The digital transformation of the retail supply chain
A P R IL 2 0 1 9
Department of Culture and Tourism Transforming procurement in Abu Dhabi
www.supplychaindigital.com
Cirque de Soleil
Running the show through collaboration
DEUTSCHE BAHN KEEPING TECHNOLOGY TRANSFORMATION ON TRACK CPO Uwe Günther on managing procurement amid digital disruption
TOP 10
Supply chain qualifications
FOREWORD
W
elcome to the April issue
Elsewhere, Simon Mardle, Retail Sup-
of Supply Chain Digital.
ply Chain Principal at Capgemini, tells
Our cover star this month is global
us how the success of digital transfor-
railway behemoth Deutsche Bahn. We
mation journeys starts with leadership
sent Sean Galea-Pace to Berlin to sit
recognising the value of data and a
down with Uwe Günther, Chief Procurement Officer, as
“single source of truth”. With the likes of Apple, Mercedes-
he discusses the pro-
Benz and Ford investing
curement methods his
heavily into blockchain
company has utilised
technology, Eric Piscini,
amidst a significant digital transformation.
Uwe Günther, DB’s CPO
CEO of Citizens Reserve, looks at the current and future landscape of block-
We also spoke with Tom Derry, CEO of the Institute for
chain in the supply chain. Our top 10 this month looks at the
Supply Management (ISM) and how
supply chain management and logis-
supplier relationship management
tics qualifications to watch out for.
remains crucial in the evolving digital landscape. “We’re moving into an era
Don’t forget to check out our exclu-
where innovation and collaboration
sive reports with Coupa Software,
between the OEMs and the suppliers
Cirque du Soleil and more.
is more recognised as a source of value,” he says.
Enjoy the issue! Harry Menear harry.menear@bizclikmedia.com w w w. s u p p l y c h a i n d i g i t a l . c o m
03
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CONTENTS
10 Digital disruption in the railway industry Deutsche Bahn AG:
40
Transforming supply chains in retail
Institute for Supply Management:
Supplier relationship management in the digital supply chain
50
60 Citizens Reserve:
bringing blockchain to the supply chain with SUKU
80 70 Building the Supply Chain of the Future
94
Events & Associations
CONTENTS
100 118 Exterran
Lufthansa Cargo AG
168 Coupa Software
132 The Department of Culture and Tourism
184 Cirque du Soleil
152
Valmet
198
WERC Association
10
DEUTSCHE BAHN Digital disruption in the railway industry APRIL 2019
11
WRIT TEN BY
SE AN GA LE A-PACE PRODUCED BY
JUS TIN BR AND
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DEUTSCHE BAHN AG
Uwe Günther, Chief Procurement Officer at Deutsche Bahn, discusses the procurement methods his company has utilised amidst a significant digital transformation
A
Photo: Thomas Herter © Deutsche Bahn AG
s an international provider of mobility and logistics services operating worldwide in over 130 countries,
Deutsche Bahn (DB) is a leader in rail passenger transport across Europe. Overlooking the 12
busy streets of Berlin, Germany, from his desk in the heart of the city, Uwe Günther, Chief Procurement Officer (CPO) at DB, says his procurement strategy has transformed significantly since first joining the firm in 2007. “From the beginning, I have put an increased focus on a better structure, a consistently applied strategy and a more reliable procurement network,” says Günther. “Since I joined Deutsche Bahn as CPO, we have worked to bring the procurement function together as we needed to provide all the necessary goods for our business units in the areas of public transport, logistics and infrastructure. In parallel, we have to ensure the right quality and cost as well as enabling efficiency.” APRIL 2019
Photo: Martin Jehnichen © Deutsche Bahn AG
DEUTSCHE BAHN CHIEF PROCUREMENT OFFICER, UWE GÜNTHER, TALKS EXCLUSIVELY TO BUSINESS CHIEF EUROPE
Photo: Max Lautenschläger © Deutsche Bahn AG w w w.suppl yc ha i ndi gi ta l. com
13
DEUTSCHE BAHN AG
By connecting customers to other
16
ensure the right technology is being
parts of Germany and beyond, DB
implemented, the company’s technical
offers passengers a safe, efficient and
and commercial teams collaborate to
affordable method of transport to allow
decide on the best way to approach
its customers to explore all Europe and
procurement. “We made the decision
the world have to offer. Considered the
to change the direction of our digitali-
longest rail network in Europe, it con-
sation. We started with upgrading the
sists of over 33,000km and more than
infrastructure, bringing out new trains,
74,000 switches. Transporting around
improving passenger information sys-
2.7bn people annually and operating
tems and so much more related to new
approximately 250 high-speed ICE
technologies,” explains Günther. “We
trains, Günther understands the im-
also have a strong technical depart-
portance of meeting the needs of DB’s
ment, which works very well with the
customers amidst constant technology
procurement department. Together,
transformation. “I believe the customer
we’re defining which technology is the
has changed a lot due to the mobility of people increasing in the past few years,” Günther explains. “We’re in competition with cars and airplanes as well as other trains. Personally, I am convinced the train is the best way to move from one location to the other because it provides safety, quality and convenience.”
DIGITALISATION IN THE RAILWAY SECTOR With technology transforming the way companies across all industries conduct their business, DB has put a particular emphasis on digitalisation over the past few years. In order to APRIL 2019
DEUTSCHE BAHN CHIEF PROCUREMENT OFFICER, UWE GÜNTHER, TALKS EXCLUSIVELY TO BUSINESS CHIEF EUROPE AND EXPLAINS ‘DB2020+’’
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17
©Jonas Holthaus
Success comes from working together. Creating networks, exchanging knowledge, consolidating strengths: In line with this philosophy, STRABAG SE, the leading construction group in Central and Eastern Europe, brings together the competence of well-recognised brands under a single roof. The close cooperation with its many subsidiaries and associates – among them German-based Ed. Züblin AG and STRABAG AG – helps set new milestones in the engineering arts around the world. With local know-how, a proprietary raw materials network and a broad range of services, STRABAG SE is known beyond the Austrian and German borders in Eastern and South-East Europe, in many countries of Western Europe and on other continents as a reliable partner for challenging construction projects of all sizes. The hard work and dedication of our 75,000 employees allow us to generate an annual output volume of about € 16 billion. Our range of services covers the entire construction value chain: from building construction, civil engineering and tunnelling to classic transportation infrastructures all the way to specialised business fields such as sports facilities, hydraulic asphalt engineering, landfill construction and power plants, the production of construction materials and the provision of construction-relevant services. Our international network ensures the successful transfer of information and technologies. By activating an enormous treasury of resources, specific to each project, we can guarantee the smooth progress of construction work for our clients around the world. Proprietary asphalt and concrete plants, quarries, gravel pits and cement plants make us independent from local supply bottlenecks and external suppliers. The result: fair prices, top-quality raw materials and constant access to state-of-the-art technologies as a prerequisite for successful construction. At the same time, the digitalisation of our processes promotes transparency and increases the efficiency and quality of our work. We believe in the strength of the team. And that this makes all the difference in creating a product that stands out from the rest.
ZÜBLIN Corporate Video www.zueblin.de, www.strabag.de
Ed. Züblin AG, Albstadtweg 3, 70567 Stuttgart/Germany, Tel. +49 711 7883-0, info@zueblin.de, STRABAG AG, Siegburger Str. 241, 50679
9 Cologne /Germany, Tel. +49 221 824-01, info.de@strabag.com
DEUTSCHE BAHN AG
best for our trains, for our business and for the infrastructure. We have also decided jointly, from the technical and commercial sides, what the best procurement model is.” With a clear strategy in mind, DB has established the DB2020+ plan, focusing on three key elements: becoming a profitable quality leader, a top employer and an eco-pioneer. To optimise DB’s core business and take advantage of international growth opportunities, the German mobility leader has created an additional five-point plan. “It’s impor20 Photo: Oliver Lang © Deutsche Bahn AG
Photo: Oliver Lang © Deutsche Bahn AG
tant to us to have a clear strategy. Our underlying strategy was DB2020+, but aiming for uncompromising excellence, we have sharpened it with the creation of our agenda for a better railway through the five-point plan. In order to achieve our goals, we must increase our punctuality in passenger and in freight transport,” says Günther. “We need to increase customer satisfaction, we will invest a greater amount of money in our infrastructure, in new lines and trains. We want to become more reliable and provide better information as well as a comfortable journey to every customer. We’re expanding our services, restructuring our rail freight
APRIL 2019
21
Photo: Georg Wagner © Deutsche Bahn AG
E XE CU T I VE PRO FI LE
Uwe Günther Uwe Günther studied Electrical Engineering and Business Administration. Before joining Deutsche Bahn (DB) in 2007, he was active in various procurement leadership positions in the aviation as well as in other industries. From 2011 to 2014 he led the infrastructure procurement department of DB. Since July 2014 he is Chief Procurement Officer of Deutsche Bahn AG.
w w w.suppl yc ha i ndi gi ta l. com
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DEUTSCHE BAHN CHIEF PROCUREMENT OFFICER, UWE GÜNTHER, TALKS EXCLUSIVELY TO BUSINESS CHIEF – WHY ARE PARTNERS IMPORTANT?
activities and making our rail service
the railway industry. “Railsponsible
greener to drive sustainability. In the
forms the basis for a common under-
end, the most important thing is to im-
standing of what makes a sustainable
prove service quality for our customers.
supply chain. It fosters a clear focus on
Every month, we set a new customer
supplying goods and services sustain-
record by welcoming more passengers
ably and allows us to create the same
onboard our trains; and we want to re-
standard across the industry. Together
main a mobility leader in our field.”
with the other Railsponsible members
As Deutsche Bahn puts sustain-
we look at how we measure the sus-
ability at the heart of its business, it is
tainability of different suppliers within
also a proud co-founder of the industry
the supply chain and define key perfor-
initiative Railsponsible, which aims to
mance indicators (KPIs) as we only
promote environmentally and socially
collaborate with suppliers that fulfil
responsible supply chains throughout
our CSR requirements.” w w w.suppl yc ha i ndi gi ta l. com
23
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“ We are currently implementing a P2P process, which means designing an entirely digital process from the order request to the payment of the invoice” — Uwe Günther, Chief Procurement Officer, Deutsche Bahn
and use a digital system to send out digital tenders,” says Günther. “We are currently implementing a P2P process which means designing an entirely digital process from the order request to the payment of the invoice.”
FORMING KEY PARTNERSHIPS In terms of Supplier Management, Günther lays out four key areas which the company’s procurement function manages. “First we define the quality of the service and the goods we need and check that the supplier can provide them while complying with our standards. Next, if necessary, we look at the
With DB maintaining a key focus in
development of suppliers in prepara-
areas such as Smart Mobility, Smart
tion for competition. We then select
Logistics, Smart Assets and Smart Ad-
the best suppliers for our requirements
min as part of its digitalisation roadmap,
and after the tender, we make a sup-
this strategy has been aligned with
plier appraisal and give every supplier
the Finance4DB program which helps
a rating. If a supplier performs poorly,
to improve DB’s finance function and
we consider the fourth phase, which
drives digitalisation. In order to make
we call the adjustment phase.”
its end-to-end processes easier and
Having established key partnerships
its internal procurement process more
with a range of different companies –
efficient, DB has utilised Plan-to-Strat-
including Ed. Züblin, Spitzke, Thales
egy, Source-to-Contract and Procure-
Germany, T-Systems, UWC, CRRC and
to-Pay (P2P). “We want to improve the
EY consulting – Günther affirms how
transparency of our internal demand
vital developing relationships with other w w w.suppl yc ha i ndi gi ta l. com
25
SPITZKE is a leading innovator for rail mobility. With our areas of expertise – track, technology, equipment/electrical engineering, structural engineering, logistics and production – we are already creating the future of railway infrastructure. We develop and connect our business segments systematically to ensure that sustainable mobility remains permanently available. www.spitzke.com/en/home
27
Photo: Christian Bedeschinski © Deutsche Bahn AG businesses is to achieving success
with us, it usually signifies a long-term
in the digital sphere. “In procurement,
collaboration. That’s standard for our
we have a clearly structured supplier
partnerships,” he explains. “We have
management system. However, the
very good construction partners to
most important thing is for there to be
build new tracks, bridges or tunnels.
mutual trust and cooperation with our
A long tunnel, for example, might cost
partners. If a supplier wins a tender
over €500mn so we need to ensure we w w w.suppl yc ha i ndi gi ta l. com
O U R PA R T N E R S
DEUTSCHE BAHN AG
Ed. Züblin Ed. Züblin AG is an important and long-standing supplier in the infrastructure sector of Deutsche Bahn AG. The company is able to handle demanding projects responsibly and has been one of DB AG’s leading infrastructure suppliers for many years.
Spitzke
28
As a system supplier, Spitzke has a high degree of specialist knowledge and understanding of the railway system. Supplier evaluation is always at least “good” in various performance areas. The company supports DB by independently developing innovative and new construction and logistics concepts to achieve its ecological goals. For its outstanding performance over the years, Spitzke received the DB Supplier Award 2018 in the category infrastructure. Spitzke Fahrwegsysteme Spitzke Fahrwegysteme is an efficient and long-standing supplier of sleepers, turnout sleepers and concrete masts for the infrastructure of
APRIL 2019
Deutsche Bahn AG. Since 2013, the company has been continuously classified as a Q1 supplier and meets all product-specific qualification requirements. The continuous improvement process, which enables the company to identify errors and eliminate their causes on a sustained basis, deserves special mention. This is reflected in a comprehensive FMEA process. The company supports DB AG through close cooperation with the Quality Assurance for Procurement and Technology department of DB Netz AG in the continuous improvement of technical standards. With a high level of competence and willingness to innovate, suggestions are introduced into the discussions and the company’s own production facilities are further developed. Support for quality assurance is currently being tested by providing statistically processed quality data.
Thales Germany Thales Deutschland GmbH is an important and long-standing supplier of control and safety technology for Deutsche Bahn AG. It is a reliable partner in project management and a supporting pillar of DB Netz’s innovation projects in the field of LST digitalisation.
T-Systems T-Systems International GmbH has been an IT service provider and strategic partner for Deutsche Bahn for over 20 years. With its portfolio from servers and network technology as well as maintenance and services, T-Systems is a participant in all relevant tenders of Deutsche Bahn. T-Systems was awarded the DB Supplier Award 2018 in the category General Requirements and Services.
and regional trains, locomotives and freight wagons. Since the beginning of the collaboration with CRRC, we have been very impressed with their product range, production capabilities and especially with the quality of their products. We’ve already placed orders in two product categories (shunting locomotives and cargo wagons) and are working together on the delivery of these products. They will be in operation at DB from this year moving forward.
29 UWC
EY consulting
UWC is a high potential supplier of freight wagons and rolling stock parts, with DB signing its first contract with UWC at the end of 2018. During the assessment phase, we aim to observe the high competences and production capabilities that UWC already has in place. We’re happy that UWC is joining our supplier pool for cargo wagons.
An Ernst & Young consultant was retained for our project “OPEXstabilisation — Introduction Regio Production System” between 1 March 2018 and 31 December 2018. The cooperation with the EY consultant as well as the execution and the quality of the work delivered were absolutely exemplary. The consultant was extremely committed and goal-oriented which meant the substantial goals could be achieved. The documentation presented by EY at project closure was of high quality.
CRRC CRRC is the world’s largest provider of rolling stock, including high speed
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31
have a very competent partner which can offer not only a reliable product but also provide the best innovation whilst remaining within budget.”
FUTURE PLANS With the customer always at the forefront, Günther believes there is further room for growth and affirms that DB is seeking success through business optimisation and digital transformation. “In the end, the most important thing is
“ We want to invest a greater amount of money in our infrastructure for the implementation of new trains, with the aim to increase customer satisfaction” — Uwe Günther, Chief Procurement Officer, Deutsche Bahn
to improve the satisfaction of our pasw w w.suppl yc ha i ndi gi ta l. com
DEUTSCHE BAHN AG
“ In the end, the most important thing is to improve the satisfaction of our passengers” — Uwe Günther, Chief Procurement Officer, Deutsche Bahn 32
APRIL 2019
Photo: Oliver Lang © Deutsche Bahn AG Photo: Thomas Herter © Deutsche Bahn AG
33
Photo: Oliver Lang © Deutsche Bahn AG w w w.suppl yc ha i ndi gi ta l. com
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“Sustainability is very important for the procurement function at DB. Railsponsible means that we have a common understanding of what makes a sustainable supply chain” — Uwe Günther, Chief Procurement Officer, Deutsche Bahn
sengers. While we have significantly
and change further. Günther, how-
increased the efficiency of our service,
ever, remains well-positioned in his
there is always room for improvement,”
understanding of what DB must do in
explains Günther. The organisation
order to sustain success in the field.
is aiming for 80% punctuality across
“The customer has an ever-increasing
its network, and Günther stresses the
expectation for punctuality, technology
importance of getting every single
and information available onboard the
member of staff on board to achieve
train and it’s vital that we reflect that.
this goal. “It’s important for everyone
The customer is paying for the service
within the company to think about what
we provide so we have to make it the
they can do to improve that KPI.”
best it can be.” To maintain the service
Over the next few years, customer expectations are predicted to adapt
with as little disruption as possible, DB is mindful of when and how it carries w w w.suppl yc ha i ndi gi ta l. com
35
€44bn+ Approximate revenue (2018)
1994
Year founded
320,000
Approximate number of employees
37
out improvements. “For example, we
for operations at the end of 2017. Now,
try to bundle all the different construc-
every month we have a new passenger
tion works we need together when
record. We’re using more trains than
making an investment in a new track.
ever before in that area and we’re a real
This means that we are trying to realise
competitor against airplanes. That’s
a tender for a track of over 100 or more
a significant success story for us.”
kilometres with a single construction
Looking to the future, Günther affirms
company,” explains Günther. “A good
his company can continue to grow over
example is the new track between
the next few years. “Deutsche Bahn
Berlin and Munich which we opened
will continue to be successful as the w w w.suppl yc ha i ndi gi ta l. com
DEUTSCHE BAHN AG
“ We’re winning a greater number of tenders and as a result of that I believe the procurement volume will increase in the upcoming years” — Uwe Günther, Chief Procurement Officer, Deutsche Bahn
38
Photo: Bartlomiej Banaszak © Deutsche Bahn AG
APRIL 2019
business itself and the company’s excellence are constantly growing. We are catering to more and more passengers, and our cargo business is growing too. Customer numbers in the logistics area are increasing across over 70 countries worldwide. We’re winning a greater number of tenders and as a result of that, I believe the procurement volume will increase in the upcoming years. However, that requires the development of my organisation, also in terms of digital know-how, and we would like to become a real worldclass procurement entity,” he explains. “I also want procurement to become a place for the personal development of every employee. I want procurement to be the place to be where everyone can develop, increase their know-how and
Photo: Max Lautenschläger © Deutsche Bahn AG
become a better part of our railway business at Deutsche Bahn.”
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39
C P O S T R AT E G Y
Institute for Supply Management: 40
SUPPLIER RELATIONSHIP MANAGEMENT IN THE DIGITAL AGE Tom Derry, CEO of the Institute for Supply Management (ISM), explores how supplier relationship management remains crucial across an ever-changing industrial landscape WRITTEN BY
APRIL 2019
DA LE BENTON
41
w w w.suppl yc ha i ndi gi ta l. com
C P O S T R AT E G Y
T
he key to any successful supply chain function is a robust supply network. As technology continues to redefine
the very nature of supply chain processes, 42
this has dramatically changed the supplier relationship management (SRM) conversation. Businesses the world over are investing into their supply chains and implementing innovative technologies that drive efficiency, reduce costs and help their businesses unlock the next level of strategic growth, but what does this do to that supplier network? “I’d say that we are in the very early stages of a shift in the landscape,” says Tom Derry, CEO of Institute for Supply Management (ISM). “We’re moving into an era where innovation and collaboration between the OEMs and the suppliers is more recognised as a source of value and an opportunity for value capture for both sides of the equation.” ISM is an independent, not-for-profit organAPRIL 2019
“ Diageo’s distribution site is in Singapore and you can have your bottles personalised. This level of customisation in the last mile of supply chains is where companies are now competing for market growth” — Tom Derry, CEO of Institute for Supply Management
isation that works with over 50,000 supply management professionals in more than 100 countries who are responsible for close to US$1trn in corporate supply chain procurement spend annually. Its mission statement is simple; to advance the practice of supply management, drive value and competitive advantage, and contribute to a prosperous, sustainable world. For Derry, the supply chain function and effective SRM is proving to be the key enablers for greater competitive advantage. This is something he feels has coincided with a shift in the perspective as to what supply chain and procurement can really mean to a business. He points to Diageo and how its market leading scotch brands are produced in their own individual locations, but its biggest market is the emerging middleclass market in Southeast Asia and China. “Its distribution site is in Singapore and you can have your bottles personalised. This level of customisation in the last mile of supply chains is where companies are now competing for market growth,” he says. “There’s also Ford Motor Company and its implementation of Microsoft Sync. Its CFO, Bob Shanks, publicly praised the procurement team for establishing that relationship. Businesses are / business is? now realising that the supply chain is more than an enabler. The w w w.suppl yc ha i ndi gi ta l. com
43
C P O S T R AT E G Y
CLICK TO WATCH : ‘SYNC® APPLINK® OVERVIEW | FORD HOW-TO’ 44
“ The agility and resilience required to be competitive in today’s global macroeconomy is a strategic capability that they all need to have” — Tom Derry, CEO of Institute for Supply Management
agility and resiliency required to be competitive in today’s global macroeconomy is a strategic capability that they all need to have.” The impact of this changing world on the very function of the supply chain is plain to see, as companies seek a more agile and resilient supply chain, they need to re-examine their entire operation in order to better understand how they can achieve this and grow. Derry points to an industry-wide belief that the world is moving into an era of demand-driven supply chain or a customer-centric supply chain. This, he
APRIL 2019
feels, is born out of the practical
which is actually a natural economic
experiences of companies. “Given the
phenomenon,” he says. “So, we’re
current tariff dispute, for instance,
moving into an era where I think we’ll
between the United States and China,
see supply chains cluster around key
we’re moving into an era where if the
geographies. We will see a fragmenta-
previous couple of decades were
tion and redistribution of supply chain
characterised by building a globally
because of underlying factors.”
extended supply chain that was linear,
As supply chains start to cluster in
we’re likely moving into an era where
order to be closer to their customers
geopolitical risk will mandate that - and
and end markets, this will radically
economics, too, tariffs and taxes - that
change the relationship between a
supply chains will break up into regional
company and its supplier base. Derry
supply chains that will be both closer to
looks to a supplier in the automotive
suppliers and closer to end customers,
industry that is involved in the manu-
E X E C U T I V E P R OF IL E
Thomas W Derry Thomas W Derry is Chief Executive Officer of the Institute for Supply Management® (ISM®) in Tempe, Arizona. Prior to joining ISM in July 2012, Derry spent nine years with the Association for Financial Professionals (AFP), a US$23 million professional association serving 17,000 corporate treasury and finance professionals. Derry has substantial experience in product development, cross-border acquisitions and foreign joint ventures, strategic restructuring of operations and developing profit generating strategic alliances. Derry is a member of the Dean’s Council for the W. P. Carey School of Business at Arizona State University, and is a member of the board of directors of the Society for Human Resource Management (SHRM).
45
C P O S T R AT E G Y
facture of dipsticks, a very low-tech
a great scenario where they are
and low margin product. This particular
making higher margins as a supplier
supplier looked at injection moulding
while the med-device firm has got a
technology used in the manufacturing
higher quality product because they
process and discovered it could also be
were unhappy with their traditional
used in the manufacture of a defibrillator.
suppliers in the med-device space.”
“Suddenly, they are now an automotive
46
“It’s just one example, but it’s a very
supplier and are now a supplier in
powerful one, of how their SRM - par-
the healthcare industry. This was all
ticularly as it’s expressed in collabora-
achieved through a collaboration
tion - is critically important.”
between engineering teams at a
With the digitisation of industry, we
medical device company and the
can point to a number of technologies
original automotive supplier,” says
that continue to dominate the conver-
Derry. “So now they’ve diversified
sation, but Derry points to one that
their revenue, reduced their risk and
may not immediately spring to mind;
created a higher margin product. It’s
Twitter. Visibility in the supply chain is
‘A particular automotive supplier looked at injection moulding technology used in its manufacturing process and discovered it could also be used in the manufacture of a defibrillator’
APRIL 2019
47
greater than it has ever been before as businesses look to have visibility into their first tiers of their supply base. But as some don’t have visibility beyond that
edge that that’s a supplier of theirs and
initial tier, what can the likes of Twitter
can immediately enact their contingen-
enable for businesses? “Say a fire hap-
cy plan or business continuity plan. In
pens and a worker tweets that they are
this day and age, the companies that
off home because of the fire. That tweet
prevail are the ones that act fast on
will be picked up by all kinds of risk
intelligence and have plans in place
management solutions that are in
in the event of those contingencies.”
operation for supply chain teams all
“There’s a number of firms today
over the world,” says Derry. “The supply
who are providing risk management
chain teams then have instant knowl-
solutions in the supply chain, who take w w w.suppl yc ha i ndi gi ta l. com
C P O S T R AT E G Y
48
“ Now technology can tell me I might have a problem, but I need to have a face-to-face conversation and that’s never really going to change” — Tom Derry, CEO of Institute for Supply Management
advantage of that capability to make real-time information available to their customers. And that’s significant stride forward.” Technology will continue to redefine the supply chain function and the role of the supply chain professional which in turn will continue to redefine SRM. Automation and robotics will become more commonplace within this space, with SRM and the data capture surrounding it being identified as a key area where this will happen. Derry
APRIL 2019
49
admits as much, but he also under-
have. Can you help me understand it?
stands that for an effective relation-
Can you explain it? What’s your mitiga-
ship there will always be the need for
tion plan?” And that takes a strategic,
human interaction. “You may have
face-to-face conversation to under-
technology with red flashing indicator
stand what is my actual risk. Now
lights that says the supplier is a
technology can tell me I might have a
financial risk, or they’re changing the
problem, but I need to have a face-to-
lead times that we need to investigate,
face conversation and that’s never
or they’re having quality issues. That’s
really going to change.”
just information,” he says. “Now what’s required is somebody going over to that supplier and sitting down and saying, “This is the data we w w w.suppl yc ha i ndi gi ta l. com
S U P P LY C H A I N T R A N S F O R M AT I O N
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Transforming supply chains in retail Simon Mardle, Retail Supply Chain principal at Capgemini, explores the key to successful digital transformation and how it starts from the leadership level WRITTEN BY
APRIL 2019
DA LE BENTON
51
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S U P P LY C H A I N T R A N S F O R M AT I O N
A
recent report from Capgemini revealed that while the UK is a leader in the implementation of digital technologies
within the retail supply chain, there is still a significant lack of strategic focus with more than 86% of retail organisations struggling to get past
the testing stage of their own digital supply chain transformations. Digital transformation continues to dominate the global conversation for supply chain professionals and this can create a culture of implementing technology for technology’s sake. This is something that Simon Mardle, Retail Supply Chain Principal at Capgemini, believes has made companies reach “a glass ceiling” with digitisation. 52
“Through my time in industry I’ve seen a lot of initiatives that drive up performance in supply chains through lean thinking. I also see a lot of experienced people building on past experiences and improving performance based lean thinking, but it’s kind of a bit siloed,” he says. “There’s not much more left to squeeze out of operations as they are.” The key to overcoming that glass ceiling is investing in the right technology and this is where organisations have found themselves to be stumbling. With the industry aflutter with buzzwords and technology trends like artificial intelligence (AI), Big Data, Machine Learning, Blockchain and even Automation, Mardle is keen to stress that in order to understand what the “right” technology is, businesses need to remember the key driver to APRIL 2019
“Data unlocks the unlocks the opportunity to allow collaboration because it gives you one version of the truth” — Simon Mardle, Retail Supply Chain Principal at Capgemini
53
their operations – the customer. Placing the customer at the heart of the digital conversation opens the doorway to the possibility of innovation. “You do that and all of a sudden you can break away from a siloed approach of focusing entirely on cost and communicate to different areas of the business. You do that and you realise that all of the business units have one common narrative that they follow,” says Mardle. “The key to this is data. It unlocks the opportunity to allow collaboration because it gives you one version of the truth.” w w w.suppl yc ha i ndi gi ta l. com
S U P P LY C H A I N T R A N S F O R M AT I O N
CLICK TO WATCH : ‘DREAM CLOUD, WAKE UP DIGITAL WITH CAPGEMINI’S DIGITAL CLOUD PLATFORM’ 54
DATA AND DIGITALISATION
operational costs and customer
Data is king to digitalisation and it will
service will allow everyone to pull
allow organisations take the supply
in the same direction. “You can build
chain onto the next level of perfor-
straightforward dashboards that can
mance, one that is driven by smarter
cover a number of end-to-end metrics
decisions and predictions. It allows
that everyone can refer to,” he says.
them to stop building solutions or
“A manufacturer of consumer goods
initiatives based on the past and
supplied to the retail market that’s sold
embrace what the future can bring.
on shelf or delivered to a kitchen
The supply chain ecosystem has large
cupboard will be able to measure
volumes of data and information that
his performance with exactly the
flows through it and so understanding
same metrics as any other player in the
that data will make all the difference.
supply chain ecosystem would. These
Mardle believes that creating end-to-
unified metrics ensures that everyone
end metrics around performance,
is aligned to the same goals.”
APRIL 2019
“ A manufacturer will be able to measure their performance with exactly the same metrics as any other player in the supply chain ecosystem - this ensures everyone is aligned to the same goals” — Simon Mardle, Retail Supply Chain Principal at Capgemini
But it’s not just internal data that is captured and Mardle is keen to stress that unstructured data through social media and customer touchpoints provides an opportunity to find out exactly what customers are thinking about the organisation and marry that to the operational performance. “It’s a single version of the truth that’s not up for debate because it shows you how you’re performing in the market,” he says. “Collectively, it’s up to the organisation to work out how do to things differently together and improve that performance.”
DIGITAL HURDLES It’s easy to talk about the benefits and the efficiencies that could be driven through digital transformation, but as the report shows, despite 50% of organisations identifying digitisation as one of their top three corporate priorities only 14% have succeeded in scaling their projects to multi-site or full-scale deployment. What then, are the biggest barriers that organisations are failing to overcome? “It’s a combination of things,” says Mardle. “Most initiatives I’ve seen haven’t failed because the technology w w w.suppl yc ha i ndi gi ta l. com
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S U P P LY C H A I N T R A N S F O R M AT I O N
“ It’s important to remember if you get it right for the supply chain, you get it right for the customer – and that’s where you deliver a win-win” 56
— Simon Mardle, Retail Supply Chain Principal at Capgemini
wasn’t there, they’ve failed because
chain function within the business and
there hasn’t been enough guidance
then taking that across suppliers and
from the top down and a lack of a clear
partners outside of the business.
and simple vision that was energising
“Once you’ve got that down, then you
the business.” The answer to this, he
can look at the data and the technol-
feels, is through the building of effective
ogy and system architecture and
partnerships throughout the business
understand how best to move
in order to demonstrate the value and
forward and establish an integration
the benefit of digital transformation to
strategy between the old world and
the wider business. This is something
the new,” he says. “This shifts the
that Mardle describes as “getting the
focus onto what will be fundamentally
basics right,” building relationships
a whole new world for supply chain
outside of the procurement or supply
experts. You have to think about how
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57
people will react and respond to the
execution systems combined with an
future because they are going to be an
overall collaborative planning process
important governance around the pace
and a tightly-knit feedback loop as
and success of any digital strategy.”
the first true steps towards a digital future. “When you’re in that situation
TECHNOLOGY TRANSFORMATION
you’re in a very good place to start
Data is one of the biggest talking points
thinking of grasping new innovation
in digital procurement and the supply
and driving innovation,” he says. “So,
chain, but what are the key technolo-
when you then look at a new innovation
gies driving this data conversation?
you can better understand how you
Mardle points to machine learning,
can use these new innovations as they
visibility tools, predictive analytics
are coming into the market. You can do
and algorithms, control tower
this because you’ve created a robust w w w.suppl yc ha i ndi gi ta l. com
S U P P LY C H A I N T R A N S F O R M AT I O N
STR ATE GY FACTS
• Organisations are struggling to move their digital supply chain projects beyond the testing stage: While exactly half of the organisations surveyed consider supply chain digitisation to be one of their top three corporate priorities, most are still struggling to get projects beyond the testing stage (86%)
58
• Most organisations have spread their investments too thinly and are struggling to scale pilot initiatives: The organisations surveyed have an average of 29 digital supply chain projects at the ideation, proof-of-concept or pilot stage. Just 14% have succeeded in scaling even one of their initiatives to multi-site or full-scale deployment. However, for those that have achieved scale, 94% report that these efforts have led directly to an uplift in revenue. • Supply chain projects that lack strategic focus are less likely to be successful: The evidence from those who have moved to implementation suggests that companies are taking on too much, and not focusing enough on strategic priorities. The organisations which successfully scaled initiatives had an average of 6 projects at proof-of-concept stage while those who failed to scale averaged 11 projects.
APRIL 2019
platform and architecture that will allow you to trial and to scale them.” As the supply chain and procurement landscape continues along this digital journey, Mardle believes that the narrative around digital transformation needs to change and it’s a simple solution, placing the customer at the heart of it all. “The narrative that supply chain people should be and can take to the rest of the business is really about how you deliver a win-win. You do that by talking about the customer,” he says. “So, there’s a new conversation to be had where you put the customer at the heart of it. It’s a big challenge for supply chain professionals to shift their own mindset in terms of what their role should be as they take their teams on a journey from lean thinking to digital supply chains, and how their role needs to change. It’s important to remember, if you get it right for the supply chain you get it right for the customer, and that’s where you deliver a win-win.”
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BLOCKCHAIN
Citizens Reserve: 60
bringing blockchain to the supply chain with SUKU Eric Piscini, Chief Executive Officer of Citizens Reserve, explores the current and future potential of blockchain and the role SUKU will play in the supply chain WRITTEN BY
APRIL 2019
DA LE BENTON
61
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BLOCKCHAIN
62
W
hen examining the digital
conversation go? With over 11 years’
climate of supply chain and
experience working for Deloitte, four of
procurement functions,
which spent focusing specifically on
you’d be hard pressed not to discover
the global implementation of blockchain
that data and blockchain are the key
technology, Eric Piscini has seen
technologies defining the conversation.
firsthand just how much blockchain in
Over the last two years alone, Amazon,
the supply chain has moved from
Apple, Mercedes-Benz and Ford have
fantasy, to reality. As the Chief Executive
revealed plans to increase investment
Officer of Citizens Reserve, a global
into blockchain technologies and how
blockchain technology company
they can impact and disrupt the supply
focused on the development of solutions
chain process. With the likes of Amazon
that will truly transform businesses,
and Apple making these announcements,
Piscini believes that it’s a very exciting
how far back does the blockchain
time for blockchain. “In today’s world
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63
there are still limitations here and there
global supply chain ecosystem. SUKU
from a public versus private conversation,
is ablockchain-based ecosystem that
but I feel that the infrastructure is going
works specifically in the supply chain
to improve and we are going to see
space, was launched in late 2018. The
something amazing,” he says. “Capa-
ambition behind SUKU is to create
bility, performance, privacy and security.
an on-demand, open and decentralised
Over the next 12 months I see thve
software distribution model that
challenges that these will bring to
allows supply chain partners to leverage
blockchain implementation go away.”
services and applications. These
Citizens Reserve was founded in 2016
applications will be built in collaboration
and through its blockchain powered
with technology partners as part of
solution, SUKU looks to create platforms
a ‘continually evolving’ ecosystem. “I like
that will enable greater efficiency,
to use the smartphone application store
transparency and collaboration in the
as an analogy to describe our goal,” w w w.suppl yc ha i ndi gi ta l. com
BLOCKCHAIN
64
“ We are building two things: the marketplace and the ability to track and trace data” — Eric Piscini, Chief Executive Officer of Citizens Reserve
says Piscini. “What we are building is an operating system as well as the app store itself, which is our foundation. We then engage with partners to build additional applications and services within that app store.” Founded by a team of a team of experienced professionals in blockchain, supply chain management, finance, contracting & procurement, SUKU looks specifically at the supply chain space for a number of reasons. Piscini believes that supply chain and procurement have the largest potential for disruption
APRIL 2019
and improvement and so the start-up
have a warehouse management solution
company set its sights firmly on this
that can track and trace inventory, we
space. Plans are afoot to head into
don’t do that but we have a partner that
different industries in the future, but
builds that application. SUKU then
Piscini notes that “supply chain is our
leverages that application in order to
mind, it’s what we’ve made our names
bring value to our customers.”
in over our careers.” With supply chain
SUKU is not merely an application
as the playing field, SUKU is approach-
and solutions platform, a key part of its
ing the space on two fronts. “We are
offering is the services the company
building two things, the marketplace
can provide through its partners that
and the ability to track and trace data,”
leverage the platform. Much like the
he says. “We do this by partnering. We
way in which a technology solutions 65
E X E C U T I V E P R OF IL E
Eric Piscini Eric has more than 20 years of global experience in highly regulated industries such asbanking, payment, supply chain and life science. He is a recognized expert in many areas including digital payments, blockchain solutions, cryptocurrencies, innovation, technology transformation, cloud implementation, and operating model design. Eric was a Partner at Deloitte Consulting, the founder of the Global Blockchain practice in 2014, reaching leadership position worldwide in 2018 with more than 900 practitioners in 20 countries. Eric has published more than 10 times on blockchain and its impact to businesses. Eric holds an engineeringdegree in computer science from Paris, France, and a master’s degree in economics from the University of Cergy-Pontoise, France.
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BLOCKCHAIN
developer accesses and works within the platform, service providers leverage the platform. Piscini points to the example of insurance in the supply chain and how supply chain insurance service providers will provide their services through the SUKU platform. of services that SUKU can enable through a blockchain-powered platform. “It becomes a single place where customers subscribe and have access to different services,” he says. “Some of these services will be free, others there will be a fee involved but that’s 66
the vision. An open, on-demand and decentralised software and service
the modern world where consumers
distribution platform where all of your
demand greater access to information
supply chain needs are catered for in
regarding the origins of their products,
one place. In time, as more companies
especially livestock, the benefits of
subscribe and become part of it, it will
SUKU become abundantly clear.
only continue to evolve.”
“There’s an upside to being able to trace
In 2019, Citizens Reserve will look to
premium products in the market as it
officially rollout the SUKU platform for
drives a much higher adoption of other
the livestock supply chain and Piscini
products,” he says. “Right now, the
notes that it will also look to work with
consumer has to trust the information
electronics, vaccines and the oil and
on the label as to whether its organic.
gas industry. The livestock industry has
By creating a situation where they can
been an area of focus in particular
track the origin of that meat in the
because it has been one that Piscini
restaurant, or the store, it is said that that
believes has been in “dire need” of
speciality market would grow up to
traceability and greater efficiency. In
30% - all through traceability. That’s
APRIL 2019
“ That’s the vision: an open, on-demand, decentralised software and service distribution platform where all of your supply chain needs are catered for in one place” — Eric Piscini, Chief Executive Officer of Citizens Reserve 67 a better upside for all the people
visibility and traceability and the new
producing that product as well. It’s
role that blockchain will have. “Once
a significant upside from a business,
upon a time blockchain was seen as
a significant opportunity for efficiency
merely a private or a public thing, there
and of course, food safety.” Citizens
was no middle ground,” says Piscini.
Reserve is targeting a launch date in
“We’re going to see a hybrid blockchain,
early Q2 2019 and its first live transac-
which is what SUKU is, that will allow
tions soon after.
each party within the ecosystem be
As Piscini notes, it’s an exciting time
able to see what other parties are
for blockchain and in recent years there
doing and how it affects them. All this
has been an increase in blockchain
through one platform. This is critical in
powered solutions, regulatory clarity
the business world and it’s not only going
surrounding blockchain and greater
to benefit SUKU but industry players
education through the likes of Apple
the world over.”
and Amazon. SUKU represents the changing landscape of supply chain w w w.suppl yc ha i ndi gi ta l. com
LOGISTICS AND DISTRIBUTION
70
APRIL 2019
71
BUILDING THE SUPPLY CHAIN OF THE FUTURE Richard Cawston, MD Supply Chain Europe at XPO Logistics, explores how technology is driving innovation and disrupting the logistics industry WRITTEN BY
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LOGISTICS AND DISTRIBUTION
W
ho said that technological innovation is strictly reserved for the likes of Google and Microsoft? Thanks to globalised
markets and the rise of e-commerce, companies
are increasingly looking to supply chain service providers to optimise their operations and meet the demands of their end customers. There is compelling interest in unlocking the potential of logistics through technology. In response, the industry is innovating at a breath- taking pace, from warehouse management and order fulfilment through delivery. Which is why, at XPO, we employ over 1,700 technologists worldwide and invest US 72
$450mn in technology each year to help some of the world’s biggest brands improve their SCM and build customer loyalty. Our investments in technology tend to be channelled into specific areas. As one example, there is an opportunity for automation to increase productivity as supply chains become increasingly complex. XPO is partnering with Nestlé to build a Distribution Centre of the Future in Leicestershire, UK, which will showcase some of the most cuttingedge technology. Drones are expected to be deployed to carry out inventory management, taking photos of stock to cross-check against data records. Intelligent collaborative robots – or co-bots – will operate alongside workers to assist in picking and packing. The co-bots handle the heavy lifting and repetitive, labour-intensive tasks, helping to APRIL 2019
73
“ AT XPO, WE EMPLOY OVER 1,700 TECHNOLOGISTS WORLDWIDE AND INVEST US$450MN IN TECHNOLOGY EACH YEAR TO HELP SOME OF THE WORLD’S BIGGEST BRANDS IMPROVE THEIR SCM AND BUILD CUSTOMER LOYALTY” — Richard Cawston, MD Supply Chain Europe, XPO Logistics w w w.suppl yc ha i ndi gi ta l. com
LOGISTICS AND DISTRIBUTION
“ I N TODAY’S ONDEMAND ECONOMY, CONSUMERS ARE LOOKING FOR A PERSONALISED DELIVERY EXPERIENCE, WITH FLEXIBLE OPTIONS” — Richard Cawston, MD Supply Chain Europe, XPO Logistics
74
make order fulfilment safer. Their
Connect platform is a cloud-based
human counterparts have more time to
digital freight marketplace that uses
focus on critical areas of logistics
machine learning to identify opportuni-
where they can add the most value. We
ties for time and cost savings when
expect to install 5,000 co-bots across
assigning loads. It considers fluctua-
our warehouses in Europe and the US.
tions in capacity, spot rates and load
At the same time, we’re using ‘big
postings by geography when evaluating
data’ to strengthen decision making
carrier bids. Drive XPO is an app for
across the entire supply chain. The key
carriers that interacts with XPO Connect
here is not only to collect the data, but
– it uses smart, self-learning algorithms
also to use it to improve operations and
to reduce empty miles, lower fuel waste,
make strategic decisions. This is
reduce road stress and make the
becoming crucial as a competitive edge.
customer service process more dynamic.
In transport, for example, the XPO APRIL 2019
One of the most important opportu-
75
E X E C U T I V E P R OF IL E
Richard Cawston Mr. Cawston leads the supply chain business of XPO Logistics in Europe. He previously held the role of managing director for XPO’s supply chain operations in the United Kingdom and Ireland. Mr. Cawston joined XPO in 2015 upon the company’s acquisition of Norbert Dentressangle, where he served first as country manager, and then as business unit director. Previously, he was general manager for transportation company Christian Salvesen, now part of XPO, and operations manager for supermarket retailer Asda.
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LOGISTICS AND DISTRIBUTION
nities presented by technology is to
Home and Amazon Echo, ensuring
improve the consumer shopping
consumers receive their updates
experience with e-commerce and
through the method of their choosing.
omnichannel retail. In today’s on-de-
76
If anything, there is more opportunity
mand economy, consumers are
than ever to innovate the many process-
looking for a personalised delivery
es entwined in supply chain operations.
experience, with flexible options.
We see the potential for further enhance-
Using XPO technology, both e-tail
ments when it comes to the delivery
and retail customers are able to offer
experience. Consumers are no longer
consumers access to live estimated
solely interested in speed; they also
time of arrivals (ETAs) during the ‘final
want the ability to make changes to
mile’ of delivery of large, valuable items,
planned deliveries at the last minute,
such as furniture or home electronics.
and they want an easy, seamless way
Recently, XPO launched voice-activat-
to return merchandise. Returns manage-
ed integration, which makes these
ment – or ‘reverse logistics’ – is one of
updates available through Google
the fastest-growing areas of logistics.
“ I F ANYTHING, THERE IS MORE OPPORTUNITY THAN EVER TO INNOVATE THE MANY PROCESSES ENTWINED IN SUPPLY CHAIN OPERATIONS” — Richard Cawston, MD Supply Chain Europe, XPO Logistics
APRIL 2019
CLICK TO WATCH : ‘XPO LOGISTICS - THE FUTURE IS NOW’ 77
As supply chain optimisation becomes an ever more important lever for business success, the pressure is on for providers to step up to the plate and deliver. The industry is already moving in this direction, but there is much more that can be done. The supply chain of the future will be defined by the technology that is being created today, and we at XPO are committed to driving that transformation.
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T O P 10
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APRIL 2019
TOP 10 Supply chain universities & degree programmes
As supply chain management becomes an increasingly vital part of every business, the pressure to find the supply chain processionals of the future continues to increase. We've taken a look at eduniversal's ranking to find out what qualifications to watch out for in potential employees WRITTEN BY
DALE BENTON
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T O P 10
10
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Master in Supply Chain Management Universidad del PacĂfico Business School Founded in 1962, Universidad del Pacifico has evolved over time to become a key contributor to the educational, economic and social growth of Peru and enabling the supply chain professionals of tomorrow. Its Master in Supply Chain Management degree looks to create the next generation of supply chain strategists through two specialisations: Project Management and Operations Management. On average, 51% of students that complete the degree have gone on to become supply chain managers, sub managers or other management positions in supply chain. APRIL 2019
09
Photo Š Antwerp Management School
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Master of Global Supply Chain Management Antwerp Management School Founded in 1959, the Antwerp Management School seeks to open minds, touch souls and energise business. Its Global Supply Chain Management degree looks to address the skills gap that’s widening as businesses continue to strategically realign their supply chain functions. Students will deepen their supply chain understanding though a number of core courses including the basics of supply chain management, modelling global supply chains, integrated business processes with SAP ERP and strategic procurement.
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T O P 10
08 Photo © Università Bocconi
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MEMIT Master in Economics and Management of Transport, Logistics and Infrastructure Università Bocconi Established in 1902 and named after the lost son of Ferdinando Bocconi, the Università Commerciale Luigi Bocconi was the first Italian institution of higher education to grant a degree in economics. The Master in Economics and Management of Transportation, Logistics and Infrastructure is an interdisciplinary and intermodal degree that covers the complexities of logistics and supply chain, transport policy, planning and management of passenger and freight transport, sustainable mobility and trade law. APRIL 2019
07
Photo © MIP Politecnico di Milano
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Master in Supply Chain and Procurement Management MIP Politecnico di Milano Graduate School of Business Established in 2003, the MIP Politecnico Milano School of Management brings together MIP (the Graduate School of Business founded in 1979) and DIG (the Department of Management Engineering – Dipartimento di Ingegneria Gestionale), established in 1990. Identified as “integral to the success of international businesses that are striving for competitive advantage at a global level,” the Master degree looks to equip graduates with the necessary skills to operate and manage a successful international supply chain and procurement operation. w w w.suppl yc ha i ndi gi ta l. com
T O P 10
06
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Master in Logistics and Defence Economic Management Universidad Complutense de Madrid With more than 82 degrees and over 293 postgraduate courses, including masters and doctorates, the Complutense University of Madrid is rightly identified as a leading educational institution in Madrid and wider Spain. It’s Master in Logistics and Economic Management of Defence looks to empower civilian and military professionals in order to better understand the logistics, budgetary and contractual management processes within the defence industry. Broken up in to two key areas, the course will provide both knowledge and practical experience in companies that are directly and indirectly linked to the Public and Defence sectors. APRIL 2019
05
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MSc in Global Supply Chain Management KEDGE Business School The leading ranked French programme in the world in global supply chain, Kedge Business School’s MSc in Global Supply Chain Management programme is accredited by The Chartered Institute of Purchasing & Supply (CIPS). 95% of students who take the course are recruited before they even graduate, with 80% of all graduates joining large global businesses. Tackling three key areas affecting the global supply chain space, change management, cross-departmental integration and the increasing digitisation of industry, the course prepares students to “confront the challenges of a new era in business management.” w w w.suppl yc ha i ndi gi ta l. com
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04
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International Corporate Master in Operations CENTRUM Graduate Business School — Pontificia Universidad Catolica del Peru Founded in 1917 and among the top 20 Latin American universities and the 500 best universities in the world, the Pontifical Catholic University of Peru’s Corporate Master’s Degree in Productive Operations Management targets the logistics space. It looks to develop student capacities for effective management of operational processes, while encouraging greater understanding of logistics management to optimise decision making, and promote the mastery of process management and the application of tools for continuous improvement. APRIL 2019
03
Photo © Nova School of Business & Economics
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Master in Management — Operations Management Nova School of Business and Economics As the faculty of economic, finance and management sciences of the New University of Lisbon (NOVA), the Nova School of Business & Economics (SBE) describes itself as a “living lab” in which its business partners can test drive and improve their technological solutions. These partners include HSBC Europe, Accenture, PwC, Unilever and many others. As part of its 10 specialised focus areas, Operations Management explores business process re-engineering, quality management, improving customer service, inventory systems, supply chain management and project management. w w w.suppl yc ha i ndi gi ta l. com
T O P 10
02
MS Global Supply Chain & Logistics Purdue University Krannert School of Management Building on the core strengths of Krannert University in
90
operations, supply chain management and business analytics, the Master of Science in Global Supply Chain Management – MS(GSCM) looks to answer the biggest challenges of global supply chains. Officially STEM certified the course connects students from all over the world through partnerships with Tianjin University, Indian Institute of Management Udaipur and Shanghai Jiao Tong University. Graduates from the course have been employed by Accenture, Apple, KraftHeinz and Mercedes Benz among others.
APRIL 2019
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T O P 10
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MIT Masters in Supply Chain Management (USA, Luxembourg, Spain and Malaysia) Massachusetts Institute of Technology (MIT) Center for Transportation & Logistics A true world leader in supply chain management educa-
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tion and research, the MIT Centre for Transportation & Logistics, through the MIT Global SCALE Network, is a multinational alliance of leading-edge research and education centres spread across six innovation centres on four continents. The goal of this network is to further the development and dissemination of global innovation in supply chain and logistics. Some of the world’s biggest companies make up the network, including Adidas, AB InBev, Apple, Amazon and Carrefour. The Master of Engineering in Logistics Programme, based in Massachusetts integrates analytical and leadership skills with real-world problem solving and is recognised as one of the best master and doctoral degrees in the US.
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EVENTS & A S S O C I AT I O N S
The biggest industry events and conferences WRITTEN BY DALE BENTON from around the world
30 APRIL–02 MAY
Women in Procurement & Supply Chain 2019 [ PULLMAN SYDNEY HYDE PARK, AUSTRALIA ] 94
The annual Women in Procurement
16 MAY
World Procurement Awards 2019
and Supply Chain conference is dedi-
[ INTERCONTINENTAL LONDON - THE O2 ]
cated to advancing the opportunities
Redefining procurement excellence -
for female executives across supply
the pinnacle of professional
chain and procurement. Looking to
achievement, each year the greatest
address specific industry challenges
procurement organisations and
facing procurement stakeholders,
thought leaders from around the world
together with timely, candid and
gather for an evening of anticipation,
thought-provoking insights into the
entertainment, and inspiration at the
future opportunities (and pain points)
World Procurement Awards. Compet-
addressing procurement, the event is
ing for a spot on the prestigious list of
a platform for procurement stakehold-
finalists and winners, organisations are
ers to share experiences, insights,
recognised for being innovative and
stories and best-practice innovations.
transformative players in the industry.
APRIL 2019
30–31 MAY
[ OXFORDSHIRE, UK ]
9th Global Manufacturing Supply Chain Innovation Summit 2019
A highly focused event that brings
[ SINGAPORE ]
together logistics professionals and key
The Global Manufacturing Supply Chain
industry solution providers, the summit
Innovation Summit returns with a new
consists of one-to-one business meet-
area of focus, New Manufacturing,
ings, interactive seminars and valuable
New Supply Chain. Eight sessions
networking opportunities; in less than
across two days will see leading prac-
two days. The Total Supply Chain Sum-
titioners from manufacturers in the
mit is specifically organised for senior
automotive, pharmaceutical, consumer
professionals who are directly responsi-
goods and logistics and supply chain
ble for supply chain within their
space discuss supply chain strategy
organisation, and those who provide the
and innovation, visibility, agility and
latest and greatest products and ser-
efficiency as well as the digitisation
vices within the sector.
of supply chain and logistics.
20–21 MAY
Supply Chain Summit (UK)
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95
REGISTER TODAY! 1.888.482.6012 • ProcureCon@wbresearch.com ProcureCon.ca
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April 9-10, 2019 | Intercontinental Toronto Centre, Toronto, ON
Where Sourcing Innovators Connect and Inspire ProcureCon Canada enhances your strategic tools to meet your business partner’s needs in a fast-changing environment. – Hersh Glass, Strategic Sourcing Specialist, SAP Canada
Organized By:
Sponsors:
10–12 JUNE
09–11 JULY
Supply Chain Summit 2019: Atlanta
ProcureCon Asia
[ THE WESTIN PEACHTREE PLAZA, ATLANTA ]
Asia’s premier gathering for global
The Supply Chain Summit 2019 is the
and regional CPOs and Asian heads
meeting place for the forces of innova-
of procurement. Procurecon Asia
tion, transformation and connectivity
2019 brings over 200 attendees and
that will fundamentally reshape the
more than 100 CPO’s and Heads of
supply chain industry over the coming
Procurement to access and explore
years. Over 800 supply chain and pro-
interactive case studies, broad discus-
curement representatives will meet to
sion on industry challenges and
discuss digital transformation strategy
trends and network with some of the
and look at the supply chain of the
biggest names in the procurement
future. Supply Chain Summit: Atlanta
space. Procurecon asks profession-
will look to enable companies from all
als in both direct and indirect
over the world to discover a truly global
procurement to ‘maximise learning
perspective on the current supply
and optimise your organisation’s
chain landscape.
supply chain strategy.’
[ SINGAPORE ]
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97
EVENTS & A S S O C I AT I O N S
11–12 JULY
Ovation: The World’s Most Exclusive and Renowned CPO Think Tank 98
[ CHANTILLY, FRANCE ] Created to look “far beyond the traditions of procurement”, Ovation looks to the future of supply chain and the key trends that will directly impact the
24–26 SEPTEMBER
Supply Chain & Logistics Summit and Expo 2019
group-level CPO. Over the course of
[ HILTON ANTWERP, BELGIUM ]
two days, 50 exclusively invited CPOs
The EMEA Supply Chain & Logistics
from around the world will attend work-
Summit & Expo is one of the most estab-
shops designed to drive divergent
lished events of its kind in Europe. Now
thinking, challenge and enlighten fellow
in its 21st year, it is a highlight in the cal-
thought leaders and learn how to bet-
endar where world-class organisations
ter harness the complexity of global
meet to maximise efficiency and mini-
supply networks and ecosystems in
mise costs through supply chain
the digital world.
strategies of the future.
APRIL 2019
16–17 OCTOBER 2019
The Responsible Supply Chain Summit 2019 [ AMSTERDAM, NETHERLANDS ] The Supply Chain Summit 2019 is the meeting place for the forces of innova-
26–27 NOVEMBER
Data, Intelligence & Technology Forum 2019
tion, transformation and connectivity
[ SINGAPORE ]
that will fundamentally reshape the
The Data, Intelligence & Technology
supply chain industry over the coming
Forum is a two-day event focused on
years. Over 800 supply chain and pro-
improving the end-to-end digital strat-
curement representatives will meet to
egy for procurement professionals the
discuss digital transformation strategy
world over. . With technology continu-
and look at the supply chain of the
ing to redefine the procurement
future. Supply Chain Summit: Atlanta
landscape, peers will share examples
will look to enable companies from all
of best practice and how to leverage
over the world to discover a truly global
data and technology to streamline and
perspective on the current supply chain
accelerate the digital transformation
landscape.
journey of procurement.
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99
LUFTHANSA CARGO AG
100
Lufthansa Carg ation into a full industry leade APRIL 2019
101
go’s transformly-digitalised er WRITTEN BY
HARRY MENEAR
PRODUCED BY
LEWIS VAUGHAN
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LUFTHANSA CARGO AG
Jochen Göttelmann, Chief Information Officer, and Boris Hueske, Head of Digital Transformation, share the story of Lufthansa Cargo’s simple, intelligent digital transformation
A 102
s one of the world’s leading air freight carriers, Lufthansa Cargo provides tailored logistics solutions to customers in over 100 countries,
transporting an average of 1.6mn tons of freight and mail each year. With over two decades of experience at Lufthansa Cargo between them, Jochen Göttelmann, Chief Information Officer (CIO), and Boris Hueske, Head of Digital Transformation at Lufthansa Cargo are bringing together technology and business to better serve the company’s customers. “Mostly I’ve worked in roles where new services, solutions and strategies needed to be developed, as well as setting up new companies for Lufthansa Cargo. Now I’m transforming our business into something much more digital than it was in the past,” says Hueske. He explains that “the level of technological adoption in B2B business models has traditionally progressed more slowly than in the B2C space. In the context of B2B, air freight is lagging behind other B2B environments.” We sat down with Hueske and Göttelmann to find out about the ways in which Lufthansa Cargo’s simple, APRIL 2019
103
1994 Year founded + 4,500 Approximate number of employees globally
+ 300 Locations served in over 100 countries
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LUFTHANSA CARGO AG
“ There is no innovation without technology. Sometimes technology is driving innovation and sometimes it is enabling it, but without technology there is no innovation” — Jochen Göttelmann, CIO, Lufthansa Cargo
104
APRIL 2019
intelligent digital transformation will close that gap and maintain the company’s position at the leading edge of the air freight sector. “The speed and momentum we are currently gaining in our industry is tremendous”, says Göttelmann, who believes the digital gap between the air freight industry, like other B2B sectors, and B2C businesses will be closed in a couple of years. Göttelmann is a firm
CLICK TO WATCH : LUFTHANSA CARGO – ‘LOGISTICS OF THE FUTURE – DIGITAL CHALLENGES?’ 105 believer in the need to increase
the move from paper into data: that’s
technology saturation throughout the
what we did over the past few years,
company. “There is no innovation
starting with one of the basic docu-
without technology. Sometimes
ments we use in our industry, the air
technology is driving innovation and
waybill.” Waybills are a form of receipt
sometimes it is enabling it, but without
issued by airlines for the transportation
technology there is no innovation.”
of goods. “Over the past few years, we
As the head of Lufthansa Cargo’s
have achieved a high rate of electronic
digital transformation, Hueske is taking
air waybills,” says Hueske. “We started
a methodical, step by step approach,
over 10 years ago with just the waybills
leveraging simple steps to produce
and now about 80% of all the compa-
effective results. “The process of
ny’s documents are electronic. That is
change obviously starts with some
not only important for our processes,
basic things,” says Hueske. “More
but now we also have data through
digitisation, for a start. We’re making
which we can, for example, offer new w w w.suppl yc ha i ndi gi ta l. com
LUFTHANSA CARGO AG
services to our customers. We saw the same thing on the passenger side with the adoption of electronic ticketing and everything that followed that, like self check-in and mobile apps.” Lufthansa Cargo is now effectively developing services for customers based on data and technology. “We also invested in improving our IT capabilities using a new backend handling system,” Hueske adds. “We’re investing in
“ We’re making the move from paper into data and into data commercialization through new services and more efficient processes” — Boris Hueske, Head of Digital Transformation, Lufthansa Cargo
a new booking engine, which is the core system we use to offer our
E X ECU T I VE P RO FI LE
Jochen Göttelmann Jochen Göttelmann joined Lufthansa Cargo as Chief Information Officer in 2015. Prior to joining Lufthansa, Jochen worked as an IT manager in the financial industry for Dresdner Bank, Credit Suisse and Allianz Global Investors. Jochen holds a PhD in mathematics and also has a strong background in computer science, physics, and business administration.
APRIL 2019
Destination: Cloud
Added value through innovation The cloud is the future! We’re opening up entirely new opportunities for our clients by migrating applications to the cloud and transforming them there, with the option of cloud-native development. As one of the world’s largest independent provider of IT and business services, we’ve also racked up many years of experience in cloud architecture, security, governance, and operations. Independent experts have confirmed our industry-leading expertise: the ISG Provider Lens™ has awarded us “leader” status in the “Public Cloud Transformation” and “IaaS – Enterprise Cloud” categories in 2019. Let us help you make your cloud enterprise-ready, too!
For more information, go to: de.cgi.com
services to customers. They can
You see your price, you push the button,
already book online, but we’re upgrad-
and then it’s booked. That is not yet
ing to a modern version, which is really
available in the air freight industry, and
helping us offer a kind of e-commerce
that’s what we are working on: enabling
solution for air freight transportation
customers to book directly through our
services.” The new booking system
own e-portal.”
uses online spot pricing, allowing
Lufthansa Cargo’s core system is
customers to enter capacity requests
developed and maintained by IBS
and receive price quotes immediately.
Software, a provider of IT solutions to
“It sounds a little bit strange, but in our
the travel, transportation and logistics
industry, this is not widely available yet,”
industries. “With IBS, we do not just
Hueske explains. “In the passenger
have a traditional provider relationship,
industry you can easily go online and
but rather a partnership on eyes’ level,”
see if your family gets seats on a flight.
says Göttelmann. “IBS is one of the
E XE CU T I VE PRO FI LE
Boris Hueske, Head of Digital Transformation Boris Hueske is responsible for the Digital Transformation of Lufthansa Cargo. He has a degree in business administration with a focus on logistics. Within 18 years industry experience in logistics and airfreight he took over management positions in supply chain management, strategy, finance, revenue management and digitalisation. Since 2018 he is responsible for defining and securing the achievement of the Digital Transformation approach of Lufthansa Cargo with activities in automation, new digital services and business models.
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109
When our clients want to move fast and make things, they turn to us! Nagarro drives technology-led business breakthroughs for industry leaders and challengers. Some of our clients include ASSA ABLOY, the City of New York, DHL, GE, Lufthansa, Siemens and T-Systems. Working with these clients, we continually push the boundaries of what is possible to do through technology, and in what time frame. Today, we are more than 5,000 experts across 21 countries. Together we form Nagarro, the global services division of Munich-based Allgeier SE.
“We need partners like Nagarro who help innovatively and technologically to take place in the digital transformation.” Dr. Roland Schütz, CIO of the Lufthansa Group, talks about the secret sauce of this successful and trusted partnership.
LEARN MORE
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“ The speed and momentum we are currently gaining in our industry is tremendous” — Boris Hueske, Head of Digital Transformation, Lufthansa Cargo
partner especially for individual software projects and major IT service packages like the complex BI and Analytics environment, or the specific Cargo revenue accounting. Hueske and Göttelmann are positive that this transformation will be beneficial to both Lufthansa Cargo and its customers. “The traditional process would involve the shipper using a forwarder to send something to its consignee, picking up the phone, asking for quotes, getting back quotes, deciding routes, confirming shipment details, ordering the airline and so on,”
most important partners to keep up our
says Göttelmann. “There will always be
momentum. Although it’s a standard
a physical flow. Shipments will be
product, they are still highly willing to
trucked from the shipper to the airport,
invest in further product development.”
flown from Europe to Asia or America
Another important partner for the
etc., and then need to be trucked again
digital transformation is Nagarro,
from the airport to the consignee. This
a software and business consulting
won’t change as long as physical
firm headquartered in Munich. Göttel-
goods are being shipped.” However,
mann describes Nagarro as “the main
alongside the movement of physical
providers for our internet portal, and
goods is a flow of information, tradi-
one of the two leading providers of our
tionally taking the form of “some paper”
booking engine”. But Lufthansa Cargo
attached to the shipment. By moving
doesn’t need to rely on external
away from analogue record-keeping
vendors only. With Lufthansa Industry
and other paperwork, Lufthansa Cargo
Solutions they have a strong captive
is accelerating the process through w w w.suppl yc ha i ndi gi ta l. com
111
112
which its clients can “request and receive quotes, confirm capacity and prices online”, Göttelmann notes. “Here, spot pricing is one of the important factors. Clients receive a quote according to shipment dimensions, weight, loadability checks, embargoes, regulations – whatever is necessary to fly that shipment.” With Lufthansa’s new online portal, customers will receive all relevant information in a matter of seconds. Hueske says: “The whole development from this analog business – this manual transfer APRIL 2019
CLICK TO WATCH : ‘HORSES AT THE LUFTHANSA CARGO ANIMAL LOUNGE’ 113
of information, paper and documents between all parties involved – to a digital one, is a severe change. It’s an evolution, but it is happening at an everincreasing speed, and that makes it so significant.” At the core of Lufthansa Cargo’s front-end transformation is the drive to be convenient and efficient for customers. “We have to be efficient on the B2B side with lean, digital, automatic processes, and being convenient for human beings booking our services,” says Hueske. In addition to Lufthansa Cargo’s w w w.suppl yc ha i ndi gi ta l. com
Lufthansa Industry Solutions: Your Partner for Digital Transformation Whether you need to develop a company-wide digitization strategy, connect machines using IT services or provide mobile platforms for cross-company collaboration: If it is a matter of company digitization, Lufthansa Industry Solutions is the right partner.
Our customers come from a wide range of different areas. These include air travel, logistics, transport, manufacturing and automotive industries. But no matter their industry, they all face the same, huge challenge of our time: They have to structure their IT all along the value chain in such a way that it reduces costs and simultaneously increases revenues and efficiency in the long run. Lufthansa Industry Solutions helps companies to digitize and automate their business processes – from medium-sized to listed companies. In doing so, we do not just focus on the IT needed, but on our customer’s business as a whole, including its internal and external challenges. This is because digital transformation affects a company’s entire structure and culture, and reaches beyond company borders to collaboration with partners, customers and suppliers.
Our project experience and industry expertise. We have been working with many of our customers for numerous years. We combine the project experience and industry expertise we have gained with our com-
prehensive services and technology portfolio. Especially, Lufthansa Industry Solutions has many years of expertise in the field of air cargo and, in particular, supports its sister company Lufthansa Cargo in the digitization of sales, handling and financial processes. We work together in agile interdisciplinary teams. Whether your need is Internet of Things, Data Analytics or to bring your IT systems into the Cloud – as an IT consultancy and systems integrator, Lufthansa Industry Solutions covers the entire spectrum of IT services. We always make the highest demands on security and quality – especially because our roots are in aviation, a highly digitized, security-sensitive industry.
Take advantage of the growth opportunities offered by automation and digitization. Lufthansa Industry Solutions division has been steadily growing since 1998. In the spring of 2015, the company was spun off from the former Lufthansa Systems AG and now does business as an independent company within the LUFTHANSA GROUP. As we are a full-service provider, we can help our customers take advantage of the growth opportunities offered by automation and digitization.
Learn More Contact Us
Visit us and follow us:
redesigned customer experience, the company is digitally transforming behind the scenes. “The whole Lufthansa Group, not just Lufthansa Cargo, is adopting a future-proof IT strategy”, says Göttelmann. “We’re moving from a dedicated, on-premises data centre to a multi-cloud environment. With this we can scale up performance instead of running through lengthy ordering processes, installing servers in the rack and de-installing again. We’ll be using IT infrastructure resources as we need
115
them. It’s capable and elastic, and it goes hand in hand with the introduc-
weak point in the system is not the
tion of Office 365 and Dynamics 365
computer or the network; too often it’s
as web-based workplace environment
a user who falls into a tech trap,” says
and CRM tool.” CGI, a Canada-based
Göttelmann. “We’re investing on all
software and service company with
levels,” he confirms.
global delivery capabilities, is one of
In all cases, a transformation of
Lufthansa’s partners for the cloud
the technology used by a company
transformation.
equates to a transformation of the
Lufthansa Group is also updating
culture within that company. At
its cybersecurity measures in order
Lufthansa Cargo, both Hueske and
to match the emerging threats of a
Göttelmann agree this is the case.
digitalising industry. “We’re investing
“There is a cultural shift necessary,”
a lot in processes, hardware and
says Hueske. “One important thing is
software protection, and, particularly,
to really instill the idea of IT as a
training and awareness. Usually, the
production factor. It is important that w w w.suppl yc ha i ndi gi ta l. com
LUFTHANSA CARGO AG
116
we as a company understand the value generation through software in a digital world.” After the introduction of agile project methods in the last two years, now Göttelmann and his leadership
to top flight talent in the tech sector. “If
team are taking the next steps. An
you look at universities, hardly anybody
adoption of DevOps principles will help
knows about the air freight business,”
to make internal processes leaner,
says Göttelmann. “Hardly any other
increase software quality and shorten
industry has such challenging prob-
release cycles.
lems to solve in the coming years.
Lufthansa Cargo’s digital transfor-
Every potential candidate should be
mation will carry the company forward
keen to knock on our door and ask to
into the next three years with an eye to
work for us. We want to be acknowl-
becoming a more attractive employer
edged and perceived as one of the
APRIL 2019
117
most attractive employers in the industry.” As for Lufthansa’s technological future beyond 2022, Hueske laughs: “I think, considering the dynamic world we live in, we shouldn’t be doing perspectives more than three years in advance.”
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EXTERRAN:
118
TRANSFORMING THE OIL AND GAS SECTOR WITH AN INNOVATIVE SUPPLY CHAIN TRANSFORMATION WRITTEN BY
SEAN GALEA-PACE PRODUCED BY
GLEN WHITE
APRIL 2019
119
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EXTERRAN
Suraj Devadiga, Director of Supply Chain of Middle East & Asia at Exterran, discusses how his company is beginning to digitise its services in the oil and gas sector.
F
or manufacturers today, digitisation is vital if they want to remain one step ahead of the competition and perhaps nowhere
can this be seen better than in the oil and gas industry. Regarded as a proactive solutions provider to a 120
range of global and regional oil and gas customers, Exterran is now embarking on the first phase of its digital transformation plan. Suraj Devadiga, Director of Supply Chain of Middle East & Asia at Exterran, highlights how the company’s procurement function has become a key part of Exterran’s operations. “In the past, procurement used to be where purchase orders were made. The company would say ‘I need this, go and buy it’ and it would be the job of purchasing to buy and provide it,” explains Devadiga. “What’s different now is that we ask lots of questions to drive value. Are we buying at the best price and is it in our plan? If so, are we buying it from suppliers who are qualified? Is this supplier consistent? Are we going to create a museum of suppliers and then end up having to spend more on maintaining parts and services? It’s APRIL 2019
121
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Project management Praj’s project management team consists of qualified, experienced and PMI certified professionals well versed with the global standards and practices.
Engineering Engineering is the backbone of Praj’sintegrated offerings. More than 70% of the employee strength consists of engineers of various disciplines – Chemical, Mechanical, Civil & Structural, Electrical & Instrumentation etc. Praj has successfully leveraged their capability to provide modular solution to range of industries.
www.praj.net
Over the last few years, Praj has successfully supplied M industries such as Oil&Gas, Refineries, PetroChemicals and C engineering capability for designing modules and equipment clients and till date we have reference base in more than 75 been appreciated by our global clients. Leveraging our man highly price competitive solutions to the industry. Praj with more challenging projects in spirit of partnership with custo
Manufacturing Praj’s business lines are supported by its world-class manufacturing infrastructure. Praj has 4 manufacturing facilities in India. All the facilities have the capability to manufacture equipment in compliance with the most stringent requirements of various countries across the globe. All the facilities are accredited with ASME U&U2 stamps and have also successfully manufactured equipment with CE, EN, GOST, DOSH certifications etc.
Supply Chain Management A strong backbone of SCM team supports the complexities involved in Praj’s business. With around 50 qualified professionals, the team handles procurement of over 100 categories of commodities, metals, equipment, electrical, automation, piping, structural, rotary equipment like pumps and compressors.
Modular Plants and Static Equipment to various process Chemical industries.This is enabled by our multi-disciplinary t. Our team has very good experience of working with global 5 countries. The quality systems are world-class and have nufacturing locations in India, we have been able to provide h its demonstrated capabilities is geared-up to take-up far omers.
FIND OUT MORE HERE
EXTERRAN
important to figure out exactly what we’re enabling.”
IMPLEMENTING DIGITISATION Having previously worked in India at General Electric Oil & Gas in a variety of different roles such as Senior Product Manager, Business Manager and then Head of Supply Chain Integration, Devadiga is well-positioned to oversee the beginning of Exterran’s digital transformation as it begins to digitise its operations. “We’re in the process of digitising our supply 124
chain operations in order to implement the same ERP globally and we’re also introducing the necessary digitisation platforms to enable engineering teams to work seamlessly across our locations in Houston, the UAE and Singapore. It also allows us to connect with the supply chain team which, similarly, is on a platform that allows us to collaborate as a global supply chain organisation,” he explains. “We’re very much in the nascent stages of digitisation and I believe our approach of low investment, high return is vital.” “At our current stage of digitisation, we have invested in two key things. Firstly, we have remote monitoring and APRIL 2019
“ We’re very much in the nascent stages of digitisation and I believe our approach of low investment, high return is vital” — Suraj Devadiga Director of Supply Chain MEA & APAC Exterran
diagnostics equipment that allows us to collect, collate, synthesise and then analyse information from equipment across various sites worldwide. Once we have refined our operations in one area, we can then implement this approach across our various locations which have the same operating dataset,” he says. “Digitisation is also enabling to us reduce our operating expenditure and better manage our finances.” Devadiga believes the transition of three enterprise resource planning (ERP) systems to two has been key to his company as it looks to implement phase one of its digital transformation. “In the third quarter, we’re targeting for all our pilots to be completed and launched to the platforms. We must be very judicious, take the feedback and refine it because you need a strategically significant dataset,” says Devadiga. “One of the big hurdles has been that we don’t have a contract operations site in the US where we just sell products. However, in terms of the rest of the world, we have more of a 360- degree solution approach because we don’t just sell products but we also build, own, operate, and maintain them over five to 10 years. Ultimately, it’s the big global w w w.suppl yc ha i ndi gi ta l. com
125
Handle the Pressure We know you’re no stranger to pressure. At Atlas Copco Gas and Process, we strive to transform industrial ideas into solutions that help you thrive under pressure. That’s why Exterran has trusted Atlas Copco Gas and Process for over a decade to supply the critical turbomachinery they need. With solutions developed to ensure on-time completion of gas processing plants across the globe, we are a connected, accessible partner when the pressure is on and delivery timelines are tight. Working with Atlas Copco Gas and Process ensures that you have a partner every step of the way, helping you handle today’s pressures while creating a sustainable future.
Find out how Atlas Copco Gas and Process can help you handle the pressure at atlascopco-gap.com
CLICK TO WATCH : ‘EXTERRAN OVERVIEW’ 127 sites in Argentina, Oman and Thailand
During the past year, our Middle East
where the first phase of our digital
operations in Oman and Bahrain as
transformation plan will be launched.”
well as our manufacturing facility in the UAE and Dubai are all on Oracle. But,
FORMING KEY PARTNERSHIPS
Pakistan, Nigeria, Thailand, Indonesia
Exterran has begun to work with
and the entire Asia-Pacific region still
Oracle across all its sites in North
use Sage Accpac as an ERP. That’s
America and Latin America. Through
why we’re rolling out these pilots only in
the company’s collaboration with
the Oracle ERP areas.”
Oracle, Devadiga believes his company
The importance of establishing and
has utilised ERP to introduce pilots
maintaining key partnerships is
successfully. “In the western hemi-
fundamental to all successful busi-
sphere, all our sites in places such as
nesses. Exterran has collaborated with
North America and Latin America with
industry leaders such as General
the exception of Peru are on Oracle.
Electric, Ariel Compressors, Caterpillar w w w.suppl yc ha i ndi gi ta l. com
Intelligence Automation
Solutions for the Oil & Gas Industry Visit us at: www.intechww.com
USA
UAE
Saudi Arabia
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Nigeria
Singapore
Pakistan
Agencies in:
Kuwait
Oman
Kazakhstan Qatar
Peru
North Africa
Angola
China
Indonesia
“ It’s up to us to select the compressor that Ariel may be manufacturing and marry it to the engine that Caterpillar might be manufacturing” — Suraj Devadiga Director of Supply Chain MEA & APAC Exterran
129
Engines and Atlas Copco. Devadiga
However, these two units don’t do
affirms that a good working relation-
anything by themselves. The engine
ship with partners is vital to success.
and compressor must be together
“Our partners are extremely impor-
and installed with the associated
tant,” he says. “From our perspective,
piping and other components in a
there’s a very high degree of depend-
manner that fulfils the purpose for
ency on these original equipment
which that compressor has been
manufacturers (OEMs). We need
designed. That capability exists with
them to value our association as a
us because we develop the solution in
delivery model for their products into
order to process and treat that gas.
the oil and gas industry because
It’s up to us to select the compressor
we’re packagers of their machines
that Ariel may be manufacturing and
and we buy the engine and compres-
marry it to the engine that Caterpillar
sor from the engine manufacturer.
might be manufacturing.” w w w.suppl yc ha i ndi gi ta l. com
EXTERRAN
“ Ultimately, it’s the big global sites in Argentina, Oman and Thailand where the first phase of our digital transformation plan will be launched” — Suraj Devadiga Director of Supply Chain MEA & APAC Exterran
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131
LOOKING TO THE FUTURE
explains Devadiga. “We’re in the first
Looking forward, Exterran is set to
stage of collecting data and transform-
remain acutely focused on its digital
ing that data into information. But if we
transformation strategy. Valuing a
can implement tools where the informa-
mentality of “knowledge is power”,
tion can be gleaned from the data and
Devadiga believes it’s important to
made available to managers both at a
remain vigilant when gathering data in
high and mid-level, it will create a
the digital space. “We can’t improve
knowledge base that will allow us to
when we don’t know what we need
scale up from being this $1-3bn
improve on. The journey to knowledge
company and hit the $5bn mark. That
starts with three simple words which
has to be the goal.”
are extremely difficult for most people to say: ‘I don’t know’. But the moment we admit that we don’t know, that’s when we can start our journey,” w w w.suppl yc ha i ndi gi ta l. com
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The vision for procurement transformation and supply chain digitalisation at the Department of Culture and Tourism WRIT TEN BY
DA LE BENTON PRODUCED BY
GLEN WHITE
APRIL 2019
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D E PA R T M E N T O F C U LT U R E A N D T O U R I S M
Waleed AlSaeedi, Director of Procurement at the Department of Culture and Tourism — Abu Dhabi, outlines the vision for procurement transformation and the digitalisation of the department’s supply chain
A
s a government agency, the Department of Culture and Tourism – Abu Dhabi (DCT Abu Dhabi) is tasked with a major goal: to
further the development of Abu Dhabi as a dynamic 134
and fast-evolving global destination of distinction through diverse leisure, business, culture and entertainment experiences for residents and international tourists. With a responsibility driven by government, achieving this places greater scrutiny on the organisation’s resources, budget and in turn its procurement function. Waleed AlSaeedi, Director of Procurement at DCT Abu Dhabi, recognises this responsibility. “In order for the organisation to best serve the people of the UAE, my procurement department has to consistently innovate and operate with agility and foresight in order to ensure that our operations have the goods, services and materials that it needs, and that the most cost-effective resources in the market are procured,” he says. DCT Abu Dhabi’s departments uwalse a variety APRIL 2019
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D E PA R T M E N T O F C U LT U R E A N D T O U R I S M
“ As an employer of choice for the profession we were able to attract industry experts and enhance our internal capabilities” 138
— Waleed AlSaeedi Director of Procurement DCT Abu Dhabi
APRIL 2019
of inputs, ranging from ‘common types’ such as training, facilities management contracts, computers, furniture and other standard items, to ‘rare services’ such as the transportation and handling of antiquities, hiring performing artists and the refurbishment of historic buildings. As a result of this, the organisation’s supplier base is extensive, complex and requires procurement to “cast its net far and wide in order to find the right solutions to the organisation’s needs”. Since 2015, the organisation’s strategy has focused on cost minimisation and the
CLICK TO WATCH : ‘ABU DHABI CULTURE MOBILE APPLICATION’ 139 implementation of a more business-
for ways in which it could rationalise
oriented approach. While previously
purchasing in order to be ready for the
DCT Abu Dhabi was tasked with just
2015 agenda. “We put an emphasis on
providing services, today its various
supporting DCT’s strategy in develop-
departments are also required to make
ing Abu Dhabi’s supplier base with
business cases for their initiatives and
three core purposes: to support local
look for ways in which they can pay for
businesses, particularly the SME
the services that they offer to the
sector; to help to develop local
public and to other government
capabilities – which will benefit us in
entities. Following his appointment as
terms of costs and simpler supply
Procurement Director in 2013, AlSaee-
chains; and to reduce the risk of
di was required to undertake a
depending on just one or two major
complete review of the spend under
suppliers.” Over time, AlSaeedi has
management against DCT Abu Dhabi’s
seen these approaches deliver on DCT
five-year corporate objectives and look
Abu Dhabi’s ambitious goals and w w w.suppl yc ha i ndi gi ta l. com
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“By devolving responsibility to our end-users, we have freed up resources to look at more strategic activities” — Waleed AlSaeedi Director of Procurement DCT Abu Dhabi
This has seen an internal restructuring over the past five years, to create three units focused on spend: Procurement Operations (Buyers), Strategic Sourcing (Business Partners), which manages all the pretender work, and a section that looks after Performance Management, which develops and manages information systems and identifies improvement areas. “As an employer of choice for the profession we were able to attract industry experts and enhance our internal capabilities,” says AlSaeedi. “As part of our efforts to streamline, all the low-value direct purchasing has been
ultimately deliver success in serving
devolved to end user departments. By
the organisation’s agenda. This, he
no means do we ignore this important
feels, has resulted in the procurement
aspect of DCT Abu Dhabi’s operations,
department becoming a critical and
but we are primarily focused on and
influential department within the
responsible for setting up blanket
organisation, recognised across the
purchase agreements (BPAs) and
board as a key player driving the
managing Purchase Orders (POs). By
organisation forward.
devolving responsibility to our end-
DCT Abu Dhabi is a merger of three
users, we have freed up resources to
authorities: the Abu Dhabi Authority for
look at more strategic activities such
Culture and Heritage, Abu Dhabi
as performance sourcing and contract
Tourism Authority and the cultural
management improvements.”
department of the Tourism Development & Investment Company (TDIC).
DCT Abu Dhabi has also redefined how it manages and approaches its w w w.suppl yc ha i ndi gi ta l. com
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142
business in order to maximise its
Dhabi has had to undergo a digital
resources and avoid unnecessary
transformation of procurement in order
costs; achieved not only by finding the
to truly embrace the digital age.
cheapest suppliers for a project but in
AlSaeedi notes that implementing new
assessing total cost of ownership of
technologies and digital processes has
assets and the long-term impacts of
been a key method to increasing eff-
BPAs and contracts. “Ultimately, our
iciency in the department’s systems
market knowledge enables us to
and processes while also enhancing
advise the organisation’s departments
transparency, accountability and data
on the most financially efficient way
analysis. Some of the projects that fall
they can achieve their goals,” adds
under digitalisation include a new
AlSaeedi.
Contract Management System that
With technology redefining the procurement function globally, DCT Abu APRIL 2019
allows DCT Abu Dhabi to capture risk, implement digital signatures to reduce
cycle time analysis. DCT also imple-
improving individual employee metrics.
mented a procurement dashboard,
It’s fair to say also that the use of our
which has enabled, and will continue to
digital cloud systems enables us to
enable, the company to make evi-
capture meaningful data from opera-
dence-based decisions using accurate
tions in real time; for example, I can see
data. “By implementing these along
the status of our tenders on our
with a few other projects there have
dashboard or review supplier perfor-
been considerable improvements
mance reports as soon as they are
made to processing time, oversight
uploaded. It enhances tactical decision
and accountability,” he says. “Our
making but also allows for evidence
procurement dashboard, for instance,
based strategic planning,”
gives us the ability to analyse data and
With technology comes a demand
supports DCT Abu Dhabi in its compet-
for agility and flexibility and so procure-
itive analysis of the market, strategic
ment managers, buyers, sourcing spec- 143
insights on spend as well as with
ialists, category managers and others
E XE CU T I VE PRO FI LE
Waleed AlSaeedi In close collaboration with the Executive Management Team, Waleed AlSaeedi is responsible for managing, monitoring and oversight of procurement, contracts, contracts administration and Supplier Relationship Management (SRM) for the TCA’s corporate requirements. In addition the role encompasses responsibility for the coordination of procurement activities across the organisation, policy compliance, coordinating procurement and contracts activities, and supervising procurement and contracts employees.
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APRIL 2019
CO M PAN Y FACT S
The Department of Culture and Tourism — Abu Dhabi manages the Emirate’s tourism sector and markets it internationally through a wide range of activities and major events, aimed at attracting both culturally sensitive visitors and increased investment. As part of its priorities, the Department also ensures the preservation of Abu Dhabi’s cultural heritage, especially its historic and archaeological sites. However, its focus is not solely on the past: it is also responsible for overseeing the development of the landmark museums in Abu Dhabi’s Saadiyat Island Cultural District, including the Louvre Abu Dhabi as well as the upcoming Zayed National Museum and Guggenheim Abu Dhabi.
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D E PA R T M E N T O F C U LT U R E A N D T O U R I S M
have to be able to adjust to meet an
Abu Dhabi can use. One area of
ever-evolving digital landscape.
particular interest to AlSaeedi is the
AlSaeedi expects to see disruptive
ever-increasing ability of smart
technologies take a stronger hold of
systems to accrue expanding data sets
procurement as computing capacity
and consequently, the methods and
and generational forces push digital
approaches to interpreting said data.
and technological approaches even
“It will create new challenges for
more into the mainstream, such as the
procurement that we’ll need to
use of machine learning and AI in
respond to,” he says. “Overall though,
contracts management and the greater
it’s clear to me that despite these
use of online and automated tools for
changes we are not replacing the
inspection and performance manage-
ability of people to make procurement
ment, creating more data that DCT
decisions. The difference, in fact, will
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APRIL 2019
be the strength of evidence, backed by
dalone systems are already in place
smart data and tools, to make and
e.g. Oracle, Dashboard and a Contract
execute those decisions.”
Management System (CMS), and the
Key to this has been the implementa-
company is currently working on
tion of automation software in the
integrating all of these into one
source-to-pay process. DCT Abu
combined system. “The benefits of this
Dhabi has automated most of the low
are pretty obvious: the amount of time
value, less complex engagements and
this saves to my team in terms of
works intensively on creating solutions
closing communication gaps and
and models to accommodate high
avoiding endless paper trails is
value complex engagements which
exceptionally high and as a result we
require multiple different stakeholders
focus on adding more complexity to
being included in the process. Stan-
our requirements of suppliers for 147
“Technological and digital transformation is at an advanced stage where now the questions are: how do we make this better and how do we take it to the next level?” — Waleed AlSaeedi Director of Procurement DCT Abu Dhabi w w w.suppl yc ha i ndi gi ta l. com
D E PA R T M E N T O F C U LT U R E A N D T O U R I S M
instance, by requesting environmental or social responsibility data,” he says. “We’ve also looked at Strategic Category Management (SCM) under the Business Partnering roles, which has enhanced the focus on analytics as an increasingly critical new approach to procurement best practice. As a first step, we have developed an advanced dashboard which provides data points from our procurement operations covering all aspects i.e. spend tracking and management for instance. The 148
next phase will be to start using data analytics reports, manage the spend performance and visualise the data.” A supply chain and procurement function can only be as strong as its supplier and vendor network and as DCT Abu Dhabi has streamlined its procurement and embraced technology, it has been able to reassess the way it categorises and measures its suppliers of choice. “Our supplier relationship management framework is designed to match risk and value with supplier capabilities,” says AlSaeedi. “It is a question of strategic clarity and building trust through fair and open tendering and working closely with APRIL 2019
suppliers during contract implementation.” Supplier relationships can change and DCT’s core strategy is to leverage its data to measure and track performance, so relationship strength assessments are based on evidence. “Technology will help us to manage these relationships: for example, data from supply histories can be used to identify the share of spend under management that goes to each major firm, and we will then be able to look at areas where we need to work on widening the base.” With technology continuing to evolve, digital transformations never end but simply evolve alongside the technology. AlSaeedi notes that DCT Abu Dhabi’s immediate digital future will see the roll-out of a central, digital procurement portal; DCT is one of nine government entities involved in piloting the portal. “We will need, naturally, to review and change certain things as we see how they work in practice but I’m confident in the job the steering committee has done over the past few years having witnessed the work first hand. The second phase will be launched later this year, by which time w w w.suppl yc ha i ndi gi ta l. com
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D E PA R T M E N T O F C U LT U R E A N D T O U R I S M
the portal’s functionality should be at 100% and we use can it to its full capacity.” The portal implementation will involve training for DCT Abu Dhabi’s procurement team as well as increased work with suppliers to accommodate digital procurement processes. “In the coming year we will most likely review the procurement and supply management strategy with reference to DCT Abu Dhabi’s corporate strategy and will no doubt 150
revise our category management approach as to better leverage the capabilities of the portal,” says AlSaeedi. Whatever the future holds for digital procurement, DCT Abu Dhabi’s efforts to streamline and to further embrace technology and innovation has created a foundation that it can build on. AlSaeedi is keen to stress that as an organisation, DCT Abu Dhabi is consistently looking for new ways to innovate in the digital and technological area. “Technological and digital transformation is at an advanced stage where now the questions are: how do we make this better and how do we APRIL 2019
151
take it to the next level?” he says. “And thankfully, I’m confident that my young, skilled but also very experienced team has the answers to those questions and will continue setting the high standards I’m accustomed to.”
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Proactive supply chain management and procurement principles WRIT TEN BY
HARRY MENE AR PRODUCED BY
CHARLOT TE CL ARK E
APRIL 2019
153
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VA L M E T O YJ
We talk to Manish Sharma, Director of Supply Chain, Asia Pacific, at Valmet, about ensuring sustainability principles are maintained across the company’s global supply chain
S 154
panning more than 130,000 miles of impenetrable coniferous forest, rugged coastal fjords and over 160,000 lakes,
the country of Finland is among the most northerly nations in the world. The entire country lies within the boreal zone, characterised by its brief, warm, balmy summers and its dark, snow-blanketed winters. Its capital, Helsinki, is the second most northerly capital city on Earth, and 78% of its land is blanketed in forest. It is no surprise then that the nation’s economy is intrinsically linked with the production of lumber, pulp and paper. In the 1970s, pulp and paper production accounted for over half of Finland’s total exports. Although the industry’s share has decreased over the past 50 years, as the nation’s economy has diversified and highskill industrial, chemical and engineering jobs have gained prominence in the workforce, the manufacture of pulp and paper still accounts for over 22,000 jobs in the country, according to a Statista report. APRIL 2019
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“We often receive very positive comments from suppliers, who say something we’ve put in place has improved their productivity and performance” — Manish Sharma, Director of Supply Chain, Asia, Valmet
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157
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CLICK TO WATCH : ‘EXPLORE SUSTAINABILITY AT VALMET’ 159
With industrial roots reaching back
South East Asia, Korea, Japan,
as far as the 1750s, Valmet is synony-
Australia and New Zealand. We sat
mous with sectors like manufacturing,
down with Director of Supply Chain,
energy and the production of paper
Asia Pacific Area, Manish Sharma, to
and pulp. Its offerings include pulp
explore the expanse of supply chain
mills, tissue, board and paper produc-
operations and the ways in which
tion lines, as well as power plants for
these operations ensure high stand-
bioenergy production. In 2017, the
ards of sustainability in the area. . “We
company reported net sales of
are always looking at ways to design
US$3.5bn and employs over 12,000
our operations to be cost competitive,”
people across more than 30 countries
says Sharma, “as well as working to
and 150 locations. The company has a
improve our suppliers’ operational
significant presence across the Asia
excellence, while ensuring that health,
Pacific region, with operations in India,
safety, environment & quality occupy w w w.suppl yc ha i ndi gi ta l. com
VA L M E T O YJ
“ Health, safety, environment and quality occupy the top spot of our agenda” — Manish Sharma, Director of Supply Chain, Asia, Valmet
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161 the top spot on our agenda.” Sharma
cuses, Sharma explains, is ensuring
has been in the procurement space
that, across all its operating regions,
for over 23 years, and has spent a
its products and methodology adhere
large portion of that time in the paper
to global standards. “Whatever we
production supply chain. He joined
do, we do it to the degree of quality
Valmet four years ago and works to
that Valmet is known for, which is ac-
ensure that Valmet’s Asia Pacific
cepted globally. We ensure that our
business interests operate in accord-
best practices are in-line with global
ance with the company’s industry-
quality standards and are followed in
leading practices. “My core responsib-
spirit,” he reiterates. For a global indus-
lity is to ensure the implementation of
trial firm, Valmet places great impor-
Valmet’s core principles and practices
tance on agility in an ever-changing
throughout the company’s value chain,”
marketplace. Sharma’s role is also
he explains.
focused around the goal of keep-
One of the company’s main fo-
ing Valmet’s Asia Pacific operations w w w.suppl yc ha i ndi gi ta l. com
VA L M E T O YJ
proactive. “We are a very proactive organization and a lot of good work is being done from the view of strategic, operational and tactical procurement,” he says. Valmet’s forward-looking approach focuses on identifying upcoming changes in the market: “What are the mega-trends? What are the upcoming environmental regulations that will require us to make changes to the way we run production? That’s one of the reasons the company is investing so heavily in R&D.” Currently, Sharma notes, the trends Valmet is 162
working on, to address range from the increasing digitisation of media to the growth of e-commerce. “Printing is disappearing, but e-commerce companies, which use large amounts of boards for packaging, are on the rise,” Sharma says. “Also, in Asia there’s a lot of urbanization, so more people are going to college, which creates demand for things like textbooks. Furthermore, the growing population in the Asian sub-continent provides demographic dividends for such industries to thrive. Nonetheless, there are always prevailing market dynamics or needs that we must be privy to, to strategize our supply chain operations. APRIL 2019
The need to adapt, while maintaining a global standard of product and sustainability practice is also “embedded in our supplier selection, evaluation and management process,” says Sharma. Over the course of his role at Valmet, Sharma has worked with “basically three types of supplier: suppliers who manufacture standard commercial items, suppliers who manufacture their own designs, and those that produce Valmet-designed products and technology. That’s the supplier segmentation that we’re looking at. However, the top spot goes to suppliers who manufacture according to our designs and work as per our practices,” he says, due to the fact Valmet’s products are manufactured to that global standard and can therefore be sourced globally. “When we select a supplier, we evaluate their social, economic and environmental strength. Where do they stand on social best practice? Do they have quality management systems? How about safe working environments that keep their workforce intact? Basically, do they adhere to their principals?” Sharma continues, noting that “there are mature countries, there w w w.suppl yc ha i ndi gi ta l. com
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VA L M E T O YJ
are medium-risk countries and there are high risk countries”. A supplier from a mature country, like Finland or Sweden, Sharma says, can be evaluated for compliance via a self-assessment questionnaire. “It’s an exhaustive questionnaire that covers every aspect of our sustainability guidelines. As for a medium or high-risk country, we do a physical audit through a third party who inspects the supplier based on our sustainability guidelines. If we’re buying something from Thailand or Vietnam for example, we make sure that we do 164
a physical audit.” Potential suppliers who do not meet Valmet’s standards are provided with feedback to improve workplace practices, safety and efficiency. “We help our suppliers improve their operations, which they very much appreciate. We often receive very positive comments from suppliers,
“ You definitely have to have to respect one another and understand one another’s cultural role to be successful when working across borders” — Manish Sharma, Director of Supply Chain, Asia, Valmet
APRIL 2019
$3.1bn+ Approximate revenue
2013
Year founded
12,000
Approximate number of employees 165
who say something we’ve put in place
expectations and can’t be successful
has improved their productivity and
in that region if we’re not meeting their
performance,” Sharma says. “They
expectations. So, when we approach
realise that sustainability is not merely
things like delivery at Valmet, we need
an exercise in compliance.”
global acceptance.” He maintains that
The cultural diversity between the
the key to meeting these challenges is
different Asian regions presents a
having good communication within the
unique challenge for Valmet’s supply
Valmet team to ensure standardisation.
chain. Offering standardized global
He continues, “you definitely have to
services can become challenging
have to respect one another and
when dealing with a disparate roster of
understand one another’s cultural role
clients and suppliers. “You have Japan,
to be successful when working across
which is very conscious about on-time
borders”. Given the diversity across
delivery, and we need to match their
Asia Pacific markets, Sharma is w w w.suppl yc ha i ndi gi ta l. com
VA L M E T O YJ
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confident that things have progressed very well. “Definitely with every supplier you’re going to find gaps, and the number of noncompliances is higher in Asia, but with fewer “serious” violations. Things are improving a lot and one of the reasons for that is that we are continuously educating and engaging in a dialogue with our suppliers.” Valmet’s procurement journey in the Asia Pacific region is one of constant adjustment and improvement. “We are always looking at the mega trends of the market,” says Sharma. “We constantly renew our products and technology, while putting emphasis on operational excellence and the people we work with and serve. Those pillars allow us to constantly improve.” On the future of his role and that of Valmet in the region, Sharma says: “I see a great future for Valmet. Since we are one of the leading companies in the world, we have a lot of responsibilities when it comes to maintaining a level of excellence. That’s why we have high standards and the need to constantly improve. That’s the key to success.”
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APRIL 2019
169
Coupa Software: Empowering businesses to spend smarter with Value-as-a-Service WRIT TEN BY
L AUR A MULL AN PRODUCED BY
CHARLOT TE CL ARK E w w w.suppl yc ha i ndi gi ta l. com
C O U PA S O F T W A R E
Customers including Unilever, Salesforce, and Airbus look to Coupa’s business spend management platform to empower their businesses with visibility, control their spend, and unlock measurable value
170
F
or businesses striving to win in the global marketplace today, every competi-
tive advantage matters. More and more
businesses are looking internally to drive value,
starting with their spend strategy. From procurement to expenses, organizations are trying to spend smarter and realize value from every investment, as well as mitigate critical risks across the supply chain. Business leaders know that profitability and growth are achieved not only by increasing revenues, but also by looking inside their organizations to cut waste and deliver value. To ensure that value is delivered, business leaders are turning to the latest technology that empowers them with the visibility and control they need when it comes to business spend. These technologies, grouped under the category Business Spend Management (BSM), offer comprehensive cloudAPRIL 2019
171
based spend solutions for companies and organizations of all sizes. Unlike spend management technologies of the past, these solutions not only centralize all spend in one place, enabling unprecedented insights, they also address business software’s age-old issue of usability—after all, software, however great its feature set, cannot deliver value if it’s not used. Additionally, for finance leaders in regions where tax compliance is complex, modern BSM technology implementation offers an easy and w w w.suppl yc ha i ndi gi ta l. com
Transform Procurement with Contract-Centric Sourcing Accelerate
www.icertis.com
Protect
Optimize
streamlined solution to an increas-
and financial services organization
ingly difficult challenge. Along every
based in Singapore, selected Coupa’s
step of the supply chain and across
procurement and compliance invoic-
the globe, software should automate
ing solutions and digitized 92% of
tax compliance and keep up with
$400mn. The company also reduced
ever-changing regulations and
the time spent on procurement by
policies at scale.
employees by 70% to increase
Coupa’s Business Spend Management Platform delivers a comprehen-
operational efficiency. The value Coupa delivers for its
sive, open, and user-centric solution
customers – including leading
for source-to-pay, travel and expense
businesses such as; Airbus, Unilever,
and risk management, offering value
and Sanofi – has earned the company
from day one. For example, Coupa
top recognition from leading analyst
customer DBS, a multinational banking
groups who frequently place Coupa
E XE CU T I VE PRO FI LE
Gabe Perez Gabe Perez, Vice President, Asia-Pacific, has been an instrumental player in Coupa’s rapid growth for almost nine years. From being a key speaker at Coupa’s first-ever Analyst Day at Nasdaq to a presenter at mainstream industry events to the leader of Coupa’s strategy in the Asia-Pacific region, Perez is a forward-thinking SaaS evangelist, advocating for how Value-as-a-Service is changing the way companies do business. Before Coupa, Perez was a business consultant and earned an MBA in global supply chain management.
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C O U PA S O F T W A R E
“What Salesforce is to sales, Coupa is to spend” — Gabe Perez Vice President Asia-Pacific, Coupa Software
into the ‘top right’ for procure-to-pay, expense management, contract management and other BSM processes. The company also achieved a coveted spot on Deloitte’s Technology Fast 500 ranking list and the Great Place to Work list by Fortune magazine. Gabe Perez, Vice President Asia-Pacific, shares more about Coupa and the company’s focus on delivering “Value-as-a-Service” as it works to ensure customer success. “Regardless of size, every company in the world manages spend. Your
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APRIL 2019
CLICK TO WATCH : ‘COUPA INSPIRE ‘19 – SPEND SMARTER TOGETHER’ 175 end-users, or employees, may need to
point in time, you can show how the
spend money in order to get the
service, people, platform and the
products and services they need to do
partners Coupa provides have driven
their job and companies will also have
measurable outcomes – something
procurement teams working strategi-
that is unique for a technology offering.”
cally with suppliers,” observes Perez.
Coupa has made a name for itself
“Today, business leaders are continu-
in the Software-as-a-Service (SaaS)
ally looking for ways to drive value, to
space, becoming a ubiquitous tool in
move faster on mergers and acquisi-
any CFO and CEOs toolkit. Indeed,
tions, to scale their companies and to
Perez enthuses that “what Salesforce
get greater visibility regarding spend,
is to sales, Coupa is to spend,” allow-
and Coupa helps fill this need. The
ing customers to gain greater visibility
reality is that Coupa, unlike other
and control of their finances. One
business software, gives a measurable
such client that has benefitted from
return on investment (ROI). At any
this approach is global financial w w w.suppl yc ha i ndi gi ta l. com
C O U PA S O F T W A R E
“Since day one, Coupa has always focused on customer success and delivering value” — Gabe Perez Vice President Asia-Pacific, Coupa Software 176
APRIL 2019
services company Aon. During one of its earnings calls, Perez notes how Aon’s CFO talked “about the US$30mn marginal expansion they were able to increase with Coupa.” Similarly, Rolls-Royce has been an advocate of the software firm. On one of its market days last year, Perez highlights how the automotive giant “exceeded the 5% industry benchmark for savings by bringing its spend down from $2.7bn to $2.3bn, all with 23% less resources” in a cost control initiative supported by the Coupa BSM Platform. The past few years have represented an exciting chapter in Coupa’s history. Having launched its IPO in 2016, the firm now stands as a billion-dollar unicorn. “For us, going public just showed the start of what we could do,” reflects Perez. “It was a great point in my career and an exciting moment for the firm because it brought us into the open market with a level of credibility that has allowed us to work with some of the largest companies in the world.” Now, headquartered in the heart of Silicon Valley, the company offers its cloud-based business spend managew w w.suppl yc ha i ndi gi ta l. com
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C O U PA S O F T W A R E
ment platform to hundreds of organisa-
Mondelēz and Procter and Gamble
tions globally.
start to use this platform across APAC,
As it extends its reach across the Americas, EMEA and APAC, Perez
their heads and realise the value that
says the firm has its eyes set firmly on
their peers are getting from managing
up-and-coming geographies. “Emerg-
their spend effectively.”
ing markets are seen as a key growth
178
local companies are beginning to turn
As software tools saturate the
driver for us,” Perez says, highlighting
market, it’s easy to get swept on up in
how, in his current role, he’s “trying to
the tide that is digital transformation.
bring that same level of acceleration
Instead of focusing solely on technol-
and value to customers in the Asia-
ogy, Perez urges businesses to really
Pacific.” “I think there’s a really big
think about the business outcomes
opportunity to create value,” he adds.
they hope to achieve. “Digitalisation
“As well-known Coupa customers like
and transformation are a critical part
APRIL 2019
of any modern business but at times,
but numbers and measurable out-
people may resist change. If you make
comes are a global language. That’s
the process one that adds value for
what Coupa has done – we’ve been
them as a stakeholder and is simple
able to make it simple for end users
and easy to use, they’re more likely to
and suppliers to engage with a
engage,” he says. It’s a simple concept.
digitized business.”
He contends that businesses should
As a cloud-based platform, Perez
start with a measurable outcome that
contends that Coupa can enable
they hope to achieve and work
customers to “move quicker, bring
backwards, striking partnerships with
acquisitions into the platform easily
firms that can deliver demonstrable
and add more functionalities.” With this
results. “The business outcome should
speed, Perez says that the Silicon
be the focus of your conversation,” he
Valley-based company has been able
adds. “Change can be hard for people,
to create a “trillion-dollar data set that
“The value you can drive for a customer’s business should be the focus of your conversation” — Gabe Perez Vice President Asia-Pacific, Coupa Software
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2006
Year founded
1,300
Approximate number of employees
180
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181
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is growing rapidly every quarter.” It’s this community data – Coupa Community Intelligence – that has enabled the company to launch innovative, AIbased capabilities across its platform, including risk mitigation and fraud prevention. “We can use this community data and apply machine learning and artificial intelligence (AI) to it to deliver meaningful, prescriptive insights that empower businesses to make smarter spend decisions,” adds Perez. “We 182
can also provide benchmarking that enables businesses to look at what peers are doing, and what you could be doing to reach your goals.” User centricity and continuous innovation are key values at Coupa. For example, Perez points out how “between 30-50% of our releases are features that were requested by the Coupa Community.” As well as having a community of enthusiastic customers to rely on, Coupa has formed a rich ecosystem of partners to help business adopt Coupa to deliver business value. “Early on, we looked to build a team of subject matter experts who would enable and co-implement spend APRIL 2019
“Coupa gives a measurable return on investment” — Gabe Perez Vice President Asia-Pacific, Coupa Software
management solutions. We have global leaders like KPMG, Accenture and Deloitte and we also have regional partners that help users across the globe.” A robust financial function is the backbone of any successful business. Recognising this, Perez says Coupa will remain laser-focused on driving business value for its customers over the coming years. “Since day one, Coupa has always focused on ensuring customer success and delivering outcomes – that’s never going to change. I see our technology continuing to play a greater role in driving even more strategic spend decisions that deliver something many other software solutions can’t: measurable return on investment.”
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02
CIRQUE DU SOLEIL: BREAKING THE SILOS WITH DIGITAL TRANSFORMATION WRIT TEN BY
SOPHIE CHAPM AN PRODUCED BY
ARRON R A MPLING
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CIRQUE DU SOLEIL
With her team of costumers and operational buyers, Fulya Oguz reveals to Business Chief how Cirque du Soleil manages unique procurement on its digital transformation journey
W
hat we do is very unique,” reveals Fulya Oguz Operational Procurement Manager, Supply Chain at Cirque
du Soleil. “On a day-to-day basis I might be talking with an operational buyer about a lift 186
that will pull up a 25-ton tent in one corner of the world, and then move on to discussing the lingerie required for our Zumanity show.” The Canadian entertainment company was established in Montreal, Quebec, in 1984. In the past 35 years the business has expanded on a global-scale, having offered shows to more than - 200mn viewers globally across 450 cities. Due to the colorful nature of the performances, the procurement team is often required to source non-conventional products in order to achieve the high-quality productions promised in its reputation. “Our goal is to invoke imagination, provoke fantasies, and evoke emotions. In order to enable that APRIL 2019
187
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CIRQUE DU SOLEIL
“ Operationally we have to be efficient and operationally we have to be on time” — Fulya Oguz, Operational Procurement Manager, Supply Chain at Cirque du Soleil
188
APRIL 2019
CLICK TO WATCH : ‘BEAUTIFUL, INTRICATE COSTUME DESIGNS AND MATERIALS OF CIRQUE DU SOLEIL’ 189 we buy extremely specialized and
is to ensure all internal business units
unique, custom-made products,” says
are supported with solid contracts,
Fulya.
efficient procurement processes, and
Fulya manages the operational pro-
good risk management. For Cirque du
curement team within the company’s
Soleil, efficiency is important in ensuring
supply chain operations, which focuses
all the customer-facing aspects of the
on strategic sourcing, travel manage-
company function perfectly. “Operation-
ment, customs and logistics. “My team
ally we have to be efficient and we have
consists of project managers and oper-
to be on time,” Fulya explains. The live
ational buyers that specialize in different
shows require reliable equipment and
commodities. Essentially, my team sup-
bold sets and costumes, and without
ports all the Cirque units, including
efficiency from the procurement team
studios, buildings, IT, touring shows,
these may not be readily available.
production and of course costumes
Innovation is a key driving force behind
workshops,” she states. Her mandate
functions. With growth influencing operw w w.suppl yc ha i ndi gi ta l. com
CIRQUE DU SOLEIL
190
ations, the team is introducing new
do we have to do it even more efficient-
technologies to manage procurement
ly and effectively,” explains Fulya. With
and ensure vital efficiency. “As our
growing demand, the team is focusing
President Daniel Lamarre has said ‘At
on introducing new, creative solutions:
Cirque du Soleil we don’t talk about
“It’s a creativity-driven business. We try
diversity, we live it every day with diff-
to acquire the best and brightest talent
erent nationalities influencing our
in the field of procurement, while capit-
growth.’ I think it is very important as
alizing on the highest technological
we’re a worldwide company and our
advancement and tools available.”
global presence has increased con-
In order to introduce new technolo-
siderably over the years. And, of
gies, Cirque du Soleil began by ques-
course, this growth influences and
tioning how it conducted business. By
impacts all of its business units and
addressing what could be eliminated
their operations. So, everything we
from everyday operations, it could then
APRIL 2019
191
E XE CU T I VE PRO FI LE
Fulya Oguz Fulya Oguz joined Cirque du Soleil Entertainment Group in May 2011 as the Operational and Costume Procurement Manager. Fulya leverages her more than 20 years of industry knowledge and experience to lead the charge on countless projects across the world. As a leader within the rapidly growing company, she manages critical relationships throughout all internal divisions of the business, in support of operational procurement. Fulya helps support many of Cirque’s largest shows, handling pivotal enterprise processes for negotiation, budgeting, purchasing, inventory logistics, operation management and vendor intelligence. Having worked within the IT, retail and online spaces like Oracle, Ice.com and Diamond.com, she brings a unique and vital business and technological perspective to Cirque’s continued growth.
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decide where to start investing. “To
also found that the solutions enabled
support our supply chain transformation,
statistic tracking, analysis and trace-
we invested in an e-sourcing cloud
ability, while connecting different
platform, shortly followed by an e-pro-
departments. “We can invite different
curement cloud platform. The e-sourc-
partners within the same tool – it breaks
ing platform was introduced with the
the silos. Everyone can participate,”
intention of streamlining our communi-
Fulya continues.
cations. As a buyer, we receive requests
Innovation is not the only priority for
in all forms – from emails to verbal.”
Fulya, with Cirque du Soleil also ensuring
Cirque du Soleil has been able to process
it sources its products in the most sust-
an increased volume without increasing
ainable ways. “As a citizen of the world
the team. The cloud has enabled time-
we have to value sustainable methods
efficient operations, allowing Cirque
and watch our footprint. We have to
du Soleil to communicate globally and
integrate these principles in our procur-
shorten its response time. The team
ement practices,” says Fulya. “Today
1984
Year founded
4,500
Approximate number of employees
193
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CIRQUE DU SOLEIL
194
“ As a citizen of the world we have to value sustainable methods and watch our footprint.We have to integrate these principles in our procurement practices” — Fulya Oguz, Operational Procurement Manager, Supply Chain at Cirque du Soleil
Photo © Cirque du Soleil – Suspended Pole act from the show CORTEOD APRIL 2019
195
Photo © Cirque du Soleil – Hoop Diving from LUZIA Photographer © Matt Beard
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CIRQUE DU SOLEIL
CLICK TO WATCH : ‘A BOOST OF ENERGY WITH...VOLTA | OFFICIAL 2018 CIRQUE DU SOLEIL SHOW TRAILER’ 196 we have performances all over the world and we have to showcase unique products, meaning the fabrics and props we use are not readily available or reachable.” In 2017, the company transported fabrics from France to Canada on the Avontuur sailboat. The successful journey emitted zero carbon as the engineless boat required no fuel. This led to the firm committing to making at least five journeys through this method by 2020 in order to reduce its environmental damage when acquiring its specialized materials. When creating the LUZIA show, the firm used 6,000 litres APRIL 2019
of water per performance. In order to offset the huge quantities used, Cirque du Soleil would ensure that every liter would be recycled during the duration of a stay in a given city. “When we say sustainability and the environment are very important to Cirque, we really mean it,” Fulya adds. Since joining the company eight years ago, Fulya has helped transform the operational procurement team. As she continues to break the silos and be a part in ensuring the company’s shows
Photo © Cirque du Soleil
are staged on time, the head of the operational department aims to ensure the solutions – allowing this to happen – are implemented across the world. “In regards to technology, we have already decided what we’re going to use and we’re working on it. The next step is making sure the cloud platforms are accessible all over the world,” states Fulya. “That’s an extraordinary responsibility in a magical environment.”
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198
Words of Wisdom from Women at WERC
APRIL 2019
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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
IN AN INDUSTRY THAT IS MADE UP ALMOST ENTIRELY OF MEN, ONE ORGANIZATION IS WORKING TO IMPROVE GENDER DIVERSITY AND BOOST THE BOTTOM LINE
T
he Warehousing Research and Education Council’s Women @ WERC program was designed to meet the unique needs
of women pursuing a career in the warehousing, 200
logistics and supply chain industries. Through networking, mentoring and educational opportunities, they aim to make it easier for women to build their careers while at the same time promoting the bottom-line benefits of increased gender diversity in the supply chain workforce. “I would love to see more women at the leadership level throughout our industry; one way to do that is to make sure we attract more women to the field at the college level, as these young people are the ones with the potential to be our next leaders,” said Kristi Montgomery, Vice President of Innovation, Research and Development at the Kenco Group and one of the newest members of the WERC Board of Directors. Montgomery is encouraged to see WERC’s increasing diversity on the Board and among APRIL 2019
1977
Year founded
1,700+
Approximate number of employees
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Nimble. You need to learn fast, stay lean and be gutsy to remain competitive in this brave new world. WERC has an unrivalled education program. We’ve got an in-depth online training, live webinars and self-guided learning choices to fit every schedule. Our annual conference offers exceptional peer-driven learning opportunities. You won’t find better education anywhere. werc.org
Better Everywhere.
CLICK TO WATCH : WERC’S ANNUAL CONFERENCE 2019
the membership as a whole, “but, I
more women in leadership roles
still think the industry has room to
markedly outperform those without.
grow and improve, and one of the
Still, most supply chain organizations
best ways women can do that is to
do not have gender diversity goals.
network with each other,” she said. “If
As the program has developed, both
you’re new to the industry, find a men-
female and male members of WERC
tor; if you’re like me and have been
have identified four priorities to help
around for a while, find those people
increase diversity and inclusivity within
that you can help to grow in their ca-
the logistics workforce. These include
reers and become industry leaders.”
offering resources and strategies for
Studies show that gender diver-
building allies within the industry, en-
sity in the supply chain boosts com-
hancing equality within the workplace,
petitiveness, productivity and finan-
advancing careers and growing leader-
cial returns, and that companies with
ship opportunities, and fostering organiw w w.suppl yc ha i ndi gi ta l. com
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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
“ At the heart of the research is a conversation between warhousing professionals and the researchers. We want to answer questions that are relevant and provide real benefits to the industry” — Karl Manrodt, Professor of Logistic
204
zational cultures that support healthy
specifically tried to step out of my
and productive work-life blending.
comfort zone and always sit with new
When it comes to building professional relationships, Gwendolyn
people at every session and meal.” Former WERC Board President
(Gwen) W. Rogers says being an ac-
(2010-2011) Catherine Cooper, Founder
tive member of WERC (for 25 years)
and CEO of World Connections, credits
was key. Rogers volunteered at the
her time on the Board as offering her
Conference registration desk for the
a chance to develop skills outside her
several years and she recommends
profession that she would not have
it as a fantastic way to meet a lot of
otherwise. “For example, public speak-
people in a very short period of time.
ing in front of 1,000 people—you don’t
“I tend to be a reserved person,” she adds, “so at every Conference I have APRIL 2019
often get to do that in a company, but you do at WERC,” she explains, add-
warehouse and it’s all men, and they use bad language. And, if you walk into a warehouse in heels and a mini skirt, don’t be surprised when you get cat called,’” she says, noting that her advice is rooted in her own experience. At her first job in the field, she had two revelations within her first week: “There truly were practically no women in the field at that time. I’d heard people say 98% men in the industry, but it was closer to 99.8% men,” she chuckles. “And, I realized very quickly that, as a woman, I had to know twice as much to gain respect and credibility in the industry.” “I strongly encourage women who are new to the industry to tap into the ing she also mastered financial state-
women who have been here a while.
ments while working with WERC.
We’re all here to help each other, and we
Many of WERC’s veteran women said relationships and mentoring
want to,” she said. “WERC is a perfect resource for making those contacts.”
is key, and several opportunities to provide mentorship to young women have come to former WERC Board President (2004-2005) Susan Rider, President of Rider & Associates, through her WERC connections. “The first thing I would tell them is, ‘you have to develop a thick skin. You can’t get insulted when you’re at a w w w.suppl yc ha i ndi gi ta l. com
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Better Everywhere.