Supply Chain Digital magazine - July 2017

www.supplychaindigital.com

Jul y 2 017

RESHORING:

SigmaPoint Technologies is the paradigm shift

TOP 10

GLOBAL

SUPPLY CHAIN

RISKS

PwC:

ON THE ROAD TO SUSTAINABLE PROCUREMENT

Make It Possible Huawei is a leading global information and communications technology (ICT) solutions provider. Driven by responsible operations, ongoing innovation, and open collaboration, we have established a competitive ICT portfolio of end-to-end solutions in telecom and enterprise networks, devices, and cloud computing. Our ICT solutions, products, and services are used in more than 170 countries and regions, serving over one-third of the world’s population. With more than 170,000 employees, Huawei is committed to enabling the future information society, and building a Better Connected World.

www.huawei.com

FOREWORD WELCOME TO THE July edition of Supply Chain Digital The cover this month features an exclusive interview with SigmaPoint Technologies, which is striving to bring business back to Canada through providing lean manufacturing and innovative technologies to support its robust supply chain operations.

Also featured is FM Global, discussing how businesses can prepare for natural threats to their physical assets. With the UN recently estimating that extreme weather has caused approximately $1 trillion worth of damage in a decade alone, Joe Cullen, Group Manager, explains how businesses can become more resilient and create increased efficiencies throughout the supply chain.

Companies can do much more with regards to corporate social responsibility (CSR). Once a popular buzzword, PwC has long-adopted a world-class procurement practice within its supply chain. Director of Procurement Jeremy Willis talks to us about the accountancy firm’s corporate responsibility priorities, raising awareness of the importance of CSR within procurement and developing network opportunities.

Finally, there are a number of issues which could decrease supply chain performance, so take a look at our top 10 global supply chain risks, according to the World Economic Forum’s Global Risks Perception Survey.

As always, tweet your feedback @SupplyChainD

Enjoy the issue! www.supplychaindigital.com www.bizclikmedia.com

F E AT U R E S

PROFILE

06

PREVENTING

DESTRUCTION

HOW TO KEEP YOUR SUPPLY CHAIN SAFE IN EXTREME WEATHER

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TECHNOLOGY

PwC:

On the road to sustainable procurement 4

July 2017

TOP10

GLOBAL SUPPLY CHAIN RISKS

20

C O M PA N Y P R O F I L E S

International Rescue Committee AFRICA

52

TASNEE

MIDDLE EAST

28 68

40

National Bank of Abu Dhabi (NBAD) Supply Chain

SHELL ASIA

80

Thales Canada CANADA

88

SigmaPoint Technologies

100

The British Columbia Lottery Corporation CANADA

CANADA

EPIC Management USA

128

112

Choice Hotels International USA

5

PROFILE

PREVENTING

DESTRUCTION

HOW TO KEEP YOUR SUPPLY CHAIN SAFE IN EXTREME WEATHER

WHAT CAN BUSINESSES DO TO PREPARE FOR NATURAL THREATS TO PHYSICAL ASSETS? WE ASKED JOE CULLEN OF FM GLOBAL FOR HIS ADVICE W R I T T E N B Y: J O E C U L L E N , G R O U P M A N A G E R – FIELD ENGINEERING , FM GLOBAL

EXTREME WEATHER CONDITIONS are not a new feature of the world weather though change in climate has changed the frequency and severity of extremes. Development in exposed areas and the increased value (and vulnerability) of assets in such areas are also important factors. Over the last few years, the devastation caused by extreme weather has dominated media headlines worldwide. The economic impact this has on the global economy is vast, with the UN recently estimating extreme weather has caused $1 trillion worth of damage over the last decade.

It is widely acknowledged the frequency of these extreme weather events is likely to increase in the future. The occurrence of Category four and five hurricanes has more than doubled since the 1970’s, partly caused by the 1°C average global increase in ocean temperatures in the same period. The UN also recently announced 2016 as the hottest year on record, indicative that an increasing 7

PROFILE number of severe weather events is a trend likely to continue.

This increase in global temperature will result in more intense levels of precipitation which in turn will increase the frequency and severity of flooding. A recent report suggested that one sixth of all property in the UK is at risk of flooding. Indeed, the UK business community is still recovering from the effects of 2015’s Storm Desmond, which affected over 200 businesses with many still, even now, not fully operational. This kind of event, clearly showcases just how destructive extreme weather can be to business and why mitigating against such a risk should be top of mind for companies.

Whilst extreme weather events cannot be stopped, businesses should take precautions and ensure that their operations are resilient, in order to mitigate damage caused by extreme weather.

When a major incident does occur, the result can be traumatic for business, as reputation, profitability and market share can be negatively affected. Mitigating these risks is therefore crucial, to guarantee a business’ long term future.

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July 2017

‘AS THE WORLD BECOMES INCREASINGLY INTERCONNECTED, AND THE DRIVE FOR EFFICIENCY INCREASES, LOSS PREVENTION BECOMES MORE COMPLICATED DUE TO THE NATURE OF GLOBAL SUPPLY CHAINS’ SO WHAT CAN BUSINESSES DO TO PROTECT THEMSELVES AGAINST THE DAMAGE AND DISRUPTION CAUSED BY EXTREME WEATHER? LOSS PREVENTION A key part of loss prevention is building business resilience. A resilient business can sustain market share and retain reputation following an extreme weather event, gaining an advantage over competitors.

PREVENTING DESTRUCTION

WIND The major impact of strong winds and the most costly, is the damage that results when the building’s envelope is torn open and lets wind and rain into the facility. During a windstorm, damage to the building’s structural frame seldom occurs. Yet, a very small breach in the building envelope can damage large area of the building’s interior. For this reason, keeping the building envelope sealed is one of

the most effective ways of preventing windstorm damage at a facility.

A building envelope can be kept secure in various ways, such as by ensuring that roof perimeters with particular focus on corners are strengthened with fasteners, undertaking regular maintenance to repair damaged roof flashing, walls or weaknesses which highstrength winds could exacerbate, and ensuring that higher level openings 9

PROFILE

are properly designed to withstand the expected wind speeds.

FLOOD Research has shown that a flood can cost your businesses an average of ÂŁ2.1m in property damage.

Therefore it is key for businesses to fully understand the exposure of their site to prevent flood loss.

For a facility located in a known 10

July 2017

flood zone, it is not a case of if it will flood, but when. Flood damage and disruption is influenced by the depth, velocity of floodwaters and duration of the event. Floodwaters carry sediments (sometime of large size) that can damage and even destroy properties. They can contain various contaminants including chemicals and even raw sewage which also adds to the damage potential. Facilities

PREVENTING DESTRUCTION

‘BUSINESSES THAT HAVE ADEQUATE RISK PREVENTION PRACTICES IN PLACE WILL BE IN A POSITION TO GAIN AN ADVANTAGE OVER COMPETITORS WHO DO NOT’

that exist within flood zones should prioritise two strategies: keeping the floodwater out of important buildings, and limiting what gets damaged when water does enter a structure.

To reduce the impact of flood on business, there are simple, practical steps that can be taken, such as moving critical items out of exposed areas. The damage can be mitigated by making permanent physical changes to your facility, such as installing flood proof doors, barriers, submersible pumps, anchoring any outside equipment, and filling empty storage tanks.

Where the above is feasible and practical, these measures significantly reduce the impact of a flood.

Elevating important equipment (permanently or temporarily) above predicted flood levels is also an excellent way of mitigating the damage. As a minimum all facilities potentially exposed to flooding should develop a flood emergency response plan. Such plan should be based on an understanding of the importance of assets to the business as well as their intrinsic value and the repair/replacement time is such assets are damaged.

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PROFILE

Educating and Connecting Data Center Professionals at the Local Level

Chicago JULY 12, 2017

The Art Institute of Chicago CHICAGO, IL

Education, Networking, Local Area Industry Leaders, and Solution Providers.

ONE DAY – ONE LOCATION – ONE RESOURCE: Data Center World Local – Chicago 2017 Learn more and register to attend at: Local.DataCenterWorld.com/Chicago

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July 2017

PREVENTING DESTRUCTION

SUPPLY CHAINS As the world becomes increasingly interconnected, and the drive for efficiency increases, loss prevention becomes more complicated due to the nature of global supply chains.

Now, one event far away can cause operations along the entire supply chain to cease. With this in mind risk to the businesses from the supply chains need to be properly evaluated, and that protection options or alternative supply sources are identified.

These alternatives need to be in locations not susceptible to the same type of weather events.

Businesses that have adequate risk prevention practices in place will be in a position to gain an advantage over competitors who do not.

HOW CAN AN INSURER HELP? Given the variety of risks that extreme weather events can present for businesses, it is clear that insurers should help their policy holders in a number of ways. At a basic level, insurers can compensate for lost income, ensuring that businesses still have the capital available to keep operating and will not be brought to a standstill by an extreme weather event.

Insurers can also go a step further by assisting in the creation of a business continuity plan covering areas such as, disaster recovery, employee safety, retrieval of business data, emergency communications and the possible relocation of a business to a more suitable area. A continuity plan can ensure that a business can resume normal operations quickly, safeguarding market share, reputation and profitability.

Insurers should help clients identify the, ‘pinch points’, as well as show which areas aren’t covered, to help them create a higher level of resilience within the business, which will mitigate the damage that extreme weather events can cause.

At FM Global we believe that business resilience and the long-term success of an organisation go hand in hand. With this in mind we would always encourage our policy-holders to take a long-term view of their businesses, and to implement risk prevention strategies which increase the resilience of their business. A resilient business can mitigate both the material and reputational damage that extreme weather events cause, ensuring long-term success.

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PwC: On the

road to sustainable procurement

Director of Procurement Jeremy Willis talks to us about the accountancy firm’s corporate responsibility priorities Writ ten by: JACKIE COS H

S U S TA I N A B I L I T Y CORPORATE SOCIAL RESPONSIBILITY is the buzzword of the Noughties, an integral and necessary part of any major company’s strategy. The Social Value Act of 2013 may have formalized the requirements for public bodies, but pioneering organizations such as PwC had already bought its ticket and found its seat on the train long before that point.

With a commitment to do what is right for clients, people, communities and the environment, corporate social responsibility is at the heart of the business, and in particular it is important to the people who make decisions about what to purchase and who to purchase from – the procurement team.

Jeremy Willis is Director of Procurement at PwC. He says: “One of our commitments is clearly to try to spend more with social enterprise suppliers, and to do that we have to have more procurement practices and policies that are inclusive, that don’t preclude their involvement with us. But also we need to have trained and raised awareness of the people involved in purchasing

decisions in the business, more broadly to raise awareness of the agenda amongst peer groups and networking opportunities.”

Clearly small enterprises work differently from multinationals such as PwC, and are often limited by what they can afford in terms of meeting insurance requirements, so Willis is aware that sticking to standard terms and conditions doesn’t work, but also that more needs to be done to assist social enterprises in learning how to engage with large organizations.

PwC has been very proactive in opening up communication with social entrepreneurs. Since 2011 it has had a Social Entrepreneurs Club, offering a full program of support to its 250 members across the UK. It also supports the School for Social Entrepreneurs, which supports people who are using entrepreneurial approaches to tackle complex social problems, running practical learning programmes and courses.

Willis explains: “We have various panels and forums where we have sat down and said – let’s talk about how you would engage large corporates. Let’s talk about 15

S U S TA I N A B I L I T Y the distinctive element you bring and how you differentiate yourself from others and what you can expect from those corporates, so we have had those sorts of sessions and it is quite perfunctory things like – who do I speak to?”

Internally steps are being taken to educate and inform staff, to change their way of thinking so that this is not simply a strategy that comes from the top.

“We are orchestrating some internal communications, so we have some videos we have produced available both externally and internally,” Willis continues. He gives examples of posters in the washrooms which highlight that the soap there is made by visually impaired people in the community, and of videos which raise awareness of what we all can do to make a difference.

But with a baseline of 59 social enterprise suppliers in its supply chain, and £2.24million annual spend, they are aware that this is only a small part of the business.

“Part of the challenge is in actually identifying the social enterprise suppliers,” says Willis. “Not all of the 16

July 2017

social enterprise suppliers are on the buy social directory. Some social enterprise suppliers have taken a conscious decision not to be on that, due to the cost. I was bemused by that at first but some have told me that they would rather spend their money on coming to the school for young entrepreneurs, spending a day here and raising awareness, than going down that route.”

But as well as looking externally and at how to help make a difference in the world outside, like any responsible organization nowadays

“We have various panels and forums where we have sat down and said – let’s talk about how you would engage large corporates” – JEREMY WILLIS Director of Procurement at PwC

PwC is looking at its own carbon footprint. “PwC’s carbon footprint is primarily around its electricity usage in its buildings, and travel,” says Willis. “Then there is a big gap down to number three, and our carbon consumption isn’t massive, but it is all around, so we have put a lot of energy, excuse the pun, into trying to put low carbon solutions into our buildings. I think our London office was the greenest new build of its time when it opened four years ago.”

The way business is being conducted is changing, with PwC 17

TECHNOLOGY

“Supply chain sustainability, for me as a procurement guy, is one of the most engaging aspects of procurement.

It is through your purchasing power that you can manage environmental and social impact and be a force for good in what you are doing” – JEREMY WILLIS Director of Procurement at PwC 18

July 2017

S U S TA I N A B L E P R O C U R E M E N T

encouraging a greener approach, with less travel and more use of technical communications. “We say to the customer - if you would agree to us collaborating via Google hangout for every second meeting or having a video audio conference for some other meetings, then it clearly costs less for us to do that and it is more carbon friendly and we will pass the cost benefit on to you. That has definitely improved as a ratio of revenue, but it is quite a hard one to break. Truthfully, in most incidences a lot of sustainability initiatives are packaged up as cost savings.”

Organisations are now increasingly working together to push through change, and PwC is part of the newly formed Buy Social Corporate Challenge.

“PwC had the opportunity to be one of the foundation members back in December when it was first launched, with an event at number 11 Downing Street. Social Enterprise UK is providing the guidance and the energy and the government is sponsoring it. The plan is to have, by 2020, large corporations signed up to committing

to spending a billion pounds on social enterprise,” explains Willis.

He stresses the key role big businesses have in shaping the future.

“PwC just launched this responsible technology policy which I am really excited about, and it is basically saying that technology is a force for good, but there are some negative consequences associated with it.

“The policy includes hints and tips around how to go off grid at certain times, both for your own mental wellbeing and to reduce consumption. It considers the negative aspect of artificial intelligence replacing humans in their jobs and what can be done to reskill people and to upskill people and enable them to gain employment in other areas.”

For Willis there is much to be excited about. “Supply chain sustainability, for me as a procurement guy, is one of the most engaging aspects of procurement.

It is through your purchasing power that you can manage environmental and social impact and be a force for good in what you are doing.

That is really energising.”

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TOP 10 GLOBAL SUPPLY CHAIN RISKS WRITTEN BY: DELANY MARTINEZ

THERE ARE ANY NUMBER OF ISSUES THAT COULD BE WORKING AGAINST YOUR SUPPLY CHAIN PERFORMING TO THE BEST OF ITS ABILITY. READY TO TACKLE TROUBLE BEFORE IT STARTS? HERE ARE 10 OF THE BIGGEST CHALLENGES FACING YOUR COMPANY’S SUPPLY CHAIN, ACCORDING TO THE WORLD ECONOMIC FORUM’S GLOBAL RISKS PERCEPTION SURVEY

T O P 10

9 EXTREME

WEATHER EVENTS

10 INTERSTATE CONFLICT

When two states, countries or even regions are at odds, it spells big trouble for a supply chain that passes through them, or even one that runs adjacent to either. These conflicts can affect everything, from the free flow of raw materials and supplies, to readily-available local labour, to 3PL companies within the country. Deutsche Post, for example, ceased all deliveries within the Ukraine in 2016, due to instability in the region. It was a move that, while arguably smart for the German delivery company, left some 620 German companies in the Ukraine without access to their services.

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July 2017

When nature decides to upset industry’s best-laid plans, it isn’t always easy to reroute or rebuild. From tsunami waves that could ground a cargo ship for good to earthquakes that cut off well-travelled routes, the transport component of the supply chain is particularly vulnerable to these sudden disruptions. While chains in disasterprone areas can (and do) tread lightly, some natural events are completely unanticipated. Consider the aggressive Southeast US blizzard of January 2016.

While veteran truck drivers might have been able to guide their rigs through typically snow-light North Carolina, the lack of local infrastructure for preparations like brining and plowing might have still barred the way.

T O P 1 0 G L O B A L S U P P LY C H A I N R I S K S

7 CATASTROPHES 8 WATER CRISES

From terrorism to manmade disasters, catastrophes have a disruptive influence that ripples outward, closing roads and heightening security out of necessity. If your cargo is slated to travel through a region that’s recently been affected by a catastrophe, you can bet it will slow down your shipping speed considerably. Often, these occurrences aren’t ones that give a heads up - they happen suddenly and force companies to reroute and replan supply chain routes on the dot.

Water plays a much larger role in the supply chain than many professionals realise. Not only is it crucial to the manufacturing process itself, it also serves as a conveyance factor when boats factor into your transportation network. If the channels and eddies that give semi-inland boats freedom to move towards a shore dry up or become inaccessible, expect your product’s journey to dry up as well. If your manufacturing or shipping area is experiencing a severe drought, a shortage of labour may also hold up your delivery schedule.

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6 GOVERNMENTAL COLLAPSE

It’s no surprise that the fall of a state has far-reaching and catastrophic effects on a supply chain. As parties or individuals vie for the vacated seat of power, shipments of goods or components are vulnerable to damage, theft, or becoming a political point of contention in the ensuing chaos.

While some countries have simmering unrest that can be sidestepped with enough advanced notice, other conflicts, such as the attempted coup in Turkey in 2016, could occur virtually overnight. This can significantly slow or even stop goods that are scheduled to move through the country in question. Without cohesive and consistent governance, an international supply chain can run into problems at checkpoints and borders.

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July 2017

5 FAILURE OF

NATIONAL GOVERNANCE

Even when a country is ostensibly under control and being operated by a ruling individual or party, that doesn’t necessarily mean said party is ruling well. If a country’s leaders aren’t following through on the laws and regulations that keep your supply chain shipments safe, you could end up with adulterated raw materials, fraudulent components or an infestation of counterfeited goods within the country and beyond its borders.

T O P 1 0 G L O B A L S U P P LY C H A I N R I S K S

4 UNDEREMPLOYED OR UNEMPLOYED INDIVIDUALS

The current truck driver shortage is a prime example of how too few workers, faced with too many positions, can devastate the continuity of supply chain growth. Faced with mounting expectations - most notably the recent eLog mandates - and stagnant wage growth, the over-road transportation industry is having a crisis that directly extends to their clients.

With less availability of drivers, shrinking availability in LTL providers follows suit as 3PLs do all they can to maximize loads and efficiency in every mile. Less options for the manufacturers means less options for distributors, sellers, and eventually, the end customer as well.

3 FAILURE TO ADAPT TO CLIMATE CHANGE

While not all supply chains are heavily linked to environmental change, others are entirely dependent on it. Consider the case of coffee giant Starbucks, which expressed deep concern in 2016 for coffee crop yields that continue to lag in the face of climate change. All perishable products are vulnerable, even tangentially, to shifts in climate change - unseasonable weather can render an entire season’s harvest unviable, and droughts, wildfires and floods can render arable farmland or grazing plains unusable.

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2

DATA FRAUD AND DIGITAL THEFT

From supply chain partners to 3PLs, the number of individuals required to operate a supply chain grows exponentially larger as a company does. Each of those individuals represents a potential security risk - the wider the network, the larger the gaps. From proprietary designs and research to billing information, the data carried through your supply chain is just as important as any physical components your company may be moving. As new warehousing innovations like the IoT and RFID-based shelving practices become more commonplace, hacking, spoofing and digital theft will inevitably follow suit.

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T O P 1 0 G L O B A L S U P P LY C H A I N R I S K S

CYBER ATTACKS

While there is no shortage of digital thieves waiting to access and steal your data for profit, there’s another dangerous group eyeing your supply chain at the same time - one that has nothing to gain but your misfortune. Cyberattacks can occur for numerous non-financial reasons, from gripes against a company’s political or cultural leanings to criminals simply looking to cause mayhem by introducing instability. If your supply chain doesn’t have a continuous assessment policy when it comes to your digital security, you may be making yourself vulnerable to these types of attacks.

Even the most foolproof supply chain plan can’t hope to completely avoid every one of these problems, but knowing where your potential weak points are is an excellent start. These are particularly important for international chains, but each of these tips applies to domestic-only companies as well. Forewarned is forearmed, so don’t let your company or your supply chain suffer in the face of the unexpected: use these tips to make an actionable plan and you’ll be able to keep your business running smoothly through any scenario.

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INTERNATIONAL RESCUE COMMITTEE: IMPLEMENTING RESILIENCE WITHIN THE HUMANITARIAN SUPPLY CHAIN Written by Catherine Rowell Produced by Vince Kielty

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WE SPEAK TO REGIONAL SUPPLY CHAIN DIRECTOR PHOEBE KUNG’U, WHO DISCUSSES HOW SHE WORKS TO ENSURE THE ORGANISATION’S SUPPLY CHAIN OPERATIONS REMAIN ROBUST IN THE FACE OF HUMANITARIAN CRISES

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or more than 80 years the International Rescue Committee (IRC) has provisioned lifesaving aid and support to refugees throughout the world. Established in 1933, it is one of the world’s most renowned and respected humanitarian organisation’s.

In order to remain resilient in the face of frequent unexpected crises, the IRC’s supply chain practices remain robust, creating efficiencies and providing world class service to individuals in need.

With many conflicts occurring worldwide, women and children are the most affected. Providing sourcing practices and compliance within East-Africa is Regional Supply Chain Director Phoebe Kung’u, who has become the only senior female Supply Chain Director in the region.

Whilst she explains that an increased female engagement and desire to help women grow within the supply chain is something she wants to see

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more of, “some countries present a lot of challenges for women, and therefore it is no wonder there are not many women in roles within the supply chain managerial roles. However, I also think that many organisations can do a bit more to encourage women to be part of this change.”

Professionalising the IRC’s supply chain operations and creating efficiencies by setting up key strategies, relevant to the context of the different countries within East Africa, falls under Kung’u’s umbrella.

“The supply chain is complex, especially the humanitarian sector,” she says. “It’s a field that has high risk, high challenge, but is very rewarding.” Supporting nine countries with different needs, Kung’u ensures all suppliers are able to respond to the IRC’S business operations, depicting a large piece of work with a wide scope. Through this role, acquiring an intimate knowledge about the context of the countries

AFRICA

AFRICA

and complex issues has been essential. Kung’u adds: “The supply chain needs to be strong, it needs to be efficient and we need to be accountable.”

Working in partnership with key stakeholders and buyers, setting up long-term and regional agreements has enabled Kung’u to become what she describes as a ‘gatekeeper’ for the various countries, providing strong leadership throughout the organisation’s global initiatives. With a limited visibility of supply chain practices at regional and HQ level in areas such as data analysis, contract management, and spend with regards to a particular supplier or category of goods and services, the organisation has since placed significant investment in both staffing and recruitment. The IRC is also

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I N T E R N AT I O N A L R E S C U E C O M M I T T E E

introducing new technologies, such as a new ERP system, which will automate supply chain processes. Whilst the new system is at design stage, the IRC is currently utilising an interim system which enables the tracking of all procurement activity for the nine countries. Kung’u explains: “I’m able to see the procurement tracking reports on a monthly basis. I know how much is spent on what categories, from which suppliers, and so we are able to come up with management strategies to determine whether we need to do global, regional sourcing or whether to do in-country sourcing.”

Local versus global sourcing Although the organisation typically sources locally, it has adopted a decentralised procurement function in order to respond to its growing business needs. By identifying high spend suppliers and high-risk categories, the IRC selects global suppliers who can procure products or services which may not be available from local suppliers when required. With nine countries in EastAfrica, the organisation has over a hundred suppliers just within this area alone, of which $275 million is put aside for the IRC’s overall supply chain operations globally.

However, Kung’u adds, “we wouldn’t be

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AFRICA

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“I MEET UP WITH SUPPLY CHAIN TEAMS ON A FORTNIGHTLY BASIS TO DISCUSS WHAT THE PRIORITIES ARE, AND THEN DECIDE WHAT IS BEST IN TERMS OF STRATEGY”

AFRICA

successful in our health programs without dedicated suppliers like IMRES. One of our global suppliers for pharmaceuticals and medical suppliers, they have provided supplies to various countries in Africa and beyond, such as Mali, Kenya, DRC, South Sudan, Yemen, Nigeria, Central African Republic and Chad.”

Embedding quality controls within procurement operations has become imperative in order for the IRC to procure responsibly and implement a competitive bidding process. “Even though the procurement activity could be happening in a certain country, we are able to review the procurement and make sure the quality is good before the contract is signed off by the suppliers,” explains Kung’u. “Our controls ensure that we have quality suppliers and we are managing the financing responsibly.”

However, with the location of some of the areas the IRC is situated, complex issues are apparent, such as lack of access and/or communication.

Consequently, multiple means of communication are utilised to broker positive relationships with suppliers

and stakeholders. Whilst email is the most frequently used communication tool, Kung’u adds: “I make a point of meeting up with the supply chain teams in countries on a fortnightly basis to discuss what the priorities are, clarify, or give assurance to a particular task or initiative, and then we decide what is best in terms of strategy.”

Complex challenges Nonetheless, working within a humanitarian supply chain could be interpreted by many as increasingly hazardous in comparison to more traditional supply chain settings.

Planning ahead and identifying potential needs is of course dependent on a variety of factors.

Crises as a result of a recent mandate can be predicted, but with ones which are unexpected the supply chain needs to be flexible and respond as quickly as possible.

To this effect, Kung’u explains that developing strong relationships with stakeholders has remained key: “Our teams of programming staff identify the needs ahead of time so we can start preparing in supply chain,

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knowing where we are going to fall, what sort of items are we getting in the local market, or whether to get these from global suppliers.”

There can also be restrictions the IRC has in relation to procurement, as funding mostly does not come without certain conditions from humanitarian donors, some of whom require that procurements are done through already established humanitarian procurement centers or donor pre-qualified suppliers.

Sometimes, Kung’u adds, “suppliers that have been prescribed by the humanitarian donor have not established a presence in the country where the programs are, which can result in additional challenges like import restrictions, long lead times associated with shipping

1933

The year International Rescue Committee was founded 38

July 2017

and delivery and most importantly responding to those most in need.”

Additionally, with a consecutive process, the organisation has to bid for funding and win grants, which can create delays. Through such high pressures, Kung’u’s strong relationships with stakeholders and senior management ensures that the IRC is an organisation with a culture for planning. Despite such challenges, Kung’u explains that the IRC has achieved a significant amount, explaining that “with the new ERP system, which is expected to launch in 2018, functionality is being built in to enable the organization to plan at the proposal stages of grants, so that the supply chain is equipped with knowledge and information about what is needed ahead of time to undertake procurement more efficiently.”

Job satisfaction With the high number of challenges attributed to the humanitarian supply chain, Kung’u explains that job satisfaction has become of prime importance, understanding

that the organisation continually makes a difference to peoples’ lives. Encompassing numerous complexities, with various countries adopting different challenges and humanitarian situations, barriers in trade and number of restrictions, Kung’u concludes by stating that the role is “very exciting, and that I have kept myself informed by collaborating with others in humanitarian agencies working groups, sharing knowledge with likeminded individuals like myself – such as the UN Agency & INGOs – where we share expertise, knowledge and experience. Having someone who is able to keep themselves informed by collaborating with others is very good and has really helped me grow within the supply chain.”

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Procu place rement in ban ’s king Writt en by Wed Prod a uced

by He eli Chibe lu ykel Ouni shi

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N AT I O N A L B A N K O F A B U D H A B I ( N B A D )

WE SPEAK TO JASON BROWN, HEAD OF GROUP PROCUREMENT AND COMMERCIAL MANAGEMENT AT THE NATIONAL BANK OF ABU DHABI ABOUT PROCUREMENT, ABOUT WHY THE DEPARTMENT IS IMPORTANT TO BANKING

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he National Bank of Abu Dhabi (NBAD): leading Middle Eastern bank, among the world’s safest banks, and has one the strongest combined ratings ever. These details can be gleaned from a simple web search, but what is known of the inner workings of the Bank? What processes lie behind the ATMs, the cashier desks and advisory helplines?

We want to know how procurement and a low visibility department contributes to NBAD’s international success, so we speak to Jason Brown, Head of Group Procurement and Commercial Management.

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Brown tells us that procurement has a strategic value for any company it’s in, let alone NBAD. “We contribute to the bank, we’re not just a service department,” he continues. “We actually value add to what we do to our customers internally.”

Brown heads procurement for all of NBAD’s services, which comprise personal, commercial and private banking. The bank spans five continents, operating in countries like Malaysia, the UK, Brazil and the US. Alongside his department, Brown helps manage these procurement operations too. “The team that I run

MIDDLE EAST

Jason Brown

Head of Group Procurement and Commercial Management Jason Brown Joined NBAD in 2012 with the remit to set up and run centralised procurement.Since his time at the bank he has led the team where it is today as a leading procurement organisation within the Middle East. The team was awarded the best Sustainable Procurement Award from CIPS in 2016. His previous role have been with major organisations such as Novartis Pharmaceuticals, Downer EDI, British American Tobacco and Dana Corporation. His experience is financial, pharmaceuticals, FMCG, automotive and electronics.He currently has MCIP’s and is working towards getting FCIP’s.

is full strength; we’re 41 people. I’ve just lost three good people in the last year and a bit, but they’ve all gone on to senior roles in other companies. It’s very hard to retain when you’re top of the game, unless they want my job,” he laughs.

“The good thing is that we’ve got the right people, because obviously, they’re moving on to bigger and better things,” In total, Brown’s team manages around 45 percent of the operational spend and has one core strategy – to reduce NBAD’s operating costs. By reducing spending the bank can maintain a lower operating base and an increased net profit ratio. The procurement department is split into four sections:

• Invoice, processing and payments (procuring low-value, everyday items) • Strategic (sourcing large spend, large cost items, such as software and hardware) • Supplier relationships (managing vendor onboarding, governance, business compliance and operational risk) • Market data

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MIDDLE EAST

“THE BANK HAS VERY STRONG TIES ON SUSTAINABILITY. WE DO A REPORT EVERY YEAR, AND PROCUREMENT IS A LARGE PART OF THAT IN TERMS OF HOW WE MANAGE THE SUPPLIER DATABASE, AND HOW WE DO BUSINESS WITH PEOPLE”

Market data is a relatively new interest for the procurement department.

To make sure that bankers remain informed, the procurement team sources financial data feeds from a broad range of data providers such as Bloomberg and Reuters. “For us, market data is the key thing that drives all of our traders,” Brown explains.

“If you’re looking at the trading floor, moving commodities and moving money around the trading market, we need accurate, up-to-date information about how trends are moving, so traders need to have the right information we deliver that to them.”

The procurement team also provides NBAD traders with feeds from NASDAQ, FTSE, and other global stock markets. These, along with the data feeds from Bloomberg and Reuters etc., allow the staff to carry out their jobs to the highest standards.

“If we don’t ensure that they’ve got the right tools (and there’s multiple tools and multiple data feeds) they can’t make informed decisions as to what to do with the global market,” Brown adds. Procurement uses a

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N AT I O N A L B A N K O F A B U D H A B I ( N B A D )

complex IT infrastructure to handle all this data. So, not only does procurement source the data, it manages it and controls it within the bank. Jason and his team are able to work closely with the IT department, as NBAD’s IT is mostly in-house.

“It is our largest spend unit that we deal with within the bank; they’re accountable for over 40 percent of NBAD spend,” Jason adds.

Safety first NBAD may invest a lot in IT, but Brown stresses that operating costs must be kept as low as possible. Among other results, this contributes to NBAD’s ‘safest bank’ accolades. It has been ranked by Global Finance as the

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Safest Bank in Emerging Markets and the Safest Bank in the Middle East.

“We’re the safest bank because we have high capital, we meet the certain requirements in terms of how much capital we have in reserve in certain areas, in case there was a run on the bank and things like that,” Brown says.

“By keeping costs low, procurement helps maximise that return to the bank.

The less money we have outgoing, the more we can reinvest into capital and assets. And by having a strong asset base and a strong capital base, that helps us be a safe bank. So, the more influence we can have on our operating costs and keeping our operating costs down, the more that influences our position on the bottom line.”

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Corporate citizen How does procurement push costs down without forsaking ethics and sustainability? Brown explains: “The bank has very strong ties on sustainability. We do a report every year, and procurement is a large part of that in terms of how we manage the supplier database, and how we do business with people.

Our policy is clearly mandated.”

Brown’s team conduct investigations with suppliers to make sure that NBAD isn’t associated with practices such as slave labour and child labour. “We take those seriously and we will investigate if it is brought up to us, we have a supplier portal where we do

a lot of supplier due diligence, making sure we’re dealing with the right partners,” he explains.

The procurement team is also committed to supporting local Abu Dhabi companies wherever possible. Brown explains: “Quite a chunk of NBAD spend is spent locally with Abu Dhabi companies to keep the money sustainable within Abu Dhabi and the UAE.”

7,500

Number of employees at National Bank of Abu Dhabi

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Khalaf Sultan Bin Rashed Al Dhaheri

Group Chief Operating Officer Mr. Khalaf Sultan Bin Rashed Al Dhaheri joined NBAD in 1997. Mr. Al Dhaheri previously served as General Manager and Chief Risk Officer. Throughout his career with NBAD, Mr. Al Dhaheri has held senior positions and gained comprehensive knowledge of the Bank’s operations. In July 2012, he was promoted to Group Chief Operating Officer. Mr. Al Dhaheri supervises a range of functions such as Operations, Information Technology, Enterprise Projects & Architecture and Group General Services. Mr. Al Dhaheri is Deputy Chairman of Abu Dhabi National Islamic Finance (ADNIF), Chairman of Abu Dhabi National Properties (ADNP), Chairman of Massar Solutions, a Member of the Audit Committee in Abu Dhabi National Oil Company (ADNOC), and a Board Member of Masraf Al Rayan, Drake & Scull and the Emirates Institute for Banking and Financial Studies (EIBFS).

Mr. Al Dhaheri graduated from the UAE University with a Bachelor of Science degree in Accounting and has earned an MBA from Zayed University. He is a Certified Public Accountant (CPA) through the California Board of Accountancy.

Future growth Brown reveals further progressive plans: “So the West East corridor, that’s been our strategy for the last couple of years. The corridor is where some of the megacities of the world are going to be and they’re the most important markets coming up, and the idea is that we support those companies in the UAE that are actually investing in those areas; in Singapore, in Africa, in Hong Kong, those sorts of areas.”

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Brown uses the example of Etihad, the second-largest airline in the UAE. “We want them to bank with NBAD, not only in the UAE, but in Singapore and Hong Kong as well, for example.” For NBAD to support its customers and investors in this way, Jason recognises that the procurement team delivers its strategic value.

“We get the best commercial deals that help the bank maintain its competitive advantage in some areas, but make life easier for the people getting the service as well,” he states. Jason plans for the procurement team to continue pushing the bank forward in the next few years. “We do a lot of good things and we’re seen in the community as not only banking, but procurement. We’re known in the Middle East, especially as a team that’s doing what we do, in the right way.”

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REAL COST value in procurement Written by Dale Benton Produced by Heykel Oluni

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TA S N E E

Through a combination of strategic organisational realignment, comprehensive supplier management framework, a Center of Excellence and a strong commitment to structured category management approach, Tasnee continues to deliver real cost value to stakeholders

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S

ince its inception over 20 years ago, Tasnee has created a network of diversified industries by working with prominent companies across the globe. One of the significant factors behind Tasnee’s success has been the way the company has transformed the procurement organisation to accelerate the process of capturing synergies and creating an organisation capable of supporting the company’s growth to deliver unrivalled value to stakeholders.

Organisational realignment Tasnee has re-designed the organisation to support the Business Units at operational level and, at the same time, affirm the strategic direction of the company. With the aim to deliver the highest quality of service at the optimal cost level, Tasnee focussed on: • Monitoring cost and spend • Implementing structured and robust processes • Focussing on customer service by processing transactions quickly and effectively Tasnee has also established Key Performance Indicators (KPIs) to monitor the performance of the global procurement organization at the SBU and operational levels. This has allowed the procurement leadership to set clear and focused objectives, provide clear understanding of the roles and responsibilities throughout the business, and ensure empowerment and ownership at lower levels.

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14 2014

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MIDDLE EAST

Supplier Management Framework focus on supplier segmentation Tasnee’s supplier management has allowed the company to: framework enables the company to • Better understand the supply base look at Prequalification, Segmentation, • Optimise resource allocation on Relationship Management and performance management, risk Performance/Risk Management management, and development when selecting potential suppliers.

• Focus on building relationship Through this process, the company with the most critical suppliers works with suppliers to establish responsible sourcing, reduce the The sourcing strategy is developed supply chain risk and ensure consistent based on the segment of its suppliers. standards across its supplier base.

A high spend, high criticality supplier Once a supplier meets the standards will have a deeper and more strategic set out by Tasnee, the company then relationship than a low spend works towards building a supply low criticality tactical supplier. chain strategy through a companyTasnee has also initiated a Supplier wide Supplier Performance Survey.

Performance Management mechanism “Depending on the criticality of the to evaluate the performance of commodity, suppliers go through a a supplier over a period of time. multi-stage qualification process.

The survey includes the rating of This allows us to select our supplier suppliers from people within the partners carefully, ensuring that they company, as well as the response understand our requirements and are a of the suppliers themselves. good cultural fit for the business,” says “The survey covers strategic Saleh H. Al Suwaiti, General Manager, Procurement Center of Excellence.

Tasnee also carefully segments its suppliers based on the The year spend and criticality to the that Tasnee business. A dedicated was founded

1985

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commodities and is planned to be rolled out to more commodities and services down the road.

The survey uses the same set of questions across all strategic suppliers of a particular commodity to gain a better understanding of the performance of certain suppliers,� Al Suwaiti says. “It will create a full 360-degree view of the relationship between our company and our suppliers and we can engage with the suppliers and the business to drive improvement opportunities.�

The company also works from an internal perspective applying a strict code-of-conduct on the way its employees engage with suppliers, providing a clearly defined set of ethics that ensure a fair, honest and transparent working relationship.

To further streamline its relationship with the suppliers, the company has implemented a Vendor Invoice Management (VIM) system. This enables suppliers to submit invoices electronically, streamline the invoice processing and allow Tasnee to improve its on time payment performance overall.

Center of Excellence (CoE) It is not only through the Organisational Realignment and Supplier Management Framework that has allowed Tasnee to transform its procurement organisation and work with key suppliers. The company has also setup a Procurement CoE, a global effort that has complete responsibility over strategic initiatives, statistical benchmarking, performance analytics, KPIs, policy and

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“The survey uses the same set of questions across all strategic suppliers of a particular commodity to gain a better understanding of the performance of certain suppliers�

Tasnee introductory video

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SUPPLY CHAIN PARTNER OF THE CHEMICAL AND PETROCHEMICAL INDUSTRIES IN SAUDI ARABIA OUR SERVICES Handling of all kinds of liquid and dry chemicals and petrochemicals.

LOGISTICS -

Own silo storage and warehousing On-site operations and complete management Value-added services on site and off site Transport of bulk materials and packed products Logistics consultancy, optimisation and EPC contracting

CONTACT Tel: +966 (0)3-3618317-119 | Fax: +966 (0)3-3618316 | E-mail: info@s-a-talke.com P.O. Box: 10610, Jubail Industrial, City 31961, Kingdom of Saudi Arabia

MIDDLE EAST

procedures, and the supplier management process. The CoE aligns with the company’s central procurement strategy, which is focused on the delivery of parts and services at the highest specification but at the lowest costs possible.

“The Center of Excellence provides the essential oversight over the procurement organisation globally, manages procurement processes, monitors performance and implements strategic initiatives and the supplier management program. This has allowed Tasnee to have a classleading procurement organisation and furthered its ability to develop a strategic and value-added relationship with its suppliers and internal customers,” Al Suwaiti explains.

As with everything with Tasnee, the overarching goal is to identify and deliver real cost value in the supply chain and procurement process and it does this through an all-inclusive approach to procurement directed toward both internal as well as external stakeholders.

Technology Through the implementation of technologies such as Ariba, Spend Visibility, e-Auctions and the VIM system, Tasnee is very much a company that is embracing the technological shift of the modern supply chain industry.

“Technology is one of the keys to procurement being able to deliver best value goods and services from our suppliers across the globe,” Al Suwaiti says. “We need to automate as much of the transactional activity as possible to ensure that we have time to devote to value-added activities.”

Tasnee has invested heavily in procurement technology solutions, particularly for automation of processes on SAP, introducing spend visibility tools and improving SAP reporting functionality. “By

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“Technology is one of the keys to procurement being able to deliver best value goods and services from our suppliers across the globe” SALEH H. AL SUWAITI General Manager, Procurement Center of Excellence

In a career spanning 25 years, Salah Al Suwaiti has worked extensively across the procurement and supply chain domain. After obtaining a Bachelor degree from King Fahad University of Petroleum & Minerals, he joined Ar Razi (SABIC) as Procurement and Contracts Representative.

During the initial 10 years of his career, Al Suwaiti has been promoted to Procurement Manager and was responsible for overseeing all Procurement and Contract function and end-to-end SAP Procurement implementation for operational performance enhancement. Post this time, he moved to SABIC HQ to engage in the SAP and Shared Services transformation projects. He was then assigned as the Project Manager for the EMDAD Supply Chain Project which was a strategic project aimed at implementing an integrated supply chain. In 2013, Al Suwaiti moved to the National Industrialization Company – TASNEE as the Logistics Manager.

During that time he obtained a Master Degree of Global Business Administration.

When TASNEE was starting its Procurement Transformation program in 2015, he was promoted as the General Manager, Procurement Center of Excellence to oversee the entire program and ensure strategic focus globally, and was also selected as the Vice-Chairman for the Gulf Petrochemical and Chemical Association (GPCA).

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introducing automation in SAP functionality, Tasnee has come up with innovative ways to speed up the procurement process and improve overall performance,� Al Suwaiti says.

The company has also signed an agreement with SAP Ariba to tap into the leading cloudbased procurement platform and implement a comprehensive tool to cover the entire P2P chain.

Already, the company is reaping the rewards for investing in technology, with an additional 20 percent savings generated in some categories as a direct result of implementing reverse e-auction capabilities.

Sustainability As a global player in procurement, Tasnee invests a significant amount of money into ensuring that the company operates an ethical, sustainable supply chain. As a company that oversees large volumes of imports and exported goods, Tasnee prides itself on the accountability of itself and its suppliers. “Through the procurement transformation, we were able to implement a category management structure, introduce BUYER approach which laid out standard sourcing guidelines, strengthened our organisation through recruitment of qualified resources and providing extensive training, developed standard reporting, and rolled out strategic technology initiatives.� adds Al Suwaiti.

The Tasnee procurement transformation program has been immensely successful and continues

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to deliver results in the form of: • Average savings of 10 percent for services, 8 percent for MRO and 3 percent for chemicals and packaging amounting to total realised savings of 150+Mn SAR to date since the inception of the program in 2016 • Enhanced the transaction time by 24 percent • Increased coverage of framework agreements “More and more collaboration between companies in the form of Group Purchasing Organizations (GPOs) aimed at leveraging

purchasing power and enhancing service efficiencies is also one of the trends in procurement.” adds Al Suwaiti.

Running alongside these initiativesis the company’s Centralised Procurement Manual, a series of policies and procedures which detail the way in which the company operates. Tasnee has taken great strides in holding its employees accountable to complying with the policies laid out in this manual and acts on this through audits and further training opportunities.

As a company, Tasnee values the importance of Corporate Social Responsibility deep within its central mission. “Our mission is to achieve the interest of the society by preserving the environment and

< Tasnee

has been recognised for excellence in social responsibility 64

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“The key is to know when it’s appropriate to invest in a new technology, implement new initiatives and engage right resources to extract the full value out of existing investments”

GULF STABILIZERS INDUSTRIES LOCAL PARTNER FOR ADDITIVE SOLUTIONS GSI is a joint venture between Zamil Chemplast – Saudi Arabia’s and AddivantTM, which is the world’s largest plastic additives and a global specialty chemicals company. Supported by Addivant’s Manufacturing, R&D, Technical Services, and Quality Assurance facilities worldwide, GSI commits to pursue strategic alliance and strong business partnerships as being the most reliable local provider of value-added products and services with global reach and standards. www.gsi.com.sa | aaasfoor@gsi.com.sa Tel : +966 13 341 7727 | Fax: +966 13 3400797 P. O. Box 35625 Jubail Industrial City – 31961 Saudi Arabia

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contributing to the human development through raising awareness, education, qualifications and skills development,” he says.

This commitment to CSR stretches wide and incorporates Tasnee’s approach to its supplier base, ensuring that its suppliers share similar CSR ambitions and values.

“We work closely with our colleagues in Sustainability, Product Stewardship, Risk and Legal, to ensure that we are all fully aligned on these issues,” comments Al Suwaiti. “We are even engaged with some third-party audits to ensure that we are fully compliant and that we can demonstrate continuous improvement.”

Concluding thoughts As Tasnee continues to advance its procurement strategies and deliver true cost value, efficiency and quality, Al Suwaiti believes that the company must find a balance in order to remain successful.

“The key is to know when it’s appropriate to invest in a new technology, implement new initiatives and engage right resources to extract the full value out of existing investments.”

STOP. THINK. TRANSFORM. Written by Wedaeli Chibelushi Produced by Charlotte Clarke

WE REACH BACK TO 2005, WHEN SHELL BEGAN A HUGE SUPPLY CHAIN TRANSFORMATION. HOW FAR HAS THE COMPANY COME? 69

SHELL

“

More upstream, profitable downstream”. In 2005, Shell used this mantra to distil its new strategy. With upstream initiatives, the energy and petrochemicals group searches and recovers oil and gas. Shell develops the way it refines and delivers products to customers via its downstream initiative. In short, Shell’s mantra means that if it boosts production, its income from refining will also go up.

A supply chain transformation was key to realising this strategy. As a result, Shell restructured its supply chain, with various end goals. These include standardising practises and technologies, generating stable cash flows and putting demand-driven best practices front and centre of operations.

12 years on from the new strategy launch, and Shell considers the supply chain transformation a success. It’s ready for the next step, i.e. transferring the new strategy to its operations in emerging markets, namely Asia. Shell’s transformation journey has been long, but it can be broken down into distinct parts:

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‘IMPROVING RELATIONSHIPS WITH SUPPLIERS WAS A KEY ASPECT OF SHELL’S TRANSFORMATION PLAN’

ASIA

3PL TO 4PL Before 2005, Shell was using third party logistics (3PL) to buy products. However, this meant that it lacked command of the procurement process.

Shell collaborated with Accenture to build a fourth party logistics operation (4PL), which Shell calls Logistics Management Services (LMS).

LMS supports Shellâ&#x20AC;&#x2122;s upstream operations, covering production, wells and projects. It is also a single-client platform, which provides a Shell-tailored solution. Furthermore, Shell is able

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Patrick Steppe, born in 1967, is chairman of the Board of Management of Lekkerland AG & Co. KG. In the position as Chief Executive Officer (CEO) he is responsible for sales and marketing, purchasing, category management of all product groups, strategy, business development, human resources (HR) and communications as well as the management of all national companies in the Lekkerland Group.

For more information please go to: www.lekkerland.com +49 2234 1821-0 | +49 2234 1821-445 | info@lekkerland.com

Changing together.

Growing together.

Shell and Lekkerland have been partners on an international level for more than 30 years. We talked to Patrick Steppe, Chief Executive Officer of Lekkerland AG & Co. KG, about the secret of successful cooperation like this.

What distinguishes the relationship between Shell and Lekkerland?

We both really want this cooperation to be successful and everybody involved does everything necessary to make it happen. One example are the international quality standards we set. We committed on these common standards and every Lekkerland employee in every country performs them precisely.

Change is normal.

To Lekkerland it is also important to continuously improve.

Change is normal. We therefore develop new solutions and services in order to support our customers even better. One example is multitemperature logistics that we introduced from 2012 on. Today, we are able to deliver all products – ambient, fresh and frozen – to Shell filling stations in just one stop. This reduces not only the kilometres driven, it also saves time and temporal expenditure for the shops.

Which additional services do you offer – to Shell and other customers?

Lekkerland is much more than just a wholesale and logistics partner. We offer solutions along the whole supply chain (order to cash process), including e.g. inventory management, purchasing, storage, reception and picking orders, distribution, service level monitoring and information flow. Of course, comprehensive consulting, optimising shops – e.g. through category management, shelf or range optimisation – or developing holistic shop concepts are also part of our services.

All services are tailored to meet the needs of our customers. As a 360 degree service partner we are able to offer Shell all product categories from a single source: tobacco, food, non-food, beverages, oils and lubricants and so on.

Depending on the needs of the Shell shops, we also deliver their own brands, e.g. oil. In addition, in some countries we support Shell with customised category management or the further development of food service offerings. And we are always there to consult with our long-term experience in the convenience segment.

Are there any new projects or services you currently develop for customers throughout Europe?

There always are. Lekkerland wants to offer solutions that allow

its customers to stay ahead of the competition. The aim is to make shops even more appealing for end consumers and thus successful.

We offer solutions along the whole supply chain.

One example are our new holistic shop concepts that we currently test in different countries.

The “Frischwerk” concept e.g. is a solution for filling station shops in Germany. The shops have a very attractive atmosphere and a design that is totally new for filling stations. We integrated a complete bakery and a broad range of fresh products as smoothies or salads.

There are also digital focus walls with advertising that changes depending on the time of day.

However, it is not only outer appearance that counts: The concept comprises all aspects that are important for the business, e.g. all hard and software, digital solutions to manage the shop, training sessions for employees, recipes for bistro products, marketing plans, category management, quality manuals and so on.

Your success is our motivation Lekkerland supplies about 90.000 filling stations, kiosks, convenience shops and quick service restaurants in Europe. We not only deliver the products but also develop tailor-made solutions - from holistic shop concepts to individual logistics services.

Our vision is to become the preferred 360 degree concept provider for all channels of on-the-go consumption and all aspects of the convenience business. The success of our customers is our motivation.

About 4,800 Employees

About 90,000 Points of sale in 6 countries

â&#x201A;Ź13 billion Revenues in 2016

For more information please go to: www.lekkerland.com

ASIA

to maintain close control of the outsource provider. It is able to build long-term strategic relationships with the provider, granting access to the provider’s best people, technology and innovation. Ultimately, by losing its old practice and negotiating with Accenture, Shell was able to take back control of the business.

LEKKERLAND Lekkerland had been the supplier of many Shell filling station shops in the past already. As a result of the transformation, in 2007 Shell closed a framework contract with the German-based company as their wholesale and logistics partner in several European countries.. Almost ten years later, Shell and Lekkerland have now signed a new international framework agreement for six countries that includes supplying more than 2,500 filling stations across Europe.

Lekkerland delivers food, tobacco, and non-food products to Shell’s stores with the same quality standards throughout Europe. Depending on the country, Lekkerland also

provides support on matters such as category management and the further development of the food service offering.

“We are very delighted that our long-term partner Shell continues to place its absolute trust in us,” said Patrick Steppe, Chief Executive Officer of Lekkerland AG & Co. KG. On an international level, Shell is one of the largest customers of the 360-degree full-service concept providers for on-the-go consumption.

TECHNOLOGY Shell adopted an SAP and APO sales system as its single platform for supply chain planning. For its lubricants business, Shell worked with supply chain company E2open. E2open provided Shell with Demand Sensing (DS) and Multi-Enterprise Inventory Optimisation (MIO), the former able to adapt to shifts in consumer behaviour and market influences. From this, it produces the most likely prediction of future short-term demand.

On the other hand, MIO uses advanced mathematics and daily

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‘SHELL WORKS WITH A WIDE VARIETY OF SUPPLIERS, FROM HOUSEHOLD NAMES SUCH AS MARS TO LOCAL SUPPLIERS’

S U P P LY C H A I N

granularity to produce more informed inventory targets. These targets mirror real-world market conditions, even in volatile markets. Combined, the solutions allow Shell to improve forecast accuracy.

Excess inventory has been reduced, which has in turn improved working capital use and free cash flow.

By using a single-instance ERP system, Shell was able to globally implement DS and MIO relatively quickly. This change had significant results. The majority of Shellâ&#x20AC;&#x2122;s finished product portfolio is now demand sense, while users can go about their daily and weekly planning tasks without disruption.

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SUPPLIER COLLABORATION Improving relationships with suppliers was a key aspect of Shell’s transformation plan. Shell works with a wide variety of suppliers, from household names such as Mars to local suppliers. In order to get the most out of relationships with these firms, Shell now holds comprehensive internal reviews on how to improve current situations. Additionally, the company developed the Shell Diverse Supplier Pipeline Management System in 2014. The programme aims to make sourcing easier and more transparent for ethnic minority and female-owned businesses and smaller potential suppliers. If a supplier meets Shell’s procurement needs, the system records basic details about the supplier into the Supplier Pipeline database and sends the potential vendor a link to add more information.

This technology also tracks the progress made by diverse businesses introduced to Shell stakeholders.

Prelude FLNG, a floating liquefied natural gas platform in Australia, provides a modern example of Shell building effective relations with suppliers.

Shell built effective bonds with main contractors to design and build this ground-breaking project.

Through its transformation, Shell has proven how important supply chain is to wider company changes. By restructuring its supply chain, it has been able to demonstrate “more upstream, profitable downstream” in action. The company has modified its supply chain in several key areas, and thus primed it to make huge strides in Asia and beyond.

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Creating the worldâ&#x20AC;&#x2122;s biggest underground signalling system Aviation systems, electronic warfare for armed forces, and security against cyber-attacks are a few of the operations Thales handles. In the Transport Supply Chain, Thales is in the middle of building the biggest metro signalling system the world has ever seen

Written by Leila Hawkins Produced by Sharicka Braley

CANADA

T

he history of the Thales Group goes as far back as 1893, when the Compagnie Française Thomson-Houston formed to operate patents for the emerging markets of power generation and transmission. An acquisition and a merger later, after the 1970s oil crises, the company started getting contracts in the Middle East and expanded its portfolio to include telecommunications and other forms of technology.

Later renamed Thales, it switched to defence electronics, still a big part of the business today along with aerospace, security and transport. The 9/11 attack made Thales strengthen its focus on areas like technology-centric warfare, and it has since acquired full control of several defence and aerospace subsidiaries. Thales in the UK is now Britainâ&#x20AC;&#x2122;s second-largest defence contractor, selected for various sizable Ministry of Defence programs.

In 2007, it acquired security, space and transport activities from longstanding partner Alcatel-Lucent, increasing its employees and revenue. More recently Thales acquired a big data management company, adding the Internet of Things and digitization to its ever-growing roster.

Transportation The urban rail transport Centre of Competence of Thales is located in Toronto, Ontario, Canada. It has built automated signalling for metro systems

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Mike White

Vice President of Procurement and Supply Chain of its Urban Rail Signalling Business Line, in Toronto

“Last year we had quite a few substantial projects finished on time, which in this industry isn’t always the case” – Vice President of Procurement and Supply Chain of its Urban Rail Signalling Business Line, in Toronto

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all over the globe, including in Dubai, Santiago and Hong Kong; it has also produced the two longest driverless train lines in the world, in Vancouver and Dubai. Supply of materials and services to support this construction work is overseen by Mike White, the Vice President of Procurement and Supply Chain of its Urban Rail Signalling Business Line, in Toronto.

“Last year we had quite a few substantial projects finished on time, which in this industry isn’t always the case,” he explains. “Approximately 50 percent of the project value is through procurement and supply chain.

We play a very significant part in its success. Normally we meet between the engineer and the installation guys, if design is late this doesn’t mean the installation can be late, so we have to do the magic in the middle to make sure everything is delivered on time.”

In London, Thales upgraded the underground’s Northern and Jubilee Lines to include automated signalling systems, on the back of which it won the Four Lines Modernization contract. This will advance four of the capital’s most important lines: the

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Thales Next Gen Transit Positioning System

Circle, District, Hammersmith & City and Metropolitan lines. The London Underground carries 1.34 billion passengers per year, and between them these lines account for 40 percent of the network’s traffic.

This is the largest project of the sort that’s ever been created worldwide. It’s a vast, complex task, as construction workers only have two to three hours each night to install the equipment.

Finding the right suppliers This makes it essential to have good relationships with partners in installation and other processes.

A good example of one of the close relations Thales has is with a USA-owned China based electronics manufacturer, which has been supplying most of its electromechanical equipment to Thales on urban rail projects for a number of years, delivering on time and with competitive costs.

“They’re fantastic for us,” White says. “The work they do is highly complex and subject to a lot of changes from designers, but they

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always manage to do it and it hardly ever impacts on the delivery to the customers. If we had another supplier we wouldn’t have got that.”

Thanks to partners like this there is often no need to pit suppliers against each other; however Thales has a network called “Family Buyers” who are managers in different categories.

Whenever a request for a quote or proposal is launched the relevant manager will ensure the right suppliers are consulted. These are bundled together and a view standardized to suit the company’s needs.

“Prior to any orders being placed we have a robust gate process at different stages which the relevant manager is included in,” he says. “This enables us to assess supplier offers, mandate any negotiations and invoke lessons learned to ensure that we gain the most cost competitive offer while meeting the design requirements and securing the delivery lead time in line with the project needs.”

It’s also very important to talk to the suppliers as early as possible.

“This can be as early as our product development stage where we

©Thales_Digital Cognitive Tool - Human sensing.

Thales Canada Research & Technology

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work with our suppliers to look at manufacturability of the product components, the global availability of piece parts and general design to cost activities,” he says.

“In addition to this, for large spend items, we would engage with our supply chain to effectively price and build our proposal to bid for the project. This would include working with suppliers of materials and equipment as well as service providers such as installation services.

This would entail conducting design for manufacturing, installation

©Thales_Urban Rail Data Analytics

and cost activities to make their inputs and our overall bid price competitive for our end customers.”

Equally important is ensuring sources are sustainable, as each project has a 20-30 year life cycle. All the suppliers must sign a corporate social responsibility charter, stating they are committed to ethical sourcing, no pollution and no child labour.

Thales is part of the United Nations Global Compact, a voluntary initiative to encourage companies around the world to adopt socially responsible policies. “At the end of the day, this is Thales’ reputation,” White says.

Challenges and strategies The biggest challenge is competition, not just in procurement but for Thales as a whole. White explains that the Chinese market is its biggest rival, as it’s no longer focused internally but is widening its footprint to the rest of the world. China’s low cost labor means Thales has to drive its prices down.

However Thales has strategy to handle this. “Within the Thales group, we have a program called Ambition 10 – that’s a ten-year

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program to make sure everything we do is lean and agile. We reduce our internal costs and improve our competitiveness. That then translates down to the business entity levels to specific action plans, so each function will have an ambition boost transformation plan each year which is then acted upon and driven down into our annual objectives. Everyone gets an annual objective based on the business plans within the company.”

In procurement specifically, this improves the competency and capability of staff, and how the warehousing is managed more effectively. Some of this is achieved internally and some by using 3PL, in other words, outsourcing to

third party logistics services.

“We make sure we’re using contemporary tools and processes as well, instead of just sitting back on our laurels and accepting what we’ve got is good,” White says. He explains there is a large focus on improvement, and while it used to be the case that each part of the business would have had its own plan, with the new Ambition 10 program they all work seamlessly together. “If I’ve got a savings or competitiveness target to achieve this year that’s also now linked to engineering, because the only way we can really do it now is with value engineering or design to cost. We’re now starting to link the plans together which was not done before.”

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RESHORING: SigmaPoint is the paradigm shift

Written by Nell Walker Produced by Sharicka Braley

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SIGMAPOINT TECHNOLOGIES

SigmaPoint is bringing business back to Canada by way of a sturdy operations-supply chain relationship and a dedication to lean manufacturing. Leah Slaughter and Stephane Dubreuil explain the company’s story

“I

t’s unusual to find supply chain and operations willing to stand beside each other during a transformation,” states Leah Slaughter, Vice President of Supply Chain at SigmaPoint Technologies. The two business processes are generally segregated and segmented, but Slaughter and Stephane Dubreuil, Vice President of Operations and Lean Enterprise Solutions, have worked

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closely to streamline and combine them to maximum effectiveness.

“It was imperative for us to get rid of traditional philosophies and methodologies and design something new between supply chain and operations, in order for SigmaPoint to become a lean enterprise leader. The tension and arguments that happen otherwise cost more money and are wasteful, so we’re putting an end to that.”

S U P P LY C H A I N

SigmaPoint: the paradigm shift

As an electronic manufacturing services provider which delivers end-to-end assembly services, SigmaPoint has not only broken, but shattered the mould of traditional manufacturing and supply chain industries. Dubreuil joined SigmaPoint 11 years ago, with Slaughter introduced in 2014.

The former’s immediate task was transforming the company into something lean, as part of a then-very small team, and the changes were seen swiftly.

“I spent the first eight months

doing small things to improve the company here and there, and changing the foundation of some areas,” he says. After a large project fell into the business’s lap, the team experimented with lean manufacturing, and it became apparent that there was huge potential benefit for the company to work on its lean thinking on a large scale. “From then, it became a priority for SigmaPoint. I started as an engineer and evolved into an executive, which shows how much the company has changed and how much they needed that change.”

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From left to right – Kim Dube, Supplier Business Relations Manager – Norm St-Jean, Senior Supply Chain Manager – Barbara Guertin, Strategic Sourcing Manager – Leah Slaughter (Middle), VP of Supply Chain – Penny Tessier, Supply Chain Project Manager – Ashley Thorpe-Hill, Supply Continuity Manager – Mike Furoy, Materials Manager – Suzanne Sonnenberg (missing) Demand Manager

According to Dubreuil, there are three levels of lean manufacturing: “Entry level is where you do some bits here and there and improve some processes. Second level is where you start to see a stream that is connected to the lean flow of the feed. At the highest level, you see a tight flow in production, combining a lot of productivity and maturity. We’re working on that third level, where we are connecting manufacturing with supply chain more and more

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with one common goal, rather than two siloes working side-byside but not communicating.”

SCOPS

Lean thinking and the combination of supply chain and operations – which the company calls SCOPS – is what has allowed SigmaPoint to disrupt its industry to the extent that it’s bringing business back onshore. The default position of so many manufacturers is “to attract customers at the design

From left to right – Melanie Kitts, Lean Transformation Agent – Eric Poupart, Value Stream Manager VS3 – Stephane Dubreuil, VP of Operation – Robert Joffre, Lean Transformation Manager – Jason Deronde, Lean Manufacturing Specialist – Nathalie Drennan, Value Stream Manager VS4 – Frederick Guerin, Value Stream Manager VS1 & VS2

stage, then move production to a low-cost country,” Dubreuil says. “That’s where we’re different. We do everything from designing to prototyping, low to high volume, under one roof.”

“Every customer has a large amount of waste that gets built into their process,” adds Slaughter.

“Offshoring means paying a lower labor rate, but that amounts to paying less to handle only that waste. At SigmaPoint, we eliminate waste and bring costs down; in

an industry where it seems like everybody is pre-programmed to go to China, we can do it all right here in Cornwall, Canada, with exceptional quality and with very agile and flexible strategies.

“North America is a technological hub and if companies can stay in North America, with the rapid prototyping we’re capable of just a short plane ride away, why wouldn’t a customer reshore

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to us? We provide an end-to-end forecast and find the customer a pure solution using a new way of thinking. We find the right price point, manage our own level-loaded demand stabilization to achieve 100 percent on time delivery at customer request with less inventory, balance supply, provide flexibility and agility, optimize people, machines, and tools, and provide high volume at low cost in your back yard.

SigmaPoint makes the effort to create tailor-made processes for each customer, removing that

waste and securing trust. In an interview with Boss Magazine, VP of Engineering Steve Blouin described the company refusing an enormous order because it would have produced massive waste, which it eliminated by altering the contract to include only what the customer needed â&#x20AC;&#x201C; even though it meant SigmaPoint losing out on money.

Certainly not standard practice for a manufacturing company, since so many of them have a minimum order requirement, but something that proves its credentials as a business

S U P P LY C H A I N

Leah Slaughter VP of Supply Chain Leah has close to 20 years of extensive experience in supply chain, redesigning end-to-end supply chains, evaluating where supply chain resources are best deployed to maximize company revenue and improve customer delivery performance by using an assessment of strategic risk for the company through strategic sourcing, demand intake, supply chain management, procurement, materials management, manufacturing, logistics and customer service. Leah’s experience with component distribution, various multinational EMS providers, and OEM’s as well as consulting for supply chain process and applications has allowed her to share her knowledge and manage teams of up to 150 people. Graduating with honours and on the Dean’s List, Leah received Diploma’s in Materials Management & Distribution and Marketing & Business Administration from Sir Sandford Fleming College.

“We’re making sure we’re part of the EDUCATION AND KNOWLEDGE base here in Canada and North America, and that allows us to disrupt the rest of the world”

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that has made the effort to create a holistic approach for customers.

This level of care, attention, and the ability to reshore also stands as a testament to SigmaPoint’s efforts towards SCOPS collaboration.

“Unfortunately, when operations and supply chain come together, one usually gets repressed by the other.

That’s not the way it is here,” says Slaughter. “Stephane and I are equal partners in this and our teams go at problems together, and it’s incredible to have a partner in crime with whom I can go back to the lab and create the ingenuity and vision that will form our future evolution. We’re one group looking outwards in both directions, and it’s a cradle-to-grave process.

We’re challenging and disrupting the rules traditionalists lived and live by.”

Scientific thinkers

Slaughter and Dubreuil are keen to express that none of SigmaPoint’s incredible transformation would have been possible without a strong and like-minded team.

“Everyone talks about the bottomup structure, but before you can

even dream about that you need to have a good top-bottom structure,” Dubreuil explains. “You need to engage, strategize, and use that strategy to inspire the workforce.

We refer to the team as an army of scientific thinkers; we give them a direction, and the goal is that they evolve the business so quickly that our competition can’t follow.”

While the executives create the vision and act as a think tank, they don’t actually run the company: “It’s our managers that do that,” says Slaughter. “They take all the tasks, the challenges, the experiments, and make it work.

Other companies’ executives might say “this is what we’re doing, just make it happen” – but not us.”

Alongside the thinkers stand lean coaches, who have been used for the past two years to measure the team’s ability to bridge the gap between the current and future states of the company.

“The coach monitors the gap by asking questions,” says Dubreuil.

“It’s a way to understand what the team’s objective is, what they

S U P P LY C H A I N

expect from taking that step, what obstacles they foresee, and what they have learned. The coach is an expert in the use of tools for continuous improvement.

“As a result, our management has raised the level of what we expect from them, which is not only to push the product out

every day, but to ensure we know how to troubleshoot the gap.”

As part of the expansion required in a company which is evolving at such an astounding rate, SigmaPoint is about to open a new site within Catalyst 137, which Slaughter calls “a 475,000 foot think tank of new inventors; an incubator for brilliant

Stephane Dubreuil VP of Operations Stephane Dubreuil is VP of Operation at SigmaPoint Technologies Inc. in Cornwall, Ontario Canada. Prior to joining SigmaPoint, Stephane held positions at Nortel and General Motors in NPI design and industrial engineering. Stephane has been the driving force behind SigmaPoint’s shift to Lean Enterprise and guided the group to becoming World Class Lean Six Sigma on July 2nd 2010. With Stephane’s leadership the company continues to improve and learn how to enable and unlock the lean culture in every employee. He has a Bachelor degree in Automated Production Engineering from the University of Quebec, a ASQ certification of Six Sigma Black Belt (ASQ CSSBB) and is also an auditor for the AME Manufacturing Excellence Award program.

“We do everything from designing to prototyping, low to high volume, under one roof”

TODAYâ&#x20AC;&#x2122;S OPERATIONS AND SUPPLY CHAINS are functioning in a traditional manner, producing demand that is inaccurate and unpredictable. Unpredictability causes waste, and waste causes cost.

But what if you get rid of that waste and manage whatâ&#x20AC;&#x2122;s important?

Would your cost not go down? And would this not allow more business to stay onshore? YES!

And here is how:

We are an army of scientific thinkers, with the philosophy of doing as a form of learning. Through people development, the organization enables a culture of new scientists that will create rapid change at all levels of the organization. Removing waste and inefficiencies allows costs to decrease naturally, providing a similar cost structure of an offshore geography.

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young minds”. It will continue SigmaPoint’s transformation into an industry leader in lean enterprise, further improving its rapid prototyping capabilities and offering supply chain, manufacturing and lean enterprise workshops, led by Dubreuil and Slaughter.

Slaughter adds: “We’re making sure we’re part of the education and knowledge base here in Canada and North America, and that allows us to disrupt the rest of the world.”

For the supply chain, Slaughter looks for those who can problemsolve, that are highly passionate to succeed, and are ready to eschew traditional processes in favor of all things lean.

“A conservative mind is not really what I look for in the DNA of this modern lean supply chain,” she explains. “People in this supply chain need to be, to some degree, adrenaline enthusiasts. We don’t conduct supply chain in a traditional way, so we need to be able to think quickly while multitasking, creating an exceptional experience for our customers, and ensuring

we’re covering everything. We’re changing and evolving every day; DNA changes in management cascade downwards. We also have to maintain strong relationships with operations: without that, we don’t and can’t become what we’re on our journey to become, which is an amalgamated presence between manufacturing and supply chain.”

Slaughter concludes: “If it wasn’t for the strength and brilliance of our people, we’d never be what we are today. The atmosphere here is one where we welcome ideas and you speak your mind, and this is thanks in part to our leader Dan Bergeron, who is our motivation and our teacher. I think it’s important to know we’re a really big family here.

That gets us through each day.”

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How improvements in corporate procurement became a catalyst to divisional business transformation The British Columbia Lottery Corporation undertook a whole host of proficiency improvements, starting back in 2005. However, even Keith Bolen, Director of Corporate Procurement, could not have foreseen the impact the improvements would have across the Finance division Written by Stuart Hodge Produced by Sharicka Braley

T

he British Columbia Lottery Corporation must be doing something right. The company was named Gaming Intelligence’s on-line Lottery Operator of the Year last year and has recently receives an HR “People First” award.

It seems that both internal and external customers of the provincial government corporation are very happy and BCLC must be pleased with revenue of over 100

July 2017

$3 billion (CAN) last year.

So, what has been at the root of BCLC’s continued success?

Well, Keith Bolen believes he has the answer. Keith looks after procurement for the company, and says firstly his department and secondly the company as a whole have undergone a significant transformation.

The initial sweep of changes began in procurement

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specifically, back in 2005. Bolen describes the procurement focus at that time as being “purely transactional”, essentially placing orders and taking orders. There was no vendor performance or contract management, the systems were antiquated, and there were only a handful or strategic sourcing events each year.

But that had to change for the business to move forward, as Bolen explains.

He says: “There was a real need to centralise procurement and then, looking at how the company as a whole was really entrepreneurial and innovative, we needed to apply that approach to how we procure as well.

“We really changed up our strategic sourcing methodologies and we adopted a new public procurement standard, allowing for better decision making through indepth engagements with vendors.

“That obviously involved addressing some of the demands of our internals customers, which in turn, allowed us to make better business decisions with sourcing.”

Leading up to that initial transformation phase, starting in 2005, BCLC had adopted a new Enterprise Resource Planning system, which allowed transactions to be processed more efficiently. The Corporation then employed purchasing cards for the first time as part of a move to modernise all operations. That resulted

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T H E B R I T I S H C O L U M B I A L O T T E R Y C O R P O R AT I O N

in 50 percent of all transactions “Then, during phase two, there being removed from the ERP was a divisional-wide transformation system, reducing the administrative effort where another company burden of these high-volume, was deployed to help with the low-value transactions. transformation of the finance The increased efficiencies division. Given that, procurement yielded by collaborating with reports into finance it is a much PricewaterhouseCoopers and broader effort for transformation. using its expertise to bring the “Part of what drove that transformation decision was looking to fruition had an at the success that undoubtedly positive procurement had effect on corporate experienced during our procurement for phase one, where we BCLC, and that’s why basically applied the the company chose same methodology of Number of Employees at The British to carry through bringing in an outside Columbia Lottery similar changes company to look at our Corporation across the Finance & business processes Corporate Services and organizational division as a whole. structure and make Bolen says: “Phase one of the recommendations to help guide transformation was specific to us in applying improvements. procurement. We had engaged a “We were being held up as company to create our very first the poster child of success, to roadmap of business process say ‘if we apply this approach improvements and we followed that to our business then we’ll see through with significant benefits results, look at procurement to our department, and improved and look what they’ve done’. services to the whole organisation.

“We were actually a catalyst in

888

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Keith Boden Director, Corporate Procurement

Keith Boden is a public procurement specialist who has held the position as Director of Corporate Procurement with BCLC since 2009. Prior to that he worked in purchasing with the company, after joining from Fraser Health Authority where he worked initially as a buyer. Keith is proud of what he’s achieved with the company, but says nothing would’ve been possible without the staff. He said: “I have to give a nod to the workforce management efforts because we’ve managed to get the right people in the right positions. That’s a big part of what we were trying to achieve. “The staff do a lot of the heavy lifting; they implement all of the new methodologies and new software and managed to make everything work, so acknowledgement that our success and transformation is very well deserved.

Without the staff, we would not be successful. Even with the best methodologies and the best systems to automate business process, you cannot make it work without the right people behind you.”

WE REALLY CHANGED UP OUR STRATEGIC SOURCING METHODOLOGIES and we adopted a new public procurement standard, allowing for BETTER DECISION MAKING AND DEEPER ENGAGEMENT WITH VENDORS

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helping to drive transformation through our finance division.â&#x20AC;?

Efforts were initially focused on centralising contract management by physically taking custody of all the organisationâ&#x20AC;&#x2122;s contracts in a central location, then using software to create a library of contacts and key information. It was a significant change from the previous system, which saw management of contracts spread across the entire organisation, with dozens or more of different managers involved.

The centralised-focus allowed us to engage in drafting of contracts, renewing contracts and negotiating contracts. With that, we were able to provide a significantly greater level of service than ever before, and I think that is a key point The company recognized the benefits of this approach, and further invested in what it saw as the necessary resources in terms of software and staff, as well as policy and procedure, to solidify the changes.

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Amanda Hobson Chief Financial Officer and Vice-President, Finance and Corporate Services

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Bolen says: “We contracted with a Software as a Service (SaaS) company named iValua who brought in a suite of procurement-centric business modules. The first one of these that we deployed was the contract management tool.”

“Prior to phase two, managers were expected to be “contract specialists” in addition to their primary roles. Consequently, the contracting effort managed at the business unit level did not meet the rigorous standards of a public entity.

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Procurement and supply chain transformation delivers lasting value Understanding what’s important to your stakeholders is the first step towards more integrated, flexible and resilient operations. Through next generation technology and operational excellence, we help our clients build world-class procurement and supply chain functions. From strategic procurement to forecasting, planning, logistics and warehousing, we have the experience necessary to help you succeed.

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We brought focused expertise in contract management, and filled a gap where there was limited access to specialized resources.”

“The other significant undertaking as a result of being able to manage information in a central manner, was the triggering of an initiative we call strategic contract renegotiation.

We took the information that we gained through the centralised reporting database and identified the top-spend vendors and contracts which were long-term.”

It took the organisation around 12 months to renegotiate all of its strategic contracts and BCLC eventually managed to save about $15 million by improving the contract management procedure.

Phase two of the company restructure involved a massive overhaul of vendor performance management, and once more, PwC and iValua were brought in to assist with the process.

Bolen says: “We had engaged PwC to perform a procurement diagnostic to benchmark the current level of maturity of all of our procurement functions against best

practices in other like-agencies.

“One of the gaps that we identified was vendor performance management, so PwC brought their methodology to our organisation to build an effective framework that would serve us well in our need to identify and effectively manage those vendors and related contracts that would result in best value to the organization. They’ve brought the expertise, trained our staff and to a degree, some of our business units how to do that according to best practices.”

“At the same time, we partnered again with iValua to

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utilise the software that would support the vendor performance management transactions.

This has been undertaken just in the last 12 months and has been one of the best-received programs we’ve ever rolled out.”

“I mean that in the sense that engagement by the business units, staff and managers has been exceptional in terms of embracing

the methodology that PwC brought to the table. The tool supporting the methodology has also been widely accepted and is providing us with the reporting that we need to really be successful.”

But although BCLC’s new, more streamlined means of operating saw the company take away a net profit, after prizes, of $2.4 billion last year, Bolen is adamant it is

CANADA

not going to rest on its laurels.

He says that the company is now looking at sustaining a “continuous improvement cycle” in terms of business practices and he wants to see the its success continue.

Bolen adds: “Around 2010 there was a divergence between centralising all of the business functions and from then, moving forward there

has been a continued focus on deploying new methodologies and bringing software business systems automation to the table to gain efficiencies.

“Phase two is still actively going, I don’t think it ever ends.

I think that’s how we position it because we’re in this cycle of continuous improvement and quest for innovation. To add to what’s happening now, there is a significant focus on re-defining business process and developing new approaches to sourcing and contracting with small start-up type companies that would not typically engage in a governmenttype procurement process.”

“Across the business there is a focus on the six sigma methodology and we’re constantly looking at all business processes for efficiencies. “That’s how we stay at the top of our game.”

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CHOICE HOTELS INTERNATIONAL: An employer of innovation and choice

Choice Hotels International has been a market leading hotel and lodging provider for more than 70 years, with a philosophy that champions inclusion, diversity and high-quality service, customers are spoilt for choice

Written by Dale Benton Produced by Denitra Price

W

ith over 6,300 hotels, representing more than 500,000 rooms in more than 35 countries and territories, it is fair to say that Choice International Hotel is deserving of its title as one of the largest and most successful lodging and hospitality companies in the world.

An American corporation company, Choice Hotels started life back in 1939 as referral chain consisting of motel owners in South America. Over the following 70+ years, Choice Hotels has expanded and grew exponentially,

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acquiring and franchising hotels, motels and inns and owning 11 brands across the world.

But no company can achieve any form of success, particularly in the hospitality sector, without the help of its employees. This is where Choice Hotels stands tall against its competitors. The company, throughout its broader business strategy, invests heavily in both time and money

into Inclusion and Diversity across the whole organisation.

Stephen P. Joyce, President and CEO, [places inclusion and diversity above all else at the company, a â&#x20AC;&#x153;building blockâ&#x20AC;? on which the company can achieve future successes. â&#x20AC;&#x153;Choice Hotels strongly supports a workplace culture and environment that is conducive to diverse perspectives,

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MOVIES THaT MOVE yOu. SHOWS THaT HOOk yOu. EnjOy IT all.

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HBO is proud to be the preferred premium at Choice Hotels. We thank you for your many years of partnership.

If you have questions about adding HBO to your hotel property, email hbobulkmarkets@hbo.com

©2017 Home Box Office, Inc. All rights reserved. HBO® and related channels and service marks are the property of Home Box Office, Inc. ©2017 Sesame Workshop®. Sesame Street® and associated characters, trademarks and design elements are owned and licensed by Sesame Workshop. All rights reserved.

USA

backgrounds, and experiences,â&#x20AC;? he says. â&#x20AC;&#x153;Diversity across our organization will be a key building block of our future successes. I understand the value of diversity and am committed to continuing to build and support an inclusive, diverse organization.â&#x20AC;?

Inclusion

Joyce strives to create a workplace culture that rewards diversity of thought and perspective and highlights them as key contributors to a high-performance culture and long term, ultimately

sustainable success.

This culture of diversity is a culture that is bread right through from top to bottom, with a key focus on ensuring that employees are well aware of the support from the top.

Choice Hotels has a Diversity Advisory Council, which is designed to pool together the input and insights from leaders and employees throughout the entire organisation. Joyce heads up this council; and works closely to develop and implement a series of diversity and inclusion initiatives and goals.

USA

But it doesnâ&#x20AC;&#x2122;t stop there, Choice Hotels is one of the few companies in the sector that has its very own Diversity Committee that sits at the Board of Directors Level. Much like the advisory council, but with much more strategic management control, the committee assists and oversees the management of all diversity and inclusion initiatives, ensuring that when these initiatives press ahead they are delivered to the highest of quality and bring about the maximum benefit for the company and its employees.

The committeeâ&#x20AC;&#x2122;s reach stretches

beyond the in-house employee base but also across the entire franchise and vendor network, as Choice Hotels looks to develop a network that reflects the community in which its chooses to do business.

Vendor network

Choice Hotels is a member of the National Minority Supplier Development Council (NMSDC) and fully utilises this database of minority owned businesses for its procurement and supply chain needs. This is crucial to the core nature of Choice Hotels International. As a franchise,

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C H O I C E H O T E L S I N T E R N AT I O N A L

Choice does not own or operate any of its hotels and therefore the company does not purchase goods or services used by individual properties. Through its commitment to diversity, Choice seeks to work with partners and vendors all over the world and qualifies them as official vendors and partners that serve its entire hotel chain.

This process of qualification is a fairly straightforward affair.

Though there will of course be certain industry specific needs and Choice Hotel standards to be considered, one of the main factors in the process of becoming a Choice Hotels qualified vendor is evidence of â&#x20AC;&#x153;standards and systems in place for continuous improvement.â&#x20AC;?

This stands as evidence of how Choice Hotels International commits to innovation and drive, not only through its employees and its services, but also through its suppliers and vendors.

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Award winning

It is all fine and well making promises and installing councils and advisory boards, but the proof really is in the feedback and work ethic of its employees.

To this end, Choice can look across its multi-award-winning service, being recognised as one of the best places to work for LGBT Equality, Healthiest Employers of Greater Washington and amongst the top 50 franchises for minorities.

These awards are a testament to the vision and drive of Choice Hotels to truly become an inclusive and diverse workplace for any employee in any role.

Technically speaking Empowering a workforce and celebrating diverse thinking and inclusion can only get a company so far. In the modern world of hospitality, with customers now demanding more access and variety in a hotelâ&#x20AC;&#x2122;s offering, technology and the embracement of technological

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innovation is crucial in order to remain as a market leader.

One such technological solution has been the implementation of Europay, MasterCard and Visa (EMV).

EMV cards are a new, much more secure credit card. The cards contain chips which encrypt

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bank information securely when compared to the old traditional magnet strip cards of the past.

In the world of increased data reliance, security is everything.

Fraud has been an ongoing problem within the U.S, with fraud cases doubling over the last seven years so the

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move to EMV comes at an opportune moment in the technological space.

Choice Hotels has been implementing EMV across its entire organisation over the past six to eight months. Cross implementation of a new wave of technology across 6,300

locations most certainly does not come without challenge. One of the more notable challenges has been a consequence of that cross location, in some cases the implementation resting in the hands of individual hotel staff as opposed to one consistent form of rollout.

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The company will continue to work through the implementation of EMV across all of its locations, aiming for a fully EMV enabled organisation by the end of 2017.

Future focus

For Choice Hotels, looking back through the company’s history, one could argue that it has well and truly been a story of continuous success.

In fact, in 2017 alone, the company continues to champion exemplary service offering. The EconoLodge, which falls under the Choice Hotels International umbrella was recently awarded the Hotel of The Year Award.

“The Econo Lodge in Russellville, Kentucky consistently goes above and beyond to make travel

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easier for guests by delivering value, exceptional service and convenience,” said Anne Smith, vice president of brand management and design for Choice Hotels. “The Econo Lodge brand is known as the Easy Stop on the Road and this hotel is an outstanding representation. The owners and staff are dedicated to maintaining the highest standards of service and instil that level of commitment in every new employee who joins the team.”

When searching for a market leading, diverse and inclusive workplace offering only the highest of quality service across a wide variety of locations and hotels, there really is only one choice.

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THE TECHNOLOGY

THATâ&#x20AC;&#x2122;S GIVING DOCTORS MORE

TIME WITH THEIR PATIENTS Written by Leila Hawkins Produced by Denitra Price

E P I C M A N A G E M E N T, L . P.

As well as providing a wide range of administrative services to physician practice groups in southern California, EPIC Managementâ&#x20AC;&#x2122;s new implementation of technology is giving doctors more time with their patients.

O

wned by the longestablished Beaver Medical Group, EPIC Management LP is a management service organization that serves as the groupâ&#x20AC;&#x2122;s administration arm. It provides a range of administrative and support services including contracting, finance, clinical

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and operations support and staffing, business development, information services, human resources, marketing, claims, billing, supply chain, and facilities management to 27 clinical sites across the Inland Empire region of southern California.

EPIC Management provides services for a wide range of small

S U P P LY C H A I N

to large physician practice groups and IPA’s. In total, EPIC’s clients include over 300 physicians and 1,300 employees.

Since it was founded in 1995, EPIC has attained a market leading track record of developing and managing high quality healthcare services for its clients. Its services make it possible for doctors to focus on their patients while benefiting from the company’s administrative and operating strength.

Time-saving tech

One initiative that’s proven extremely beneficial has been the implementation of automated scanners for supply replenishment, a system that enables the barcoded inventory storeroom to be easily categorized and managed. Using the Opticon Scanner system in conjunction with the McKesson Medical Surgical online supply manager platform, replenishing and ordering of supplies is now truly automated. At no cost under

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a Medical Distribution agreement, the Scanner and Barcode system interfaces directly with the Online requisition software platform. Before this was introduced, to re-stock medical supplies in storerooms, nurses and clinicians had to place orders using paper.

Jason Gateas, the Executive Director of Supply Chain Management, oversaw the move from this system into online requisitioning. Two years ago he introduced the use of the Opticon scanner which barcodes every single

EliteCom is a technology and solutions company with a strong history of introducing new technologies into the workplace and deep expertise in managing and streamlining workflow while reducing costs.

Debby Bubonic is a valuable resource who builds strong relationships by responding quickly and delivering results. Debby has negotiated extremely discounted pricing for Beaver Medical and all of its affiliates to take advantage of.

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DEBBY BUBONIC 949.903.1400 dbubonic@elitecomusa.com

S U P P LY C H A I N

item making the process of replacing clinical supplies much faster, saving the time it takes to replenish supplies in the clinical setting.

It took about a year and a half to roll it out to all the clinical sites but it means that now all the medical and non-medical products are documented onto a computer. The only items this doesn’t apply to are pharmaceutical items as these are kept in controlled environments.

Then, when it comes to ordering, clinicians simply enter the quantity they need based on the shelf levels.

“All they [clinicians] do is press a

button and that online requisition goes to purchasing,” Gateas explains. “It takes 50 per cent less time to replenish supplies.”

Although this system hasn’t impacted EPIC in terms of a hard cost savings, Gateas explains the savings are invaluable for the medical staff in the reduced time it takes in managing critical medical supplies.

“As far as the contracting cost goes it doesn’t affect us,” he says.

“What it does affect is the soft savings cost as far as the backoffice time and supplies, so it gives

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that time back to the clinicians to do important clinical work and better attend to their patients.”

There is a difference between the big health groups and smaller practices and hospitals.

Gateas explains: “Larger medical groups are more technology-savvy and more complex when you’re dealing with aggregate volumes, vs. the smaller clinics that don’t have the same time and resources for complex software systems” He says the latter can be a challenge however also a

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benefit if managed correctly and where Supply Chain Management acts as a professional consultant to the clinical teams. Change management utilizing a Lean management process combined with technology usually leads to a win-win scenario for the clinical and administrative teams.

more efficiently and accurately will lead to more informed purchasing contracts with manufacturers. The maintenance is the challenging part.”

As far as EPIC’s market goes, it’s currently servicing over a dozen sites that provide care to more than 150,000 patients in the Inland Empire region of the Southern California marketplace.

Looking ahead

The main challenge, however, is to keep up the efficiency of this system.

“It’s an on-going training process, he says. “You have staff turnover.

Tracking and managing inventory

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Discuss new technologies and money saving strategies by meeting innovative suppliers.

LEARN Learn from industry experts, learn from each other. Do both at the best conference experience available.

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THE RICHMOND SUPPLY CHAIN FORUM 17th October 2017 | Warren Weir, Luton Hoo 22nd March 2018 | The Belfry, Birmingham

Our unique system ensures your time is extremely well spent. We build a personalised itinerary that enables you to participate in the meetings, the conference programme and also leaves you free time to network with your peers.

Build a network of peers facing similar challenges.

Complimentary places are available for senior supply chain executives.

REGISTER HERE For more information on joining us as a supply chain service provider please contact Grant Townshend E: gtownshend@richmondevents.com T: 07720 814174

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