Supply Chain Digital magazine - November 2017 by Supply Chain Digital

SPECIAL REPORT

IoT hits the mainstream as it becomes central to improving the industry

November 2017

www.supplychaindigital.com

TOP 10

EUROPEAN SUPPLY CHAINS

TRUST IN BLOCKCHAIN Supply Chain Digital speaks to SAP Aribaâ&#x20AC;&#x2122;s Paul Devlin on the vital importance of blockchain to procurement and global trade

FOREWORD WELCOME TO THE November issue of Supply Chain Digital and what a packed issue we have for you this month. Up front and centre is our cover interview with Paul Devlin, General Manager for EMEA & MEE for SAP Ariba about the importance of blockchain to procurement and well as wider trade across the globe. In this exclusive interview Devlin details his belief that industry is about to see a wave of transformation and a concerted period of disruption driven by blockchain. Jump to page 10 to read the piece now. Continuing the theme of enlightening interviews, Sergio Barata, EMEA General Manager at Telogis, speaks about how the industry is on the cusp of an IoT revolution and how leading organisations are considering how it can streamline their supply chain operations. He outlines five key ways IoT is already benefitting companies – the interview begins on page 22. This month’s Top 10 runs down Europe’s leading supply chains, as ranked by Gartner. The list includes some of the industry’s best-known brands, and is sure to instigate debate in the procurement and supply chain community. In addition, this month’s Supply Chain Digital includes a number of eye-opening company reports that cut through the corporate spiel to find out what is really making the world’s best supply chains and procurement operations tick. Among the companies covered are PCI Limited, Charles Tyrwhitt, and TFG. You can join the fast-growing Supply Chain Digital community on Twitter @SupplyChainD, on Twitter Facebook and LinkedIn.

Enjoy the issue! 3

F E AT U R E S

INTERVIEW

TRUST IN BLOCKCHAIN SUPPLY CHAINS IN EUROPE

TECHNOLOGY

TOP 10

22 30

IoT hits the mainstream 4

November 2017

glcs

MV international

Conference 2017

jointly organized by

KL Malaysia 31st Oct 2017 - 1st Nov 2017

Supply Chain In Digital Economy 2017 The 6th GLCS conference takes place in Empire Hotel, KL Malaysia bring together over 200 participants from Asia Pacific countries including exhibitors, decision makers, to gather for business and create solutions for international supply chain challenges. GLCS is a leading conference and most important meeting point in South East Asia Join and enjoy: • Business Networking • Latest best practice • 30+ professional speakers • Meet more than 200 delegates

Sponsor & unpack the benefits: • Develop new business • Maintain business relationships • Demonstrate expertise • Raise awareness and branding

Supporting Partners

The latest technologies and strategies for visibility, flexibility and speed

scms-summit.com Official Commercial Partners:

Featuring 30+ supply chain leaders, including: Anita Arts

Lisa Davis

Alexander Bahr

Didier Dayen

Edwin de Boer

Daniele Fregnan

Managing Director â&#x20AC;&#x201C; Supply Chain, Liberty Global

Director Supply Chain Information and Integration, McDonalds

Director Supply Chain Operations, Cisco

Phil Boyd

VP & GM, Supply Chain IT, Intel

Senior Director Global Advanced Planning & Center of Expertise, Merck Group

VP Supply Chain, Aldo Group

Iveta Kozlickova

Head of Center of Supply Chain Expertise EMEA, Covestro

Brigitte Peltier

Global Logistics V.P., Benetton Group

VP, Global Supply Chain Academy, Schneider Electric

Thierry Gaudet

Stefano Pietroni

Director of Operations, HP

VP Supply Chain & Logistics, Michelin

Andreas Brock

Tim Hourihane

Lecturer for Supply Chain Management, Hochschule Fresenius Hamburg University of Applied Sciences

Craig Jones

Vice President Supply Chain Transformation EME, EstĂŠe Lauder

Group Supply Chain, VP for Network Design, Planning & Sourcing, Barilla Group

Volker Schmitz

VP Supply EMEA, HP

C O M PA N Y REPORTS

Charles Tyrwhitt EUROPE

Zinnovate EUROPE

Clarion Housing Group

Katoen Natie ASIA

Nexteer Automotive ASIA

EUROPE

LF Logistics Asia

112

102

128

TFG

AFRICA

PCI Limited ASIA

Al Futtaim Retail MIDDLE EAST

142

Education Corporation of America USA

154

168

WERC USA

Organized by:

Supported by:

INTERVIEW

TRUST IN BLOCKCHAIN

Supply Chain Digital speaks to SAP Ariba General Manager for EMEA and MEE, Paul Devlin, on the vital importance of blockchain to procurement as well as global trade generally Written by Stuart Hodge

INTERVIEW AS THE LATE Stephen R. Covey, business and leadership expert and keynote speaker, once remarked: “Trust is the highest form of human motivation. It brings out the very best in people.” In a business relationship, trust is one of the most, if not the most, vital components. No self-respecting organisation is going to continue to do business with another if trust has been grossly breached in any way. And although most businessminded people can usually trust their gut as to whether they should begin to trade with someone, a strong bond of trust between organisations is something that takes quite a while to build up. With blockchain technology, there is a guarantee of who you’re doing business with and an authenticity surrounding the transaction. That’s why Paul Devlin, SAP Ariba’s General Manager for EMEA and MEE, believes we are about to see a wave of transformation – not just in the procurement industry and across the supply chain, but in terms of global trade itself. Devlin is clearly a big believer in 12

November 2017

the technology and recognises how disruptive it is. He also reckons it won’t be long until everyone is embracing it. “Blockchain is enabling trust in technology almost like nothing else that exists today,” he says. “It will really be at the root of all global asset movement and that will be regardless of which particular market or commodity we are talking about. In the way that we’ve just taken for granted the fact that we do 90% of our work today on a smartphone, we will think about blockchain in that way in a three-to-five-year window. “It’s just going to be the way we do things because of the provenance, trust and guarantee that it offers. “It will then be about how companies want to imagine and innovate the usage of that.” But, for the uninitiated, what is blockchain? How does it work? And how does it engender the trust, provenance and guarantee that Devlin talks about? “At its core, it’s a digital ledger of transactions, agreements, contracts, anything which really needs to be independently recorded and verified as to actually having happened,” he explains.

“I think anything that engenders better trust and gives guarantees in a supply chain between businesses and between customers and businesses opens up borders” PAUL DEVLIN, General Manager for EMEA and MEE, SAP Ariba

“The ledger is not stored in one place, it’s distributed throughout several-hundred systems globally so, today, it’s virtually impenetrable. “If you think about some of the biggest issues that companies face, it is around provenance. It is around track and trace, it’s around recall of goods. Think of yourself as the buyer: ‘I know that I bought something, but how can I actually testify to the provenance of the thing that I bought actually being the thing that arrives in my warehouse or on my doorstep?’ “If I then take that a stage further, with track and trace today we can be very clear that something which was ordered has actually arrived in the warehouse. What you can never be clear about, is ‘was the thing that arrived in the warehouse the thing that actually shipped?’. “’Or was I the victim of fraud?’ So, something legitimate actually arrived but the thing that was actually shipped wasn’t what arrived in the warehouse. “This whole thing about provenance, actually being able to guarantee that the thing that you bought was what went into the warehouse and was the same thing that actually arrived, is where trust comes from.” 13

INTERVIEW

November 2017

â&#x20AC;&#x153;This whole thing about provenance, actually being able to guarantee that the thing that you bought was what went into the warehouse and was the same thing that actually arrived, is where trust comes fromâ&#x20AC;? PAUL DEVLIN, General Manager for EMEA and MEE, SAP Ariba 15

INTERVIEW

The technology is built upon the global cryptocurrency Bitcoin. Devlin points to the $330mn real estate business launched recently by British tycoon Michelle Mone in Dubai, where property can only be paid for by using Bitcoin, as an example of how the market is really beginning to embrace the security offered by the blockchain. But that’s just one example of how the technology is currently being used, and he believes that there is potential for far more creative innovation pertaining to the supply chain. 16

November 2017

Devlin says: “The transaction is instantaneous, you own that property the second you buy it. And the company that’s sold the property knows that they’ve got the money, they know who it has come from and that it was paid. “Then, taking that more generally, companies can then ask themselves: by having that guarantee, provenance and trust, can I offer a better service to my customers or the market? “If the answer to that is ‘yes’, then companies have to start to think about

how they develop and move from the analog way of doing business to the digital way of doing business, with blockchain at its heart. “Then it goes a step further to: ‘What is my purpose as a business and how do I guarantee the purpose, and ensure that it’s actually finding its way into supply chains?’ “An example would be how to guarantee that items being bought in a supply chain are free from parts of the supply chain which use slave labour or child labour. Or, guaranteeing to customers that this supply chain utilises diversity, minority-owned business or comes from supporting emerging countries. “How do I take that purpose of the company and guarantee to the market that when you buy into it, it actually has a supply chain which guarantees that efficacy? That is what blockchain also brings. “So, when you buy something, you know the money is safe. You

know who the seller is, you can guarantee the thing that you know you were buying is indeed what arrives, and you can guarantee it was made ethically and comes from an ethical supply chain. “If you start to apply that thinking to the marketplace, then the scope of potential is huge.” SAP Ariba is already working with a number of companies looking at how the technology is going to improve their business and improve their supply chains. As well as that, the company hopes to launch sourcing intelligence and contract intelligence solutions in the not-too-distant future. Devlin is passionate about technology, and it certainly ties in with the company’s philosophy of “enabling procurement with a purpose”, but does the Scotsman think that it will make money? “My gut feeling tells me yes,”

2008

The year Bitcoin’s invention was published by Satoshi Nakamoto

INTERVIEW

“More and more companies are realising if they’re going to do business in the digital age, then they’ve got to think about their company as a software company” PAUL DEVLIN, General Manager for EMEA and MEE, SAP Ariba

he says, after pondering the question for a moment. “I think anything that engenders better trust and gives guarantees in a supply chain between businesses and between customers and businesses opens up borders. “There are a lot of companies today who are maybe hesitant to do 18

November 2017

business in certain territories because they’re unsure of the regulation or the reputation that certain markets or certain places have. “Anything you do that engenders trust can only open those markets up and that creates choice, which tends to improve competition, drive down pricing, bring more people into the

market and improve innovation so that you’re then in that continuous cycle. “In my mind, there is absolutely no doubt that it will impact companies’ bottom lines, and their top lines as well, with new markets that they will be able to go after, new opportunities that they will be able to pursue and, frankly, new customers that will come into their market because trust exists.” And just how far does Devlin believe that this technology can be taken? “I think companies will be limited by

their own imagination,” he answers. “More and more companies are realising if they’re going to do business in the digital age, then they’ve got to think about their company as a software company. They’re taking things that were once analog and figuring out how to digitise that thing or that process. “If you think about blockchain in the middle of that, then it’s going to have a massive, massive impact.”

TECHNOLOGY

IOT HITS THE MAINSTREAM

IoT, once an exciting concept on the margins of industry, is gaining a role at the heart of businessesâ&#x20AC;&#x2122; operations as it helps companies drive innovations and efficiencies in their supply chains Writ ten by: JAMES HENDERSON 23

TECHNOLOGY THE INTERNET OF Things (IoT) has come a long way from LG’s first ‘Internet Refrigerator’, which was unveiled in 2000. As is the case with many technological advancements, while IoT has perhaps failed to reach its potential with consumers, business has grasped the nettle (consider industry finding alternative uses for ‘smart glasses’ that were met with a lukewarm response on their much-hyped public release). So, while connected fridges have not hit the mainstream – yet, at least: the rise of devices such as Alexa could change all that – more practical uses for IoT have been derived from businesses looking to leverage the capabilities and potential of digitalisation. Speaking to Supply Chain Digital, industry expert, Sergio Barata, General Manager for Europe, Middle East and Africa at Telogis, tracks the journey of IoT in industry, saying: “The increasing number of use cases for the IoT have been driven by advances in mobile connectivity, making internet-enabled sensors much smaller and more affordable. These sensors, often the size of a hockey puck, can transmit vital information to other devices in a way could only be dream of back 24

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when the concept of the IoT was born. “The ability to analyse and make sense of the vast amount of data collected has also helped propel the adoption of IoT tech. While we are only on the cusp of the IoT revolution, forward thinking organisations are already starting to think about how it can streamline key processes and optimise the supply chain.” Barata says there are five key ways the IoT is already helping to streamline the supply chain: firstly, increased visibility, where he cites the example of the technology enabling supply chain managers to connect their vehicles, equipment and devices and gain to-the-minute status updates on jobs. This can offer a full picture across the supply chain, from the warehouse to different stakeholders and customers. For example, rather than seeing a job status listed as ‘with courier’ or ‘in transit’, managers can see the exact location, enabling more informed decisions to be made. “IoT plays a very strong role in offering that additional visibility, right down to the customer level. In the past, it was almost peer-to-peer or business-to-business visibility that was necessary. I think it’s now

â&#x20AC;&#x153;While we are only on the cusp of the IoT revolution, forward thinking organisations are already starting to think about how it can streamline key processes and optimise the supply chainâ&#x20AC;? SERGIO BARATA

TECHNOLOGY de-facto requirement that customers expect to participate in that supply chain in terms of having visibility and being able to make choices and selections. They expect the opportunities that visibility offers.” The second point Barata identifies is the role of IoT in encouraging collaboration. He says the rise of IoT enables organisations to take a much more holistic view of how their supply chain impacts business. It is particularly important for more complex supply chains, where different parts

or components are sourced across disparate suppliers and locations. “In these circumstances, it’s easy to organise these centres into silos,” comments Barata. “The IoT across the supply chain gives decision makers real-time details on job statuses across the entire chain, and helps break down silos. Increased collaboration across business areas can help to identify potential issues or bottlenecks earlier, make smarter strategic decisions and boost productivity.” The emergence of IoT is also

FreshDirect maintain cold chain using Telogis sensor reporting

November 2017

enabling businesses to maximise their assets, with supply chain managers able to make decisions in real-time. In the example of fleet management, more informed choices can be made on routes and utilisation to boost efficiency and productivity. “Our customers are making huge investments in their assets,” says Barata. “We have a significant number of aviation services customers, and that’s pretty challenging in that they are full-on for certain times of the day when the air schedules are heavy, and then for large periods of the day they may not actually have any work to service air craft or to service flights. “Maximising how they use their assets on any particular air field or airport is critical to them. Visibility and system integration with other parts of their IT landscape to make sure that they’re very dynamically dispatching and very dynamically sharing those resources across the workload at peak times is a significant factor for them.” He says that even in what could be defined as less intensive or critical supply chains, this approach is being taken, as businesses look to leverage any advantage they can to get the maximum from their assets.

2001

The year that Telogis was founded

163,400

The total number of staff, Telogis is owned by Verizon Communications Inc.

$123.64bn

Verizon current revenue Companies are increasingly using IoT to bolster their customer service, for example to make tracking and forecasting more accurate. Barata says that managers are able to identify potential issues quicker, contact the customer to manage their expectations, or make alternative arrangements to ensure Service Level Agreements (SLAs) are met. The connected fleet also allows for automation of status updates for customers, helping them stay informed and reducing inbound enquiries to customer centres. Finally, Barata pinpoints compliance – a historically challenging area for businesses to remain on top of – as a 27

TECHNOLOGY

â&#x20AC;&#x153;Increased collaboration across business areas can help to identify potential issues or bottlenecks earlier, make smarter strategic decisions and boost productivityâ&#x20AC;? SERGIO BARATA

November 2017

factor pushing IoT into the mainstream of industry, especially against the backdrop of ever-connected laptops, phones and tablets. “The IoT doesn’t just help track the location of assets across the supply chain, it can look at other key elements such as driver behaviour and vehicle diagnostics,” he comments. “Realtime visibility allows supply chain managers to ensure their assets are performing as they should be and that the organisation remains compliant. For example, it helps ensure drivers are obeying road rules, taking required

breaks, filing correct paperwork and performing the appropriate safety checks before setting off. “It can also keep track of vehicle health, to make sure appropriate vehicle maintenance is carried out when it should be – for example ensuring tyres are changed and services are carried out. If goods need to be transported in certain conditions, for example kept in a certain temperature range, a more connected fleet can enable managers to see real-time temperatures of their cargo. These features remove some of the headaches from compliance.”

TOP 10 SUPPLY CHAINS IN EUROPE Gartner has released its top 15 supply chains in Europe. Supply Chain Digital takes a look at which companies make up the top 10 and breaks down how the scores were awarded Written by OLIVIA MINNOCK

Introduction: Gartner based its rankings on various criteria including return on assets, corporate social responsibility, and revenue growth. The organisation commented that some common themes were evident in the top companies listed below. These included: Global scale, local responsiveness: The companies on the list deal with their many sites and suppliers by allowing flexibility in how goals are achieved in different markets. Gartner suggested a combination of global and local manufacturing distribution was key. Multiple models though segmentation: The companies have many product categories, emerging markets and channels, and use segmentation to create a portfolio of standard models. This helps them deal with complexity and meet the needs of different end users. Collaboration: Collaborating across various networks to achieve strategy was important, whether with customers, competitors, governments or interest groups. Investment in talent and technology: The latest technology is necessary to execute strategy, and these companies use talented individuals, for example by building relationships with universities. Culture of excellence and master of change: The businesses are always transforming and dedicate resources to driving change.

T O P 10

10 DIAGEO Website: www.diageo.com The global leader in wine and spirits, Diageo has over 200 brands including Johnnie Walker, Bailey’s, Guinness and Smirnoff. Its brands are sold in 180 countries “at almost every price point, in every category to meet customer demand”. Having been founded in 1997, Diageo now produces over 6.5bn litres of its brands’ products every year, from over 100 manufacturing sites in 30 countries. In 2016, it achieved a return on assets of 8.9%. Diageo strives to “maintain high standards of integrity and social responsibility,” and earned a CSR score of 7.00. The company states that it tries to promote an entrepreneurial spirit, giving its 32,000+ employees the “freedom to succeed”, placing an emphasis on “diverse people and perspectives”. Overall, Gartner awarded Diageo a composite score of 2.57.

November 2017

09 BMW Website: www.bmwgroup.com With a 2016 return on assets of 3.7% and a revenue growth of 6.6%, BMW is showing positive signs of growth across 31 production locations in 14 countries. It works across three main segments: automotive, motorcycles and financial services. The company overall has 124,729 employees as well as 4,600 apprentices. BMW states its goal is to â&#x20AC;&#x153;set trends in production technology and sustainability as an innovation leader with an intelligent material mix, a technological shift towards digitalisation and resource-efficient productionâ&#x20AC;?. This has earned it a CSR core of 10.00 and Gartner awarded it an overall score of 2.62. 33

T O P 10

08 L’ORÉAL

Website: www.loreal.com/group L’Oréal currently has a portfolio of 34 beauty and skincare brands which it supplies across all distribution networks: mass market, department stores, pharmacies, hair salons, travel retail, branded retail and ecommerce. It has experience revenue growth of 5.1% in the past year and in 2016 its sales reached $30.3bn. L’Oréal’s return on assets for the past year was 10.4%. With a dedicated research team of 3,870 people and 89,300 employees worldwide, L’Oréal says it is committed to “sharing beauty with all” and fulfilling its sustainability commitment for 2020. Gartner awarded the beauty company with a CSR of 5.00 and a composite score of 2.72.

November 2017

07 SCHNEIDER ELECTRIC

Website: www.schneider-electric.co.uk Schneider Electric is a French company that provides energy management and automation solutions. The company’s 10 commitments to sustainability helped earn it a CSR score of 10, as well as being named by Newsweek as the 10th most sustainable company in the world for 2016. Having made a 2016 revenue of $39.01bn, 41% of this came from new economies, and 5% of each year’s revenue is earmarked for research and development. Schneider employs 144,000 people in over 100 countries and last year made a return on assets of 4.2%. Other achievements include being number 24 of Fortune’s “50 companies that are changing the world” and being a DJSI Industry Leader for four years running. Overall, Gartner awarded Schneider Electric a composite score of 3.15. 35

T O P 10

06 BASF

Website: www.basf.com BASF provides chemicals, plastics, performance products and crop protection products as well as oil and gas across the world. Claiming to “create chemistry for a sustainable future,” BASF earned a CSR score of 10. The company currently employs 114,000 people around the world and emphasises good working conditions and inclusive leadership for its staff, as well as an ethos of trust, respect and dedication. BASF prides itself on innovating to align its business with the needs of the customer, striving to “offer innovative and sustainable solutions”. Overall, Gartner awarded BASF a composite score of 3.21. The company had a 2016 return on assets of 6.1%.

November 2017

05 NOKIA

Website: www.nokia.com Nokia began as a paper mill in 1865, but has since diversified into several sectors such as cable, mobile devices, paper products, rubber roots and tires, and telecoms infrastructure equipment. Headquartered in Espoo, Finland, the company employs approximately 101,000 people and last year made $27.72bn in net sales. Nokia invested a total of $5.76bn in research and development in 2016, which prompted Gartner to award it a composite score of 3.32. It also gained a CRS score of 10.

T O P 10

04 NESTLÉ

Website: www.nestle.co.uk Since its foundation as Anglo-Swiss Condensed Milk in 1866 and merger with Henri Nestlé’s Infant cereal in 1905, the company has diversified into baby foods, bottled water, cereals and chocolate among other food and beverages. It now has over 2,000 brands and a presence in 191 countries. In 2016, the company’s total sales amounted to $92.15bn. Gartner awarded Nestlé a CSR score of 10 and a composite score of 4.10. At present, the company employees approximately 328,000 people and had a 2016 return on assets of 7.9%.

November 2017

03 H&M Website: www.hm.com Hennes & Mauritz began as a single womenswear store in Vasteras, Sweden, in 1947. It claims to be “dedicated to creating a better fashion future,” using its size and scale to “drive development towards a more circular, fair and equal fashion industry”. These efforts afford it a CSR score of 10.00. Indeed, 96% of electricity used in 2016 came from renewable sources and stores have collected over 4,500 tonnes of clothes for reuse and recycling since 2013. H&M currently operates across 41 online markets and over 4,500 stores in 68 markets. The company welcomed 13,000 new employees in 2016, bringing it to a total of 161,000. Including VAT, the group’s 2016 sales are reported as $27.32bn. Gartner awarded H&M a composite score of 4.63. 39

T O P 10

02 INDITEX

Website: www.inditex.com Inditex is one of the world’s largest fashion retailers, and has eight brands including Zara and Stradivarius. Founded as a family business producing women’s clothing in 1963, the company now has 7,405 stores in 94 markets across the world. Its CSR score of 10.00 is unsurprising given claims that the company aims to put “people and the environment at the centre of our decision making… always striving to do and be better”. With a workforce of 162,000, Inditex claims to “never lose sight of the customer.” The company had an average revenue growth of 12.0% according to Gartner and earned a composite score of 4.98.

November 2017

01 UNILEVER

Website: www.unilever.co.uk Unilever as it is known today was formed in 1930 and since then it has become known as the seventh most valuable company in Europe. Unilever’s products vary across food and beverages, cleaning agents and personal care products, and it owns 400 brands in total, including Knorr, Lipton and Ben & Jerry’s. Thirteen of Unilever’s brands each achieve sales of over €1bn ($1.18bn) per year. Some 57% of its business is in emerging markets and it employs 169,000 people, with 46% of Unilever managers being women. Each year, the company invests around $1.17bn in research and development, particularly in innovation and customer research. This has helped it earn a composite score of 6.39 from Gartner, with 10.00 for sustainability. 41

Dressed for

SUCCESS Written by Fran Roberts Produced by Richard Durrant

Having celebrated its 30th anniversary last year, Charles Tyrwhitt (CT) is recognised as the UK’s largest purveyor of fine shirts. Founded as a mail order company in 1986 by Nicholas Charles Tyrwhitt Wheeler while he was a student at the University of Bristol, the business now boasts a substantial footprint both online and across its stores

harles Tyrwhitt has a clearly defined purpose: “Making it easy for men to dress well” – and that is helping to drive expansion. “The business is growing and we are on a very clear growth path. It’s one of our core values – growth matters,” reveals Pete Lemon, Director of Distribution. “It’s our plan to open a number of stores before Christmas, taking us to over 30 stores in the UK and the US, with one in Paris. Our core territories were the UK, USA, Germany and Australia but we’ve recently launched websites in France and in Canada and our Euro website in Ireland, launched a couple of years ago, has developed a very successful market there too.” During the seven years with the company Lemon has, with his small team of managers, developed the DC operations at the 130,000 sq ft warehouse in Milton Keynes, where they moved four years

November 2017

S U P P LY C H A I N

CTâ&#x20AC;&#x2122;s purpose built 130,000 sq ft capacity warehouse in Milton Keynes w w w. s u p p l y c h a i n d i g i t a l . c o m

OCS DELIVERS ADVANTAGE With 60 years experience, OCS expertly provides a range of fast, predictable and accountable international ecommerce distribution services. The seasoned matrix of airline partners, network terminals and lastmile distributors has created a strong, efficient logistics mechanism uncomplicated by regional consolidators or intermediaries. Enterprising, consultative and independent.

OCS Worldwide 0845 678 9800 www.my-ocs.net | www.ocsworldwide.co.uk

Accountable International Delivery OCS has been an international distribution partner to Charles Tyrwhitt for almost fifteen years and is proud to have played a part in their dynamic growth. Established in the United Kingdom in 1958, OCS has always specialised in the provision of precise and accountable International Distribution. Initially handling the timecritical delivery of news and media through the 1960’s, services expanded to include business-to-business courier in the 80’s and 90’s. By the early 00’s OCS became a mature global network, expert in reaching both private and business addresses in every country – a perfect platform for the burgeoning ecommerce market. We spoke to OCS Managing Director, Tim Jones, about what characterises the relationship between Charles Tyrwhitt and OCS: “Charles Tyrwhitt sets itself apart by providing a great buying experience as well as great products. Buying is easy and there is total accountability as demonstrated by their no-quibble guarantee. These values are very-much part of the OCS ethos and this common spirit has led to consistent innovation and mutual growth. What makes OCS different? OCS comes from a background of direct international hand delivery and parcel distribution rather than as a provider of untracked postal solutions. Our culture is one of service and accountability. As ecommerce volumes have grown so has the OCS network ensuring connections with the best last-mile partners for smooth and flexible residential delivery.

The OCS backbone remains strong, with direct airline relationships, strategic global hubs, and efficient cross-border processes at destination. Broad IT competence moves data in parallel to parcels smoothly and securely. Compliance with regulatory authorities, and facilitating flexible delivery, are aspects which require accountable and protected data handling. How about the actual delivery – why OCS? We are fast and efficient. We collect seven days a week and despatch orders 24/7. Parcels collected in the evening, even on a Sunday, fly the following morning – connecting sameday to last-mile partners in markets such as the US where the time-difference is favourable. Contracts with the delivery agents are direct with long-standing relationships with Australia Post, New Zealand Post, Austria Post and many others. Indeed, OCS was the very first US Postal Service Global Direct Entry (GDE) partner appointed back in 2012. Ecommerce peaks during the runup to Christmas - how do you ensure consistent delivery allowing retailers to take advantage of more of those critical selling days before cut-off? OCS enjoys a very long-standing relationship with many airlines and is an IATA air cargo agent. Capacity is planned carefully and contracted for peak usually by September. OCS commits to minimum projected volumes which are pre-allocated to a specific flight schedule on all major routes. We also increase the number of gateways into each destination country and increase the number of flights within the schedule. Peak is a busy time but retailers can ship with confidence right up to the deadlines.

CHARLES TYRWHITT

ago, into a highly efficient and cost-effective facility servicing the company’s online orders worldwide and replenishing stock to all UK stores. He explains that key to its success has been to have plans of what it will look like in 10 years’ time and then build towards that, refining to meet changing business needs. “We’d only been open in Milton Keynes for a year when a business change meant we needed to build a 30,000 sq ft racking structure to increase our stock holding capacity. Apex

are also based in Milton Keynes and were able to design, manufacture and install the entire system in three months, working with other trades to deliver on time and budget. It was a tricky build as the operation had to be able to carry on in a safe environment whilst the construction was completed in two stages.” CT has built a network of reliable partners and suppliers, like Apex, to help the company not only expand its global footprint and provide the highest standards

The 30,000 sq ft racking structure that was built to handle the increase in the stock holding capacity for Charles Tyrwhitt

November 2017

EUROPE

The CT warehouse located in Milton Keynes

of service to customers, but also enable it to create efficiencies within its operations. Robust design Such partnerships are key to the running of CT and have enabled the company to achieve recognition from some of the most prestigious sources – the firm won a Queen’s Award for Enterprise: International Trade 2016. Another such supplier is Knapp; “I prefer the term mechanisation to automation and Knapp understood what we wanted and needed.

£220 MIL LION

Cha rl e Ty rwh s it A nnua t l Revenu e

w w w. s u p p l y c h a i n d i g i t a l . c o m

CHARLES TYRWHITT

They came up with a really simple, robust design – not automation for automation’s sake. These are really sensibly designed, well-engineered solutions and they absolutely meet our needs,” states Lemon. The Knapp-designed conveyor systems have also improved efficiency within the operations at CT. “Our dispatch department four years ago had no mechanisation,” Lemon

to its valued customers. “Seko has been our freight forwarding partner for a number of years,” explains Lemon. “They were recently awarded the contract to run our third party US distribution centre giving them responsibility for the management of our retail stock holding and replenishment into our US stores. Seko are a company who will adapt and modify what they do to best

“In a typical non-peak day we sort 7,500 orders and that used to take seven or eight people. Now it’s just two, which shows the benefit that you can accrue by just getting the design right” Pete Lemon, Director of Distribution continues. “In a typical non-peak day we sort 7,500 orders and that used to take seven or eight people. Now it’s just two, which shows the benefit that you can accrue by just getting the design right.” It’s not just in CT’s distribution warehouse that the company has entered partnerships to become more efficient and deliver a better service

November 2017

suit the needs of Charles Tyrwhitt. “Another key partner is OCS Worldwide, a parcel consolidator shipping goods all over the world. We’ve known and worked with them for many years. This relationship is mutually beneficial as OCS has grown with us, taken on other clients on the back of our business and so the services, costs and value for all of us

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Hermes is a dedicated service partner, providing an onsite liason team to assist with any potential issues during the dispatch process

can be maximised. They now carry all of our parcels to the United States, our biggest growth market, Australia and many of our ROW orders, leveraging their relationships with other shipping companies like Royal Mail where they can get the maximum discounts available. A great company led by great people,” Lemon adds. Domestically, CT has partnered with Hermes to ensure delivery of its products to customer in the UK. “The service level that Hermes provide is extremely good value for money. We have one of the Hermes team onsite

every day in Milton Keynes to follow up any delivery issues that arise and hold monthly service reviews with our account manager. The relationship has developed, we’ve been working with them now for four years as our primary UK carrier, and they have now taken on the majority of or UK next day service parcels too. At peak times, they react well to what we need, and are developing their business too, offering the same services, such as in-flight options, as some of the more expensive carriers.” Of course, an important part of

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CHARLES TYRWHITT

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CT’s relationships with its suppliers is trust. “You have to pick the right ones and you have to trust them to do their job and I think that’s true of all of those,” remarks Lemon. “Specify the service and let them do their job, and when they let you down you have to have the relationship with them that means that you can pick up the phone and have the frank conversation: ‘You’ve let our customer down, now let’s fix this’.”

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The staff turnover at CT is less than 3% per annum

1,000 Number of staff at Charles Tyrwhitt

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Employee engagement A little over 1,000 people work across the business at CT and a fifth of those work within Lemon’s operations. “I would think that probably 50% of my time is spent dealing with people matters and those are not negative things,” explains Lemon. “I’m actually dealing with things that are looking to engage with people in the right way and to encourage people to enjoy working here, to want

to work here and that’s absolutely key. It’s about recruiting the right people in the first place and then retaining them through positive engagement, personal development and reward. Our turnover is less than 3% per annum, which is great.” Indeed, people form one of the four core values at CT. “The first one of those is Quality with Value Matters and that applies to everything about our product,” Lemon advises.

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“The second one is that Customers Matter. We’re nothing without our customers so they have to be right up there. People Matter is next, and that’s about treating our colleagues with respect and dignity, and our final value is Growth Matters. “We’re not in business to stagnate and whilst all businesses go through ups and downs we are very much on an up – we’ll go that extra mile, we’ll set realistic goals and take pride in beating them.”

November 2017

Quirky and fun Alongside the core values, CT also has four supporting behaviours. “We are Simple and Straightforward for our customers and internally, trying to avoid bureaucracy wherever we can. We’re Cost Conscious and Modest. We’re not a very ostentatious company, we’re not extravagant, we print in black and white, not in colour. It’s simple things like that, because why be frivolous and spend money on things that don’t add value to the

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business or indeed make it easy for men to dress well?” Lemon remarks. “We Believe in Teamwork – not operating in silos, working across departments. Finally, we are Quirky and Fun. We have a book that describes these values and each one is depicted as a dog dressed in Charles Tyrwhitt clothing in a very fun and quirky way, and we do that in the way we communicate internally, the way we present things and the way we engage with our customers too.” Of course, all of this is underpinned by the drive to make it easy for men to dress well. “The great thing about that phrase is that it doesn’t matter where you work in this business. If you think ‘Is what I am doing making it easy for men to dress well?’, whether that be from designing the product in the first place, to the care you take in making sure it’s exactly the right garment going out and that it arrives on time when the customer expects it, that’s all about making it easier for men to dress well,” Lemon observes. “You

“We’re not in business to stagnate and whilst all businesses go through ups and downs we are very much on an up – we’ll go that extra mile, we’ll set realistic goals and take pride in beating them” Pete Lemon, Director of Distribution

can apply it anywhere in the business, so that is definitely something that underpins the company.” With such measures in place to ensure quality throughout the operations at CT, the company seems well-suited to its current growth trajectory.

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Realising the potential of procurement Written by Laura Mullan Produced by Richard Durrant

As one of the largest housing associations in the UK, procurement is a crucial part of the day-to-day business at Clarion Housing Group. With a CIPS accreditation under its belt and top industry expertise, it is overcoming industry-wide challenges with only the best of procurement standards

he slogan for Clarion Housing Group is ‘Building Homes. Developing Futures’. It’s a bold concept which perfectly encapsulates the company’s vision: to develop largescale housing projects whilst creating a meaningful impact on residents’ lives. Today, the company has set itself the immense challenge of building 50,000 high-quality homes over the next 10 years. For Head of Procurement, Kirsty Bower, this is not only an impressive feat from a procurement point of view – “we’re expecting to procure over a million windows over the next 10 years,” she says - but it also demonstrates the company’s social purpose, as the Group will offer two thirds of these homes as affordable housing. “Ultimately, we want to provide

November 2017

homes and improve our residents’ lives so that they can put down roots,” says Bower. “At Clarion, we see ourselves as a business with a social purpose. We have the ability to be very commercial but at the same time we’re not doing that to deliver profits into shareholders pockets; we’re doing that to see a bigger benefit in terms of social value and social impact.” Shining a light on procurement

The largest housing association in the UK, Clarion Housing Group was created in 2016 following a merger between Affinity Sutton and Circle Housing Group. Bower has held the position of Head of Procurement for over nine years, remaining loyal to the company throughout the

S U P P LY C H A I N

The ribbon is cut on a new development merger. Throughout her time, she has seen a significant change in perspective towards procurement. “Procurement can often be undervalued by companies,” reflects Bower. “When I first entered the sector, procurement only came on the radar because housing associations were being caught out by EU procurement regulations. “At Clarion Housing Group we believe that procurement isn’t

just about regulation; it’s about how can we drive value out of the money that we are spending. “I think the message that procurement is vital to business has always been present at the company because of the level it has been able to influence at, for instance, my role reports directly into the Group Executive Director for Governance and Compliance, something that wasn’t often seen in the sector when I joined.”

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CLARION HOUSING GROUP

Kirsty Bower and the Clarion Housing Group team recieving the CIPS Corporate Accreditation

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November 2017

At Clarion Housing Group we believe that procurement isn’t just about regulation; it’s about how can we drive value out of the money that we are spending KIRSTY BOWER Head of Procurement

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Raising professional standards

By observing the highest procurement standards, Clarion Housing Group was one of the first housing associations to achieve the CIPS Corporate Accreditation. Bower says that this demonstrates the company’s commitment to maintaining the highest level of processes and professionalism. “I think CIPS helped us to benchmark what we were doing and re-inforce that there are always new things that you can learn. It was a real eye-opener in terms of where we were doing really well and areas where we needed to do more work. I think the other benefit was that it demonstrated the value of procurement and my team internally to the company and externally to our supplier base. It also helped the junior members of staff feel more valued. It doesn’t matter how much you tell someone they’re doing a good job if they see themselves that they helped to achieve the CIPS certification - that is really empowering.” Procurement is interwoven into all aspects of business life at Clarion Housing Group and not only does it help the company, it

also benefits the supply chain. “If we want people to bid so that we can get the best contracts, we’ve got to have the best processes, we’ve got to be professional, and we’ve got to be transparent. I think the CIPS accreditation demonstrates that and that’s really important from a procurement perspective, because the more diverse your supply chain the more value you can derive from it.” A team effort

Since its creation, Clarion Housing Group has achieved great things; last year it built 1,340 homes, engaged with over 10,000 young people and provided £130,000 of grants to help communities. However, for Bower, these achievements wouldn’t have been possible without the dedication and expertise of the company’s staff. “I really want to stress that the success of procurement and the success of getting the CIPS accreditation is down to the team,” Bower says. “It’s an enjoyable organisation to work in; it’s not hierarchal, it is innovationbased and the staff really drive the

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CLARION HOUSING GROUP

Clarion partakes in many community projects company towards the end-goal of improving residents’ lives.” Overcoming challenges

The housing industry faces pressing challenges, as skill shortages and tightening budgets adversely impact the sector. However, Clarion Housing Group aims to mitigate such challenges by pre-emptively enhancing its supply chain, which is the cornerstone of its successes. “Not only do we want a diverse supply chain, we also want to ensure that it’s resilient and can

November 2017

mitigate industry challenges such as skills shortages,” Bower says. “To tackle this challenge, we are in the process of setting up a supply chain management programme to help develop SME’s and look into how we can develop the market and can help them access our supply chains.” Clarion Housing Group is also preparing for industry challenges through technological prowess and continuous innovation. In what is described as “a huge project” for the company, Clarion Housing Group is implementing an ERP

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system through which every area of the company will be connected. “I think the opportunities that this is going to afford us are going to be immense,” says Bower. “It’s a really exciting project, it’s huge, and I think that will help revolutionise our services going forward.” A new perspective

I think the CIPS accreditation demonstrates that and that’s really important from a procurement perspective, because the more diverse your supply chain the more value you can derive from it

With a heritage spanning over 100 years, Clarion Housing Group has established itself as a major player in the housing market, tackling bold largescale projects whilst still maintaining a social purpose. The housing market may face uncertainty, but Clarion Housing Group is well prepared for any challenges that may come its way. ”The merger gave us the opportunity to take a step back momentarily and take a look at the wider picture of the industry and how we can move forward. We now have had time to review the landscape and chart where we want the company to go.”

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Disrupting

with honesty Written by Nell Walker Produced by Richard Durrant

The tiny giant that is Zinnovate just keeps growing, consistently beating global competitors to become a leading IT consultancy. CEO Håkan Nilsson explains how

he last time I spoke with Håkan Nilsson, CEO of Swedish IT consultancy Zinnovate, his tiny but immensely talented fiveperson team was already defying the odds by beating huge, worldfamous competitors in acquiring a network of global customers. Eighteen months later, that same five-person team has just taken on a global logistics leader – one previously let down by a technological giant with over 500 consultants – as a client, its revenue has skyrocketed, and Nilsson himself has received a CEO of the year award (Best CEO Management/Logistics) from European CEO magazine. “While we have kept the team as small as it was a year ago, our influence and power is at

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quite a different level thanks to the global network we have built,” Nilsson explains. Revenue numbers in Zinnovate’s first year were around €140,000 per employee; four years later, it’s closer to €1mn per employee. While this is certainly impressive, not to mention thrilling for any small business, Zinnovate has no profit targets – it just has customer targets – and ROI is replaced by ROC (return on competence). While the global reach has dramatically changed, Zinnovate’s approach to customers remains the same. “It shows that the philosophy we had from the get-go at Zinnovate is the right one,” says Nilsson. “I started Zinnovate on the premise

Z I N N O VAT E

“You can throw around fancy words like ‘cultural alignment’, but in the end it’s about people: people working together, and people making business” Håkan Nilsson, CEO

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November 2017

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that we admit to everything. We dare obsession of WiseTech Global and to admit that we have some unique the freight excellence of Greencarrier skills, and we will do our utmost – help Zinnovate grow through to leverage those unique skills to combined synergetic strengths, deliver value – but we will also admit and synergy is driven through what that we have some weaknesses. We delivers value to customers. recognise those too and will “We don’t enter into any partnerships unless there be brutally honest about is a mutual personal them, teaming up with chemistry,” says others that are better Nilsson. “You can in those areas.” throw around Using this fancy words like system of simple ‘cultural alignment’, honesty, Zinnovate Annual but in the end has expanded its revenue it’s about people: customer network people working to Spain, Italy, France, together, and people making Germany, Denmark, Sweden, business. That’s the driver.” and the US, leveraging a partnership Zinnovate’s expertise is leveraged network from around 15 countries further by Nilsson himself, who spent to build project teams and address 23 years on the other side of the table global challenges. The partnerships as a CIO for global freight forwarding – notably including the intense companies. This has afforded him a integration product development unique perspective into the mind of focus of Xware, productivity

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Zinnovate aims to position customers one step ahead

the customer, and he believes that actions are far more important than the type of disingenuous strategy presentations he endured as a client. “Many companies are guilty of creating a mission statement, and then a few years down the line they can say they achieved it and pat themselves on the back,” he says. “Rather than set up from the beginning, we try to learn as we go,

November 2017

which allows us to make the whole more than the sum of the parts. “We do that in three distinct areas: one is helping companies to transform to global optimisation, with the whole being more than the sum being systems, processes, and organisation. “The second area is team performance, which we’re getting better at all the time.

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“The third area is system integration, because when I articulated the vision statement of Zinnovate from the start, it was for us to help companies in freight forwarding to realise the full potential of their IT portfolio. Even if you have great systems, they may not be well aligned between operations, finance, and customers.” Zinnovate keeps proving itself to the industry thanks to this winning combination, making it irrefutable that the business gets results. Reputation, as Nilsson is more than aware, is incredibly important. “As much as I would like to think that I’m perfectly logical and make all decisions based on strong, logical rationale, I know that I – like everyone else – am an emotional creature and perception makes a difference,” he says. “There is of course real value in what we can deliver, but our ability to get the chance to prove that is largely dependent on the perception of people. We are almost

“There is of course real value in what we can deliver, but our ability to get the chance to prove that is largely dependent on the perception of people” Håkan Nilsson, CEO religious about reputation, and I would rather walk away from a great opportunity that I know we cannot deliver, than fail and have that failure spill over into everything else.” Nilsson’s CEO award will undoubtedly contribute to this reputation as news of it ripples through the industry, and the business will continue to inspire other small companies that don’t necessarily feel brave enough to compete with the bigger

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Z I N N O VAT E

HĂĽkan Nilsson - CEO Nilssonâ&#x20AC;&#x2122;s unique IT expertise stems from more than three decades of IT focus with senior management roles in three different industries: Manufacturing, Finance and for the last 26 years, Transport & Logistics. He is devoted to building and delivering Customer Value and Shareholder Value through Innovation and Optimization of processes and system solutions. Nilsson is instrumental in creating a world-leading global operator in the freight forwarding industry through mergers and acquisitions, and by delivering cutting edge IT solutions and processes. He introduced and led the global deployment of an industry-changing global freight forwarding system based on single-file concept and end-to-end network process. This has resulted in impressive productivity improvements whilst replacing a myriad of legacy systems. Nilsson is a renowned and sought-after speaker at international conferences on the subjects of IT, Processes, Change and Logistics.

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players. It takes courage to be a disruptor, Nilsson says. “If you’re a disruptor, you’re doing something different, rather than just doing more or less of something. Of course, we believe we are doing things better and faster and with more value, but I think there is some truth in the disruptor label in that we’re a different player. We look at both the hard technical and analytical stuff as well as the behavioural stuff to do with organisation, systems, and team dynamics. Often, 98% of the focus is on the hard tech, but the 2% of fluff is what makes or breaks a project.” Nilsson continues: “Sometimes I’m a bit surprised that a lot of companies want to be world class and unique, yet they turn to the same consultancy firms everyone else is using. When somebody like Zinnovate comes in and says ‘I won’t give you that impressive hundred-slide PowerPoint, but

I would advise you to do things differently,’ that gets their attention.” What is most important to Zinnovate is wanting the customer to be successful. Nilsson is in a position where he enjoys seeing the success of others more than anything since achieving his own success, and when he and his team get behind a project, it is destined to succeed. “I know whether a project is going to be successful or not,” says Nilsson. “I’m very privileged to not only have extremely skillful people – teammates and people – around me, but also there is this dual heartfelt thing where we really want the other person to be successful, and that truly makes the difference.”

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LOGISTICAL PROWESS Written by Nell Walker Produced by Charlotte Clarke

The LF Logistics Digital Dashboard that provides real-time information for operations in Singapore

Joseph Phi, President of LF Logistics, describes the ways in which his business has achieved incredible success with hand-picked technologies and an enviable company culture

hina is the largest and fastest-growing online market in the world, and LF Logistics has pivoted to ride on this growth bandwagon through its e-logistics services. From working with just one brand in 2010, LF Logistics now collaborates with over 40 world-renowned multinational brands. This year, the number of orders it will process during Singles’ Day (the equivalent of Black Friday and Cyber Monday) is expected to exceed 8,000,000. Just four years ago, the number was 300,000. At this rate of growth, LF Logistics is well on its way to dominate this all-important market segment. Guided by its operations-centric philosophy, LF Logistics has built an unparalleled track record of executing an excellent omni-channel strategy for customers, a well-acknowledged point of differentiation against its rivals.

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Asia is its home court, and it enjoys a superb home-court advantage. LF Logistics focuses on five key verticals – Footwear & Apparel, FMCG, Food & Beverage, Healthcare, and Electronics. For each vertical, the goal is to become either number one or two in every market in which it competes. Its scalable and repeatable business model allows the company to add a new vertical at the right time and with the right opportunity. Its menu of services includes distribution center management, transport (including first and last-mile delivery), freight forwarding, hubbing and consolidation, order processing, data analytics and other value-added services. LF Logistics runs a full suite of IT services that digitises each facet of its customer’s demand and supply chain. This global logistics arm of Li & Fung, the world’s leading supply chain solutions partner for brands and

Joseph Phi, President of LF Logistics

A STRONG SUPPLY CHAIN PARTNERSHIP LF Logistics’ Distribution Centre Management services nearly 400 brands worldwide, and needed a new, purposebuilt warehouse to meet growing demand. With land in Singapore both scarce and expensive, and skilled labour difficult to find, LF Logistics decided to invest in a highbay, automated warehousing solution for its new ambient and temperature-controlled food and beverage facility in Jurong. The move to a 38 metre high SRM system would greatly reduce the footprint of the new facility, and the need for as many skilled operators. LF Logistics turned to automation leaders, Dematic, who it knew could meet its requirements, especially with Dematic’s fast and experienced local customer support team. These expert resources would be

crucial to meet the extremely tight project schedule. And Dematic committed its very best people. Dematic developed a solution that incorporated 11 SRMs, goods-to-person pick stations, 45,000 pallet positions, and conveyor with modular and configurable controls, all controlled by Dematic’s iQ Warehouse Control System software. Dematic and LF Logistics worked together as a team to bring the new facility to life. The result of this successful partnership was a fast, efficient and reliable distribution solution capable of an impressive throughput of 200 pallets per hour. And LF Logistics and Dematic are looking forward to more successful partnerships in the future.

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The semi-automated conveyor in LFL Hong Kong Regional DC 82

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“In today’s digital world, we must stay relevant by constantly adapting and pivoting, and selectively applying pertinent technology to improve efficiency and effectiveness. Having said this, it is essential that we don’t get carried away by technology” JOSEPH PHI President of LF Logistics Using augmented technology to improve efficiency in the dispatch process

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Grand opening of World Gateway in Singapore retailers, is run by Joseph Phi, President of LF Logistics. With an illustrious career spanning three decades, Phi has nurtured the organisation and guided its evolution every step of the way. Phi describes his leadership style as embracing both the old and the new. “In today’s digital world, we must stay relevant by constantly adapting and pivoting, and selectively applying pertinent technology to improve efficiency and effectiveness. Having said this, it is essential that we don’t get carried away by technology,” he says. “We need to take heed of what is driving

November 2017

logistics and what makes it tick in the first place. At the centre of what we do is our people. We must cultivate a sense of compassion, making sure our people feel engaged and stay involved, and that we help them realise their full potential. By juxtaposing people motivation with digital solution, we are able to curate a superb customer experience.” On the technology front, LF Logistics keeps itself informed of emerging technologies that will make its processes simpler, easier, and quicker, and experiments with them in a practical way to assess the benefits they would

GLP PARK BAOSHAN YUEPU FOR LF LOGISTICS, SHANGHAI, CHINA

Together, we make a difference GLP is the leading provider of modern logistics facilities in China, Japan, US and Brazil. Our property portfolio of 55.8 million square meters is strategically located across 118 cities, forming an efficient logistics network serving more than 4,000 customers.

www.glprop.com | group.enquires@glprop.com “Our relationship with GLP is driven by the need for modern logistics solutions in the right locations across China. As a leading global supply chain manager, we require an efficient and seamless logistics solutions network with the flexibility to expand when needed, that’s close to our customer base and environmentally responsible. GLP meets all of these requirements, which is why we are expanding our cooperation”. Dominic Gates, Executive Director, Head of North Asia, LF Logistics,

â&#x20AC;&#x153;At the centre of what we do is our people. We must cultivate a sense of compassion, making sure our people feel engaged and stay involved, and that we help them realise their full potentialâ&#x20AC;? JOSEPH PHI President of LF Logistics

November 2017

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offer to the business. Some of the experiments it has conducted include vision picking, operating drones for cycle counting, using smart watches to highlight process bottlenecks, among others. Having said this, Phi is adamant that his business uses technology to enrich the quality of work life of the staff, as well as to enhance service level to customers. It is never technology for technology’s sake. One area LF Logistics does use heavily is data analytics. “By digitising our processes, we are able to leverage our huge database that allows us to constantly learn from hindsight information and make mid-course adjustments. We are also able to generate business insights to aid in decision making. More importantly, with data, we now can purposefully anticipate and prepare for future business needs with better foresight,” says Phi. INSPIRE Greatness LF Logistics’ culture is driven by its INSPIRE values (Innovation, Nimbleness, Simplicity, Productivity,

Supply Chain Analytics

In this video, LF Logistics shows how it uses data to help its customers and optimise its resources, inventory, information, process flow and plan for the next steps

Initiative, Reliability, Engagement), which aim to cherish employees and what they add to the business, while simultaneously encouraging them to work more effectively. “I learned many years ago that culture is not something that’s a platitude you can hang on a wall,” says Phi. “It’s not what we say as management, it’s what people are saying about us when we’re not watching. From a management standpoint, we believe the best way to create a culture is for us to behave in a certain way for people to emulate.” This attitude of

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LF LOGISTICS

LF Logistics annual dinner inspiring the best behavior in others flows from the heart of the business. TEAMWORK LF Logistics follows an asset-light model. As such, it works closely with warehouse developers, truckers, labor agencies and other vendors when developing a solution for its customers. To forge long-term partnership with the vendor community, it follows the TEAMWORK principle. TEAMWORK stands for Trust, Engagement, Accountability, both

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sides driving positive Momentum, Win-win situations, Operation-centric, taking Risks, and KPIs. This is the framework used by LF Logistics in building its partnership ecosystem. â&#x20AC;&#x153;First and foremost, you need to build trust, and for people to trust us, we need to have a sense of humanity. Our customers and partners can count on us during the good times and bad. When things are going well, how can we scale quickly to support their growth? When things are going less well, how do we streamline so we can provide

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a cost cushion for our customers? “For the ecosystem to thrive, each member has to be better off by being part of it. This means we need to measure and gauge how well we’re doing as partners,” says Phi. “The challenges are a spectrum, but what’s important is that the partnership is sustainable.” This all feeds into Phi’s vision of building the model partnership ecosystem that stands the test of time. This in turn helps position LF Logistics as the most admired

logistics company in the industry. Phi quotes a Confucian teaching to underscore the way he runs his business – “Talk to me, and I listen. Show me, and I understand. Involve me, and I’ll make it happen” – and with his leadership and a solid company culture that involves his people, customers and partners, LF Logistics’ sterling growth momentum shall continue way into the future.

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THE CUSTOMER IS EVERYTHING Written by Ben Mouncer Produced by Charlotte Clarke

Arnaud Derbaudrenghien, Managing Director of Katoen Natie in Thailand, talks about the company’s customercentric philosophy and why it won’t be budging from Thailand any time soon

t Katoen Natie, one priority runs through everything it does – its desire to go above and beyond when serving its customers. As one of the world’s premier logistics service providers, the Belgian company’s reputation has steadily grown since being founded in 1854 by four working partners handling cotton goods in their native country. Now with operations in North and South America, Africa, Asia and the Middle East as well as Europe, Katoen Natie, though still familyowned, employs over 13,000 workers worldwide, building on-site, support and multi-customer platforms to smoothen the supply chain for many of the world’s biggest companies. Arnaud Derbaudrenghien is Managing Director of one of the business units in Thailand, where it works side-by-side with customers in the country’s eastern province

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of Rayong. He explains how the company’s close relationships with its partners work. “As a company we try to work on a longer-term base with our customers, and because of that we have grown to be a multinational company operating all over the world,” says Derbaudrenghien. “We work with multinationals in Thailand who have the same international standards. We provide state of the art facilities, together with our processes and our trained teams which can provide the premium services our customers require. We have customers like BMW, Ford and Suzuki, but we also work with the first tier and second tier suppliers of these companies. Basically, we build up a network within our customers that goes through the whole loop of the supply chain. “We are not in it for a quick shot

“As a company we try to work on a longerterm base with our customers… we are not in it for a quick shot - we are in it for the long-term” Arnaud Derbaudrenghien Managing Director of Katoen Natie Thailand

Arnaud Derbaudrenghien on how Katoen Natie goes above and beyond for its customers

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sophisticated IT management solution - we are in it for the long-term. We that successfully connects its own cannot just go to a customer and say system with those of its customers, ‘okay, we take the quick money for giving all of the information and one year’ and then forget about them. reporting needed for the customers Our strategy is to invest in long term to optimize their planning, work relationships with our customers. process and logistic flows. That’s why we have our own assets The solution, built using electronic and develop further together with data interchange (EDI) technology, our customers further business generates automatic reports on and collaboration. We as a a highly-secure two-way company has already channel between invested quite a lot both companies. of money here in It’s a process that Thailand and our has proven highly plan is to continue successful for Katoen to do so. We have Natie, but also one some customers to which it commits that have been with time and resources us for more than Number of employees to improving. 15 years, and we at Katoen Natie “To have an efficient work every day to keep and correct information them satisfied and expand flow is really important. our long-lasting collaborations.” Otherwise, our customers cannot work,” Derbaudrenghien explains. Innovating to improve “We have a complete team that is customer delivery working on that in our HQ. It develops All of Katoen Natie’s work to improve regularly based on feedback from our its service is part of its promise to customers, improving our system to deliver ‘value-added logistics’, and be up to date with the developments a key selling point of its offering is a

13,000

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K AT O E N N AT I E

“They (companies) will have more incentives to see Thailand as a perfect location in order to develop further their business” Arnaud Derbaudrenghien Managing Director of Katoen Natie Thailand

November 2017

within our industries, and to the specific needs of our customers. “The EDI messages are all encoded, making it secure to send messages in and out of their systems. In today’s business environment a lot of attention is given by our customers to cyber security and to the securement of their own IT systems. With these developments our customer can be assured that this combines operational efficiency without having security breaches within their systems. “At the moment, when the customer sends an order out, it will automatically come into our system

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and we will be able to process that order. The same happens once we complete an order - it will send a signal towards the system of the customer so that the customer knows that it has already been implemented.” Further innovation can be seen in its warehouses too, where Katoen Natie works to reduce the links in its customers’ supply chains by providing an advanced service when it comes to the handling of goods, often tailored to the specific requirements of each client. “What we try to do at Katoen Natie is think together with the customer,

and always look for opportunities to improve the complete process of our customers, providing them additional services so our customers can focus on their core business, while leaving the complete supply chain part to us.” Derbaudrenghien wants to do more in the near future, however, adding: “Our goal is always to go a step further in the process. “What we usually start with, in the first steps of our logistic process is just to receive, store and send out the collies of our customers. The next step is to say, ‘okay, what can we do more for this customer to help them in their process?

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K AT O E N N AT I E

“For example, what we can do for them for example are quality checks of incoming goods, repackaging of goods, pre-assembly of parts, sequencing of the parts to the production lines of our customers. “Often the level of service will depend on the specific flows of our customers, on the challenges that they are facing and on some of the bottlenecks/quality issues within their productions that we can help to resolve by providing our services.”

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Thailand’s bid for business Katoen Natie currently operates a total of 350,000 sq metres of warehousing space in Thailand, split over two main locations. Nevertheless, the company is still looking to further expand its offering. Extra efforts are being made by the country’s government to attract foreign investment and this is undoubtedly positive news for Derbaudrenghien. His warehouses are situated in Thailand’s newly-defined Eastern

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1854

The year that Katoen Natie was founded

Economic Corridor (EEC), a region along its eastern seaboard where at least 1.5trn Thai Baht is set to be invested over the next five years to transform its logistics infrastructure. Major work is being undertaken at the nearby U-Tapao International Airport and Laem Chabang deep sea port, on top of considerable road and rail upheaval. Companies from around the world are being incentivised to bring business to the EEC, with corporate income tax exemptions of up to 13 years available if they meet certain criteria. “It will mean that we’ll have companies that before were not considering Thailand as a potential hub,” says Derbaudrenghien. “They will have more incentives to see Thailand as a perfect location in order to develop further their business. From there on, they can be involved in and develop both the domestic markets and the exports markets in the region too. “The locations for supply chain are really, really important. The government has made quite some effort in order to make roads better. They will have a railway too that will give the opportunity to send goods all over Thailand and even to China. “All this connectivity will help not only the logistics, but I think industry in general in order to support further development and more efficient development.”

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Accelerating towards

INDUSTRY 4.0

Written by Laura Mullan Produced by Charlotte Clarke

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The automotive industry is currently embracing the so-called ‘fourth industrial revolution’, commonly known as Industry 4.0. As the sector shifts its focus towards the world of self-driving cars, Nexteer Automotive has emerged as a market leader with technological prowess and ingenuity

riverless cars used to be a thing of the future. However, now, with technological innovation, Nexteer Automotive is making autonomous cars an ever-closer reality. Specialised in steering and driveline solutions, Nexteer Automotive is the number three global supplier of steering systems and half shafts. “Our vision for the future is to be a leader in intuitive motion control,” says Alberto Rodriguez, Asia Pacific Manufacturing Engineering Director. “This is an important objective for us because, as the automotive world is evolving to become more autonomous, ‘intuitive’ will be a keyword which defines our company’s vision.” Nexteer Automotive is a multi-billion automotive company purchased in 2010 by Chinese firm Pacific Century Motors from General Motors. However, the company’s roots run much deeper.

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Nexteer Automotive originated in 1906 as the Jackson, Church and Wilcox, Co. in Michigan, USA and was later acquired by the Buick Motor Car Co. in 1909. Buick eventually became General Motors. It is this rich heritage and expertise that gives the company a competitive edge, explains Rodriguez. “Vehicle system integration is in our DNA. That’s why when we work with OEM’s - we can clearly understand their requirements and their product needs. This allows us to provide highlycustomisable and suitable steering solutions for the industry and it’s why we are the partner of choice for OEMs.” Global reach Nexteer Automotive has 25 manufacturing plants, three technical centers, and 11 customer service centers located strategically across North and South America, Europe and Asia. Spanning across four

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Number of staff at NEXTEER AUTOMOTIVE

10,000 Alberto Rodriguez, Asia Pacific Manufacturing Engineering Director BELOW: Asia Pacific headquarters and tech centre in Suzhou, China ABOVE:

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NEXTEER AUTOMOTIVE

“If we want to be a player in the coming years we need to be actively working to be ahead of the autonomous driving trend” ALBERTO RODRIGUEZ Asia Pacific Manufacturing Engineering Director

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continents, the company’s large global footprint is pivotal to its success. “Our extensive footprint allows us to follow our main global customers and OEM’s such as the big three in the US – General Motors, Ford, and Fiat Chrysler – or BMW in Europe, for example. Having a global, extensive footprint allows us to have a greater reach and serve any type of customer, whether they’re global or local.” As Asia-Pacific Manufacturing Engineering Director, Rodriguez understands the opportunities which lie east, particularly in the booming Chinese automotive market. “It is a very strategic and promising market for us,” notes Rodriguez. “If we look at the Asia-Pacific market, particularly in China, you can see that it is growing rapidly. Right now, the Chinese automotive market represents about 30% of all the vehicles sold in the world and if we look more broadly at AsiaPacific, more than 50% of vehicles sold in the world are sold in the region. China, India and Indonesia are all big opportunities for growth. With our technical center, five customer service centers and 11 manufacturing plants

in the Asia-Pacific region, we are well aligned to meet that growing demand.” Trendsetter The sector is currently in the midst of a Fourth Industrial revolution, commonly known as Industry 4.0. It is an exciting and bold shift for the automotive industry, and it is one which Nexteer Automotive has embraced with its ‘Manufacturing 4.0’ vision. As part of this strategy, Nexteer has been developing an interconnected ‘Digital Thread’ of manufacturing technologies to help optimise its work chain. Today, the company uses these technologies to plan upcoming production needs, track products throughout the manufacturing cycle, manage inventory and material flow throughout the complete supply chain, gather and analyse real time data from the production line, and ensure final product quality. Nexteer Automotive is at the forefront of Industry 4.0, working diligently with both partners and suppliers to ensure that the company remains ahead of the curve. As part of this, the company is looking into big data analytic solutions

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FACTS

NEXTEER AUTOMOTIVE

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Nexteer Automotive has 25 manufacturing plants, three technical centers, and 11 customer service centers located strategically across North and South America, Europe and Asia. The Chinese automotive market represents about 30% of all the vehicles sold in the world and if we look more broadly at Asia-Pacific, more than 50% of vehicles sold in the world are sold in the region. Nexteer Automotive is the number three global supplier of steering systems and half shafts.

November 2017

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facilitated by cloud computing platforms. These solutions enable the real-time computing of products and process data in order to support predictive quality and maintenance models. Another area of interest for Nexteer Automotive is virtual reality, as Rodriguez says that the technology could shorten manufacturing system design development cycles. By allowing the company to virtually approve aspects of equipment design such as material flow, ergonomics and workplace organisation before physical construction, virtual reality could enhance the efficiency of the manufacturing chain. Although the cost of labour in China is low, Nexteer Automotive also believes that Co-Bots (Collaborative Robots) could also be a cost-effective solution to the automotive industry. Co-Bots can collaborate safely with the operator, undertake work usually done by the operator, and can also perform critical inspection operations when coupled with an artificial vision system. From a technology partnership perspective, one project that Rodriguez is excited about is the company’s

joint venture with automotive supplier Continental. Focused on advancing motion control systems and components for automated driving, it is hoped that this venture will further accelerate advancements in automated driving to meet the demands of autonomous cars. “Nexteer is specialized in steering systems that laterally control the vehicle whilst Continental is a major player in longitudinal control,” says Rodriguez. “Therefore, the purpose of this venture is to create a fully integrated solution that allows for autonomous driving. It’s an important partnership because innovation is a key part of our community at Nexteer Automotive. Also, if we want to be a player in the coming years we need to be actively working to be ahead of the autonomous driving trend.” Although a transformative force, Industry 4.0 doesn’t come without its challenges. Cybersecurity and data protection is of the utmost importance to the company and so Nexteer Automotive is keen to tackle the demands of innovation with care and precaution. “Our products have

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a lot of software and they control crucial functions of car control,” says Rodriguez. “From that perspective, it’s very important that we protect our product and manufacturing process to ensure that no one could compromise our system. Therefore, when we talk about the tools and solutions that Industry 4.0 can offer, we are keen to approach new innovation with the utmost care and precaution. As we go beyond the four walls of Nexteer Automotive, we want to make sure that we are fully protected.” Driverless cars have four stages of development: feet off, hands off, eyes off and, finally, brain off. “All of the technology is available to make driverless cars a reality,” notes Rodriguez. “The automotive industry is becoming more intuitive, more autonomous and in our field, we are at the heart of this shift. As technology evolves, the challenge that we see is that regulation needs to adapt to cope with those changes and also needs to be consistent from country to country. For instance, we can see that in China, they are already modifying the laws to push autonomous

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driving and electric cars. While this requires a shift in laws and regulation there also has to be a change in the infrastructure and the cultural norms.” We are currently at the cusp of a new industrial revolution and as a result, driverless cars seem an ever-closer reality. But in this evolving industry, what does the road ahead look like for Nexteer Automotive? “The future is bright,” reflects Rodriguez. “We have grown significantly over the past few years. We are currently the number three steering solution supplier globally and we are hoping to close this gap to become number one in the near future. We want to really make our mark in the Asia-Pacific market, particularly the Chinese automotive market. Right now, when we’re the partner of choice for OEM’s and there’s increasing investment in the industry, our vision of becoming a leader in intuitive motion control is more relevant than ever.”

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Example of collaborative robot working side by side with the operator - no fence needed with force collision detection feature integrated in the robot TOP RIGHT: Asia Pacific headquarters and tech centre in Suzhou, China BELOW: A collaborative robot coupled with camera to perform 100% inspection on critical product features TOP LEFT:

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PCI: Electronics manufacturing made simple W R I T T E N B Y DA L E B E N TO N P RO D U C E D B Y C H A R LOT T E C L A R K E

PCIâ&#x20AC;&#x2122;s cell manufacturi

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ing division

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Through a transformation programme taking things “back to basics”, PCI has positioned itself to ride the oncoming wave of digitisation

CI Limited (PCI) is an Electronics Manufacturing Serviced (EMS) company headquartered in Singapore. The company offers a comprehensive suite of services, extending to all points in the manufacturing outsourcing cycle. This comprises of design, manufacturing engineering, material sourcing and procurement, assembly, testing and logistics. From the launch of new products to improving the competitiveness of existing projects, PCI remains dedicated to enhancing value at every step of the supply chain. “We are a customer centric EMS company. Apart from design and manufacturing electronic products for our customers, we are also capable in managing the entire supply chain for the customer,” says Dominic Chan, Senior Vice President, Operations - PCI. The goal? To be the EMS partner of choice for companies that require a highly competent service, one that can meet their complex demands. A fully diversified company, PCI works with some of the leading businesses in a number of

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SAFE Secure, Align, Flexible, Ethical

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industry sectors, including industrial, commercial, consumer, automotive and medical. Customer complexity As the Senior Vice President of Operations, Chan is all too aware of those complex needs and, more importantly, how quickly they can change. “The electronics industry is so dynamic, and with that the supply chain demand is ever-evolving,” he says. “For me, that means that the supply chain and operations of the company have to be versatile and responsive, providing innovative solutions that can meet those changing and unique requirements.” It is this need to be agile, to be innovative and to be able to offer the right solution to

1972

The year that PCI Limited was founded

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PCI LIMITED

“The supply chain and operations of the company have to be versatile and responsive, providing innovative solutions that can meet those changing and unique requirements” DOMINIC CHAN Senior VP Operations

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the right customer in the face of a changing customer expectation, that saw PCI embark on a transformative journey eight years ago, one that would “take things back to basics. This journey saw the company invest significantly into three key areas that would completely transform the its supply chain operations, enabling that agility and versatility. “We need to be able to respond rapidly to customer’s evolving needs and keep up with the pace of our industry. We needed to think big, but operate small,” says Chan. Through this investment, PCI bolstered its workforce with training Programmes, equipping them with the right skillsets and to improve their work processes and problem-solving abilities. The company also identified what Chan describes as “technology enablers”, which saw the implementation of a new ERP system (SAP) and linking it with PCI’s Manufacturing Execution System (MES) in order to enable a far greater control of the production shop floor. “It allowed us to collect more data,” says Chan. “And with that we could improve our overall performance.” PCI also heavily invested in a system integration, one that revamped its entire quality system and certifying it to a number of standards, including ISO 9001 (Quality Management

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System (QMS), ISO 13485 (QMS for medical) and ISO/TS 16949 (QMS for automotive). This particular level of investment was rewarded, with PCI receiving the Singapore Quality Class, a business excellence mark issued by SPRING Singapore.

Location of PCI Limited headquarters

Singapore

A challenging landscape No transformation is without challenge, and to transform in the way that PCI has over the last eight years is certainly no exception. “The greatest challenge, really, is helping all the team members adapt to change,” says Chan. “We know that in our industry, the only constant is change. In each project implementation, we continue

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PCI LIMITED

“We know that in our industry, the only constant is change. In each project implementation, we continue to pay attention to training. The key to mastering a specific skillset or capability within the organisation is to be able to learn, unlearn and relearn” DOMINIC CHAN Senior VP Operations

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to pay attention to training. The key to mastering a specific skillset or capability within the organisation is to be able to learn, unlearn and relearn.” Amidst the quest for versatility and agility, PCI is supported by its supply partners. For Chan, in the eyes of the customer the supply chain is as strong as its weakest link, and the continuous challenge that PCI faces is identifying and working with the right partner who has the right capabilities for the company’s needs. “It’s important to know where our own strengths and weaknesses are, and to find the right supply partner who can complement us in the right way so that we can elevate on one another’s strength to offer the best value proposition for our customers,” says Chan. As one of the key areas for investment, technology has played a significant role in the transformation of PCI, and with the pace of technological change growing faster and faster, will continue to drive growth. “It’s important to keep abreast of the latest developing in technology innovation. IT gives us more options in approaching any kind of challenges that we may face,” says Chan. But as many companies innovate and implement new technologies, there can be the temptation to innovate for innovation’s sake. Chan, however, understands this changing landscape all too well.

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“Not all technology may be relevant,” he says. “It is more important to know what we need, and what the technology can offer, rather than to just be always ahead of the technology innovation curve.” Powered by people A major core value for the company is its people, and PCI goes to great lengths to secure the services of its skilled workforce long term, with a large portion of its staff being with the company for more than 10 years. “Each year, PCI has a long list of long service award recipients during our annual dinner and dance,” says Chan. “This is something that we at PCI are proud of. We have an open work culture which brings about sufficient trust amongst peers and management that everyone is working towards a common goal of continuous improvement.” While the company truly values the talent and the workforce already in its family, the company cannot ignore the future and the workforces of tomorrow. In Singapore, talent acquisition is a challenge for a number of manufacturing companies and so PCI works hard to attract the younger generations into a career in the industry. “We run a management trainee Programme to recruit and nurture fresh graduates with high potential. We give them a chance to participate in key projects together with more experienced colleagues, providing them access to senior management, while

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DEDICATED PCB MANUFACTURING SERVICES

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“The vision for the company is to continue to be the EMS partner of choice for OEM companies who are leaders in their own field” DOMINIC CHAN Senior VP Operations

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their career progression is being monitored by a mentor,” says Chan. Over the last 30 years, PCI has grown, continued to innovate and remain as a manufacturer of choice, but the company cannot rest on its laurels. Chan speaks to the age of digitalisation, with electronics manufacturing outsourcing continuing to expand at a rapid rate, with PCI being well positioned and consisting of all the right capabilities

and experience to ride this wave and propel it to greater heights. “The vision for the company is to continue to be the EMS partner of choice for OEM companies who are leaders in their own field,” he says. “This is achieved through a strong spirit in continuous improvement, and achieving excellence in all the strategic projects that we do.”

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Driving innovation in retail logistics

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TFG

With stores spanning 34 countries, TFG has truly cemented itself as a market leader in the retail industry. Head of Logistics, Jan Tukker, explains how the company is continually improving its supply chain and logistics process with technological ingenuity

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ARFERTIACI A L

ith brands such as Foschini, Markham, Sportscene and @home under its belt, TFG is a name which is synonymous with retail. The company first set up shop in Johannesburg, South Africa, in 1925 and today, the retail giant has over 3,300 outlets in 34 countries across the globe. Overseeing the logistics function within the TFG supply chain is Jan Tukker, Head of Logistics. Having worked at the company since 1998 in roles such as Systems Manager, Senior Financial Manager and beyond, Tukker is well-placed at the helm of the group’s logistics team. TFG is widely regarded as one of the most successful and profitable retailers in South Africa. However, despite its success, the group is keen to evolve further by continually improving efficiency in its supply chain. “I’ve been with TFG for some time now and over that time we have significantly developed the logistical network and our supply chain processes,” Tukker says. w w w. s u p p l y c h a i n d i g i t a l . c o m

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TFG

More than 5% of total sales internationally are generated online “Driving efficiency in our supply chain is very important to us. We still have plenty of opportunity to improve, whether that’s by enhancing our stock turn, our stock holding, or our replenishment speed. “A huge amount of competition has come into South Africa and, like any retailer, we need to be more efficient and conscious of the small things to ensure that we continue to succeed. Therefore, continually enhancing processes that improve productivity and efficiency is crucial to us.”

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Speed of service As a forward-thinking company, TFG stocks trend-setting, fashionable items as well as products which will sell all year round and are easy to replenish. To ensure that these items remain on trend, agility or ‘speed of service’ is a vital area of focus. “For some of our retail brands, unit sales are growing quite rapidly partly due to negative inflation,” says Tukker. “As a result, our supply chain is under increasing pressure to quickly deliver these products.

Largest Fashion Logistics Provider in Africa RTT STYLE is the largest logistics provider within the Fashion, Footwear and Lifestyle sector in South Africa, with over 70% market share. Partnering with TFG for over 18 years, we have gained tremendous insights and experience within this niche market. We see ourselves as an extension of our clients, priding ourselves in our client centricity and agility in this ever changing environment. Through our strategic positioning and focus driven approach, our clients are able to leverage a competitive advantage within the market. Our focus areas of speed, consolidation, reliability and frequency, are all underpinned by state of the art technology, which differentiates us from our competitors. Adopting an On-Demand Omni-Channel distribution strategy, we have created a service offering tailored around the ever evolving needs of the consumer, becoming the benchmark against which the South African logistics industry is measured. Servicing over 5800 stores, across 800 shopping centres within the SADC region, our ever expanding

footprint affords us the reach needed to execute on our promise. RTT STYLE is committed to the evolution of logistics, working closely with our partners to breech new markets and territories, continuing to deliver fast fashion. Please visit us at www.rtt.co.za 0861 788 538 Chris Rossouw Manging Executive chris.rossouw@style.rtt.co.za

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AFRICA

“A huge amount of competition has come into South Africa and, like any retailer, we have to be a lot more efficient and conscious of the small things to ensure that we continue to succeed” – Jan Tukker, Head of Logistics To manage this effectively we are developing and expanding our distribution centre capability.” “We want to make sure our supply chain is agile by creating what we call multi-business distribution centres. These will allow suppliers to deliver to multiple distribution centres across the country rather than just the one which is available in the current systems and processes. This is a big project from a distribution centre footprint and IT point of view. We will be leveraging our investment with our WMS supplier, Manhattan Associates to make this happen.” Visibility Managing stock levels is critical for any retailer and with over 21 brands, visibility within the supply chain is more important to TFG than ever,

says Tukker. “Visibility has been a big focus for TFG because it enables us to reduce stock, it allows us to know where our products are, and it allows us to improve our decision-making. It is an area where we are showcasing innovation in everything that we do. “So, for instance, we are currently using software called Llamasoft Supply Chain Guru to model and evaluate our supply chain network from supplier all the way through to our customers. This enables us to optimise our supply chain by selecting the right locations for our distribution centres.” Global footprint Spanning several continents, TFG has a wide-reaching global footprint. In recent years, the company has procured numerous big-name retailers such as Phase Eight, Whistles

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and Damsel in a Dress in the UK and The Retail Apparel Group in Australia. “We are currently in a space in our organisation where we have procured other retailers not only in South Africa, but also Internationally,” says Tukker. “We continue to open stores in South Africa and in selected African countries, but are growing our international footprint at the same time.” Whilst the company is targeting new territories, it has strategically targeted the value, mid and high customer segments within the market. “This is

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a strategic move which shields TFG from economic risks,” explains Tukker. “If the economy declines and consumer spending is under pressure, people will want to buy value products and so we have strong value brands in Exact and The Fix. In the upper market we have brands such as Fabiani, @home and G-Star Raw. TFG has brands spanning all three of these markets positioning ourselves to capture all three of those market segments. This makes us a less risky as an investment opportunity because we cover all areas of the market.”

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â&#x20AC;&#x153;Customer centricity is a key focus for TFG and our Supply Chains need to ensure that ever increasing customer demands are metâ&#x20AC;?

Jan Tukker Head of Logistics

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“Driving efficiency in our supply chain is very important to us” – Jan Tukker, Head of Logistics Driving efficiency This large footprint hasn’t come without its challenges, particularly in South Africa. TFG has embarked on several projects using the Lean Methodology, whereby it aims to cut out waste from its supply chain. “Over time inefficiencies creep into processes which need to be reevaluated to remove unnecessary time and cost. We have multiple projects across our supply chain addressing these areas of waste, continually improving the way we work.” “There are quite a few suppliers that have helped us to develop our Logistical Network to the level that it is at now,” comments Tukker.

“Notably, a long-standing logistics partner of ours is the RTT Group. They are responsible for the transport from TFG’s distribution centres to our stores and in that process, they haven’t been just a trucking company, they have been valuable partner. They are now implementing a much more sophisticated, digital, delivery mechanism to stores allowing our stock position to be more visible. We’re also working with Adjuno, whose head office is in the UK, on developing improved supply chain collaboration between TFG and our stakeholders. This will result in better visibility of orders from suppliers into our DC’s and is all part of digitizing our supply chain.”

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TFG

The road ahead As a retail giant, TFG has captured the hearts of the South African and global market. But, with such visible successes, what is the company’s next move? “We’re going to continue to grow and become more efficient,” Tukker says. “Our online presence is growing quickly and more than 5% of our total sales internationally are generated through online sales. Customer centricity is a key focus for TFG and our Supply Chains need to ensure that ever increasing customer demands are met.” “We will continue to drive efficiency, agility and visibility in our supply chains which will allow us to react quicker to sell better. We’ll be analysing the data in our supply chain at a completely different level and are going to become more analytical. We’re driving to always understand global trends and improve our supply chain because, in retail, it is an ever-evolving world.”

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Inside one of TFGâ&#x20AC;&#x2122;s warehousing facilities

AL FUTTAIM: F&B SUPPLY CHAIN SUCCESS IN THE MIDDLE EAST Written by Dale Benton Produced by Heykel Ouni

Inside Ba Dubai Fe

AL FUTTAIM HAS EMBARKED ON AN AGGRESSIVE EXPANSION PLAN INTO THE FOOD AND BEVERAGES SECTOR, STARTING WITH A SOLID SUPPLY CHAIN PROCESS

he Al Futtaim Group is one of the largest family-owned diversified businesses operating in the Middle East, encompassing global brands in a multitude of sectors including: automotive, financial services, real estate and retail. Over the last two years, the company has created a new vertical, forming an aggressive expansion plan into the food and beverages sector. Ensuring the Supply Chain is in place for this expansion is Nick Gallager, Head of Procurement &

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Supply Chain at Al Futtaim Retail - F&B Division. “Al Futtaim, technically, has already been operating in the food and beverages space,” says Gallager. “for example, Ikea & M&S both have cafes as a by-product, it is not their core business. With the food and beverages arm, the company wants to cement its position as a leading player in the franchisee market.” The company began its journey into food and beverage with a number of key acquisitions. First, TWG Tea from

MIDDLE EAST

arilla Restaurant at stival City Mall

Singapore, a high-end producer of quality tea products. Soon after, the Italian restaurant chain Barilla and the US based Super Chix followed and Al Futtain’s food and beverage arm had its first three franchises. “Now we have those three horizontals we can start to look at the verticals, in particular the

different food themes,” says Gallager. “The aim is to expand the brand and portfolio in the Middle East, acquiring more verticals from all around the world and in the space of five years make this a substantial element of Al Futtaim’s offering.” Gallager is no stranger to the supply chain and logistic operations in the

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A L - F U T TA I M R E TA I L

food and beverages sector, having principles and locally available”. To worked for major companies in the UK ensure the best commercials without as well as for a number of the Middle losing the quality, a localisation East’s biggest F&B operators. Starting strategy is needed. All the products in Kuwait some two years ago and are approved by the brand principles. then moved across to be Dubai based The aim is to match products locally while still covering MENA operations. available in the Middle East with an It is that local experience that will equal product to the brand principles allow for a smoother expansion home country product, reducing the for Gallager, and not the steep requirement to directly import learning curve that comes with and carry that cost and risk of a new geographic location. direct importing. The goal “In setting up of this is to keep costs any new food down and give high and beverage levels of security of Number of supply chain, it supply whilst start employees at Alis essential to have up volumes are small. Futtaim Group the right foundations to For the proprietary deliver from the start and will products, Gallager explains, support the business expansion “Once it’s imported, I have and exceed expectations on the ‘control’ product that I can try cost and product quality. There are and match,” he says. “For example, always going to be challenges, but in Dubai there are a number of if your foundations are strong, they manufactures that can produce an can be overcome with the minimum equivalent product meeting the brand commercial impact” he says. principles spec and requirements In supplying the products for but manufactured locally. Removing its franchises, Gallager explains, the costly reliance on importing “there are two main product types, from America or Europe.” proprietary products from the brand While Gallager admits that matching

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“THE AIM IS TO EXPAND THE BRAND AND PORTFOLIO IN THE MIDDLE EAST, ACQUIRING MORE VERTICALS FROM ALL AROUND THE WORLD AND IN THE SPACE OF FIVE YEARS MAKE THIS A SUBSTANTIAL ELEMENT OF AL FUTTAIM’S OFFERING” – Nick Gallager, Head of Procurement & Supply Chain, Al Futtaim Retail - F&B Division

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MIDDLE EAST

DUBAI The HQ location of Al-Futtaim Group

the product will significantly reduce the costs in the supply chain and logistics, there is still a reliance on the imports that cannot be escaped. “The infrastructure in the Middle East has come on leaps and bounds in manufacturing and importing, but it still doesn’t have enough raw ingredients. Products may be manufactured locally, but the manufacturer will source a lot of its raw ingredients through imports,” he says. In food and beverage, recipe is king. Each POS system in each

franchise will have in excess of 70 different dishes, which in turn will have 70 different recipes, and then of course each POS will have 70 different buttons and links to each dish. For Gallager, when it comes to managing all of these intricate details, an inventory system is a crucial tool to keeping those costs down. “Think of the recipe writing process in general and you need to account for many points, but one of the most important is - yield loss,” he says. “Getting that yield

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loss right is very hard, it affects the cost of goods and the stock that the system is reporting as a variance.â&#x20AC;? â&#x20AC;&#x153;The more accurate the yield losses, the more accurate the cost of goods, the consumption, the wastage and the variance and a solid inventory system is key to that.â&#x20AC;? This extends further with regards

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to the forecasting of consumption, a key part in minimising the input cost, from freight to warehousing to product pricing. This allows Al Futtaim F&B to gauge and predict what it needs in terms of stock and inventory with minimal risk and cash tied up. Technology in supply chain and logistics operations continues to

MIDDLE EAST

Nick Gallager together with Chiara Pisano (Head of Marketing Barilla, Italy) and Melissa Samarakkody (Marketing Manager - Al Futtaim) grow. Where an inventory system, or supply management platform once consisted of a single document, it now manifests itself in the form of much more intricate and detailed planning systems and tools. “This ensures suppliers can offer exactly what we require for our customers. In franchises, you

cannot vary the quality, there are standards and specifications set by the brand principles” says Gallager. “That consistency is achieved by leveraging the management platforms we now use. The key driver here is as much the quality of food as it is the costs of procuring that supply in the first place.”

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As a host to some of the world’s leading and most luxurious brands, Al Futtaim prides itself on the strong relationships it has built with brand principles and suppliers in order to achieve a product offering of the highest of quality. This is no difference in the food and beverage space. “It’s about understanding their business as much as understanding our markets andcustomers” says Gallager. “It’s about being open. Being open removes risk on both sides. Understand their needs and requirements, explain what you can offer to them and it all makes for a greater relationship that is built on trust and a win/win approach.” This is the same for brand principle and suppliers alike. Already 12 months into this expansion plan, AL Futtaim’s

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F&B footprint already stretches across four TWG Teas, two Barilla Restaurants, one Super Chix and a central production facility. Over the course of the next five years, Gallager will look to oversee an aggressive expansion that exceeds 80 stores. A key component in the future of Al Futtaim, will be to continue the company’s approach to supplier and partner relationships. “When you go into a franchise it’s a relationship of trust. They are trusting you with their brand and you’re trusting them with their knowledge of the market and consumer” he says. “Foster that relationship, grow it and have open conversations – if you can achieve that, and it needs to work on both sides, you can build a relationship that works for both and the customer enjoys the benefits.”

MIDDLE EAST

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Student-centered

procurement Charles Leslie, Vice President of Procurement at Education Corporation of America discusses how it continues to innovate in order to drive significant cost savings

Written by Catherine Sturman Produced by Denitra Price

E D U C AT I O N C O R P O R AT I O N O F A M E R I C A

he procurement industry is undergoing a revolution. No longer viewed as something solely operating behind the scenes, the sector has gained increased prominence within business organizations. Ensuring businesses remain competitive, but also drive value across all operations, Vice President of Procurement Charles Leslie saw the growing potential of such a transformative industry and the opportunity to make a long-term impact within Education Corporation of America’s (ECA’s) procurement operations. Upon ECA’s acquisition of Kaplan Higher Education Schools’ 38 campus locations across the US two years ago, Leslie had the ambition to transform the organization’s procurement services to become best-in-class and deliver long-term advantages to both the business and its students, with the support of ECA’s Chief Executive Officer Stuart Reed. “At that point in time, I said that if we’re going to make this work and set up a sustainable model so that we are able to acquire new companies, then we needed to have a best-inclass procurement organization,” Leslie explains. With a background in accounting, he notes that working with vendors and finding ways to gain additional savings remains an exciting challenge which continues to bring abundant rewards.

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ECA acquired Kaplan Higher Education Schoolsâ&#x20AC;&#x2122; 37 campus locations across the US two years ago

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Data analytics Completing a deep dive, Leslie successfully ascertained the nuances of ECAs department budgets and potential bottlenecks in its operations, alongside ongoing business drivers. “This has enabled us to therefore provide a less expensive, higher-quality service,” he adds. The analysis has also enabled Leslie to grow from a ‘one-man procurement band’ to a strong procurement team. His launch of e-procurement solution, Coupa, also now works to support the future of ECA’s procurement transformation. Through Coupa, past volumes of suppliers and categories have been reduced and streamlined, as it is now responsible for ECA’s data analytics and subsequent monitoring of ongoing spend from all campuses under its umbrella. The tool – Charles Leslie, Vice President is also vital in centralizing data surrounding the of Procurement purchasing of supplies, placed into one main portal. “We can report off all this data and therefore start using our volume to negotiate better prices with suppliers, and we can use it to our advantage,” Leslie says. “If we’re able to drive savings down to the bottom line in each function, this frees up additional funds to spend on better innovations and tools which allow for a better student experience at a campus level. “Vendors are also engaged, especially where they have realized the value and savings which we could bring.”

“We can report off all this data and therefore start using our volume to negotiate better prices with suppliers and we can use it to our advantage”

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“Where we were purchasing office supplies from four or five suppliers; now we’re able to use one supplier and push that down to campus level” – Charles Leslie, Vice President of Procurement

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“Simply put, procurement has an effect on our bottom line,” supports Reed. “This allows us to provide more dollars to invest in the student experience - through lower tuition, through better technology, and through refreshed curriculum. Supplier relations With ambitions to strengthen its relationships with suppliers, ECA has utilized market intelligence and undertook a spend diagnostic and cost cube analysis. This has enabled its procurement team to identify not

S U P P LY C H A I N

only long-term market spend, but administration and faculties related spend, as well as product order spend throughout its operations. “We used these assessments, developed a strategic sourcing framework, then issued the RFP and determined who our best partners were,” explains Leslie. “This has weeded out a lot of vendors, and allowed us to consolidate where possible. Where we were purchasing office supplies from four or five suppliers; now we’re able to use one supplier and push

that down to the campus level.” “Cost efficiency gives us the assurance that we can continue to invest in the latest technologies,” adds Reed. “The use of bestin-class procurement practices gives us the confidence that we will be able to invest in a sustained manner, rather than stop and go. In a sustained manner, we invest in the best that technology has to offer.” Streamlining inventory Noting that every campus had previously utilized different suppliers,

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“If we’re able to drive savings down to the bottom line in each function, this frees up additional funds to spend on tools which allow for a better student experience” – Charles Leslie, Vice President of Procurement

the use of Coupa has enabled ECA to not only centralize its supply purchases and look at the remaining spend and use of resources, and led the team to analyze the top 200 items purchased at campus level. “I think we found that our campuses were ordering 10 different types of staplers, for example,” chuckles Leslie. “We decided to find the one stapler that’s going to give us what we need, and negotiate better pricing for that one particular item.” Going forward, ECA’s e-procurement solution will only enable contracted items to be purchased to steer all campuses in the same direction.

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Coupa has enabled data surrounding the purchasing of supplies to be centralized into one main portal However, despite such focus on sourcing potential savings, Leslie notes that the team “tends to look beyond these price savings to adopt a more holistic approach into managing costs and come up with savings to the bottom line which will be reinvested in the student experience”. “With these dollars, we can then take education to the next level. That

is our aspiration,” supports Reed. With an aim to reduce administrative work for its faculty and staff, content strategy and logistics company Ed Map, Inc. has also been brought on board to oversee all of ECA’s textbook orders based on its current projections as part of this student-centric drive. However, the procurement team remains responsible for the

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Golf Academy of America

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delivery of each campus’ student uniforms, which is also done without traditional orders being placed. “We run all of the projections and modelling out of our student record-keeping system, and we’re able to place a centralized order to our uniform supplier who deliver all uniforms to campus level,” Leslie says. “We’re still delivering all of the supplies and the content, but we’re not having to get much involvement from the campus level as far as placing orders, we’re able to do that centrally.” This is also being developed further through the implementation of kits, which will be built for each student, rather than the procurement of single items. These bulk orders will then guarantee long-term savings for ECA and provide longterm advantages for its students.

Moving forward With a focus on providing exceptional procurement, Leslie constantly looks at ways to innovate and provide long-term benefits across ECAs operations. He concludes that this also extends towards its workforce. “It is vital for each team member to know the business inside and out, and each function inside and out. “They are then able to move up the procurement cycle. I want to ensure that the procurement team is able to speak the language of the other business functions and are able to be transformative across the entire organization. We rotate functional assignments to deliver the most experience possible within the team. This will further develop the team into future procurement leaders.

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WA R E H O U S I N G E D U C AT I O N A N D R E S E A R C H C O U N C I L ( W E R C )

hen you think of networking, do you think of cubed cheese and awkward small talk? Not so for logistics professionals. The logistics and distribution industry is fundamentally rooted in networking, creating nationwide linkages that keep commerce moving. It’s no surprise then that logistics professionals are expert networkers themselves: forging new business relationships, exchanging knowledge and spreading innovation. The Warehousing Education and Research Council (WERC) is the only national association uniting the vast logistics industry that intersects every border and every sector. It offers members unparalleled networking opportunities that serve individuals and the industry very well. “I know every industry will say networking is important,” said Tony Ward, managing director of retail for Accenture Strategy. “It’s way beyond jobs and hiring, suppliers and buyers. Networking is about growth for both individuals and companies. It’s keeping pace with trends. It’s about

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collaborating on the complexities between source and doorstep.” Today, Ward is president of WERC’s board of directors, but has been involved for 20 years. He first joined the association for the education and professional growth resources, but as his career progressed, it became important for him to be an advocate for the industry. “WERC has a critical role in that it puts forth fundamental tools and processes about what actually happens in a warehouse,” said Ward. “Then it levels up with strategies, analyses and best practices to help companies and individuals see beyond their four walls and recognize their place in the bigger supply chain picture.” WERC is both a product of and supplier of networking. Forty years ago, a small group of individuals came together to build a network of education and research opportunities geared toward warehousing professionals. Today, its state-of-the art resources, guides and reports are made possible because of WERC’s network of experts. And, it supplies

its members with multiple entry points into the industry’s network, both on a national and regional scale. “I picked WERC specifically for its focus on learning and collaboration,” said Ernie Elbert, an industrial engineer with Dillard’s department stores. Almost immediately after becoming a member of WERC, Elbert began volunteering on the conference planning committee. Held annually, the conference brings together about 1,000 logistics professionals for peer-to-peer education sessions, facility tours and ample networking events. Registration opens in November for the 2018 edition, which will be held at the Charlotte Convention Center in Charlotte, North Carolina from May 6-9. “The heart of engineering is looking for better ways to do something and that’s what networking is to me, too,” said Elbert. “WERC creates spaces for its members to learn from one another and get fresh perspective. The calibre of people they bring together is always impressive and I really value how much relationship-building happens.” A strong networking program

Michael Mikitka CEO

Michael Mikitka is chief executive officer and is responsible for helping WERC live up to the commitment it has made to their members and the industry. Mr. Mikitka and his team work to ensure WERC provides its members with education, research and services to develop them professionally and to improve the performance of logistics within their organizations. WERC is headquartered in Oak Brook, IL. Mr. Mikitka joined WERC in 2000 and served as the senior director of the organization’s flagship annual conference and managed WERC’s network of chapters. In 2009, WERC’s board of directors appointed Mr. Mikitka as CEO. Mr. Mikitka began his association career at the Property Loss Research Bureau (PLRB), a trade association of property and casualty insurance companies.

effectively creates a cycle of learning and development for people and industry. No one sees this more clearly than Jennifer Pazour, assistant professor at Rensselaer Polytechnic Institute and a WERC board of directors member. “In my short time with WERC, I’ve met tremendously impressive people,” said Pazour. “WERC’s emphasis on peer-led education lets the workforce dictate what they want to be learning, determined by the challenges and opportunities in front of them each day.” As Pazour learns about new solutions and innovations from her networks, she incorporates the knowledge into her teachings and research, informing the next generation of logistics professionals. “It’s an exciting and disruptive time in warehousing,” said Pazour. “We’re collaborating in completely new ways to meet the evolving expectations of consumers, driven largely by new levels of e-commerce. At the same time, we have better data and analytics available than ever before, which transforms the way

Tony Ward President, Board of Directors Managing Director – Retail, Accenture Strategy

Tony Ward is a lead managing director within the retail strategy practice for Kurt Salmon, part of Accenture Strategy. Mr. Ward has more than 25 years of experience in supply chain management, global product flow, transportation, sourcing and enabling technologies. Prior to joining Kurt Salmon/Accenture, Mr. Ward was a partner at Cap Gemini Ernst & Young, Verticalnet, and Whitman Hart. During his career, he has served as a trusted advisor to some of the biggest brands in the world, assisting with their global supply chain needs and helping them achieve significant business gains. Mr. Ward has spoken at CSCMP, WERC, RILA and many other supply chain forums. He has been featured in more than 40 articles, and is a contributing author to several books. Mr. Ward is also a member of the WERC Executive Board, Executives Club of Chicago, and the Council of Supply Chain Management Professionals (CSCMP).

WA R E H O U S I N G E D U C AT I O N A N D R E S E A R C H C O U N C I L ( W E R C )

SOLUTIONS CENTER

PA Z O U R JENNIFER

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we solve problems and innovate.” Ward and his colleagues all agree that technology has been the most significant source and reason for transformation in the warehousing industry. To outsiders, this is most evident in the proliferation of online retail availability, but as Ward explains, it goes much deeper. “Decades ago, we were focused on getting boxes in and boxes out,” said Ward. “Today, technology gives us the ability for real-time

THE SCIENCE & THE ART OF WAREHOUSING

tracking and inventory, new levels of metrics to analyze, and opens up processes to consumers.” As technology drives change in the industry, it’s also supporting new forms of communication and information sharing. WERC members enjoy regular webinars, convenient self-study or online courses, a web-based member directory and a comprehensive library of reports and best practice guides at their fingertips. When they can get out of the workplace, they network with other professionals at regional WERCouncil events. The most significant networking event on WERC’s calendar is the

Annual Conference and Solutions Center, coming up May 6-9, 2018 in Charlotte North Carolina. It’s the largest forum for learning and knowledge exchange among logistics professionals, as well as showcase of products and services. Conference registration opens in November at WERCconference.org

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