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FOREWORD
W
elcome to the December issue
the right partners are onboard,”
of Supply Chain Digital!
he explains.
Our cover feature this month zones
Elsewhere in the magazine, Lindsay
in on LF Logistics as we speak with
Bridges, Senior Vice President of HR
Simon Oxley, Executive Vice President
at Deutsche Post DHL Supply Chain,
– Global Business Development and
UK and Ireland, discusses talent
Head of Indonesia, to discuss the
management at the logistics giant.
importance of developing customer relationships in collaboration with revenue streams. “We’re the logistics provider of choice in Asia, focused on expanding our customers’ operations across the region,” says Oxley. In our leadership slot this month, we interview Capgemini’s Jörg Junghanns, Vice President Europe – Digital Supply Chain, to talk about the acceleration of blockchain in the supply chain space. “The key challenge is to convince others to engage with you on the blockchain journey along with the
Also be sure to check out in-depth features with Rhenus Logistics Indonesia, Huhtamaki, Brenntag Group, Erdinger Weißbräu, Anheuser-Busch InBev and Saudi Telecom Company. Finally, our top 10 this month counts down the biggest companies we’ve featured throughout 2019 in Supply Chain Digital by revenue. Would you like to be featured in the next edition of Supply Chain Digital? Get in touch at sean.galea-pace@ bizclikmedia.com
usual challenges of IT implementations,
Enjoy the issue!
the cost involved and ensuring
Sean Galea-Pace www.supplychaindigital.com
03
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Click the home icon (top right of page) to return to contents page at anytime EDITOR-IN-CHIEF
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CONTENTS
12
26
36 TALENT MANAGEMENT WITHIN LOGISTICS
48
58 Featured companies
74 Events & Associations
CONTENTS
78 Rhenus Logistics Indonesia
102 DIGIB
90 Huhtamaki
120 Erdinger Weißbräu
CONTENTS
138 Anheuser-Busch InBev
166 PepsiCo
150 Saudi Telecom Company
12
LF LOGISTICS: GROWING A BUSINESS ALONGSIDE THE CLIENT WRITTEN BY
OLLIE MULKERRINS
DECEMBER 2019
PRODUCED BY
CAROLINE WHITELEY
13
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LF LOGISTICS
Simon Oxley, Executive Vice President – Global Business Development and Head of Indonesia at LF Logistics, discusses developing customer relationships in tandem with revenue streams to provide a robust network of solutions
LF
Logistics is a third-party logistics (3PL) provider based in Asia and operating as part of the LF Group. It has been in
operation since 1906, and today provides three key areas of service to users: distribution centre 14
services, transportation management services and global freight management. LF Logistics manages over 250 distribution centers across 15 countries in the Asian region. These distribution centers serve over 400 customers, many of which are recognisable, household brands. Its operations cover a range of key verticals, including Footwear, Apparel & Accessories, Fast-moving Consumer Goods, Food and Beverage, Beauty & Wellness, Consumer Electronics and Healthcare. Simon Oxley, Executive Vice President - Global Business Development & Head of Indonesia at LF Logistics explains: “We’re the logistics provider of choice in Asia, focused on expanding our customers’ operations across the region. One of our customers, for example, has grown across nine countries with our support and another has doubled in size over the DECEMBER 2019
2008
Year founded
10,000+ Number of employees
15
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LF LOGISTICS
“ We’ve been very successful in the industry, our growth is above the industry average and we believe our three pillars are the foundation of this” — Simon Oxley, Executive Vice President – Global Business Development & Head of Indonesia, LF Logistics 16
DECEMBER 2019
past 18 months. Through our solution design expertise, we can help a business design and build its distribution centres, employ staff, put first-class operational systems in place or start operations in a new location.” LF Logistics uses a three-pillar model to measure its success and guide its operations with its customers. The first of these is operational excellence, as Oxley explains: “We believe providing excellent service is a main driver for customers’ success and their
CLICK TO WATCH : ‘MANAGEMENT TRAINEE PROGRAM 2018’ 17 desire to stay and grow with us. We
With regards to business develop-
are operations-centric and focused on
ment, LF Logistics identifies potential
exceptional customer service.”
customers’ growth targets to see how
The second and third pillars are
LF Logistics can facilitate this growth,
account management and business
to both provide a solution that best fits
development. Each customer has its
the customer and benefits LF Logistics’
own dedicated account team to facili-
revenue stream. These three pillars have
tate the transformation it will undergo
become the foundation upon which the
with LF Logistics. “This provides
company has built its business. “We’ve
confidence that we are serving our
been very successful in the industry, our
customers to their required service
growth is above the industry average
standards, that operations are
and we believe our three pillars are the
efficient, and that we are prepared
foundation of this,” says Oxley.
to grow our business with existing customers,” Oxley notes.
The dedication to these key areas has ensured LF Logistics rapid expansion w w w.suppl yc ha i ndi gi ta l. com
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Service Excellence We provide modern and wide range of transportation and logistics services. We aspire to be creative and innovative leader to transcend in the industry and develop efficient processes without compromise on safety. Our professional drivers and staff are visible reminders to our commitment of providing excellence and dependable services.
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DRIVER MANAGEMENT
of services offered to its customers. As more companies join the network, the benefits of growing infrastructure and forward planning become evident. According to Oxley: “We are investing in our business in the region, whether that’s in people, in systems, in distribution centres or transportation networks, our customers can see our visible commitment to the industry, our infrastructure and an excellent level of service.” LF Logistics’ own growth is led by the needs of its customers, both
“ Through our solution design expertise we can help a business design and build its distribution centres, employ staff, put first class operational systems in place or start operations in a new location” — Simon Oxley, Executive Vice President – Global Business Development & Head of Indonesia, LF Logistics
current and potential. The company
19
E XE CU T I VE PRO FI LE
Simon Oxley Simon Oxley is an experienced supply chain professional, having worked in the Industry for 30 years and loves being a part of an industry that improves the lives of billions. He has significant experience in designing and delivering operational solutions to large brands across multiple business sectors, and a strong background in distribution center management, transportation operations, ogistics system implementations and delivering improved supply chain performance. Simon has global experience, having worked in Europe, the US, and in multiple countries across Asia, a region that has been his focus over the past two decades.
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LF LOGISTICS
C O M PA N Y FACT S
• Working in 15 countries • Managing over 250 distribution centers • 100% annual growth over the past two years in Indonesia
20
DECEMBER 2019
invests in its future operations to anticipate the requirements of the industry. For example, rather than building up fulfilment networks from scratch, LF Logistics will instead build upon pre-existing needs to ensure smart investment. “We don’t look to expand into new countries from a zero base. We would rather expand into the markets that our customers are targeting. Over the past five years our expansion has been driven by customer expectations. Entering into a new country with a customer means we expand with their business and can readily provide expertise as they are already familiar with us. We know their operating procedure and, in many cases, are already working with the same implementation teams they have used before.� LF Logistics looks to breed that same sense of partnership and familiarity with other partners it works with. One of the largest types of vendors are property developers, such as MMP Property, that aid in the construction of distribution centres. LF Logistics will work in tandem with developers to design each new facility and from there, negotiate leasing agreements w w w.suppl yc ha i ndi gi ta l. com
21
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23 to use the space. Transportation
strain from areas that may be in need.
vendors, such as Ugasan Berkat Jaya,
A good example of these peaks was
then provide operational and rental
the singles day period of 11 November
services for the vehicles needed to
2018 when the LF Logistics facilities
manage a site, as and when they are
in China received 7.6mn orders in a
required. These services may include
24-hour period. Lastly, equipment
drayage to seaports, heavy duty haul-
providers ensure that customers have
age vehicles or smaller vehicles for
a connection to a steady and reliable
city deliveries. This allows the com-
supply of anything from software and
pany to adapt the infrastructure of its
hardware to automated machinery.
organisation to suit its needs whilst
In addition to this, providers such as
leaving room for reassessment in the
Re>Pal and Loscam give the com-
future. Labour providers meet the
pany a choice in what kind of pallets
requirement to fill positions with addi-
or handling materials it wishes to use
tional labour at peak periods to relieve
throughout its operations. w w w.suppl yc ha i ndi gi ta l. com
LF LOGISTICS
24
“ We’re very focused on remaining a leading 3PL in Asia, and if there are countries we could expand into then we will ensure that expansion is in line with our customers requirements so they can grow their business with us” — Simon Oxley, Executive Vice President – Global Business Development & Head of Indonesia, LF Logistics
DECEMBER 2019
The ability of LF Logistics to serve a vast array of requirements, whilst maintaining a trusted network of partners, enables a customer to streamline the growth of its business across individual sectors, through a tried and tested process. This level of holistic integration extends across many LF Logistics systems. Oxley elaborates; “The Oracle Transport Management system allows us to process orders. If we move to a new market we are able to seamlessly provide this same operational system. So, if a brand moves
25
to a new market and needs a 3PL pro-
represents half the world’s population.
vider, it will already have an integrated
Of all the global consumer spending
system with us and that’s one less
growth in the next 12 years, 84% of
obstacle to entry in a new region.”
that is forecast to be within Asia. We’re
Over the past two years LF Logistics
very focused on remaining a leading
has seen 100% growth across the
3PL in Asia, and if there are new mar-
business in Indonesia and continues to
kets we could expand into then we will
grow throughout the Asian region. By
ensure that expansion is in line with our
developing in familiar territory it can
customers’ requirements, so they can
improve upon the services it can offer
grow their business with us.”
its clients, whilst taking advantage of the economic opportunities provided by one of the fastest growing markets in the world. “The area we operate in w w w.suppl yc ha i ndi gi ta l. com
P R O C U R E M E N T T R A N S F O R M AT I O N
26
DECEMBER 2019
SHOWCASING BLOCKCHAIN IN THE SUPPLY CHAIN SPACE Jorg Junghanns, Vice President Europe, Digital Supply Chain of Capgemini, discusses the importance of establishing a strategic blockchain approach while ensuring customer-centricity in the supply chain space
WRITTEN BY
SE AN GA LE A-PACE
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27
P R O C U R E M E N T T R A N S F O R M AT I O N
W
ith technological innovation accelerating on a rapid scale, an increasing number of
companies are beginning to introduce blockchain into their operations in a bid
to counteract cyberattacks. Blockchain is a relatively new technology. Having only existed for just over a decade, it has become a popular component of how companies keep their data encrypted and secure. At its core, blockchain is a chain of blocks, however, instead of a physical chain, there’s digital information (the block) stored in 28
a public database (the chain). Jorg Junghanns, Vice President Europe, Digital Supply Chain of Capgemini, believes it’s important to first establish a clear blockchain strategy instead of implementing it with no direction. “There are several key questions to ask when setting up a blockchain approach,” affirms Junghanns. “What do you want to use it for? Is it the right thing? In what ways are you using blockchain? From there, you can critically assess if blockchain is the right choice.” Having spent 17 years at Accenture, Junghanns has the experience and pedigree to lead Capgemeni’s blockchain strategy. “Both companies operate a similar business model so it wasn’t a major difference,” he states. “At Accenture,
DECEMBER 2019
29
“ We primarily use AI in areas such as demand and network planning as well as fulfillment management” — Jorg Junghanns, Vice President Europe, Digital Supply Chain, Capgemini
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P R O C U R E M E N T T R A N S F O R M AT I O N
“It’s our responsibility to identify a pragmatic solution that helps our clients” — Jorg Junghanns, Vice President Europe, Digital Supply Chain, Capgemini
distinct advantages to leveraging blockchain. “It helps to fix problems such as transparency, trust, IT and process security. However, the blockchain solution only works if there’s a number of partners using it. It’s also important to form the right partnerships to make them part of your solution because convincing others to engage with you on in blockchain is one of the biggest challenges to overcome.” Capgemini offers a diverse range of services that caters to a variety of different sectors such as aerospace
30
& defence, distribution, travel & I gained lots of experience in manage-
transportation, automotive and
ment consulting and it really laid the
telecoms. Junghanns affirms block-
groundwork for me to succeed in my
chain is still in its early concept stage
current role with Capgemini.”
as companies begin to search for the
As a research and advisory company
best ways to utilise it. “The key chal-
that prides itself on delivering the best
lenge is to convince others to engage
service to customers, Capgemini is
with you on the blockchain journey
recognised as a leader in consulting, technology services and digital transformation. With a customer-centric mindset, Capgemini is continuously seeking how to better serve its customers through innovation amidst the ever-changing technological world. As a result, Junghanns points to the DECEMBER 2019
CLICK TO WATCH : ‘CAPGEMINI INVENT TALKS: BLOCKCHAIN IN SUPPLY CHAIN MANAGEMENT’ 31 along with the usual challenges of IT
businesses’ digital transformations.
implementations, the cost involved
However, Junghanns believes there
and ensuring the right partners
is still room for development before
are onboard.”
AI is considered an essential tool
The influence of new technology
industry-wide. “Technology is becoming
can’t be ignored. Over the past decade,
increasingly important, but is AI a key
artificial intelligence (AI) and Big Data
part of all businesses’ strategies at the
are increasingly impacting how
moment? Not yet,” explains Junghanns.
businesses conduct operations. With
The scale of what tomorrow’s
companies worldwide searching for
technology could be is staggering. The
ways to leverage new tech in a bid to
supply chain industry remains keen to
speed up their existing processes and
introduce technologies such as ML
differentiate from competitors, this has
and AI to enhance productivity and
led to AI and machine learning (ML)
streamline operations. “We primarily
becoming prominent features of
use AI for demand and network w w w.suppl yc ha i ndi gi ta l. com
P R O C U R E M E N T T R A N S F O R M AT I O N
“ It’s about putting our client’s needs at the heart of what we do” — Jorg Junghanns, Vice President Europe, Digital Supply Chain, Capgemini
planning as well as fulfillment manage32
ment,” he says. “We’re continuously looking at how we can include AI to better serve our clients but we certainly don’t rely on it.” With staying ahead of the curve paramount to success, Junghanns believes in the importance of juggling innovation with customer-centricity. “It’s our responsibility to identify a pragmatic solution that helps our clients. We have to be ahead of the latest trends,” he explains. “However, we must ensure we tailormake solutions to our clients’ needs and integrate new technologies based on what they really want.” It’s fair to say Capgemini values its customers. With customer-centricity recognised as DECEMBER 2019
a core part of the company’s corporate values, Junghanns believes his firm’s success rests on how it treats its customers. “We’re fair, frank and open. We believe that we can help our customers achieve their targets more efficiently than anyone else. It’s about putting our client’s needs at the heart of what we do.” Looking to the future, Junghanns has a clear vision for the future of the supply chain industry. “It’s clear that technology is the future of the supply chain space,” he says. “We’re currently working with our customers on ‘no touch supply chains’. We want to free up supply chain professionals and allow a greater focus on strategic thinking to enable better decisions to be made. We want to make life easier for the millions of executives working in supply chain. The future is full of uncertainties and exceptions but it’s how you manage these challenges that ensures you succeed in the future.”
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33
COVERING EVERY ANGLE IN T HE D I G I TA L A G E The Business Chief platforms offer insight on the trends inf luencing C and V-level executives, telling the stories that matter
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H AV E Y O U S E E N O U R O T H E R T I T L E S ?
D I G I TA L I S AT I O N
TALENT MANAGEMENT WITHIN LOGISTICS
36
Lindsay Bridges, Senior Vice President of HR, Deutsche Post DHL (DPDHL) Supply Chain, UK and Ireland, discusses talent management at DHL WRITTEN BY
GEORGIA WIL SON
DECEMBER 2019
37
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D I G I TA L I S AT I O N
D
eutsche Post DHL (DPDHL) Group
is a world leader when it comes
to mail and logistics. The group
operates under two brands: Deutsche Post provides postal services to Europe and
DHL offers international express, freight transportation, e-commerce and supply chain management services. Lindsay Bridges, Senior Vice President of HR, Deutsche Post DHL (DPDHL) Supply Chain, UK and Ireland, has worked at DHL for 25 years. Bridges began her career at 38
DHL in an operational role before moving to HR. Over the last 12 years, Bridges has led HR functions in multiple regions around the world. Today, Bridges leads the HR function for the UK and Ireland. Bridges describes DHL as, “a diverse, and globally connected business, that is exciting to work for. The opportunity to progress and develop within the company both in the UK and abroad for the individual is endless. Many of our colleagues have moved around the world with the company.� Over the last 16 months, Bridges has not only been focusing on traditional HR functions of talent learning and development, but driving engagement and a change in culture too.
DECEMBER 2019
39
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D I G I TA L I S AT I O N
“WE CONTINUOUSLY COMMUNICATE WITH OUR COLLEAGUES, ENSURING THEY HAVE THE NECESSARY TOOLS TO UPSKILL WHERE NEEDED” — Lindsay Bridges, Senior Vice President of HR, Deutsche Post DHL (DPDHL) Supply Chain, UK and Ireland
“We want to strengthen our core
40
business, DHL’s Strategy 2025 provides a framework for accelerating opportunities,” says Bridges, who highlights that talent management is an important aspect of her role. “Logistics is a marketplace driven by the employee,” continues Bridges. “It is important that our talent strategy ensures DHL hires and manages its employees effectively in order to develop their skills and progress them within the business.” In order to do so, DHL uses a lifecycle approach that clearly maps out an employee’s journey. “There are key ‘moments that matter in an employee’s journey that DECEMBER 2019
CLICK TO WATCH : ‘DHL SUPPLY CHAIN: ONE TEMPLATE, ONE SYSTEM, ONE WAY OF WORKING’ 41 are an integral aspect of how we
groups - show us that those who have
manage and maintain talent,” says
clearly defined career paths stay with
Bridges. When it comes to retaining
us longer,” comments Bridges. “We’ve
talent, Bridges acknowledges that
used this data to create bespoke
expectations are changing, “candi-
employee journeys, tailored to specific
dates want to work for more than just
groups of individuals,” she adds.
a pay cheque. They want a flexible
To manage performance at DHL,
career, clear progression and
“colleagues have regular feedback
managers that act as mentors,”
sessions with their line managers to
continues Bridges. With the help of
ensure there is a two-way conversa-
data analytics, DHL has been devel-
tion about performance which is then
oping these key areas to further
fed into a bespoke employee map
improve inclusivity as well as increase
outlining their journey, objectives and
staff retention. “Our data points - gener-
goals.” Bridges also notes, in 2019,
ated by running focus and listening
DHL piloted an employee experience w w w.suppl yc ha i ndi gi ta l. com
D I G I TA L I S AT I O N
management tool which includes
leaders through programmes to
coaching, mentoring and practical
reinforce culture, instil values, and
development plans.
create a sustainable leadership.”
Looking back on the evolution
When it comes to maintaining
of HR functions, Bridges highlights
and developing talent, DHL offers
that “HR has shifted. Strategic HR has
its employees a ‘Certified Specialist
always been on the agenda but it is
Programme’ that provides a suite
being elevated.” DHL’s talent strategy
of products, delivered by subject
is now focused on making its recruit-
matter experts to enhance leadership,
ment process more efficient and
operations and functions capabilities.
effective using ‘competency-based’
“We place emphasis on practical
recruiting and automation. “We want
application of learning and on the
to better develop managers and
job learning, while empowering
42
“ LOGISTICS IS A MARKETPLACE DRIVEN BY THE EMPLOYEE” — Lindsay Bridges, Senior Vice President of HR, Deutsche Post DHL (DPDHL) Supply Chain, UK and Ireland
DECEMBER 2019
colleagues to take control of their
through our operations as well as for
development,” says Bridges. In
employees leading a department and
addition to the company’s ‘Certified
looking to make the next steps into
Specialist Programme’, DHL wants
senior management.” DHL also
to upskill its workforce at all levels,
partners with
specialist
through tailored programmes that
training
align to business needs and priorities.
providers
“We have developed our own
to offer
training schools for ware-
appren-
house colleagues and drivers looking to progress
ticeship schemes ranging from a level two 43
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D I G I TA L I S AT I O N
“ WE WANT TO BETTER DEVELOP MANAGERS AND LEADERS THROUGH PROGRAMMES TO REINFORCE CULTURE, INSTIL VALUES, AND CREATE A SUSTAINABLE LEADERSHIP” — Lindsay Bridges, Senior Vice President of HR, Deutsche Post DHL (DPDHL) Supply Chain, UK and Ireland
qualification (equivalent to two GCSE’s) 44
through to a level seven qualification (equivalent to a Masters). With sustainability and digital transformation being key 2019 trends within the business world, Bridges highlights that it is talent and good leadership that provides DHL with a competitive advantage. “We continuously communicate with our colleagues, ensuring they have the necessary tools to upskill where needed. As we adopt cleaner and greener technology into our fleet, we make sure our drivers are fully informed and coached.” In addition, DHL now offers a robotics engineer apprenticeship for employees to upskill their talent as technology continues to advance. DECEMBER 2019
Reflecting on the company, Bridges believes that DHL’s ‘Certified Specialist Programme’ is the company’s biggest success to date within talent management, which the company will be continuing to develop to ensure cohesion across the business. In addition, Bridges advocates that DHL’s strengths when it comes to talent management are, its global presence, its employee journey mapping process and its talent programmes. “We have defined the moments that matter the most to our employees and this has had a positive effect on onboarding, engagement, retention and productivity metrics.” DHL continues to aspire to be agile enough to quickly identify competency gaps to deliver training, e-learning, or development programs where needed, as well as utilising these gaps to inform how the company hires the right people.
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45
S U S TA I N A B I L I T Y
48
SEEKING A GREENER FUTURE IN THE SUPPLY CHAIN SPACE Alex Saric, Chief Marketing Officer (CMO) and smart procurement expert at Ivalua, discusses how his firm can achieve a more sustainable future by welcoming collaboration in the supply chain industry WRITTEN BY
DECEMBER 2019
SE AN GA LE A-PACE
49
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S U S TA I N A B I L I T Y
W
ith a drive to unlocking significant strategic value within a company’s spend and supply chain,
Ivalua provides software solutions to supply chain and procurement leaders in order to digitally transform business processes. Recognised as a ‘Leader’ by Gartner in the consulting company’s Procure-to-Pay Magic Quadrant 2019, Ivalua’s industry-leading Source-to-Pay suite empowers procurement and supply chain leaders to fully digitise all processes, manage spend categories and improve transparency and data quality. 50
The firm also harbours a vision of a greener future, which it strives to achieve through the provision of powerful sustainability capabilities that support customers’ CSR initiatives in several ways. Alex Saric, Chief Marketing Officer (CMO) and smart procurement expert at the business, discusses how a greener supply chain can ultimately be achieved through harnessing collaboration in the space. How would you describe Ivalua? What gives it an edge over competitors? We provide a solution that truly works for customers, whether they are just getting started with supply chain digitisation or are already leaders looking to build a competitive advantage. Year after year, Ivalua leads DECEMBER 2019
the industry with a retention rate of over 98%. Ultimately, Ivalua keeps customers from having to make the compromises typical in the supply chain industry. The first is between realising rapid time-to-value or having the flexibility to meet unique or evolving requirements. The platform is extremely flexible, but Ivalua has pre-packaged solutions for industries to enable the deployment of tailored best practices as quickly as competitors can deploy generic ones.
51
The second compromise is between digitising the complete source-to-pay (S2P) suite with a unified suite or having best of breed capabilities in the specific processes (excluding sourcing). Ivalua provides a complete suite but is also ranked as leader for its specific modules across the full S2P process. How do you help businesses to achieve true sustainability in procurement? We offer an extremely robust supplier management solution, ranked a ‘Leader’ in Forrester’s current SRPM Wave report, to manage suppliers, w w w.suppl yc ha i ndi gi ta l. com
S U S TA I N A B I L I T Y
52
including robust questionnaires to
In what ways can a greener future be
gather needed certifications and other
achieved in the supply chain space?
information directly from suppliers.
Supply chains are absolutely critical
Its unified data model and powerful
to us achieving a greener future. They
reporting lets customers have a true
determine what goes into the products
360-degree visibility of suppliers.
we consume, how they are produced
To augment customers’ own data
and how they are delivered to us. The
provided by suppliers with third party
key is improving supply chain collabora-
information, Ivalua has integrations
tion. Overly prescriptive approaches
to common sources of supplier data,
of dealing with suppliers ties their hands
such as Ecovadis. We offer an add-on
and makes them miss out on opportuni-
that includes pre-built integrations to
ties to improve. If companies instead
Ecovadis’ supplier data and pre-pack-
include green goals along with their
aged CSR reports.
other ambitions, and then give suppliers
“ SUPPLY CHAINS ARE ABSOLUTELY CRITICAL TO US ACHIEVING A GREENER FUTURE” DECEMBER 2019
CLICK TO WATCH : ‘IVALUA OVERVIEW VIDEO 2019’ 53 flexibility on how to best achieve those,
Can you talk through Ivalua’s Pro-
great things are possible. Suppliers are
curement Empowerment Platform?
the experts in their fields and best
What are the key benefits?
suited to find creative ways to produce
Ivalua’s platform helps unlock the full
an item using new processes, designs
value of its customers and suppliers
or materials that can not only be greener
spend. We aim to help reduce costs
but potentially also cheaper and of
through improved sourcing and
greater value to end customers. Some
efficiency improvements. But it also
companies do engage collaboratively
helps customers achieve all their
with suppliers, but usually only a handful
growing objectives, such as accelerating
of suppliers for a subset of the goods
innovation, mitigating risks and growing
and services they buy. Technology can
revenue. Take Meritor for example,
help scale that collaboration to address
which has digitised the full supplier
more suppliers and categories, helping
lifecycle, including configuring a unique
everyone win, including the environment.
approach to new product introductions w w w.suppl yc ha i ndi gi ta l. com
S U S TA I N A B I L I T Y
54
through Ivalua’s platform. As a result,
where and, thanks to the platform’s
the company was able to launch more
unified data model, see everything.
products with greater margins. Our platform is truly comprehensive,
In what ways do you help to ensure
so customers can manage all spend,
that procurement unlocks significant
including direct materials, services and
strategic value from a company’s
even assets/tooling, and digitise all
spend and supply chain?
S2P processes. Ivalua realises
There are three areas. Firstly, Ivalua
companies want to start at different
helps companies achieve extremely
points and get up and running quickly.
high levels of digitisation and automation,
You can start anywhere, go every-
which frees capacity normally consumed
DECEMBER 2019
“ IVALUA’S PLATFORM HELPS UNLOCK THE FULL VALUE OF ITS CUSTOMERS SPEND AND SUPPLIERS”
55
by tactical, manual processes for more
where you need a lot of information
strategic activities. Ivalua drives very
sharing or back and forth. A great
high levels of supplier onboarding
example is on new product introductions,
and user adoption, with customers
which customers can fully digitise. That
routinely seeing over 98% of suppliers
requires much deeper collaboration
onboarded and 100% user adoption.
than just coordinating shipments and
Secondly, the platform enables
invoice timing. The platform supports
broad and deep collaboration with
both types of collaboration at scale.
suppliers. Broad in that collaboration
Thirdly, Ivalua provides complete
is possible on virtually any process in
transparency. Ivalua’s unified data
the platform, and deep for those areas
model and master data management w w w.suppl yc ha i ndi gi ta l. com
S U S TA I N A B I L I T Y
capabilities mean a user can see everything that has or is taking place, including a true 360-degree view of suppliers, and have actionable insights at their fingertips to act on opportunities.
“ INNOVATION IS ABSOLUTELY CRITICAL�
With a high value placed on enabling companies to make better decisions, how important is keeping up with the latest trends to ensure you are delivering exactly what your customers need? How important is innovation? 56
Innovation is absolutely critical. Customers, especially consumers, have become accustomed to continuous innovations and those companies
and suppliers. Building the right
that can deliver over and over again
relationship, where you are the
will be the winners. That means building
customer or partner of choice, is key
a culture that constantly gathers and
to unlocking the full potential of your
assesses customer expectations and
supply chain to drive innovation.
an approach to capture the best ideas and bring them to your customers in the
What does the future look like
form of innovative goods and services. It
for Ivalua?
also means leveraging all the channels
In a word, bright. Ivalua certainly
and knowledge at your disposal. That
has accelerating momentum at the
includes internal ones such as employ-
moment. But more importantly,
ees and your own customer engage-
our entire approach around enabling
ment channels. And it increasingly
more effective engagement and
includes external ones such as partners
collaboration with suppliers puts
DECEMBER 2019
57
us in a unique position to deliver value.
with suppliers across the organisation
Ivalua’s supplier-friendly model drives
and better collaborate across stake-
extremely high levels of suppliers
holders. This overall approach and
onboarding. The platform was
architecture means no one is better
designed to maximise supplier visibility
positioned to empower customers to
and collaboration. Customers can
collaborate with suppliers – a function
collaborate with suppliers on all
that is becoming critical.
processes spanning the full supplier lifecycle, from assessing suppliers, co-developing products, forecasting orders, shipping, payments and more. The unified data model and vendor master data management capabilities allow customers to see all activity w w w.suppl yc ha i ndi gi ta l. com
T O P 10
58
DECEMBER 2019
59
Supply Chain Digital counts down the top 10 companies featured in the magazine and on the website during 2019 by revenue WRITTEN BY
SEAN GALEA-PACE
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T O P 10
60
10
Starbucks
[ HQ: SEATTLE, USA ]
One of the world’s leading coffee chains, Starbucks boasts more than 25,000 stores across six continents. Having substantially increased its influence in China, the firm now operates over 3,500 branches in the country with plans to expand to 5,000 outlets by 2021. In 2008, Starbucks created a three-step supply chain transformation plan in a bid to realign and achieve significant success. It would reorganise and simplify its supply chain, cut costs and improve service while also to be more sustainable. This has subsequently led to Starbucks developing greener stores, rewarding customers that reuse cups, preserving water and reducing its environmental footprint.
DECEMBER 2019
1971
YEAR FOUNDED
$24.7bn APPROXIMATE REVENUE (US)
291,000 NUMBER OF EMPLOYEES
09
SAP ARIBA
61
[ HQ: PALO ALTO, USA ]
1996
SAP Ariba is considered the go-to place for companies to connect and conduct business together. The leading
YEAR FOUNDED
global spend management network, SAP Ariba allows businesses to monitor spending and reduce costs by enabling buyers and suppliers to collaborate with each other. SAP Ariba’s spend management solutions allow firms to digitise and simplify processes through an end-to-end,
$27.3bn APPROXIMATE REVENUE
3,636
single integrated platform in the cloud. Through the Ariba Network, buyers and suppliers from over 190 countries
NUMBER OF EMPLOYEES
transact US$3trn in business commerce annually. The company ranked in first place in Supply Chain Digital’s top 10 software companies worldwide in the October issue.
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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
08
Coca-Cola [ HQ: ATLANTA, USA ]
1886
The beverage giants offers over 500 brands in more than 200 countries. With an established and extensive
YEAR FOUNDED
portfolio, Coca-Cola’s brands include its eponymous
$31.9bn
cola, Fanta, Sprite, Powerade and Minute Maid among many others. The company has firm sustainability objectives and featured in the top 10 largest sustainable supply chains worldwide in September. Coca-Cola aims to collect a bottle or can for every one it sells by 2030 and it’s working towards becoming greener through packaging initiatives.
APPROXIMATE REVENUE
62,600 NUMBER OF EMPLOYEES
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63
T O P 10
07
Nike
[ HQ: BEAVERTON, USA ]
As one of the largest manufacturers of athletic footwear and apparel, Nike is renowned for its product quality, innovative designs and unique marketing style. Nike’s products are manufactured in over 40 countries and it operates 525 factories worldwide. The company has a diverse network of suppliers and operates a smart, efficient and agile supply chain. In order to help achieve its sustainability ambitions, Nike opened its North America logistics campus in Memphis, Tennessee. 64
The facility is set across 2.8mn sq ft and helps the company align to its sustainability endeavours as well as meeting customer demands.
DECEMBER 2019
1964
YEAR FOUNDED
$34.3bn APPROXIMATE REVENUE
73,100 NUMBER OF EMPLOYEES
06
Accenture
[ HQ: DUBLIN, IRELAND ]
65
1989
The company specialises in consulting, strategy, technology and digital operations. Accenture works with
YEAR FOUNDED
clients to enable innovative supply chain strategies that drive profitable growth and cater to a variety of industries including the automotive, travel and energy sectors among many others. The firm prioritises sustainability and was recognised as the leading sustainable supply chain in September’s magazine. Kai Nowosel, Chief Procurement Officer at Accenture, commented: “With a multi-billion-dollar supply chain, Accenture has the
$41.6bn APPROXIMATE REVENUE
492,000 NUMBER OF EMPLOYEES
purchasing power to drive positive change on a global scale, creating a more economically inclusive world and helping to shape the future of procurement.”
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Supply Chain Efficiency Demands a World-Class Supplier.
Put Your Trust in a Vertically Integrated Partner. Committed to Sustainability. Driven by Innovation. Graphic Packaging International is an integrated supplier of paperboard, cartons and machinery. We deliver packaging solutions and machinery systems using state-of-the-art technologies. Brand owners around the globe rely on us for our unwavering focus on quality and efficiency. Our products are made from paperboard, a recyclable material and made from renewable resources. When you choose Graphic Packaging International, you’re making a sustainable choice for the environment and your business. Ask us about our alternative paperboard solutions to plastic shrink film and rings. Learn more at graphicpkgeurope.com
Š2019 Graphic Packaging International the wholly-owned operating subsidiary of Graphic Packaging Holding Company (NYSE: GPK)
05
67
Intel
[ HQ: SANTA CLARA, USA ]
Through its technology solutions, the tech giants play a major part in helping its customers to achieve a digital transformation. In recent years, Intel has transformed its own supply chain into a modern “glass pipeline” that improves decision-making capabilities and business agility. Powered through its integrated data platform (IDP), the system features SAP HANA as part of a significant $208mn investment strategy. Intel featured in March’s top 10 global supply chains.
1968
YEAR FOUNDED
$70.8bn APPROXIMATE REVENUE
110,200 NUMBER OF EMPLOYEES
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T O P 10
68
04
Nestlé
[ HQ: VEVEY, SWITZERLAND ]
As one of the world’s leading food and beverage companies, Nestlé operates over 2,000 brands and is active in 189 countries worldwide. Having worked towards achieving its commitment of zerodeforestation by 2020, Nestlé now predicts “over 90% of its key agricultural commodities to be verified deforestation-free by the end of 2020, which has increased from 77% at the start of 2019”. Nestle ranked seventh in Supply Chain Digital’s top 10 global supply chains in March.
DECEMBER 2019
1866
YEAR FOUNDED
$92bn APPROXIMATE REVENUE
328,000 NUMBER OF EMPLOYEES
03
Microsoft
[ HQ: REDMOND, USA ]
The technology powerhouse, Microsoft, aims to empower every person and organisation worldwide to achieve more. Microsoft helps people achieve their potential through cutting edge procurement practices and serves diverse markets globally. Conducting operations in 170 countries around the world, the company has established four key focus areas in a bid to achieve a more sustainable future in the areas of climate, agriculture, biodiversity and water. Microsoft ranked eighth in the top 10 largest
1975
YEAR FOUNDED
$125.8bn APPROXIMATE REVENUE
144,100 NUMBER OF EMPLOYEES
sustainable supply chains worldwide in September.
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69
T O P 10
02
Amazon
[ HQ: SEATTLE, USA ] A global leader in e-commerce, Amazon offers a diverse range of services. The company operates under the divisions of Amazon Logistics, Amazon Web 70
Services, Amazon Prime and Amazon Retail. Considered one of the “Big Four” alongside Google, Facebook and Apple, Amazon is customer-centric under the leadership of CEO and founder, Jeff Bezos. The firm has over 850 warehouse and distribution centres in 22 countries and has recently accelerated its interest in logistics, as featured in November’s edition of Supply Chain Digital.
DECEMBER 2019
1994
YEAR FOUNDED
$232.9bn APPROXIMATE REVENUE
647,500 NUMBER OF EMPLOYEES
71
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T O P 10
01 Apple
[ HQ: CUPERTINO, USA ] The tech giant is one of the world’s leading brands and is also a member of the “Big Four”. The annual release of new products, such as the newest generations of iPhone and iPad, cause a significant spike in sales every year. 72
Founded originally by Steve Jobs, Steve Wozniak and Ronald Wayne in 1976, Apple has enjoyed staggering success over the past 43 years and, in 2018, became the first US company to be valued at over $1trn. With sustainability considered a key pillar at Apple, the company has made a concerted effort to be greener through the launch of new products, with the MacBook Air and Mac mini made from 100% recycled aluminum.
DECEMBER 2019
1976
YEAR FOUNDED
$258.5bn APPROXIMATE REVENUE
132,000 NUMBER OF EMPLOYEES
73
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EVENTS & A S S O C I AT I O N S
The biggest industry events and conferences WRITTEN BY SEAN GALEA-PACE from around the world
9–10 DEC 2019
2 DEC 2019
Oil & Gas Supply Chain Compliance 74
International Conference on Supply Chain Planning in Uncertain Environments
[ HOUSTON, TEXAS ]
[ LONDON, UNITED KINGDOM ]
The one-day event will centre around
The conference is a federated organi-
supply chain compliance, risk and audit-
sation that aims to provide a range of
ing, as supply chain professionals gather
diverse scholarly events for presenta-
to discuss the regulatory issues and
tion within the conference programme.
trends that are creating problems in
The event will bring leading academic
supply chains worldwide. With digitalisa-
scientists, researchers and research
tion becoming an essential tool in supply
scholars together to exchange their
chain management, the conference pro-
experiences and enable research
vides insight into the ever-changing
results on a number of different aspects
space and offers advice on embracing
of supply chain planning in uncertain
the latest trends. There are several
environments. The meetup will create
global oil and gas companies set to be
a platform to discuss the most recent
in attendance, such as Halliburton,
innovations, trends and concerns
Weatherford and Marathon Oil.
in the supply chain field.
DECEMBER 2019
21–22 JAN 2020
5th Annual Strategic Sourcing and Procurement MENA Summit [ DUBAI, UAE ]
27–30 JAN 2020
ship and digital procurement solutions
Temperature Control & Logistics 2020
from top cross-industry players,
[ DUSSELDORF, GERMANY ]
Dubai’s event will focus on the impor-
Recognised as the industry’s foremost
tance and future of digital procurement
operational and hands on conference,
in the supply chain industry. Repre-
the event centres around logistics,
sentatives from leading banking, retail,
supply chain and temperature controlled
pharmaceutical, aviation and other
for the pharmaceutical industry. Now
international firms will discuss how
in its 19th year, there are expected
to gain a leading position on the
to be over 400 attendees, 60 expert
market. Offering attendees great
speakers and 60 sponsors from solution
networking opportunities and the
providers across the entire supply chain
opportunity to partake in important
industry spread across the three-day
discussions with senior-level decision
event. There is set to be logistics giants
makers, the event is expected to be
such as FedEx, DHL and Kuehne &
well attended.
Nagle all in attendance.
Providing cost saving, supplier relation-
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75
EVENTS & A S S O C I AT I O N S
21 FEB 2020
IRU Logistics and Innovation Forum [ LONDON HEATHROW, UNITED KINGDOM ] Offering road transport companies 76
30–31 JAN 2020
Supply Chain Finance Summit
and stakeholders the opportunity to network with like-minded professionals in the industry, the event will play
[ AMSTERDAM, NETHERLANDS ]
host to experts in the transport and
Now in its fifth year, the Supply Chain
logistics industry. Recognised as “the
Finance Summit provides a great
new networking hub for innovative
opportunity to learn about the latest
road transport solutions,” the meetup
trends, ideas and developments in the
will provide attendees with insight
industry. The event showcases the lat-
into the newest solutions driving the
est innovations in the supply chain
industry forward. There are a number
space for both domestic and cross-bor-
of key themes set to be discussed this
der financing, examines the future of
year, such as fleet management and
technology-enabled supply chain mod-
the digitalisation of the supply chain,
els and increases the access to supply
which includes distribution and ware-
chain finance for emerging markets.
house systems.
DECEMBER 2019
17–18 MAR 2020
26–27 FEB 2020
Defence Supply Chain and Logistics [ LONDON, UNITED KINGDOM ]
Supply Chain Conference
[ LONDON, UNITED KINGDOM ] Now in its 17th year, the event welcomes over 200 professionals and provides the opportunity to network, learn and
The event is set to address the
connect fellow supply chain and logistics
challenges to both logistics and
professionals together under one roof.
engineering commanders to ensure
The Supply Chain Conference will zone
mobility and capability is maintained
in on how to maximise efficiency, reduce
within the combat force. The two-
costs and future proof supply chain
day conference will centre around
operations in the industry. Thought
enabling mobility, momentum and
leaders like Laura Bacon, Integrated
capability through identifying
Business Planning & Operations
innovative, cost-efficient solutions
Manager of Nando’s, and Tom Rose,
to modernise operational capabilities
Head of International Operations at
such as robotic and autonomous sys-
SPAR International, are scheduled
tems in the supply chain.
to speak at the event.
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77
78
DECEMBER 2019
RHENUS INDONESIA 79
OVERCOMING SUPPLY CHAIN CHALLENGES IN INDONESIA WRITTEN BY
SEAN GALEA-PACE PRODUCED BY
CAROLINE WHITELEY
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P T. R H E N U S P R O J E C T L O G I S T I C S I N D O N E S I A
SARI SAFIANTI, MANAGING DIRECTOR OF RHENUS PROJECT LOGISTICS INDONESIA, DISCUSSES HER COMPANY’S SUPPLY CHAIN STRATEGY IN THE FACE OF LIMITED IT INFRASTRUCTURE IN THE COUNTRY
A
s an international freight and logistics forwarding company, Rhenus Project Logistics Indonesia is part of Rhenus
Group and specialises in air, ocean and road freight. Operating as just one component of the larger 80
Rhenus Logistics Worldwide Organisation, Rhenus holds locations all over the globe. Following the company’s expansion into Indonesia in 2017, Rhenus’ headquarters is located in the capital of the country, Jakarta; it has an additional two offices in Semarang and Surabaya. The company offers a project logistics service which focuses on transporting heavy equipment and building parts, for the oil and gas, mining, power, electrical and construction industries. However, Sari Safianti, Managing Director of Rhenus Indonesia, recognises that the nation is a challenging market to operate in. “Indonesia is a developing country where operations don’t run as easily as they do in Europe,” she admits. “When you invest money in Indonesia, it’s important to remember that you’re not likely to see a return on the investment for at least six months to a year.” DECEMBER 2019
81
With a population of over 270mn, Indonesia is the fourth most populous country in the world. Safianti affirms one of the biggest challenges to overcome is finding a way to manage the 17,500 islands in Indonesia. “We have to ensure we’re granted logistics custom clearance more quickly. In Europe, this can be completed within hours, however, in Indonesia, it could take between five days and two weeks,” she explains. “This is especially true if there’s any issues with the documents or discrepancies on the physical goods.” w w w.suppl yc ha i ndi gi ta l. com
P T. R H E N U S P R O J E C T L O G I S T I C S I N D O N E S I A
“IT’S UP TO US TO KNOW WHAT THEIR NEEDS ARE AND HOW WE CAN BEST FULFIL THEIR REQUIREMENTS TO DELIVER ON OUR PROMISES” — Sari Safianti, Managing Director, Rhenus Indonesia
82
DECEMBER 2019
CLICK TO WATCH : ‘WOMEN IN BREAKBULK-BEYOND LOGISTICS: WIDE RANGE OF OPPORTUNITIES FOR WOMEN IN PROJECT CARGO’ 83 Due to technology having a sig-
check where they are at all times but
nificant influence on how businesses
unfortunately, this isn’t supported
conduct operations globally, most
for all areas in Indonesia yet.” With
companies are keen to implement new
Indonesia recognised as one of the
processes whenever they can. With its
world’s most populous countries, the
European locations kitted out with the
potential ability that technology has in
latest IT infrastructure, Safianti admits
the country is staggering. With artificial
Rhenus Indonesia isn’t where it needs
intelligence, machine learning and big
to be from a technological standpoint.
data playing a prominent role in the
“Indonesia still has work to do. We’re
operations of a vast number of supply
not there yet in comparison to some of
chains worldwide, Rhenus has seen a
our operations in European countries,”
clear gap to its European counterparts
she explains. “For example, equipping
open up. “Indonesia has begun digitis-
GPS on trucks is an important tool. We
ing its supply chains, but it is mostly
want to control our trucks and time
centralised in Jakarta at the moment,” w w w.suppl yc ha i ndi gi ta l. com
PT. Karana Line Reliable partner in shipping and logistics Established in 1967 , PT. Karana Line is one of the most experienced and trusted shipping group in Indonesia. Experienced Management, sound finance, own branches manned by professional team and investment in People, equipment and digitalization has made the company trusted by many clients worldwide. Main Services are: - Ship owning - Ship Agency and Stevedoring - Chartering and broking - Depot container - Freight Forwarding - Logistics Support
PT. KARANA LINE RELIABLE PARTNER IN SHIPPING AND LOGISTICS
SHIPOWNING & CHARTERING
SHIP AGENCY & STEVEDORING
Learn More karana.co.id
+62-21-43934356 FREIGHT FORWARDING & CONTAINER DEPOT
2017
Year founded
€6.5mn+ Approximate Revenue
15
Number of employees DECEMBER 2019
explains Safianti. “There’s a lot of startup
to deliver on our promises. Once our
companies that are beginning to do well
customers recognise our commitment
in Indonesia. However, leveraging tech-
towards them, they’ll want to continue
nology remains a big task for the country.”
to work with us. With this mutual trust
Rhenus values customer-centricity
in place, I believe this will help us to
and delivers comprehensive project
achieve long-term sustainability.”
solutions tailored to ensure the needs
Growth is an important focus area for
of its customers are met. “We like to
Safianti. With just six employees a year
focus on select industrial sectors to
ago, Rhenus Indonesia has since dou-
understand as much as we can about
bled the number of its workers. “The
a customer,” says Safianti. “It’s up to us
team is already growing significantly,”
to know what their needs are and how
she says. “We have a number of differ-
we can best fulfil their requirements
ent locations of the project as well as of 85
E XE CU T I VE PRO FI LE
Sari Safianti Sari Safianti started her career in logistics at the age of 18, and at the bottom. Despite the few women in the industry, her measurable performance rapidly led her to work with different international companies at the top level. She is well known for being one of the few women leaders in Indonesia with over 25 years of experience in logistics. In 2019, she received the “Indonesia Woman Leadership Award” from CMO Asia. Her experience is known to be broad in the logistics industry and covers automotive, FMCG, semiconductor, chemical, cosmetics, high-end retail, manufacturing, geothermal, power, engineering and construction.
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P T. R H E N U S P R O J E C T L O G I S T I C S I N D O N E S I A
86
DECEMBER 2019
“WE’RE OPTIMISTS AND HAVE OUR OWN TIMELINE OF WHAT WE WANT TO ACHIEVE IN THE NEAR FUTURE” — Sari Safianti, Managing Director, Rhenus Indonesia
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87
P T. R H E N U S P R O J E C T L O G I S T I C S I N D O N E S I A
our subsidiary companies. We operate all over Indonesia.” Rhenus Indonesia has developed a strategic partnership with PT Karana Line to drive operations forward. Safianti believes in the importance of establishing mutually beneficial business relationships and looks for “trust, communication, commitment, and consistency” when seeking to begin a new collaboration. Looking to the future, Safianti has a clear vision of the position she 88
expects her firm to be in over the next
DECEMBER 2019
89
few years. “We’re optimists and have
implemented rapidly on a global scale,
our own timeline of what we want to
it’s clear the industry is moving in that
achieve in the near future. Ultimately,
direction. I expect that the combination
we want to ensure we become more
of technology and the supply chain will
sustainable,” she affirms. Safianti
drive efficiency forward and save com-
expects the supply chain space in
panies money. It’s only a matter of time
Indonesia to continue to accelerate as
before it’s fully embraced here too.”
technology becomes a bigger player in the Indonesian market. “The supply chain industry is growing and I expect it to continue, not just in Indonesia but worldwide too,” she says. “At the moment, Indonesia is very traditional. However, with digitisation being w w w.suppl yc ha i ndi gi ta l. com
90
Packaging solutions to solve sustainability WRITTEN BY
OLLIE MULKERRINS PRODUCED BY
CAROLINE WHITELEY
DECEMBER 2019
91
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H U H TA M A K I H O N G K O N G
92
Huhtamaki works with clients to find the most practical sustainable solutions to increase revenue without impacting the environment
H
uhtamaki is a global specialist in the food and drink packaging industry. The company
operates across 35 countries including Europe, Asia, Oceania (EAO) and the US, working across three verticals; flexible packaging, moulded fibre packaging and foodservice packaging. Through these key verticals, Huhtamaki holds sustainability at its core and ensures that it offers an increasingly diverse portfolio of sustainable products and practices to satisfy the rising demand for CSR coming from a more
DECEMBER 2019
93
conscious consumer base. Chi Lu, Head of Sourcing –
to a functional sourcing organisation working within the Foodservice EAO
Foodservice Asia-Oceania at
segment,” explains Chi. “For sourc-
Huhtamaki, outlines the challenges of
ing, I’m part of a group function. Our
maintaining a network of sustainable
team supports manufacturing units in
products across distant locations and
India, New Zealand, Australia, China
evolving cultural shifts. Chi is respon-
and Malaysia, totalling seven factories
sible for the governance of sourcing
and four sales offices operating in the
operations in the Asia Oceania region
Asian Oceania region.”
within the Foodservice segment and
The complexities of finding sustain-
is accountable for managing five
able materials produced by sustainable
direct reports for the traded goods.
manufacturers, who take social respon-
He coordinates projects between
sibility seriously, provides its own
the group and local units. “I belong
challenges. To eliminate the ambiguity w w w.suppl yc ha i ndi gi ta l. com
H U H TA M A K I H O N G K O N G
“In terms of changing from plastic to a more sustainable alternative, there is no challenge – it simply must be done” 94
— Chi Lu, Head Of Sourcing, Food Services Asia and Oceania, Huhtamaki
of operating in smaller departments across a diverse range of countries and cultures, Chi has turned to creating a sourcing hub for traded goods in the Asia Oceania region, where suppliers and materials can be vetted through a single aligned process and set of regulations. To maintain consistency across all of its sourcing methods, Huhtamaki Foodservice EAO has chosen to apply a single centralised sourcing model within its group level. “In the group sourcing organisation, we have a sourcing director who is based in Europe for all the sourcing functions operating with our category buyers,”
DECEMBER 2019
CLICK TO WATCH : ‘PLEASE MEET HUHTAMAKI’ 95 says Chi. “The group function will cen-
practicality of what a material can do
trally source key raw materials, paper,
when trying to replicate the versatility
polymer, resin, ink and logistics for the
and robust nature of plastics. Some
segment manufacturing units. My team
materials may require additional chemi-
looks after third party traded goods
cal additives to achieve a level of quality
and we are based in Asia.”
in line with what a consumer may be
When looking to find alternative
used to from traditional materials.
materials, a number of factors must be
“There are instances where a client
considered beyond the tangible assets
may be used to plastics, yet when turn-
being offered by a prospective sup-
ing to sustainable materials, has very
plier. Maintaining sustainability can be
high standards. Not every supplier will
easy to overlook with the production
pass those strict requirements,” affirms
methods or workforce conditions used
Chi. Another challenge to replacing
to manufacture any given material. As
traditional material like plastic is main-
a juxtaposition to this there is also the
taining its long-term sustainability. An w w w.suppl yc ha i ndi gi ta l. com
H U H TA M A K I H O N G K O N G
96
1920
Year founded
example “typical alternative to plastic utensils is wooden cutlery made from birchwood. Birch tree usually takes about 20 years to mature. In the US
€3.1bn+
alone, there are about 40bn plastic utensils used each year. If you intend to
Total Revenue
replace all 40bn units annually, the end
3,200
considered as a whole. With this in mind,
Number of employees
product wouldn’t be sustainable when we ensure our suppliers source their raw material from a sustainable source.” Huhtamaki is also a creator of sustainable materials. It’s Fresh initiative created a meal tray from natural wood
DECEMBER 2019
E XE CU T I VE PRO FI LE
Chi Lu Chi Lu is an experienced senior strategic sourcing professional with industry experience spanning close to 20 years. He has worked for multinational corporations in Australia, New Zealand and Asia. His work portfolio is extensive, including logistics, medical consumables, dairy, building products/construction, and food packaging. Chi is recognised for his proven track record of improving profitability by delivering sustainable cost saving and being a driving force behind transforming from a transactional price based approach to a strategic focus value proposition model. He has influenced business decision making processes, challenged the status quo, and contributed to the growth of businesses. He has participated in organisational transformations and commercial optimisation projects which have contributed to the growth of businesses considerably. In his current portfolio he is part of a regional leadership team and is currently managing sourcing and sales operations. Prior to this, he served in various sourcing and commercial positions. He has a Bachelor’s Degree in Management Studies with a double major in Finance and Strategic Management and a Master’s Degree in International Business and Law from the University of Sydney. w w w.suppl yc ha i ndi gi ta l. com
97
Quality assurance PPD focuses mainly on thermoformed plastics in food packaging industry. Using high-speed in-line automatic forming machines along with in-house tooling and design team, plus in-depth industry knowledge and expertise in production, we will ensure high quality products to our customers. Learn More
“Our team supports manufacturing units in India, New Zealand, Australia, China and Malaysia, totalling seven factories and four sales offices operating in the AO region.” — Chi Lu, Head Of Sourcing, Food Services Asia and Oceania, Huhtamaki fibres, sourced from FSC certified
a natural alternative to provide one
renewable Nordic forests, in collabora-
solution with the resilience of plastic
tion with Saladworks and Södra. The
packaging. Bagasse is the dry pulpy
material can match the versatility of
fibrous residue that remains after sug-
black plastic but is still recyclable
arcane or sorghum stalks are crushed
and certified for home composting.
to extract their juice. This material can
“Huhtamaki Fresh has ensured
then be processed to create a biode-
the removal of 56 tonnes of hard to recycle black plastic from Waitrose
gradable plastic alternative. The perception of sustainable products can sometimes
& Partners supply chain,
be different from the
per year. The fibre-based
reality. Consumers
packaging is also 10%
may expect sustainable
lighter than conventional
materials to behave
trays and creates a 50%
a certain way on first
reduction in CO2 Emissions,”
impressions without
comments Tor Harris, Head
knowing the details behind
of CSR at Waitrose & Partners.
it. For example, there are
Chi has also turned to Bagasse,
instances of materials that w w w.suppl yc ha i ndi gi ta l. com
99
H U H TA M A K I H O N G K O N G
100
“We ran trials, product samples and negotiated the commercial terms” — Chi Lu, Head Of Sourcing, Food Services Asia and Oceania, Huhtamaki
DECEMBER 2019
may be listed as biodegradable but require certain conditions to act as a catalyst in order to achieve that degradation, such as PLA. “PLA is made from starch and other compound which may be able to decompose into a carbon in a controlled environment; that is industrial composting facilities,” says Chi. “However, there are places that don’t have the industrial composting facilities needed to start this decomposition. Putting it into a landfill is not enough.”
to work with customers to find which materials would best accommodate the customer’s requirements, ensuring a satisfactory outcome for the business and the environment. Chi explains one example where Huhtamaki Foodservice EAO worked with its client to reach a sustainable and economically viable solution. “Our customer’s goal was to find an alternative to plastics by 2020. We were able to work with our customer, understand their requirements, and from there we ran supplier selection, trials, product samples and negotiated the commercial terms. The sourcing and product development process ran within our customer’s specific time line and, by the end, we were able to remove Huhtamaki is also educating customers around achieving sustainability
plastics in that supply chain.” The demand for sustainability is ris-
whilst maintaining high standards for
ing as consumers are unable to ignore
product packaging. The Packaging
the realities of a future reliant on sin-
for Good programme focuses on
gle use products manufactured from
four key themes – people, packaging,
pollutive materials.
supply chain and operations – to offer
“Sustainability is on top of the agenda
Huhtamaki’s expertise and guidance
for Huhtamaki,” summarises Chi. “In
for a company’s CSR goals and within
terms of changing from unsustainable to
Huhtamaki itself.
more sustainable alternatives, there is
By educating consumers on the reali-
no challenge – it simply must be done.”
ties of sustainable materials, Huhtamaki Foodservice EAO segment is able w w w.suppl yc ha i ndi gi ta l. com
101
102
BRENNTAG GROUP: A UNIQUE DIGITAL STRATEGY WRITTEN BY
HARRY MENEAR PRODUCED BY
LEWIS VAUGHAN
DECEMBER 2019
103
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DIGIB
Maarten Stramrood, CDO at Brenntag Group and Managing Director of the DigiB innovation hub, discusses the ongoing digital transformation of the world’s largest chemical and ingredients distributor
A
wave of digital transformation is sweeping across the global business landscape, driven by the rapid technological advance-
ments of Industry 4.0 and the Information Age. 104
From cutting edge robotics to paperless invoicing, companies across every industry are racing to galvanise meaningful change that improves efficiency, increases transparency, and translates into greater value for employees, suppliers, partners, customers and shareholders. Digital transformation is no mean feat. It can be an exhaustive, top-down process that reshapes the internal workings, culture and even purpose of an organisation; it can be a revolution. More often, however, the process more closely resembles something different – something slower, and more considered: evolution. Embodying this process is German chemical and ingredients distributor Brenntag Group and its innovation hub, DigiB.
DECEMBER 2019
105
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DIGIB
“ Create it, launch it, learn from it” 106 “When it comes to digitalisation, our approach is to create it, launch it,
— Maarten Stramrood, CDO, Brenntag Group, Managing Director, DigiB hub
and learn from it,” explains Maarten Stramrood, Chief Digital Officer at
over 580 locations across 76 countries,
Brenntag Group and Managing Director
Brenntag’s decision to establish the
of the DigiB hub in Amsterdam. “We’re
DigiB hub is a bold affirmation of the
not trying to wait until we have a perfect
need for even large-scale companies
situation; we would rather launch some-
dealing with physical products and
thing fast and do it 92% right instead
services to rapidly accelerate their
of delivering a platform or delivering
technological progress. “The business
a project which might be 100% right
we are in is very physical, but you can
but which gets endlessly delayed
enhance and improve the business in
to the point that, by the time it’s ‘ready’,
parts of the supply chain by using
it’s been out of date for two years.”
digital technology,” explains Stramrood.
For a distribution company with more
“I think this is the kind of definition that
than 16,600 employees operating in
we have for digital transformation.”
DECEMBER 2019
CLICK TO WATCH : ‘#ONEBRENNTAGMINUTE WITH MAARTEN STRAMROOD’ 107 Founded in 1874 as an egg wholesaler,
We sat down with Stramrood to find out
Brenntag expanded into chemical distri-
more about his role in the DigiB hub and
bution in 1912 and today leads the market
its ongoing endeavours to accelerate
on a global scale. “We serve around
the digital evolution of Brenntag.
195,000 different customers, from huge
“We started about two years ago.
accounts like Shell or BASF down to
I was – I don’t know – employee number
small customers who might only buy one
four. We were basically starting from
ingredient each year,” says Stramrood.
scratch,” recalls Stramrood. With an
“Our added value comes from the fact
extensive background in the telco indus-
that we have a dense global distribution
try, Stramrood reflects that he had spent
network that means we can deliver to
the past ten years focusing on digitalisa-
both large and small clients anywhere in
tion, building ecommerce channels and
the world.” The company has a presence
building teams. “Basically, I went through
in almost every manufacturing industry,
a few acquisitions and a couple of big
from food and life science to oil and gas.
mergers in the space of two years, and w w w.suppl yc ha i ndi gi ta l. com
KEY INSIGHTS FROM A CORPORATE STARTUP “DigiB is building the digital future of Brenntag. We opted for a launch-and-learn approach, so that we can easily make adjustments based on feedback and demonstrate the added value of digital applications more quickly.” Maarten Stramrood, Chief Digital Office Brenntag
TECHNOLOGY, DATA, CREATIVITY.
ON A MISSION TO REINVENT B2B Digital transformation is a necessary step for many
er-facing platform providing consumers with the option
businesses but there is not just one way of accom-
to order products digitally with access to individual docu-
plishing this. At one end of the spectrum, companies
mentation, historic purchasing data and other self-service
are increasingly selling products online, while others
components. Since its launch six months ago, Brenntag
still operate in analogue. Digital agency Dept now
Connect is now live in Germany and North America with
successfully offers digital transformation as one
other countries to follow shortly.
of its services following the development of DigiB, the start-up offshoot of chemical distribution manufacturer, Brenntag.
MARKETING ACTIVITIES IN ACTION These digital marketing transformations have helped
Brenntag owns 500 warehouses worldwide which are
elevate Brenntag to the position of global market leader
used to store and distribute chemical products. Though
in chemical distribution – a sector that has remained largely
the company is forward-thinking and guarantees safe
untapped by the digital evolution. Dimi Albers, CEO at Dept,
and sustainable operations, it still largely operates
said: “The DigiB infrastructure is one of the most advanced
as a traditional B2B company – with many orders made
architectures we have. A lot of time was spent on continuous
via telephone and e-mail. DigiB launched in Amsterdam
integration, which makes it possible for Brenntag to onboard
in 2017 after an initial period testing concepts in Berlin.
new developers and roll out functions quickly to make
The corporate start-up was founded to stand apart from
the business more successful.”
its parent company and act as a platform for working on new digital innovations as well as allow Brenntag to
LOOKING FORWARD
be more efficient and prioritise their customers’ experience.
By setting up DigiB as an innovation hub outside of the parent
FINDING THE RIGHT PARTNER AND PLATFORMS
processes inherent to an international B2B player and remain
Dept came on board to facilitate Brenntag with the design and development of new platforms, Brenntag Source and Brenntag Connect, as well as digitise and centralise its analogue processes with its team. Albers: “Our team possesses a range of skillsets to provide us with the flexibility to keep up. We know that we can
company, Brenntag is able to optimise the complex digital competitive. Dept helped the company transition from a traditional company to a digitally-minded one seamlessly. Stramrood said: “DigiB is building the digital future of Brenntag. We opted for a launch-and-learn approach, so that we can easily make adjustments based on feedback and demonstrate the added value of digital applications more quickly.”
provide teams with bolstered creativity, technology and data, which is why it was a no-brainer to help DigiB across all three of these axes. From brand development to digital products and digital marketing, there was no aspect of this process that we weren’t comfortable getting involved with.” Brenntag Source is an innovative tool that helps to boost the company’s internal efficiency by ensuring that data can be easily shared across the company’s subsidiaries.Brenntag Source allows them to retain a local presence within each market and enables Brenntag to use its purchasing power more effectively to optimize spend. “The fact that we can enjoy savings with a relatively simple innovation illustrates the incred-
Maarten Stramrood, Chief Digital Office Brenntag
Dimi Albers, CEO Dept
ible potential digital transformation offers us,” said Maarten Stramrood, Chief Digital Officer at Brenntag. Brenntag Connect, on the other hand, is a custom-
DEPTAGENCY.COM
DIGIB
110
thought it might be time to look for some-
distribution firms on the planet with
thing more stable. Whenever there’s a
sweeping digital change. One of the
merger, you lose all the best people in
things that makes the DigiB hub special
your team, who go on to get their own
is its autonomy from Brenntag’s wider
teams. Then you have to build a brand
operation. The hub is set up as an inde-
new team. After a few mergers, I thought
pendent entity, giving Stramrood the
it looked like I was pretty good at building
power to expand his team, oversee HR
new teams,” he laughs. “Then, Brenntag
and develop new policies and processes
came calling.”
in the name of finding ways to accelerate
For the past two years, Stramrood
the digital evolution of the wider organi-
has built an 80-person team across
sation. “Not a lot of companies have a
Europe, the US and Asia Pacific focused
setup like ours,” he says. “A lot of them
on starting and accelerating digital
have a little innovation hub tucked away
initiatives, and infusing one of the largest
inside the larger organisation. DigiB
DECEMBER 2019
feels like a little startup. Of course, we’re
Amazon in their personal lives, and
funded by Brenntag, but the impact we
they’re starting to expect the same
make and the way we approach things
kind of convenience when doing busi-
is very entrepreneurial.”
ness with a company like Brenntag.
As a strategist with extensive B2C experience, Stramrood acknowledges that a lot of the drive towards digi-
The big challenge for a company like ours is to deliver on that expectation.” This expectation of a digitally
talisation is coming from that sector.
empowered experience is one of
“What we hear when we talk to our
the primary drivers behind the three
customers and suppliers, is that more
pillars around which DigiB’s efforts
and more people are expecting the
are centred. “We’re really focused
way that they do things in their per-
on experiences, on the customer and
sonal lives to be the way they do things
employee side of things, in order
in their professional lives as well,” he
to build smoother relationships,”
explains. “People use companies like
explains Stramrood.
E XE CU T I VE PRO FI LE
Maarten Stramrood Stramrood is a seasoned digital entrepreneur, mobile veteran, manager and strategist with a very broad background. He is an expert in go—to—market strategies, digital marketing and sales, conversion, data science, digital care, digital driven marketing, data driven operations, operational management, product management, business development, digital disruption and product and process design. He has worn many hats throughout his career— entrepreneur: entrepreneur, CCO, manager, product manager, marketeer and strategist.
w w w.suppl yc ha i ndi gi ta l. com
111
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1874
Year founded
$15bn+ Revenue in US dollars (2018)
16,600 Number of employees
tests across multiple dimensions of their portfolios. “A project manager in Poland can benchmark their procurement data against Brenntag’s US figures or against a competitor, or they can compare two different suppliers. This gives us new insights to strengthen our global position in negotiations,” says Stramrood. The goal of Brenntag Source is also, Stramrood explains, to improve collaboration across the many regional branches of Brenntag. “We’re trying to enhance the inter-company trading, between our subsidiaries, for example
BRENNTAG SOURCE
the BeNeLux and German organisa-
The first pillar corresponds to DigiB’s
tions, because this will optimise our
goal of improving the abilities and
global stock position.”
experience of Brenntag’s employees. Brenntag Source is a portfolio of
BRENNTAG CONNECT
internal applications that harness the
The most impactful of the pillars,
company’s data and deliver insights
Brenntag Connect, is the company’s
back to its employees. “We have a lot
ecommerce portal, designed and
of pricing trends and other data points
supported by DigiB. Stramrood
from all across the globe which can be
characterises the portal as an ecom-
very useful to any Brenntag employee,”
merce knowledge and self-service
Stramrood explains. One of the applica-
portal. Due to the highly regulated
tions, Brenntag Explore, gives company
nature of some of the chemicals and
project managers the ability to perform
ingredients Brenntag deals in, only
highly customisable benchmarking
existing Brenntag customers have w w w.suppl yc ha i ndi gi ta l. com
113
DIGIB
access to the portal, and “becoming a Brenntag customer means going through an intensive onboarding process.” For those that have already been cleared, Brenntag Connect is a powerful tool that can access the company’s product portfolio, place orders, automate repeat business, access track and trace functionality and an array of other contextual information. The service is currently live in the US, Germany, Benelux and Scandinavia. “We have a substantial number of cus114
tomers already on the platform and it’s growing rapidly,” enthuses Stramrood.
DIGITAL MARKETING For those who aren’t already onboarded as Brenntag customers — a process that the DigiB hub is focused on automating and streamlining as much as is responsible — the third pillar that Stramrood and his team are working on is the publicly accessible face of Brenntag Connect, which is tied into a digital marketing campaign. The past two years, like any bold endeavour, haven’t been without setbacks and challenges. “The ride has definitely been bumpy at times, from DECEMBER 2019
“ We have a substantial number of customers already on the Brenntag Connect platform and it’s growing rapidly” — Maarten Stramrood, CDO, Brenntag Group, Managing Director, DigiB hub
technology to cultural transformation,” says Stramrood. The digital acceleration that DigiB is working to cultivate has also presented its obstacles. “With the launch of new digital offerings, we’re not waiting until we’ve got a perfect situation; we’re just trying to get customers on the platform and see if things work,” he explains. “It’s a challenge in itself, because of course you don’t want to disappoint your customers. On the other hand, we’ve found that if you’re open with them, they’re often very accepting, and some are even keen to help you improve the platform. In a traditional organisation like Brenntag, this is a big thing.” No transformation happens in a vacuum. From recruitment to design to the launch and optimisation of new products and processes, Brenntag and DigiB have embraced the expertise and assistance of experienced, industryleading partners. When DigiB first got started, Stramrood found himself in need of a large, experienced team to start working on the hub’s vision. “We wanted to make a big impact and not have to start by recruiting one developer at a time,” he explains. “This is why we did a pitch w w w.suppl yc ha i ndi gi ta l. com
115
Launch your Customers’ Experiences into the Future. Today. Win the customer. Own the platform. Activate the data. Win the client to build the direct-to-consumer engagement. While data is becoming the new asset, it’s all about building the platform to connect the ecosystem in delivering relevant value to customers. Activate the data to generate insights and translate into meaningful customer experiences and profitable business. www.deloitte.nl Š 2019 Deloitte The Netherlands
for a software development agency and ended up choosing Dept. it offers a great combination of developers and creatives, which is what we desperately needed.” Brenntag has grown rapidly, organically and through acquisitions during the past few years. “Against the background of the numerous acquisitions and Brenntag’s existing business landscape,
“ We’re really focused on experiences, on the customer, supplier and employee side of things” — Maarten Stramrood, CDO, Brenntag Group, Managing Director, DigiB hub
especially in EMEA, the company now is putting energy into a single back-end
we discovered our new CMS was going
platform,” Stramrood explains. “Now,
to be a major thing, that’s when we
we’re trying to standardise this process,
decided to go with BloomReach.”
which is why Brenntag decided to bring
The challenges of overcoming inter-
Deloitte on board. They’re advising us
market regulation, and varied standards
on how to adopt this more standardised
across dozens of countries, also
approach, because if we want to accel-
prompted Stramrood to bring Vasco
erate the digitalisation of the entirety
Consulting on board. “One big thing
of Brenntag, we need to find ways to
is the issue of complexity, because
speed up the process.”
we work across multiple countries in
DigiB is working with trusted partners
parallel, so the programme manage-
to better build out its core offerings.
ment itself is very complicated. This
“When we start building something, like
is the reason that we started work-
Brenntag Connect for example, we try
ing with Vasco Consulting, because
to make it as open source as possible.
they have done similar types of
However, if the demands placed upon
programmes before: multi-country,
it become more serious, we always look
multi-backend integration projects.”
to embrace more mature, professional offerings,” explains Stramrood. “When
Stramrood is excited to see the work done by DigiB gaining traction in the w w w.suppl yc ha i ndi gi ta l. com
117
DIGIB
A customer journey should be as simple as crossing a bridge. There is always a solution, no matter how complicated the challenge! Please follow us on Linkedin for interesting blogs and surveys. Follow us
+31(0)851307990 vasco-consult.com
119 wider business, but acknowledges
digitising and optimising the internal
that there is still a long way to go.
processes of Brenntag itself.”
“It’s quite thrilling, this evolution and
Step by step, driven by the mani-
digital enhancement of Brenntag.”
festo of “create it, launch it, learn
Looking to the future, the three pil-
from it,” DigiB is using its unique
lars of Connect, Source and the
identity, capabilities and trusted
Digital Marketing will remain at the
network of partners to continue
centre of everything that DigiB does
accelerating digital evolution of the
to realise this evolution. “It’s going to
world’s number one chemical and
be our main focus for the next year,
ingredients distributor.
as we go into 2020,” he explains. “In the future, we’re looking into things like speeding up our onboarding process and exploring ways to use IoT to simplify aspects of the business. The long-term goal is to move into w w w.suppl yc ha i ndi gi ta l. com
120
DECEMBER 2019
121
The procurement transformation of Erdinger Weissbräu WRITTEN BY
HARRY MENEAR PRODUCED BY
CHARLOTTE CLARKE
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ERDINGER WEISSBRÄU
Florian Eineder, Head of Procurement, discusses his vision of a first-of-its-kind procurement transformation at the private brewery Erdinger Weissbräu
B
etween 2004 and 2018, Florian Eineder worked in the solar power, trucking, oil and gas, chemical, utilities, market
research and procurement consulting industries. He moved onwards and upwards in the procurement divisions of the world’s most important companies, 122
leading global teams and driving transformation at speed and scale. Even early on a Friday morning, with the weekend firmly in sight, his voice is bright and energetic over the phone, rising to laughter as we ask the obvious question. “Why did you decide to go and work in a brewery?” “Come on,” he chuckles. “Isn’t that obvious?” Of the dizzying varieties of beer brewed around the world throughout history, wheat beer has one of the most interesting stories. A passionate beer lover, Eineder chose the brewery that reigns supreme in the wheat beer niche: Erdinger Weissbier. The roots of wheat beer date back to ancient Egypt. Its properly documented history only began around 500 years ago in the Duchy of Bavaria. At the time, beer made from wheat was quite
DECEMBER 2019
123
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© 2019 SAP SE or an SAP affiliate company. All rights reserved.
125
controversial, as wheat was important
‘common,’ and no longer the province
to the bread baking process. From 1567
of the aristocracy. Noble or common,
onward, the use of wheat for brewing
wheat beer’s spiritual home has always
beer was even forbidden throughout
been IN Bavaria, where 90% of all wheat
Bavaria. Over time, a number of elec-
beer sold in Germany is brewed. Today,
toral breweries emerged throughout
the state is home to more than 1,000 dif-
the country in which the local rulers
ferent beer brands.
were allowed to have wheat beer brewed
The most prominent of those brands,
on payment of a special duty. However,
Erdinger Weissbräu, can trace its ori-
it was only when new brewing tech-
gins back to 1886, the year in which the
niques led to an improvement in the
construction of a wheat beer brewery
quality of brown beers in the mid-
in the Bavarian town of Erding was first
18th century that wheat beer became
officially recorded. Today, the mid-size w w w.suppl yc ha i ndi gi ta l. com
ERDINGER WEISSBRÄU
“When you work at a smaller company like Erdinger you really have to be as effective as possible, as quickly as possible. There’s no time for bells and whistles” — Florian Eineder, Head of Procurement, Erdinger Weissbräu
126
DECEMBER 2019
brewery produces around 1.8mn hl
Today, as the world becomes an
(2018) of wheat beer per year.
increasingly complex and digitalised
Its longevity and success are based on
place, Erdinger is undergoing
the four cornerstones of the company’s
a first-of-its-kind procurement transfor-
philosophy: quality of the product
mation. we spoke with Eineder (sadly,
above all, a dedication to wheat beer,
not over a stein of wheat beer) about
appreciation of the employees and
his decision to leave one of the world’s
straightforward brand management.
largest consultancies for a 530-person
Erdinger makes no compromises
beverage company, how he’s driving
when it comes to quality, premium
a cultural and digital procurement
ingredients and its passion for
transformation across the more than
Bavaria’s cultural heritage.
130 year old brewing operation, and 127
C O MPAN Y FACT S
Market-altering innovation with Erdinger Alkoholfrei Innovative decision making has always been a part of Erdinger’s strategy. The decision to position Erdinger Alkoholfrei as an isotonic drink for athletes was no different. This shook up the market and helped kickstart the entire non-alcoholic beer market. The brand soon established itself as the leader in Germany and has helped maintain the overall growth momentum for non-alcoholic beers.
Around the world, non-alcoholic beer is typically seen as the responsible choice for designated drivers who are tired of mineral water. In Germany, it has another role: the perfect drink for athletes and active people. “It helps to recover much faster. As an athlete or a sporty person, drinking an alcohol-free wheat beer after training provides the body directly with valuable ingredients, satisfies thirst even faster and is completely natural,” says Eineder.
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Your SAP partner in the food and beverage industry
Consulting
GQS@ Product Series
AMS
For more than 30 years, we have been supporting the food and beverage industry in the digitization of production, manufacturing, finance and sales processes - always with the focus on strengthening competitiveness. Together, we have set ourselves the goal of becoming SAP Partner No. 1 in the food and beverage industry in Germany, Austria and Switzerland by 2025.
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“ I was looking for a company where you can really move something, make a difference” — Florian Eineder, Head of Procurement, Erdinger Weissbräu
how I came to Erdinger. I really like the company’s philosophy – taking care of each other, being close, being one team.” Upon taking the job, he assumed responsibility for Erdinger’s entire external spend. “Everything from hops, barley, wheat, yeast, glass bottles, bottling machinery, glasses, labels, label printers, cases, packaging, trucks, cars, the buildings to put them in, that’s all my team and me,” he explains.
Erdinger’s new role as the first
“We do actually have our own well at
brewery to implement SAP’s
the brewery, so I don’t need to buy
S/4HANA.
the water, which is nice.”
Eineder took on the role of Leiter Einkauf (Head of Procurement) in February 2018. “I had this very broad spectrum of experience — all in procurement of course,” he
When Eineder arrived at the company, its procurement function was very classical. Purchasing was regarded mainly as a back office function, and its success was mainly tracked by the number
recalls, “but I was not happy
of purchase orders made
with where I was. My last
throughout the year and the
project was outsourcing
savings that were negotiated
7,500 jobs, while the people
per purchase order. “Having
at the top were making mil-
worked for so many different
lions. From my perspective,
companies in so many differ-
that’s not how it should
ent industries, I had seen that
work. So, I was looking for
everyone is facing more or
a company where you can
less the same problems: opti-
make a difference. That’s
mising the external cost w wew.suppl uro pe .busi yc hane i ndi sscgihief. ta l. com
129
ERDINGER WEISSBRÄU
“ We are the first brewery to implement SAP S/4HANA as a full scale adoption” — Florian Eineder, Head of Procurement, Erdinger Weissbräu
130
DECEMBER 2019
131
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ERDINGER WEISSBRÄU
132
1886
Year founded
$600mn Revenue in dollars
530
Number of employees DECEMBER 2019
position while keeping quality at a high level and increasing the efficiency of the procurement function. The difference is, when you work at a smaller company like Erdinger, you really have to be as effective as possible, as quickly as possible. There’s no time for bells and whistles,” says Eineder. At Erdinger, roles that would be dealt with by a 20-person team in a larger corporation are handled by a single individual; the consequences of decision making are felt faster and more
clearly than in bigger companies, leav-
catalogues, etc, but there’s also
ing little room for error.
a huge mindset change within the
Now, Eineder is driving a cultural
whole company that needs to be
and digital transformation across
accomplished.” Digital transformation
Erdinger’s procurement department
without a reimagining of culture and
centred around the integrations of
business process can never be suc-
two pieces of enterprise software:
cessful; George Westerman, a
SAP Ariba and SAP S/4HANA.
principal research scientist at MIT
“We’re going to get rid of as many
Sloan notes that, “when digital trans-
operational activities as possible,”
formation is done right, it’s like a
he explains. “There are technical
caterpillar turning into a butterfly,
challenges, of course, when it comes
but when done wrong, all you have
to implementing the software, the
is a really fast caterpillar.” For Eineder 133
E XE CU T I VE PRO FI LE
Florian Eineder Enthusiastic, professional and with a huge amount of experience, Florian Eineder is leading the procurement function at Erdinger Weissbräu and driving important change across the organization. His specialties include using procurement as an enabler and developing teams into business partners to stakeholders in order to drive corporate strategies and promote business goals. He is driving the digitalisation of Erdinger along with a strong focus on ROI with the necessary caution. Florian has 15 years’ experience in procurement divisions of the world’s most important companies, in leading global teams and driving transformation at speed and scale. w w w.suppl yc ha i ndi gi ta l. com
ERDINGER WEISSBRÄU
artn official Pg ss Er ng
UV ink frosted relief glass including relief printing Erdinger Exclusive 0,5 l
DISCOVER MORE: WWW.SAHM.DE
135 to effect a meaningful transformation
is the decision to position itself as the
across the brewery’s purchasing and
most progressive brewery at the fore-
procurement processes, that mindset
front of digital innovation with a new,
change has been essential. “It was
cutting edge ERP. Erdinger worked
and still is important to take every
successfully for many years with its
employee with us on this journey,”
previous legacy system. However,
he says. “We must ensure that digital
due to the company’s constant growth
transformation is seen as an opportu-
and the new digital requirements
nity and a necessity, not as a fashion
of an ever-evolving world, the system
phenomenon or even as a job destroyer.
reached its limits; more and more pain
Therefore, openness, transparency
points were discovered. This disruption
and a lot of communication are
isn’t unique to Erdinger; companies
non-negotiable.”
in every sector are faced with legacy
In addition to a new procurement
processes that are in need of moderni-
solution, perhaps the most disruptive
sation and optimisation. Erdinger’s
change that Eineder is implementing
growth has, for many years, been w w w.suppl yc ha i ndi gi ta l. com
ERDINGER WEISSBRÄU
driven by the quality and individuality of its product, but the company’s backend processes have not grown in tandem. “The bigger you get, the more difficult it gets to put your processes in order and have a cost effective workforce setup,” says Eineder. Erdinger decided to go with a new ERP system and face this mammoth task. “We’re implementing S/4HANA, which is sleek, modern and innovative. We are the first brewery to do this as a full scale adoption. It’s a showcase project; if it works 136
for us, then all the other breweries are going to start switching over to S/4HANA. We meet the brewery’s demand for innovation which is also evident throughout the departments of the company,” explains Eineder.
“It was and still is important to take every employee with us on this journey” — Florian Eineder, Head of Procurement, Erdinger Weissbräu DECEMBER 2019
137
Looking to the future, Eineder is
base in order to generate the most value.
excited to be bringing procurement
I think this kind of orchestrating function
out of the back office and into a place
is where the procurement department
that’s more relevant to the overall busi-
in most companies wants to go.”
ness. “Procurement is a driver for all sorts of things: for cost, innovation, risk management, and efficiency,” he says. “Going forward, I want to manage the relationship between internal stakeholders and external supply w w w.suppl yc ha i ndi gi ta l. com
138
Harnessing the potential of the Middle Americas at AB InBev WRITTEN BY
WILLIAM SMITH PRODUCED BY
CAITLYN COLE
DECEMBER 2019
139
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AB INBEV
Gabriel Guzman, Director of Raw Materials, Agricultural Development & Utilities for AB InBev’s Middle Americas region discusses the zone’s potential and the sustainable strides the company is making
A
s the world’s largest beer company, AB InBev (ABI) maintains a complex and interrelated global supply chain. One of
the regions most important to the company’s oper140
ations is the Middle Americas, as Gabriel Guzman, Director, Raw Materials, Agricultural Development and Utilities elucidates. “It’s a fast-growing region, for sure. Out of the entire ABI group it is the second largest in terms of revenue and the largest in terms of EBITDA. It’s a growth engine.” The region’s potential is obvious, but it also brings its own set of challenges. “We deal with less developed economies, so we sometimes have problems with taxation and changing regulations and treaties.” Guzman’s role requires the management of a number of teams, each dedicated to the different sections under his purview – the provision of raw agricultural materials, the coordination of utilities and the sustainable development of agriculture all being examples. That last area is covered by Jose Luis Taylor, Director of Sustainability and DECEMBER 2019
141
1366
Year founded (the Artois brewery)
$54.6mn Revenue in US dollars
170,000+ Number of employees
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AB INBEV
“ Our goal for 2025 is that 100% of our farmers are to be skilled, connected and financially empowered” 142
— Gabriel Guzman Director, Raw Materials, Agricultural Development & Utilities AB InBev Middle Americas
DECEMBER 2019
Agricultural Development at the company, who speaks to the importance of treating farmers ethically and with respect. “Our goal for 2025 is that 100% of our farmers are to be skilled, connected and financially empowered,” says Taylor. “We have a base of around 4,000 farmers, the majority of which are in Mexico, where we implemented this programme four years ago. We have another programme now in Colombia, and we are making strides in Ecuador. In Mexico, we were challenged to ensure that 100% of the
CLICK TO WATCH : ‘WE ARE AB INBEV’ 143 barley came from local farmers instead
sustainability targets to benchmark
of being imported, which we have now
its progress in these areas, including
achieved. In doing that, we’ve invested
in energy. “By 2025, the target is for
in machinery and created jobs for local
ABI to use 100% renewable electricity,”
people.” This focus on having a positive
says Guzman. “In Mexico we should
effect on the people with whom the
be at 100% by the end of this year,
company works is echoed by Guzman.
which is our largest market – about
“The question is, ‘can we truly talk the
45% of the entire zone. Our goal is
talk and walk the walk and empower
to continue to expand that, so we’re
the communities in which we oper-
looking at opportunities in Colombia.
ate?’ In the early stages, it can be more
in Honduras we have found a source
expensive, but it’s an investment. After
of 11 megawatts of hydro power that
that it can become self-sustainable as
we can potentially use. It will not satisfy
it should be.”
100% of what we are looking for but
ABI has implemented a number of
will definitely help us with our target.” w w w.suppl yc ha i ndi gi ta l. com
AB INBEV
“ We’ve invested in machinery and created jobs for local people” 144
— Jose Luis Taylor Sustainability & Agro Development Director, AB InBev
Water Management is also a focus,
this vegetable protein to change their
as the company’s CEO Carlos Brito
diet, and we are looking at a number
demonstrated during a recent talk.
of disruptive projects to create the
Guzman himself discussed the corol-
right products to match this consumer
lary concern of decarbonisation at a
demand. For instance, last year we
Bloomberg event last year.
launched a smoothie made out of
A sustainable approach can also
spent grains. It’s been in a pilot in the
offer opportunities for value crea-
US and it’s being positively received.
tion. “We have a significant amount
We are also making snack bars from
of byproducts left over after finishing
the grains – we have a significant
the beer-making process, in the form
amount of protein value there.”
of vegetable protein content,” says
ABI’s sustainability work serves to
Guzman. “There is a trend in the mar-
complement its focus on making the
ket where consumers are looking for
best beer. “The quality of the beer is
DECEMBER 2019
145
E XE CU T I VE PRO FI LE
Gabriel Guzman Gabriel leads Anheuser-Busch InBev’s Middle Americas Zone teams for Raw Materials, Agricultural Development and Utilities Procurement. Gabriel oversees the Zone’s plan to achieve its ambitious 2025 100% renewable electricity commitment, which is an integrated part of the company’s strategy across procurement, sustainability and supply chain. He works in close collaboration with cross— functional teams, supporting the company’s energy and water reduction targets. Gabriel holds a Bachelors in Management and Economics and an MBA from Case Western Reserve University.
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“To maintain a sustainable, high standard of beer, you have to be dynamic” — Gabriel Guzman Director, Raw Materials, Agricultural Development & Utilities, AB InBev Middle Americas
determined, not only by the expertise
computer models which can help to
of the chief brewers, but by the quality
protect against future price volatility.
of materials,” says Guzman. “Without
Robotic process automation has been
that, you cannot achieve the high
another focus. “We can reduce the
standards that we have in the organi-
amount of man hours spent on very
sation.” Regionally, this year, adverse
basic tasks, freeing us up to evaluate
weather conditions led to 50% of the
the procurement function, to think in
barley crop in Mexico being lost. ABI’s
more strategic ways and to add value.
worldwide presence, however, means
We use robots, for instance, to help
that such an eventuality does not spell
with managing and indexing contracts.”
disaster. “In order to find the quality
Another innovation involves the intro-
that we need, the teams have to mobi-
duction of inter-departmental buying
lise globally with all their counterparts
software. “We use a platform similar to
in other regions. To maintain a sustain-
Amazon whereby the different func-
able, high standard of beer, you have to
tions within the organisation can order
be dynamic.”
whatever they need,” says Guzman.
Tying its efforts together is the
“That may be people in marketing, in
deployment of technology. The vola-
legal, et cetera. They can order certain
tility of prices and currencies in the
amounts without approval, which help
region has led to the development of
them to expedite the process.” w w w.suppl yc ha i ndi gi ta l. com
147
AB INBEV
Aside from making easier the work of employees, technology is also serving to improve the quality of raw ingredients. ABI has pioneered an AI technology pilot, internally referred to as a “brain”, which is able to closely monitor the state and health of cargo as it is being shipped. “We can measure the moisture content of the barley being loaded in Denmark, for instance, and then track that moisture content, based on factors such as weather conditions, all across the route from 148
Denmark to Colombia. When the ship arrives, we will know that the barley arrived with X amount of moisture
“ My dream is to increase Mexican barley to the highest of international standards” — Gabriel Guzman Director, Raw Materials, Agricultural Development & Utilities AB InBev Middle Americas
DECEMBER 2019
content, therefore at the malting process we will only need X amount of energy to convert that barley into malt.” In the near-term, ABI will continue to chase its sustainability targets, covering not just the brewing side of the operation but also manufacturing and the entire distribution network, where it is introducing a number of electric trucks to deliver products. ABI is also furthering its origination programme in Mexico. “In Mexico, we use about 400,000-500,000 tonnes of corn imported from the United States,” says Guzman. “You can imagine the impact to Mexican agriculture if we could buy that from a local grower, instead. That’s precisely what we are trying to do right now by launching a corn origination programme. This year we are going to get to 40,000 but our goal is to get to 400,000.” In the longer term, ABI is interested in consolidating its position in the region. “From an agrodevelopment standpoint the goal is to improve the quality of Mexican barley,” says Guzman. “My dream is to increase Mexican barley to the highest of international standards.”
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149
150
How STC is leading the digital revolution in MENA WRITTEN BY
MATT HIGH PRODUCED BY
GLEN WHITE
DECEMBER 2019
151
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STC
Haithem M. Alfaraj, Chief Technology Officer at STC, explains how its technology transformation has made it a digital leader
“ T
echnology transformation is a major enabler of our overarching strategy, which is to be a world-class regional digital leader
that provides innovative services and platforms that enable the digital revolution of the MENA region, and enrich people’s lives,” says Haithem M. Alfaraj, 152
Chief Technology Officer at STC Group. Alfaraj has considerable experience in implementing new technologies and driving innovative transformation programmes. He has been with STC since 2016, assuming his current role in the early part of last year. A key responsibility in this position is the developing and leading of transformation projects designed to improve the organisation-wide deployment of innovative IT and communications solutions. It has been, he explains, “an interesting and informative experience that required a high learning curve in terms of my leadership, both with regards to technology and the wider company’s ambition and transformation. It also creates an opportunity to develop new digital leadership that can take the company to the next level and support the national transformation of the country’s Vision 2030.” DECEMBER 2019
153
During Alfaraj’s tenure, STC has been no stranger to innovation. It has pioneered the use of 5G, for example, becoming the first operator to launch a live 5G network in May 2018. In June of 2019, it launched 5G services commercially. These developments, Alfaraj notes, as well as other wider initiatives and technology innovations, form part of the wider transformation he has overseen. “We focused on developing a strong technology strategy that would advance our capabilities and enable our business w w w.suppl yc ha i ndi gi ta l. com
STC
“ Our customers’ experience and achieving true customer-centric operations have been fundamental principles in our transformation” 154
— Haithem M. Alfaraj, Technology & Operations SVP at STC
to be successful – we knew we always had to be at the advanced stages of development when it comes to technologies covering infrastructure, platforms, cloud, applications, AI and Big Data to maintain our leading position in MENA’s digital revolution. At the same time, we worked on our operating model to ensure it was both agile and collaborative.” A key focus for Alfaraj was to ensure that STC’s technology transformation supported the organisation’s wider DARE strategy. This outlines the key pillars under which the business looks to expand: Digitise by becoming a data driven, technologically agile organisation focused on enhanced experiences; Accelerate core asset performance through cultural and technological change, as well as growing both B2G and B2B market segments to lead the market; Reinvent the customer experience through the personalisation of interactions with technology to create new, attractive journeys; and Expand aggressively by pursuing all opportunities for growth related to services and applications, platforms
DECEMBER 2019
CLICK TO WATCH : ‘STC’ 155 and connectivity and infrastructure. Digital and technology are key
“In so doing, it was apparent that our legacy infrastructure wouldn’t have
aspects of realising DARE, he notes,
been able to meet the requirements
outlining how he focused on certain
of the new services we were looking
domains such as services and appli-
to introduce or meet the expecta-
cation, AI and analytics, platforms
tions of our customers in terms of
and connectivity, and infrastructure.
the quality standards we expect to
However, much of the overall devel-
deliver. As an example of our digital
opment was driven by the desire to
transformation, in the wholesale
reinvent STC’s customer experience.
domain, technology demands and
“Going through this transformation
gaps are covered by digitisation,
provided an opportunity to baseline
which is a result of agile partner-
our current operations and archi-
ships adapted during the innovation
tecture and better understand our
phase of the solution. These part-
business performance,” says Alfaraj.
nerships resulted in improvement of w w w.suppl yc ha i ndi gi ta l. com
STC
156
time-to-market, cost reduction and
company’s capabilities and create an
automation of processes.
evolution to customer satisfaction.
“If you look at technology and opera-
“Our objective,” he adds, “is to make
tions as a sector of the business, then
customer experience a competitive
our customers’ experience and achiev-
advantage and a true differentiator for
ing true customer-centric operations
us in the market – something we have
have been fundamental principles in
successfully managed to do over the
our transformation,” Alfaraj continues.
last few years.” Key aspects of that
He details how this has been achieved,
success include leading the region in
including through a focus on baselin-
investing in technologies that continu-
ing and reimagining customer journeys
ously measure customer experience,
and stories through in-depth customer
revamping assurance and operational
design thinking with our business
processes to make service and
units to ensure they are in line with the
customer experience the priority,
DECEMBER 2019
E XE CU T I VE PRO FI LE
Haithem M. Alfaraj Engineer, Haitham M. Alfaraj joined STC in 2016 and currently serves as Senior Vice President of Technology and Operation. He is responsible for conceiving, planning, operating as well as leading the implementation of transformation projects to improve organisationwide deployment of information technology and communication services and solutions. Previously at STC, Haitham served as Vice President of Operation Sector, where he led challenging transformation programmes that excelled the technical operational performance of STC communication services. Haitham joined STC in 2016 from Etihad Etisalat, Mobily Company, where he was Chief Technology Operations Officer. He spent 11 years with Mobily in leadership positions for infrastructure and service management operations. Prior to that, he worked at Saudi Aramco for four years. He holds a Bachelor in Computer Engineering from King Fahad University in Dhahran, and enrolled in multiple executive leadership programmes from Harvard Business School, INSEAD, and other institutes. Haitham is currently on the board of STC Specialized, STC Solution. He is an experienced technology executive who possesses extensive technology knowledge, strong leadership skills and superb relationship management abilities. Haithem has a well-rounded business foundation with keen strategic insight that allows him to manage relationship building, talent development, and organisation turnaround and realignment activities. He has additional expertise in telecom and information technologies, quality management, infrastructure planning, performance improvement, partner alliances, operations excellence, vendor management, outsourcing strategy, and facility/data center and cloud services.
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157
STC
“ Technology transformation is a major enabler of our overarching strategy, which is to be a world-class digital leader that provides innovative services and platforms that enable the digital revolution of the MENA region”
160
— Haithem M. Alfaraj, Technology & Operations SVP at STC
With regards to specific technologies, connectivity and speed of connection have been a large focus for Alfaraj and his team. STC already has the highest mobile speed and the most reliable network in the Kingdom of Saudi Arabia, yet it continues to improve this through investment in its ‘backbone’ – data centres, transportation networks and each individual layer of its overall network. “Our new MySTC app has also had a significant impact,” he notes. “This is entirely in line with our digitalisation vision, and facilitates the purchase of smart devices and SIM cards through the
establishing a dedicated service
app store, complete with free delivery.
performance and customer services
It also covers fixed services with intel-
unit, and creating new KPIs and KQIs
ligent customer support capabilities.”
that are aligned with a customer-
On 10 November it was announced
centric approach. To achieve these
that MySTC had received the ‘App
objectives, STC leveraged its data
of the Year’ Golden Award at the
and analytics capability it has built
Network PGs 2019 IT World Awards,
over the years to not only improve
an event organised annually in San
customer experience, but also to
Francisco to recognise excellence in
generate revenue and optimise cost.
technology worldwide.
This capability includes employing
To achieve such significant change
AI techniques such as machine-
requires effective relationships with
learning, NLP and RPA to introduce
key partners and vendors. Here,
efficiency into its operations.
Alfaraj explains that the business has
DECEMBER 2019
161
collaborative platforms at every level
solutions to our customers. For more
of the organisation. “Going through
mature technologies and services, we
this transformation has actually
prefer an ‘off the shelf’ approach that
opened doors for us to have better
is efficient, cost-effective and allows
strategic dialogue with our partners
for faster delivery of products through
and to explore new technologies and
their lifecycle.”
solutions with them,” he says. “For all
STC works with many of the larg-
new or emerging technologies and
est tech and telco brands, including
services, such as 5G, telco-cloud, vir-
Accenture, for digital telco transforma-
tualisation or network transformations,
tion, Ericsson, Huawei and Nokai for
we adopt a collaborative development
5G development and IoT, Redhat for
ecosystem in which we work together
cloud technology developments, and
as partners to identify and deliver
Teradata and SAS for Big Data analyt-
optimal, agile, robust and high-quality
ics. Accordingly, says Alfaraj, STC w w w.suppl yc ha i ndi gi ta l. com
STC
162
has “vast experience� in managing successful collaboration. To do this, he explains, the business approaches each collaboration with firm guidelines in mind that cover such areas as joint planning and strategising, business alignment and planning, executive engagement, technical integration and field readiness, and more. Naturally, greater use of technology brings heightened risk, particularly in terms of cybersecurity. Being a digital leader, STC well understands the risks and how DECEMBER 2019
1998
Year founded
51,963mn Revenue in Saudi Riyal
13,383 Number of employees
critical they are to a successful technology transformation, particularly with the adoption of cloud and IoT solutions. The company invests in three key areas: people, process and technology. “This includes hiring the best cybersecurity professionals and consultants and training a large pool of Saudi graduates in the latest preventative security technologies, all in line with our vision,� says Alfaraj. In addition, the company has established a strong cybersecurity governance, risk and compliance capability within its cybersecurity sector. This combines policies, standards and audits for use in the STC partner ecosystem to ensure consistency in all operations. In terms of technology and partnership, STC has invested in security technologies to complement the governance aspect of protection, deploying the largest Threat Intel programme and Anti-DDoS capability in the Kingdom. These two programmes, as well as several others, have protected STC and the Kingdom at large from major globally known cyberattacks, guaranteeing not only STC’s continued service, w w w.suppl yc ha i ndi gi ta l. com
163
STC
but business as usual for every STC client (Government, Enterprises and Consumers). High-level partnerships with giants like Saudi Aramco, Cybersecurity Center under the World Economic Forum and FIRST. org have been forged to solidify STC’s contribution to local and global Cybersecurity. With the continuous evolution of technology security risks, STC is mandated to sustain and ensure full command around risks mitigations and proper controls. 164
Looking more broadly, STC intends to continue leading the digital revolution in MENA in line with the
“ Once the leadership adopted the changes, the rest was a chain reaction right through the organisation” — Haithem M. Alfaraj, Technology & Operations SVP at STC
transformation Alfaraj describes. One example of this is the company’s contribution to Saudi Arabia’s Vision 2030 programme, which includes objectives around digitalisation and extending high speed internet access to all citizens. Steps the business has already taken in this area include streamlining of its vision with that of Vision 2030, adopting a digitalisation framework to significantly lift the nation’s digital potential, improving infrastructure and technology, and upskilling its workforce.
DECEMBER 2019
165
In the latter, Alfaraj is resolute in his
significantly into building our capabil-
belief of the importance of people.
ity across the company, and we were
“Any transformation is about people
fortunate to have a management team
and how we work – we knew from the
committed to driving that change.
start that this journey would be about
That has brought real innovation in
enhancing capabilities, increasing
the way we run our operations, and it
collaboration and developing new
was important to our overall success
ways of working,” he explains. “Our
– once the leadership adopted the
change management was built
changes, the rest was a chain reac-
around three themes; clarity, capabili-
tion right through the organisation.”
ties and commitment. We made sure everyone knew of all the changes every step of the way, we invested w w w.suppl yc ha i ndi gi ta l. com
166
PEPSICO LATAM: DRIVING INNOVATIVE SUPPLY CHAIN OPERATIONS IN A HIGH PERFORMANCE MARKET WRITTEN BY
MARCUS LAWRENCE PRODUCED BY
DENITRA PRICE
DECEMBER 2019
167
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PEPSICO
PEPSICO LATAM HAS BEEN UNDERGOING A SIGNIFICANT SUPPLY CHAIN TRANSFORMATION AS THE COMPANY AT LARGE CONTINUES TO STREAMLINE AND OPTIMIZE THE EFFICIENCY OF ITS OPERATIONS
P
epsiCo’s portfolio of evocative household names has a foothold in every major market around the world, and delivering
those products to consumers in the most effective manner possible has become a company-wide 168
strategic imperative. For PepsiCo’s operations in Latin America (LATAM), the centralization of procurement has been an ongoing endeavor for the past several years and the transformation is reaping dividends. As a key region for PepsiCo’s wider balance sheet, optimization of procurement and logistics in the region stands to have a significant impact on success at large. The procurement function is, in effect, essential to the company’s wider growth strategy. When new CEO, Ramon Laguarta, came in last year, there was a refinement in the company’s vision focused on how PepsiCo can become the leader in convenience food and beverages by winning with purpose rather than just performing – and this mentality is central to the company’s supply chain transformation.
DECEMBER 2019
$64.6bn Approximate revenue
1898
Year founded
250,000+ Number of employees worldwide
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169
PEPSICO
“ THE FIRM’S STRONG PARTNERSHIP MANAGEMENT IS TIED INTO THE SUCCESS OF ITS NEW FLEET MANAGEMENT CAPABILITIES”
With its LATAM operations accounting for around 11% of PepsiCo’s global revenues, optimizing supply chain and procurement operations in the region is essential for continued growth at both a national and global level. Leveraging relationships with suppliers worldwide is key, along with the capacity to negotiate on a global scale whilst simultaneously servicing and supporting local markets. In 2012, previous CEO Indra Nooyi set a goal of securing $1.5bn in cost savings through streamlining and incrementally
170
DECEMBER 2019
CLICK TO WATCH : ‘PEPSICO SUPPORTS RECYCLING IN LATIN AMERICA WITH INNOVATIVE PROGRAMS’ 171 upgrading the company’s productivity,
region, has been vital to the realization
citing the firm’s positive performance
of this ambitious goal. By combining
in the five volatile preceding years
procurement and operations, both
for world economies. “Our goal is to
delivering more cost-effective ways
continue on that earnings trajectory
of purchasing and enabling the supply
over the next five to 10 years, fully
chain with new technologies – such
recognizing that we need to make
as the new fleet management system
changes to the way we operate to
– quarterly productivity has been
address the challenges identified in the
enhanced significantly both on a local
review process,” said Nooyi in a press
and wider level.
statement at the time. “2012 will be
Partnerships have been particularly
a transition year, in which we will be
crucial to the cost-saving strategy, as
taking the appropriate steps to build
more effective relationships can yield
a stronger, more successful company
higher quality solutions at cheaper
going forward.” Latin America, as a
rates. Not only that, but the complex w w w.suppl yc ha i ndi gi ta l. com
We transport your future Tomorrow’s mobility is what drives us today Electricity is the fuel of the future – not just because switching to electric vehicles is good for both your business and the environment. Thanks to compact batteries, short charging times and unrestricted access to ultra-low emission zones, you will have a head start in urban mobility. Where will your cars take you in the coming years? Let us be part of your journey. volkswagen-commercial-vehicles.com
About Volkswagen Commercial Vehicles: As an independent brand within the Volkswagen Group, Volkswagen Commercial Vehicles (based in Hanover, Germany) is responsible for the Group’s worldwide activities in the area of light commercial vehicles, people carriers and camper vans. This includes the systematic further development, the production and the sale of the successful Transporter, Caddy, Crafter and Amarok model ranges (almost 500,000 sold units in 2018) as well as the development of new vehicle types, (digital) services and (electric) mobility solutions. By doing so, Volkswagen Commercial Vehicles focuses on the individual transport and mobility needs of its commercial and private customers and contributes decisively to their economic success by offering added value for their work, their business models and their everyday lives. Beyond that, the brand is responsible and will set the pace for the strategic future field of autonomous driving for the entire Volkswagen Group, aiming to become the leading company for individual mobility and interconnectedness by 2025.
Mission: we transport success. Volkswagen Commercial Vehicles is fully concentrating its activities on the fundamental changes taking place in the industry and to the changing customer requirements. Therefore, we pursue a clear strategy for our future business – called GRIP 2025+ (Growth, Responsibility, Innovation, People) – allowing us to design the necessary transformation, to stay competitive and to secure the long-term success of our brand.
For all our products and mobility solutions, we aspire to minimize environmental impact along the entire life cycle – from raw material extraction until end-of-life disposal – in order to keep ecosystems intact and to create positive impacts on society. Compliance with environmental regulations, standards and voluntary commitments is a basic prerequisite of our actions. Facing the task of shaping mobility in a cleaner, safer and more efficient way with our vehicles and services, Volkswagen Commercial Vehicles, too, just like the other brands of the Volkswagen Group, is committed to the target of the Paris Summit on Climate Protection, which aims to restrict global warming and to target a fully CO2-neutral balance by 2050, for example. The opinion and feedback of our customers is very important to us. That is why we always work closely together with them when developing new products. In addition, a huge capital employment enables us to consistently push the transformation towards zero-emission mobility. With the all-electric e-Crafter, ABT e-Caddy and ABT e-Transporter (the last two developed together with our strategic partner ABT), our portfolio contains solutions for urban traffic that are already sustainable now. Expected in 2022, the fully electric ID. BUZZ, which has entirely developed anew, will be one of our most important products for the future and is our technology carrier for autonomous driving. In the end, working together responsibly in all areas of the organization, developing and involving enthusiastic and talented employees, and working together as one team with the best partners of the industry are the crucial things that enable us to live up to our promise: we transport success.
For more info on Volkswagen Commercial Vehicle’s Fleet solutions, visit: www.volkswagen-nutzfahrzeuge.de/de/geschaeftskunden/grosskunden/kontakt-international.html
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175 nature of Latin America’s established
source locations. The aforementioned
and varied markets necessitates
regional and intra-regional quirks are
a high degree of expertise on the
similarly vital to consider when it
business side to initiate and maintain
comes to both partner selection and
such relationships. Every country
the application of innovative techno-
has its particularities, so having the
logical solutions. Driverless vehicles,
necessary talent and capability
for example, are not currently viable in
to connect with the correct partners,
places like Sao Paolo and Lima due to
provide the right efficiencies and
both infrastructural and technological
scale relative to different countries
limitations. However, these limitations
is essential for PepsiCo’s delivery
have not prevented the company from
of its supply chain objectives.
establishing a new fleet management
PepsiCo proactively and regularly
solution in the region replete with
assesses its partners and ensures it
benefits to productivity, efficiency,
is leveraging the most cost-effective
logistics, sustainability, driver safety w w w.suppl yc ha i ndi gi ta l. com
PEPSICO
and more. Focusing on safety and making sure hard braking, hard cornering, inefficient acceleration and so forth are reduced has reaped myriad benefits, improving the employee experience along with wider ranging results. Beyond safety, the new fleet management system has a much broader reach: the platform pilot is seeing a reduction of 10% in both idling and travel distance, significantly reducing fuel consumption and greenhouse gas emissions. The 176
implications for enhanced sustainability are a particular boon as consumers around the globe become more conscious of the environmental impacts of the products they buy. The firm’s strong partnership management is tied into the success of its new fleet management capabilities, too. Leveraging key relationships with expert fleet managers to augment its ability to build and deploy customized systems has enabled PepsiCo to boost efficiency, automatic dispatching, roadside assistance, and more. These efforts have resulted in a 90% reduction in DECEMBER 2019
“ IT’S CLEAR THAT THE POTENT INTEGRATION OF TECHNOLOGIES AND BLENDING OF THEIR CAPABILITIES HAS BEEN KEY TO PEPSICO LATAM’S SUCCESS”
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PEPSICO
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DECEMBER 2019
associated administrative work, enabling employees to focus on more fulfilling value-added activities. No single technological solution or platform is responsible for or capable of securing such successes, however, it’s clear that the potent integration of technologies and blending of their capabilities has been key to PepsiCo LATAM’s success. The transport management system is tied into the telematics system, the last mile system, the route planning systems and so on, enabling the best qualities of each solution to be available in the same place. Taking a broader view of business operations, growth of the company at a global level, and the focus on a clear strategic vision are collectively bringing PepsiCo ever further forward as an example of procurement and supply chain operations done right.
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