malaria is peaking in the camp. There are patients flocking in to the Author: Anup Ravi, Supply Logistics Manager for MSF in South Sudan
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SPECIAL REPORT hospital. I need to be able to deliver all the medical and logistical items that are needed and I need to do it now. I asked the construction logistician whether it would be possible to erect the Central Pharmacy in a day. He was leaving the project the day after tomorrow to set up an inflatable maternity ward in another neighbouring project. Luckily the material for a prefabricated container
24
January 2017
and the air-conditioner were just lying among all the other logistical items and he got straight to work setting it up. But unfortunately the Central Pharmacy wasn’t completed that day. The two of us woke up very early the next day and he showed me what needs to be done to finish this express project. Then he left for the airstrip. The Central Pharmacy was finally set up with the help of some strong
DIARY FROM THE FRONTLINE
South Sudanese men that day. The team were excited. The relocation happened successfully. Finally for the first time in Bentiu we had a Central Pharmacy and a Medical Warehouse in 2 separate structures. We did a similar set up to relocate the logistical warehouse and suddenly these congested warehouses begin to look very spacious. They could now accommodate tonnes of supplies. And this was just one of my projects.
While all this clean up and organisation of the warehouse and Central Pharmacy was happening, I was liaising with the supply team and flight coordinator in Loki to fly in supplies via Cessna caravans, Antonov, and cargo planes. The four and half months just flew by. It was the fastest four and half months of my life. We transported 80 tonnes of cargo in four South Sudanese monsoon months. MSF team, I’m proud to be part of you. 25
TOP 10
Top 10 SUPPLY CHAIN EVENTS in Q1 and Q2 2017
Which events should be on your radar in the first half of 2017? In chronological order, Supply Chain Digital rounds up 10 from across Europe, Asia, the Middle East and America W r i t t e n b y : To m W a d l o w
TOP 10
10 9
PROCUREMENT FRAUD SUPPLY CHAIN MANAGEMENT 2017 FINANCE SUMMIT 18/01/2017 TO 20/01/2017
01/02/2017 TO 02/02/2017
Procurement fraud is a persistent and significant problem faced by all companies and organisations around the world, and those that act to address fraud and corruption will have a competitive advantage with real business benefits. This three-day event has been designed to provide supply chain executives and personnel with a practical and complete guide to detecting, preventing, mitigating and managing procuring fraud effectively.
The supply chain finance environment is rapidly changing. A price slump has created new working capital issues for suppliers in commodity focussed regions. De-risking and stimulating institutional investor appetite is increasingly on the agenda of forward thinking banks. Find out how these market shifts as well as pressures in the EU political landscape are reshaping the SCF climate and creating new challenges and opportunities.
SINGAPORE
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January 2017
FRANKFURT, GERMANY
T O P 1 0 S U P P LY C H A I N E V E N T S I N Q 1 A N D Q 2 2 0 1 7
EUROPEAN SUPPLY CHAIN DIRECTORS FORUM
27/02/2017 TO 01/03/2017
MUNICH, GERMANY
With keynote speakers confirmed including global supply chain heads from Volvo, Air France-KLM, Oriflame, L’OrÊal and Covestro (formerly Bayer), this event is a must for companies facing procurement challenges in Europe. The programme is designed to provide real actionable advice to future-proof businesses and is known for its interactive approach.
8
15TH COLD CHAIN GDP & TEMPERATURE MANAGEMENT LOGISTICS SUMMIT 27/02/2017 TO 02/03/2017
TORONTO, CANADA
The leading event for cold chain and temperature management logistics is back for the 15th time next year. It promises to cover key concerns involving regulatory, logistics, quality, packaging, security and overall supply chain management, with the opportunity to network with industry peers and create innovative ideas that will shape the future of the industry.
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TOP 10
TRANSASIA
SHOPTALK
02/03/2017 TO 04/03/2017
19/03/2017 TO 22/03/2017
JAKARTA, INDONESIA
LAS VEGAS, USA
Co-located with CeMAT South East Asia and ColdChain Indonesia, TransAsia offers transport and logistic companies the ideal platform to engage and network with key cargo owners. The three shows, each launching for the first time in 2017, are bringing together the full spectrum of the industry under one roof. In total, 220 exhibitors are expected to showcase their products to over 5,000 industry professionals.
Shoptalk is a platform for established retailers and brands, startups, tech companies, investors, media and analysts to come together to learn, collaborate and evolve. Everyone benefits from rich, in-person interactions spanning three days packed with incredible content, wide-ranging exhibitors and meaningful networking opportunities. Shoptalk attracted more than 3,100 attendees in 2016 including over 395 CEOs, and is growing to more than 5,000 attendees in 2017.
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5
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T O P 1 0 S U P P LY C H A I N E V E N T S I N Q 1 A N D Q 2 2 0 1 7
4
LOGISTICS & SUPPLY CHAIN CONFERENCE 21/03/2017 TO 22/03/2017
LONDON, UK
Based at the iconic Waldorf Hotel in London, the Logistics & Supply Chain Conference welcomes some of world’s most valuable brands. Supply chain representatives from the likes of Lego, Nestle, Telefonica, Diageo, Carlsberg and GSK will all be attending and sharing best practice advice.
3
HOME DELIVERY WORLD EUROPE
28/03/2017 TO 29/03/2017
LONDON, UK
With supply chain and logistics operations so closely linked to customer experience and ultimately company reputation, it is vital that retailers get delivery right. Leading retailers and ecommerce brands are attending Home Delivery World Europe to reflect on their current practices and evaluate the new systems and technologies that will keep them competitive. John Lewis, Argos, Sainsbury’s and American Apparel have all confirmed speakers. 31
TOP 10
2
PROMAT 2017
03/04/2017 TO 06/04/2017
CHICAGO, USA
ProMat 2017 is the premier showcase of material handling, supply chain and logistics solutions in North America. The show is designed to offer productivity solutions and information by showcasing the products and services of over 700 leading material handling and logistics providers. To make it easier for attendees to find the solutions they need, the ProMat 2017 show floor is divided into three solution-specific centres: Manufacturing and assembly solutions, fulfilment and delivery solutions, and information technology (IT) solutions. 32
January 2017
T O P 1 0 S U P P LY C H A I N E V E N T S I N Q 1 A N D Q 2 2 0 1 7
1
CIPS MIDDLE EAST AND NORTH AFRICA CONFERENCE
09/05/2017 TO 10/05/2017
VENUE TBC
The CIPS MENA conference agenda is especially designed to provide attendees with expert led content, allowing them to discover procurement breakthroughs in the MENA region and share best practices with peers amongst different industries. Last year’s conference presented attendees with a range of enhanced networking opportunities, from extended breakfasts with a choice of networking sessions, briefings to attend and meet with their peers, suppliers, CIPS branch representatives and high-profile experts in the field, to lively panel discussions with Q&A sessions to find out how they can integrate procurement as a leader within the business. 2017 promises to deliver the same benefits to guests. 33
How ZTE is transforming
its supply chain Written by Lisa Higgins
Produced by Charlotte Clarke
35
Chinese tech giant ZTE is already reaping the benefits of a substantial supply chain transformation
C
hinese Telecommunications corporation ZTE is currently in the middle of a gamechanging transformation. Already market leaders in terms of technology and products, the company was in need of a complete modernisation of its supply chain process according to Assistant CEO Anders Karlborg, who was brought in to do the job. Business Review Asia speaks to him at length to learn how he has achieved the changes he set out to make and what challenges have been overcome. Founded in 1985 ZTE has always set out to be a global leader in telecommunications and information technology. A thriving business 30 years on, the company offers wireless, access & bearer and ICT solutions for enterprises and government
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January 2017
agencies. It also produces a series of smartphones and mobile devices. ZTE has a turnover of ÂŁ12 billion and more than 60,000 staff providing mobile tech solutions for both the Chinese and overseas markets. Transforming the supply chain Anders has been working in China for 15 years. Originally from Sweden , he has worked in Beijing, Nanjing and Dubai. When he first took on the mammoth task of revamping the supply chain a year ago he quickly saw the weaker links. “When I came in here it was a very hard working supply chain with hard working people, but it was a lot of manual, labour intensive work. “They were working very hard but maybe not getting the results we
Anders Karlborg Assistant CEO
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For more information, visit our website or follow us on Twitter. www.oclaro.com @OclaroInc
ASIA
wanted. I would never say it was bad but it needed improvement,” he says. “We had a big workshop with the management team and discussed what should be done at ZTE. This led to the creation of a big corporate transformation project with 16 different sub- projects. Ye Weimin, Senior Vice President for ZTE Group said that the transformation project is very important for ZTE future success to be a complete ICT solution provider. “Some of the projects include automated integrated planning, E-commerce integration,
configuration solutions, global supply network, and a customer/account collaboration model. We have a whole supplier relationship module that is very important for us and have set up a very clear model on how to collaborate, with quarterly and yearly business review meetings.” Leadership Reflecting on the first of a threeyear plan, Anders says it has been imperative to keep channels of communication open. “After being here for six months we decided that the organisation needed
61,000 Number of employees at ZTE
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We had a big workshop with the management team and discussed what should be done at ZTE. This led to the creation of a big corporate transformation project with 16 different subprojects - Assistant CEO Anders Karlborg
Anders Karlborg Assistant CEO and Mr YE Weimin, SVP of ZTE
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DAMCO.COM
THE WORLD’S LEADING PROVIDER OF END-TO-END SUPPLY CHAIN MANAGEMENT SOLUTIONS Visibility, scalability and flexibility At Damco, we understand that visibility, short lead times, scalability and responsiveness are keywords in managing your supply chain. Our tailor-made solutions enable you to achieve unparalleled levels of reliability and flexibility in your supply chains; whilst helping you to cut costs and gain end-to-end stock keeping unit (SKU)-level visibility. A global network of logistics professionals Damco, one of the world’s leading third party logistics providers, specialises in delivering customised freight forwarding and supply chain solutions. The company provides services in 300+ locations across 100+ countries and employs 11,000+ people. In 2015, Damco had a net turnover of USD 2.74 billion, managed 2.9 million TEU of ocean freight and supply chain management volumes, and air-freighted 180 thousand tonnes. Damco is part of the Maersk Group. From single shipments to integrated supply chain management OCEAN FREIGHT
AIR FREIGHT
SUPPLY CHAIN MANAGEMENT
CUSTOMS BROKERAGE
WAREHOUSING & DISTRIBUTION
James Savagar Chief Commercial Officer – South China, Hong Kong & Taiwan 2nd Floor, Skyline Tower, 39 Wang Kwong Road, Kowloon Bay, Kowloon. Hong Kong Phone: +852 3765 2312 Mobile: +852 9172 1763 james.savagar@damco.com
TRUCKING
ASIA
some changes to drive us forward so we implemented a new supply chain organisation. This meant some positions became redundant and also some new positions were established. This was a tough job, but necessary. “We believe it will take another two years before we are on the level we want to be, but we get great support from the company and the staff. Of course, not everybody welcomes change, but most do. “We send out monthly newsletters on each sub-project to help staff understand. We also do bi-weekly
reporting within our own management team in the supply chain and we report to the top-level management team monthly. We have an open-door policy. Our strategy is worth nothing if you don’t communicate it well.” Anders adds: “It’s also very important to have a cross functional team. So even if it is a supply chain project, we are integrated with service people, R&D, sales, HR and finance. We’re moving away from silo-oriented thinking into process-oriented thinking.
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Z T E C O R P O R AT I O N
S U P P LY C H A I N T R A N S P O R TAT I O N CUSTOMS & COMPLIANCE WA R E H O U S I N G & D I S T R I B U T I O N
W W W . E X P E D I T O R S . C O M
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ASIA
Supply chain digitalisation The implementation of new technology has played an important part in this journey. According to Anders, taking ZTE’s supply chain into the digital age means achieving a customercentric platform that maximises real time data that, in turn, enables demand stimulation, matching, and management. It has done so well in the last year that the company was recently invited to write a white paper together with the Centre for Global Enterprise (CGE). “There was no clear definition of digital supply chain before. It was talked about but not very clearly. We are very proud that it will be used as an education document,” Anders said. “Every company needs to be more efficient and with digitalization
of your supply chain you can save up to 10 percent of your purchase cost. We have many sub projects related to digitalisation such as E-commerce, customer collaboration, integrated planning with technology to understand what customers want. Also, big data and analytics to understand behaviour and for scenario planning. There are so many different technologies to be used but nobody can do it in one year, so we are still exploring each one step-by-step.” Anders says he understands the anxieties that his staff have. “When we are communicating change we never talk about reducing people. We know that people think about that so we communicate that change is needed for a good future and that may have implications for some
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Z T E C O R P O R AT I O N
people who don’t have enough competence. To rectify this problem we are training people to be good.” Culture shift But what does an overhaul of supply chain mean for the wider culture and ethos of ZTE? Jeff Chen, HR President for the ZTE Group, told us that being a majority Chinese company, having Swedish Anders leading the transformation was not without initial concern. “Anders is the only nonChinese person in the senior-level management and at the beginning I was a little bit worried about the communication and cooperation, but so far it’s good because he is familiar with Chinese management culture as well as Western culture and management so he can understand both sides. He can communicate
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with everyone very well and he has rich experience in the industry which gave me more confidence about having an overseas manager.” Taking on fresh young talent from universities in China and now the US has injected diversity into ZTE. Anders insists flexibility and maintaining a positive, cultural harmony is key to predicting where they will be in five years. “I have a different culture compared to the ZTE staff and we need to show respect to each other regardless of who we are and where we come from. I have four idioms in the way I manage - lead by example, contribute every day, know your numbers and, finally, show respect to each other’s culture. I know my thing and they probably know other things and together we can be strong.”
ASIA
Jeff Chen HR President
ENTERPRISING
in the UAE Written by Dale Benton Produced by Heykel Ouni
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Al Ghurair, one of the largest diversified companies in the Middle East, has transformed its procurement function and will spearhead the evolution of procurement functionality in the UAE
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l Ghurair is one of the largest diversified industrial enterprises in the UAE. With over 40 years of experience spanning 20 countries across nine different businesses, including food, construction, property development, energy, resources, international exchange, printing and education, it has been crucial that the group has a strong procurement foundation to fully utilise those business units and continue to be a market leader. For Pekka Sammallahti, Group Head of Procurement, a way to achieve this has been through the development of a centralized or centrally led procurement function. “To try and build this centralised function in a diversified group with multiple Business Units, each focused on its own aspect, there’s no real major common procurement category,” he says. The bottom line At the start of this procurement process, the key goal was to make an impact on savings in both
indirect and direct procurement. Sammallahti set out to separate what can be categorised as direct procurement and indirect procurement to achieve maximum savings for the enterprise. During this time, the group was also undergoing a shift in focus with regards to functionality. “Al Ghurair had previously focused on ensuring that we are buying our products at the right time for the lowest cost,” says Sammallahti. “But I have built up the procurement function so that we have adopted e-sourcing and e-auctions which is key in making the efficiency of procurement much better than the traditional model.” The development of the procurement function has been driven by two key goals: to improve the bottom line through significant savings and to create a more strategic function and be a business partner to the stakeholders. “We ensure that the supply is there and the prices are there, but now we are looking at total cost of ownership and specifically, the total value that
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YESTERDAY.
TODAY.
TOMORROW.
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procurement can bring from an end to end perspective,” Sammallahti says.
procurement strategies in which I define the key initiatives for the following year, set the KPIs and ensure that our processes are streamlined across the various different Units,” he says. Sammallahti will work with the Units to tweak and change the processes where necessary to reflect the expertise and various unique demands of each particular Unit.
Diversification In an enterprise that is diversified through so many business facets within the UAE and globally, support from procurement across the whole board from central Group Procurement out to the procurement teams in each Business Unit (individual sector) is key Flexibility Years Al Ghurair in ensuring then, is key. Investment has maximum “All processes are been operating efficiency and savings. defined at a Group level, For Group Procurement which we as Al Ghurair and Sammallahti, the roll out to our businesses. focus is on supporting the We look at cycle times, lead Business Unit procurement times and define the approval in all aspects, from e-auctions matrix before tailoring the policies to defining the processes and the to be able to work in any particular policies which are then adapted Business Unit,” Sammallahti adds. by each and every one the Units. The Heads of the Business Unit Market driven procurement teams report back Market dynamics change on a daily to Sammallahti through matrix. basis and for any business it is key “Each year we conduct annual to be aware of how those dynamics
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“E-auctions have been key to our success due to the fact that many people didn’t believe it would work in this particular business or the business units, or even if it was applicable on this scale” – Pekka Sammallahti, Group Head of Procurement
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impact the business. For Al Ghurair, flexibility across the internal processes is met with agility from an external perspective. A key question that the group must ask and be aware of is how the current world economy impacts its businesses and therefore its procurement. Sammallahti stresses the importance of understanding what the drivers in the businesses are and what the drivers in the world economy are for the group’s suppliers. “We are not isolated; we are aware and following on all things that are happening across the world which have an impact on the supply chain,” he says. Technology in procurement In any transformation or development strategy, the role of technology cannot be underestimated. In the Middle East, technology can often prove to be difficult to adapt and businesses and the suppliers have in the past proven to be reluctant to take that risk and adopt a new technology. One of the key successes for Sammallahti
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and Al Ghurair has been the group’s role in adopting new technologies that have been key in advancing the development of the procurement function. “Al Ghurair is one of if not the leading group using e-auctions, which is something we run hundreds of times a year,” he says. “It has been key to our success due to the fact that many people didn’t believe it would work in this particular group or the Business Units, or even if it was applicable on this scale.” E-sourcing and e-auctioning are now everyday practices across the whole of Al Ghurair in what Sammallahti describes as the “standard way of negotiating” for the group. Start of something special For Sammallahti, being offered the opportunity of building and
developing the procurement function of a group so embedded within the very make-up of the UAE was one he simply could not turn down. Al Ghurair, through its nine different Business Units, serves communities all across the UAE and globe, be it one of the largest trading houses in the world in food commodities, to supplying external cladding and glass for the tallest building in the world, the Burj Khalifa. Sammallahti has worked for over 17 years in procurement, with companies such as Nokia and Siemens, but he admits that it was the level of understanding and focus on procurement from senior management that was a turning point in helping him begin his journey with Al Ghurair. “During interviews I started to fully appreciate just how much of a dynamic and forward thinking
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group Al Ghurair really is and it was something I really bought into from a procurement perspective,” he says. Naturally, for one of the largest diversified groups in the UAE, it needed to ensure that Sammallahti was the right man to take it forward. To do this, there was one final interview with a gentleman named Abdul Aziz Al Ghurair, Chief Executive Officer of Mashreq Bank and Chairman of Al Ghurair at the time. “I was so impressed that the Chairman of a group of this size understands and really values procurement; it was and still is an
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excellent opportunity to create something dynamic here,” Sammallahti says.
Number of countries that Al Ghurair Investment works in
Evolving the procurement function Looking to the future, Al Ghurair is entering a new chapter of evolving the way procurement functions in the Middle East which has been focused on buying the right supplies and goods at the lowest price. Sammallahti and Al Ghurair are looking to transform suppliers into business partners to collaborate together and ensure key benefits
for both business and partner. “We are looking at consolidating certain categories and consolidating the spend so we can go to the market as one whole entity with a stronger purse to utilise,” says Sammallahti. “It’s all about looking at supplier life-cycle management and how the partners can better support the ongoing growth ambitions of the group,” he concludes.
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Creating inspiring products in the automotive industry Written by Catherine Rowell Produced by Andy Turner
Ken Morgel, Director of Purchasing and USA at BraunAbility, discusses how the company is continually ensuring accessibility within the automotive industry
BRAUNABILITY
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ince its inception in 1973, BraunAbility (formerly known as The Braun Corporation) has produced innovative, highquality products in the wheelchair accessible vehicle and lift markets, allowing customers to retain their independence. Its products include personal use vehicles, as well as wheelchair lifts found in mass transit vehicles, such as buses, taxis and more. “We are expanding our production capabilities to meet the volume and all the things associated with that, from facility changes to manpower, acquiring skillsets we haven’t had, but are now required. It has been a crazy pace for growth,” comments Ken Morgel, Director of Purchasing and USA at BraunAbility. The company has thrived during several significant stages of growth. The invention of the lowered floor minivan secured its position within the automotive industry. Then the Americans with Disabilities Act of 1990 opened up brand-new markets by etching accessibility into the law. Now, today’s customers
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increasingly demand independence, seeking to maintain their quality of life, accessibility and mobility. The company’s Indiana location is ideal, drawing on southeastern Michigan, Chicago, northern Indiana and Ohio, where numerous automotive plants are also situated. “We are actually able to leverage off a lot of other manufacturing that’s going on in this area and obtain highquality parts on time,” states Morgel. “We share many suppliers with both Original Equipment Manufacturers (OEMs) and the RV industry.” Until six years ago, BraunAbility’s supply chain remained relatively
“We can stratify our suppliers by spend and/ or by part within that supplier” – Ken Morgel, Director, Purchasing & USA, BraunAbility
USA
Ken Morgel Director, Purchasing & USA, BraunAbility
I have over twenty years of experience in USA. The first part of my career was spent at FCA Chrysler and the last six years at BraunAbility. I love the variety of challenges the USA field presents and feel very fulfilled by the people I work with and customers I serve at BraunAbility. When not at work I like spending time with my wife, Tiffanie, and my five kids, Calvin, Owen, Ethan, Ivy and Nina.
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unchanged, with all suppliers located within 200 miles of the company’s manufacturing area. Morgel says, “A lot of that was because this company was founded on quality. If we could not make it or manufacture it here locally, we wanted to buy it from someone locally so we could always control the quality of the product.” Since joining BraunAbility, Morgel has remained loyal to the suppliers he inherited, with around 80 core suppliers. However, he’s recruited more, including within the RV
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market, to provide new innovative products and solutions for new technologies. Morgel explains, “I adapted the supply base to fit better with our low-volume, high-mix environment. We partnered up with the right folks who can continue to add value as far as technology and innovation. We also look to partners who keep us cost competitive while ensuring quality stays high.” Continuing with core suppliers has enabled the company to throw things out to bid and drive lower costs. But BraunAbility understands that keeping track of quality, deliveries and other metrics is paramount. “We have a
Year founded
1973
USA
score carding system to make sure that those who are performing well get a shot at more business versus those that are maybe under-performing, who are then maybe left out of the next quote process,� reflects Morgel. Similar to many automotive companies, BraunAbility has turned to scan data. This lets BraunAbility share information with suppliers who can then modify vehicles and reduce manufacturing time. For example, companies previously built fiberglass molds for any interior plastic component within a particular vehicle. But 3D models can now be fashioned into a tool, which
Yearly revenue
$100 MN USD
can then be turned into a plastic component and fitted. In addition to such time-reducing, cost effective and forward engineering solutions, the company is designing virtually before constructing hard parts, enabling more competitive bidding. Through close partnerships with Chrysler, Honda and Toyota, BraunAbility is able to convert each of their minivan models, and it recently converted the Ford Explorer, offering the first SUV to enter the mobility market. In addition, the company is Nissan’s mobility partner in the New York City taxi market. Conversions on each model are built on site, allowing
750
Number of employees at BraunAbility
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“People want a specific color and specific content – we want to offer that same menu to mobility clients, but keep affordability in mind” – Ken Morgel, Director, Purchasing & USA, BraunAbility
customers to have a selection of finished products to choose from, Morgel explains: “We’re made aware of significant changes throughout the year to these companies’ vehicles in their own production facility so that we can understand what we have to do from a conversion standpoint if that then affects us.” Through increased information sharing, OEMs have increased sales by working alongside a premier mobility conversion company such as BraunAbility. However, BraunAbility’s high-mix, low-volume environment is the
USA
“We have a score carding system to make sure that those who are performing well get a shot at more business versus those that are maybe under-performing” – Ken Morgel, Director, Purchasing & USA, BraunAbility
complete opposite of an OEM’s, and that has presented several challenges. Morgel explains: “When you have low volume and a high mix, as a purchasing organization this makes affordability difficult because you don’t have that leverage with volume. And secondly, it makes it hard to predict and forecast need beyond a certain short timeframe, which is again opposite of an OEM.” OEMs produce blanket orders and commit to high volumes so they can ensure the best prices from supply bases. For BraunAbility on
the other hand, this is not possible. Yet the company has slowly begun to move away from ‘spot-buy’ purchasing and move toward more strategic procurement services supported by a new ERP system. This embedded system increases visibility. “We can stratify our suppliers by spend and/or by part within that supplier, whereas before we had a system that required a little more data handling through spreadsheets,” says Morgel. “Now we have ready-made reporting and dashboards so we can do analysis
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USA
right away on not only supplier spend but delivery performance, quality metrics like parts per million – all of these titbits that are great for supplier negotiation and new business.” The industry continues to grow, along with the demand for innovation, forward thinking and a key focus on affordability in the mobility sector. “Many of our customers are looking for something different than a minivan, something more spacious,” says Morgel. “Many wheelchairs are
getting larger, so more space is a necessity.” Equipment will also need to become increasingly adaptable and BraunAbility stays ready with products that can be up-fitted. “We want to make sure we have the selection available that people would desire just like anybody would if they go to a car lot,” Morgel says. “They want a specific color and specific content – we want to offer that same menu to mobility clients, but still keep affordability in mind.”
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PROCUREMENT
prowess Written by Sarah Arnold Produced by Erika Kracer
Victoria University has undergone a fiveyear transformation in its supply chain processes, helping to streamline operations and elevate the higher education center to the forefront of sustainability
VICTORIA UNIVERSITY
U
niversity to most people on campus is a place to spend three to four years studying before going on to gain employment, travel or delve into further study. It is an institution to attend while working out your interests in life while meeting people from around the globe. What is not often noted is the operation that occurs behind the scenes to provide a seamless service for these students. At Victoria University (VU) 1,800 full time staff support its 46,000
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students across Melbourne, Sydney and international colleges (mostly in Asia). VU is currently celebrating its centenary year and became a university in 1990. It boasts a curriculum that includes both higher education and vocational options. Director of Procurement and Business Operations Juliana Tiong stresses that “Victoria University is a fantastic place to work. People are very friendly; if you can explain the logic behind a change, they will come on board,� she follows.
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Since joining VU, Tiong has worked on a five-year transformation of Procurement throughout the university. Procurement comprised siloed purchasing activities across the functions of the University. “I was brought in to transform that and centralise it over two phases,” she notes. The first phase involved forming a strategic procurement team to create and implement category strategies for the short, medium and long-terms. This included consolidating purchasing volume, data mining, tendering and negotiations. “This is the strategy part of procurement,” Tiong states. “It had been done in a silo manner by each individual department. This could be an individual faculty or college. They would call a supplier and the product would be delivered.” Some of these ad-hoc purchases resulted in incorrect products, unmet expectations and cost creep. Procurement in VU worked in this way for many years and it was not sustainable. “We could not leverage the suppliers and
therefore could not leverage enough savings. We could not manage the supplier performance appropriately because it had been done in such an ad-hoc manner,” Tiong explains. The first phase brought standardization of tendering processes, redefined policies, procedures, governance and framework, and facilitated clear understanding of spend by category. This resulted in large savings within the first 18 months. The second phase was to centralise, streamline and introduce end to end procurement, with the establishment of the Procurement Centre of Excellence (CoE). eProcurement tools and systems were introduced as enablers of efficiency and reporting accuracy. This brought about streamlined processes, efficiencies, reduced paperwork and improved approval times. This is not the first time Juliana Tiong has embarked upon a transformation of procurement. Previously, when working for defence company Thales, in the Air System Division, she worked on similar transformation. She
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centralised Procurement ensuring ad-hoc ways of purchasing were eliminated by close collaboration with stakeholders, demand planning/ forecasting for greater leverage, and contract negotiation. However, she says: “Coming to Victoria University, the transformation was multiple in size and complexity compared to Thales.” Tiong applied Procurement methodologies such as identification of the “low hanging fruit”, supply and demand strategies and volume aggregation to improve leverage and market interest and leverage. Prior to the transformation, for the same product, the same supplier could be charging a different department within the university a range of prices. The product would be delivered to the same location. Tiong identified such areas of lower complexity, describing them as low hanging fruit. “There were about 30 categories in this area and we started looking at them within six months of the establishment of the strategy procurement team. We started delivering savings immediately through
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Year Founded
1916
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that part of the process,” she says. Following activities for the low hanging fruits, the team targeted the medium and high complexity categories. During the second phase of transformation, Tiong searched for people to actively contribute to this process and be part of the Procurement Hub team. The establishment of the procurement hub led to the creation of a Procurement Centre of Excellence
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for the whole university. Those who previously worked in procurement for departments brought their expertise to the hub. “We have created a shared services function in Procurement for the whole University to use. The Procurement Specialists in the Centre of Excellence will support every need of the University,” notes Tiong. The University has been advancing its technology so students have the best
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access to education, but also for use behind the scenes by staff members. VU is working on a cloud-based solution with IT for ERP systems. “Cloud is not new anymore. Everybody is migrating to cloud. We have been looking at how to make the system more efficient and that is by moving to the cloud,� Tiong comments. Full migration has not happened due to the data security risk. The Procurement, Finance and IT
departments have been working closely together to ensure the transition is smooth. The Procurement Hub launched an e-catalogue as part of streamlining the process. The e-catalogue captures negotiated pricing and approved suppliers. The success of e-catalogue was achieved through collaboration between Procurement, Finance systems and IT. Groundwork included tenders, negotiations, category
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VICTORIA UNIVERSITY
Number of Employees
2,000
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classification, coding and reporting standardization. The e-catalogues has “made it easier having all relevant information captured within the ERP system,” notes Tiong. The Centre of Excellence also drove efficiency in the Procureto-Pay (P2P) process, with invoices streamlined by using consolidated invoices instead of one invoice per delivery. “We now have one invoice a month for multiple deliveries. The right system has to be put in place” states Tiong. Strong partnerships with key suppliers including CISCO and Optus ensure VU has relevant advancements in technologies when available. This is important to the head of procurement. “We are partnering with these suppliers because we want to be active in bringing in new technologies. I would say bring in a new era to Victoria University” Tiong says. These technologies include bringing educational services to students digitally, which involves improving the online portals and streaming lectures and seminars online.
While VU is advancing with technology, it has not neglected sustainability. Between 2006 and 2010, the university decreased its water usage by 75,000 kilolitres in partnership with City West Water thanks to initiatives spanning harvesting rainwater in pools, single flush toilets and installation of water meters. Energy efficient solutions have been implemented; solar panels have been erected on site. A new lighting system works through sensors. All of this leads to the undeniable conclusion that procurement takes sustainability seriously. “When we look at our tender documents and requirements we must think, how sustainable is this?” comments Tiong. The proactivity shown towards sustainability and the transformation of Procurement in Victoria University cements its place as a pioneer for higher education in Australia and further afield, continuing to provide the movers and shakers for the country’s future.
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