SupplyChain Magazine December 2023 by Supply Chain Digital

December 2023 | supplychaindigital.com

REVERSE LOGISTICS PROVIDERS

ON BOARD WITH SUCCESS

How tech improves supplier onboarding

FULFILLING POTENTIAL

Why fulfilment’s a cost-control and service-level boon

THE NEXT GENERATION OF AI Darcy MacClaren introduces JOULE, SAP’s gen AI supply chain co-pilot

FEATURING

DUN & BRADSTREET

FEDEX EXPRESS

MONDELĒZ

GARTNER

THE ULTIMATE VIRTUAL EVENT FOR MANUFACTURING LEADERS COMING NEXT WEEK 6th December 2023

Ready to stay ahead of the curve with Manufacturing Digital LIVE Virtual 2023? Covering five key themes, the event will showcase engaging presentations, interactive sessions, panel discussions and fireside chats, facilitating deep learning and exploration: Factory of the Future, Sustainability, Digital Manufacturing, Tech & AI and Women in Manufacturing.

AGENDA HIGHLIGHTS: The Future of Manufacturing

Helena Jochberger CGI

KEYNOTE

Maximising Profitable Growth with a Resilient Supply Chain

Alan Duncan Blue Yonder

FIRESIDE

The Manufacturing Leaders Forum

Bijender Kumar Mishra - Alkem Laboratories Mark-Philipp Oberhoff - Wipro

PANEL

Industry 4.0: Navigating the Next Industrial Revolution

Ashley Sayed Intertech UK

KEYNOTE

BP – Performing while Transforming

Ulrich Angeli BP

KEYNOTE

Industrial AI: Current State and Looking to the Future

Bryan DeBois RoviSys

KEYNOTE

GET YOUR FREE TICKET

A BizClik Event

The Digital Platform for Suply Chain Leaders

JOIN THE COMMUNITY

MAGAZINE | WEBSITE | NEWSLETTER + MORE

Ways to Work With us SupplyChain Magazine is an established and trusted voice with an engaged and highly targeted audience of 550,000 global executives Digital Magazine Website Newsletters Industry Data & Demand Generation Webinars: Creation & Promotion White Papers & Research Reports Lists: Top 10s & Top 100s Events: Virtual & In-Person

WORK WITH US

Never miss an issue!

+ Discover the latest news and insights about Global SupplyChain...

JOIN THE COMMUNITY

The SupplyChain Team EDITOR-IN-CHIEF

SEAN ASHCROFT

FEATURE DESIGNERS

CHIEF CONTENT OFFICER

SCOTT BIRCH

JULIA WAINWRIGHT VICTORIA CASEY EMMA WALLER

MANAGING EDITOR

ADVERT DESIGNERS

NEIL PERRY

MATT JOHNSON

DANILO CARDOSO CALLUM HOOD ADRIAN SERBAN

HEAD OF DESIGN/ SUPPLYCHAIN LEAD DESIGNER

VIDEO PRODUCTION MANAGER

CHIEF DESIGN OFFICER

ANDY WOOLLACOTT SENIOR DESIGNERS

SAM HUBBARD REBEKAH BIRLESON

KIERAN WAITE

DIGITAL VIDEO PRODUCERS

ERNEST DE NEVE THOMAS EASTERFORD DREW HARDMAN SALLY MOUSTAFA PRODUCTION DIRECTORS

GEORGIA ALLEN DANIELA KIANICKOVÁ PRODUCTION MANAGERS

JANE ARNETA MARIA GONZALEZ YEVHENIIA SUBBOTINA KENDRA LAU

MARKETING MANAGER

KATHRYN WEBB

PROJECT DIRECTORS

STUART IRVING JAMES BERRY

MEDIA SALES DIRECTOR

JAMES WHITE

MANAGING DIRECTOR

LEWIS VAUGHAN CEO

GLEN WHITE

FOREWORD

ROBOTS SHOWS THAT THE FUTURE IS ALREADY HERE UNLIKE DRONES AND OTHER AI USE CASES ROBOTICS IS NOW SO EMBEDDED IN SUPPLY CHAIN THAT THE TECHNOLOGY IS BECOMING LIKE THE FORKLIFT TRUCK OF THE WAREHOUSE WORLD A recent Gartner supply chain study found mobile robot tech is moving far faster than that of drones, and warehouses are the main beneficiary of this. It shows around three-quarters of companies are either already using some type of robotic warehouse automation, or plan to.

“You can pick up a robot for a thousand dollars a month” DWIGHT KLAPPICH

RESEARCH VP & FELLOW, LOGISTICS AND CUSTOMER FULFILMENT GARTNER

Warehouse automation is nothing new; it goes back 120 years, to the first conveyors, while automated storage and retrieval systems were first deployed in the 1950s. But today’s robotics can give warehouses a sci-fi vibe, or that of a psychological thriller, if you were to stumble into a dark warehouse – so-called because such places are fully automated and so require no lighting. In this issue, we speak to Dwight Klappich, of Gartner’s Logistics and Customer Fulfilment team. His research focuses on the strategic role logistics plays in leadingedge supply chain management organisations. He is a recognised authority on logistics technologies. Klappich says it’s likely there will be thousands more mobile robots working in supply chains over the next three years. “You can pick up a robot for a thousand dollars a month, which means companies of any size can have them,” he says. The future is here – and this is part what makes supply chain such a fascinating discipline.

SUPPLYCHAIN DIGITAL MAGAZINE IS PUBLISHED BY

SEAN ASHCROFT

sean.ashcroft@bizclikmedia.com

supplychaindigital.com

CONTENTS UP FRONT 012 LIFETIME OF ACHIEVEMENT

Deborah Surrette is Chief Commercial Officer with warehouse robotics giant GreyOrange

016 THE MONTH THAT WAS

012

018 PEOPLE MOVES 020 THE SUPPLY CHAIN INTERVIEW With Sebastian Andreescu, CEO of Billhop

018

052 REVERSE LOGISTICS BUSINESSES

020

DECEMBER 2023

024

FEATURES 024 SUPPLY CHAIN

Why technology is the future for supplier onboarding

034 SAP

Darcy MacClaren, on why Joule takes AI out of the sandbox and places it at the heart of businesses

052 TOP 10

Reverse logistics businesses

034

Darcy MacClaren Chief Revenue Officer, SAP Digital Supply Chain

supplychaindigital.com

CREDIT: FEDEX

066

076 10

December 2023

094

DECEMBER 2023

120

106 066 LOGISTICS

Balancing last-mile cost control with personal service

076 SAP

Sophia Mendelsohn & Gunther Rothermel discuss sustainability at SAP

094 SUSTAINABILITY

Extreme weather prompts supply chain action at Mondelēz

106 HALMA

Dedicated to a safer, cleaner, healthier future

120 TECH & AI

The future is already here for warehouse robotics

132 ARXADA

Randy Willis of Arxada discusses synchronising supply chains with people, processes and tools

132 supplychaindigital.com

DEBORAH SURRETTE

Helping make robotics an automatic choice Deborah Surrette is Chief Commercial Officer with warehouse robotics giant GreyOrange, and explains why the role is all about problem solving

eborah Surrette is Chief Commercial Officer of GreyOrange, the multinational tech company that designs, manufactures and deploys advanced robotics systems for automation in warehouses, as well as distribution and fulfilment centres. It is a massive job in a rapidly expanding market, because a tight labour market globally means that automated warehouses are rapidly becoming a must-have in the move towards resilient supply chains. US-based GreyOrange uses automation to accelerate and scale the warehouse fulfilment operations of its customers. “We want to make warehouse fulfilment quicker, more flexible, more scalable, and more cost-

December 2023

efficient,” Surrette says. Speaking to Accenture, as part of its Logistics Disruptors series, she adds: “The way we do that is through robotic automation and our AI-driven, enterprise-level software platform.” For Surrette what differentiates GreyOrange in the automation market is that its clients “look to us when they want to achieve extraordinary scale”. She adds: “They look to us for our expertise and our years of experience, and for us to help them take the next step in automation.” Surrette’s background is in technology sales. Most recently, she was VP Sales with Oracle, where she led the company’s North America sales operation, focusing on large

LIFETIME OF ACHIEVEMENT IN SUPPLYCHAIN

“Sometimes we might encourage a client to bite small and chew fast” supplychaindigital.com

THE WAREHOUSE ROBOTICS MARKET IS WORTH AN ESTIMATED

US$6.1bn

AND IS PROJECTED TO REACH

$10.5bn by 2028

and medium-sized retail enterprises throughout the US and Canada. Prior to this, she was VP Sales North America for IBM, a role that saw her lead sales for its Smarter Commerce and Watson Customer Engagement Business Unit. The experience is standing her in good stead for her role at GreyOrange, whose customers, she says, are asking for one thing above all else: education. “A huge part of the job that our go-tomarket teams and industry experts have is to educate clients on how they can solve their problems,” she says. “About 60% of our time is spent on education about opportunities and alternatives. And there is a lot of educating to do in a market that is growing at a rapid pace. Education is one thing that can make it easier for clients to move forward. Seeing how other customers have done it can help here.” As COO, growth is something Surrette thinks about “on a 24/7 basis”. She says: “The way we’ll grow is by continuing to innovate and by understanding how to help clients do things in a repeatable, scalable fashion so that they can recreate initial successes throughout their enterprises.” GreyOrange is also helping drive growth through innovation. “We launched our Certified Ranger Network platform this year,” she says.

December 2023

“This allows various vendors’ robots to join our platform and be used by our clients.” Surrette says, too, that because automation requires a lot of capital, the company offers robot-as-a-service models that commit customers for only a year, instead of committing to capital outlays that cover ten years. “Sometimes, we might encourage a client to bite small and chew fast: take a project that’s smaller, get through it quickly, and then take it from there. You don’t necessarily have to boil the entire ocean to get good value out of starting an automation journey. The challenges that Surrette and her team help customers meet come from all angles, including the labour market. “Today’s talent market in logistics is very tight,” she says. “A retailer might want to put in place same-day shipping but because they don’t have labour available to them that turns into threeday shipping.” This, she says, is a challenge GreyOrange can handle. “We can do that in a multitude of ways that fit into the client’s existing footprint, meaning they don’t necessarily have to go out and buy a new greenfield space to build another warehouse.” Serving customer needs is what drives Surrette. She says: “I always want our teams to think about everything from

LIFETIME OF ACHIEVEMENT IN SUPPLYCHAIN

WATCH NOW

the client’s perspective. Clients will weigh the risk of moving forward versus the cost of staying where they are, and their decisions get cloudy because by staying where they are they haven’t broken anything, but neither have they fixed anything. “So I always encourage our teams to ask themselves what the client is thinking about that’s going to either hold them in place or help push them forward. And then give them clarity on how we make it easy for them to move forward.”

“About 60% of our time is spent on education about opportunities and alternatives”

supplychaindigital.com

THE MONTH THAT WAS

INTEL’S STURM: CO-OPERATION KEY TO RESILIENT CHIP SUPPLY Writing in the foreword to a report on the global chip shortage from the Council of Supply Chain Management Professionals, Intel Global Supply Chain Operations VP Jackie Sturm points out that semiconductors are “extremely complex and sensitive devices”, and that manufacturing them “requires a unique blend of high-purity minerals and chemicals, highprecision equipment, structurally optimised facilities, and a regulatory licence to operate”. READ NOW

GARTNER URGES CSCOS TO TAKE MORE OWNERSHIP OF CYBERATTACKS The threat of supply chain cyber attacks means Chief Supply Chain Officers (CSCOs) must assume more ownership of their company’s cybersecurity strategy, urges Gartner. Brian Schultz, Senior Director Analyst with the Gartner Supply Chain Practice, says CSCOs should mitigate cyber threats by following a three-prong approach to cyber security.

READ NOW

December 2023

SUPPLIER DIVERSITY CHAMPIONS ‘MUST SPEAK LANGUAGE OF EXECS’ Container Store Supplier D&I manager LaTisha Brandon says securing board buy-in is vital to the success of any supplier diversity programme. Embedding ESG programmes into operations is easier said than done for most organisations, she says, and that those that are successful invariably have buy-in at every level, from READ NOW boardroom to shop floor.

AI SET TO GIVE LOGISTICS TECH REAL-WORLD VISION – DHL

KEARNEY CHARTS RESILIENCE-TOREGENERATION BUSINESS STRUGGLE A study from global consultancy Kearney finds almost half (48%) of C-suiters say their current business transformations aren’t working. Kearney’s report – ‘Regenerate: For a future that works for everyone’ – says that firms know they now need to be ‘regenerative’ as well as resilient. READ NOW

‘ONE HANDSHAKE’ TECH INITIATIVES HURTING SUPPLY CHAIN – EY Organisations looking to digitally transform their operations are damagingly obsessed with a “single handshake” approach to the undertaking, one of EY’s top supply chain experts says.

READ NOW

DHL has published a study exploring the future in logistics of AI tech that allows computers to see and understand. The company offers insights into how this is likely to reshape the industry, and usher in a “new era of interconnectedness and efficiency”. The report – Trend Report: AI Driven Computer Vision – is aimed at logistics professionals, technology enthusiasts and advocates for sustainable supply chains. READ NOW

supplychaindigital.com

PEOPLE MOVES

SIGNIFICANT MOVERS

IN THE SUPPLY CHAIN INDUSTRY UPS names President of new geographic region; COUPA names new CEO; BDO launches supply chain consultancy service

UFKU AKALTAN JOB FROM: P RESIDENT, INDIAN SUBCONTINENT, MIDDLE EAST & AFRICA, UPS JOB TO: P RESIDENT, UK, IRELAND, NORDICS & INDIA, UPS

“ I am honoured to lead UPS in a crucial European market during such an important time for our business” 18

December 2023

UPS has appointed Ufku Akaltan as the president for its business in the UK, Ireland, Nordics and India. In this role, Akaltan leads the operations and growth strategies across the expanded district. Akaltan says: “I am honoured to lead UPS in a crucial European market during such an important time for our business. We are strategically investing in our capabilities to expand our offering to our customers, from opening smart sortation facilities, to innovating in the last mile to foster growth and reduce our carbon output. “Our global network is uniquely positioned to support the UK to India trade lane with our dedicated teams and strategic initiatives, we are not just delivering packages, we are shaping the future of logistics.”

LEAGH TURNER

GARRETT GOLDBERG

JOB FROM: C O-CEO, CERIDIAN

JOB FROM: P ARTNER, BEES PARTNERS

JOB TO: C EO, COUPA

JOB TO: C OO, WELLPLAECE

“ We have a huge opportunity to transform global organisations and communities for the better”

Procurement AI specialist Wellplaece has appointed Garrett Goldberg as its new Chief Operating Officer. Goldberg has deep knowledge and experience in tech-based marketplaces. He says: “The opportunity to apply AI to procurement is vast, and Wellplaece is at the forefront of this innovation.”

Turner most recently served as co-CEO at Ceridian, a global leader in human capital management technology, and has also held senior leadership roles at both SAP and Oracle. She says: “Coupa makes every dollar matter, and we’re supported by a mission-driven team, passionate community, and innovative platform. “We have a huge opportunity to transform global organisations and communities for the better. I’m honoured to lead this company, and to evolve and scale how we deliver real value to our community that helps them grow and succeed.”

OLIVER BACK JOB FROM: P ARTNER, BDO UK

SCOTT WHIFFIN JOB FROM: S ENIOR DIRECTOR, SUPPLY CHAIN, HIB JOB TO: E XECUTIVE DIRECTOR, SCALA Wiffin says: “I’m delighted to have joined such an exciting and progressive business. SCALA has a customer-first culture and delivers real business benefits, from helping clients to implement greener supply chain practices to enabling them to enhance their profitability.”

AJ WILHOIT

JOB TO: B DO HEAD OF COMMERCIAL ADVISORY

JOB FROM: E VP, ENTERPRISE PRODUCT & TECHNOLOGY, FLEXPORT

BDO now provides end-to-end supply chain capabilities across procurement, third-party management, supply chain and logistics. Heading up the team is Oliver Back, who says: “We know the critical importance of our clients’ value chains, so have brought together a range of expertise in their fields to support their ongoing success.”

Wilhoit says: “project44 manages more than 1 billion unique shipments annually for over 1,300 of the world’s leading brands. In this role, I will drive solutions that make it even easier for our customers to optimise their complex global supply chains.”

JOB TO: C HIEF PRODUCT OFFICER, PROJECT44

supplychaindigital.com

THE SUPPLYCHAIN INTERVIEW

SEBASTIAN ANDREESCU Sebastian Andreescu, CEO of FinTech company Billhop, discusses how paying suppliers by cards helps corporations eliminate the need for supplier onboarding WHO IS BILLHOP?

» We are a payment service enabling businesses to manage supplier payments by card on a global basis. Businesses can instantly pay any supplier by card, regardless of whether the supplier accepts cards. This effectively eliminates the need for supplier onboarding as suppliers do not have to be onboarded onto a corporation’s Enterprise Resource Planning (ERP) system to be paid. Billhop caters to predominantly midcapitalisation and large-capitalisation enterprise clients. It makes little business sense to onboard a supplier that you’re only going to pay once

WHAT ARE THE MAIN ISSUES AROUND SUPPLIER PAYMENTS?

» Supplier payments for enterprise

clients are usually divided into direct spend and indirect spend. Direct spend normally represents the lion’s share of a company’s spend,

December 2023

but is often concentrated around a few strategic suppliers, who tend to use this as negotiation leverage, to ensure swifter payments terms. This can lead buyers to have low Days Payable Outstanding, which means a significant amount of working capital is tied up in inventory. Indirect spend tends to be ad hoc and/or low-value payments spread across many suppliers. Enterprises are required to onboard suppliers to their enterprise resource planning (ERP) system and follow the same procure-to-pay process as their direct spend. This often leads to a situation where the cost of manpower spent onboarding indirect-spend suppliers to their ERP system is higher than the actual invoice they are trying to pay, as the ERP onboarding process is rigorous and time consuming.

“The challenge with suppliers is that the vast majority of them do not accept card payments”

HOW DOES YOUR SOLUTION HELP?

» The challenge for businesses with

suppliers is that the vast majority of suppliers do not accept card payments. Billhop solves this by enabling them to use their cards as the preferred method for managing supplier payments, whether it is to optimise cash flow or to enhance process efficiency. On direct spend, together with commercial issuers, we offer enterprise clients a cost-efficient solution to manage their cash flow. Commercial issuers offer bespoke card-products with prolonged interest-free payments terms, and with significantly extended credit lines of up to hundreds of millions of euros. Using Billhop, organisations can pay all suppliers, even when the suppliers

supplychaindigital.com

THE SUPPLYCHAIN INTERVIEW

“By paying tail-end suppliers with a card, our clients don’t have to onboard them”

Billhop’s partner programme is seamlessly tailored for card issuers and solution providers seeking to enable card payments

SEBASTIAN ANDREESCU TITLE: CEO COMPANY: BILLHOP INDUSTRY: FINTECH Andreescu founded Billhop over a decade ago. He is experienced in payments, financial services, financial technology, change management, business strategy, negotiations and strategic procurement.

December 2023

do not accept card payments – something that is true for the vast majority of B2B suppliers. The fees that are involved in using card rails are often offset by the earlypay discounts that suppliers offer our enterprise clients as an incentive to getting paid faster. For instance, Enterprise A will typically pay Supplier B after 60 days. Supplier B offers a 2% early-pay discount if Enterprise A pays after 10 days. Using Billhop, Enterprise A pays Supplier B after 10 days with the bespoke card they have received from their commercial bank, which has a 90-day interest-free payment period. The fee that is incurred for the card transaction – including Billhop’s margin – is lower than the 2% discount offered by the supplier. The enterprise client has effectively extended their DPO from 60 days to 100 days, paid their suppliers on time, and fully offset the cost of paying by card. (Note: These figures are purely illustrative).

WATCH NOW

HOW DOES BILLHOP HELP WITH THE SUPPLIER ONBOARDING CHALLENGE?

» Supplier onboarding is a pain point

when it comes to indirect or tail spend management. As companies continue to scale and grow, they inevitably accumulate more and more indirect suppliers that need to be onboarded onto the ERP system to get paid. Payments to indirect suppliers are frequently given lower priority compared to their direct spend counterparts, given their ad-hoc and low-value nature. In fact, studies have shown that it can take large enterprises up to six months to onboard a single supplier. It makes very little business sense to onboard a supplier that you’re only going to pay once. Billhop addresses this by offering process efficiency in indirect spend management.

Enterprise clients can use their existing procurement cards – predominantly used for travel and entertainment – to pay indirect suppliers and treat them as ordinary expense items. This way, they get all the necessary reconciliation data on card rails, which flow directly into their expense management system, in the same way as when they pay for hotel accommodation, for example. By paying all tail spend suppliers with a card, our clients do not have to go through the costly and time-consuming process of onboarding these suppliers to their ERP system. SUPPLIER ONBOARDING CAN This comes with BE A COMPLEX significant cost AFFAIR. READ savings, without OUR FEATURE ON having to compromise BEST-PRACTISE on governance ONBOARDING and data. STRATEGIES

WHY TECHNOLOGY IS THE FUTURE

FOR SUPPLIER ONBOARDING Strategic supplier onboarding is vital for managing risk around ESG compliance and disruption, and technology is increasingly doing a lot of the heavy lifting WRITTEN BY: SEAN ASHCROFT

December 2023

SUPPLY CHAIN

supplychaindigital.com

SUPPLY CHAIN

aving a strategic approach to supplier onboarding is a key component of supply chain risk management. Brian Alster is GM North America, Finance & Risk, for business intelligence and analytics multinational Dun & Bradstreet. He says that in today’s uncertain world, it is imperative that C-suiters “act with urgency around risk”. Dun & Bradstreet helps businesses turn data into actionable insight, by leveraging its data cloud, which contains information on 500 million businesses around the globe. In his role, Alster helps procurement and global sourcing organisations solve supply chain disruption challenges, and also to reduce expenses. He says that the major risks facing supply chains right now is inflation, an unpredictable global economy and the ever-increasing regulatory burden on firms.

“ Automating supply chain data allows you to find new suppliers or manage existing ones” BRIAN ALSTER GM NORTH AMERICA, FINANCE & RISK DUN & BRADSTREET

December 2023

The regulatory landscape is in a state of extreme flux, due to increasing geopolitical issues (Russia & Ukraine, China and the US and now Israel and the wider Middle East), and Alster says companies are struggling to keep up. “This year we expect to see increased ESG regulation, which most companies have not yet built into their supplier onboarding risk assessment processes,” he says. “Companies are trying to go from being reactive to being proactive, which is really challenging in a global sourcing environment where they are trying to do more with the same, or fewer, resources.” In terms of managing supply chain risk, Alster says there are four components of a successful supply chain program. “The first is having a risk-based assessment process that helps companies identify potential supplier risk upfront during the onboarding process,” he says. “ That process should include a review of financial and credit, health, cyber risk, ESG risk, sanctions, and beneficial ownership.” The second, he says, is to look at tier one suppliers in order to understand where the critical suppliers are. “These might be in the sub-tier supply chain – in tiers two or three, which are your supplier’s suppliers,” he explains. “Most of our customers struggle for visibility on that second and third tier.”

supplychaindigital.com

Social Values Compliance Operationally Where It Counts Empower your entire ecosystem to drive real and meaningful change. Suppeco leverages the potential in relationships to solve key challenges within the value chain. An award-winning solution built for the real world.

Take a tour

BOOK A DEMO

He adds: “Thirdly, we encourage clients to identify those suppliers that are most critical. Firms then need to put a continuous monitoring program in place, to ensure the risk profile of those suppliers has not changed. If it has changed, it’ll help inform decisions around the amount of business you’re doing with that company.” Alster and his team also help companies shift from being reactive to being proactive. “Being able to identify alternative suppliers among your most critical group of suppliers is really important,” he says. “If you have alternatives on hand you’re able to pivot quicker. You can never eliminate supply chain disruption, but you can proactively mitigate the impact it has on profitability and the ability to maintain operations.”

CREDIT: DUN & BRADSTREET

SUPPLY CHAIN

Brian Alster TITLE: GM NORTH AMERICA, FINANCE & RISK COMPANY: DUN & BRADSTREET INDUSTRY: ANALYTICS At Dun & Bradstreet, Alster is responsible for the strategy, product development, and sales efforts for the company’s third-party risk and compliance product portfolio. supplychaindigital.com

Onboarding specialist Certa unveils new AI solution Third-party management solutions specialist Certa has introduced CertaAssist, which uses generative AI technology for workflow optimisation, data visualisation and streamlined supplier onboarding. Alongside CertaAssist, the company also introduced a suite of rapid-integration modules covering compliance, risk and procurement and ESG. “By offering AI capabilities within our tool, we are providing our clients and their suppliers with cutting-edge solutions that enhance efficiency, accuracy, and security in third-party management,” said Jag Lamba, Certa Founder & CEO. “Certa AI is a strategic step towards building the Certa Network of ecosystems across our customers, partners, and third-party suppliers that will seed future network effects. “The future of compliance and procurement is guided supplier discovery, frictionless onboarding, and comprehensive data management.”

SUPPLY CHAIN

Tips For Onboarding New Vendors WATCH NOW

Alster says the take-away message for C-suiters is to “act with urgency on strategic supplier onboarding”. He adds: “Invest in your processes, to ensure you can do more with the same, or fewer, resources. This usually means automating your supply chain data, so you’re finding new suppliers or managing existing suppliers.” Technology has a vital role to play in supplier onboarding. One solution that exemplifies what is happening in this space is SmartOps, from UST, an AI-powered cognitive automation platform that holistically learns and reimagines business processes, while intelligently digitising and compressing manual workflows. Running on AWS, SmartOps works across business and IT operations, including help desks and onboarding tools. It optimises procurement and supply chain management

– everything from tracking shipments and invoice payment to contract management to ESG compliance. Technology of another flavour is also helping streamline and improve supplier onboarding processes and tighten protocols: blockchain. One company at the forefront of helping drive blockchain adoption in supply chain is IT consultancy Tech Mahindra – part of the Mahindra Group, founded in 1945 and one of the world’s largest multinational federation of companies, with 260,000 employees in 100 countries. Tech Mahindra meets the needs of global customers by leveraging next-generation technologies – including 5G, blockchain, cybersecurity and AI – to enable end-to-end digital transformation for global customers. Rajesh Dhuddu, is SVP & Global Business Head, Emerging Technology at Tech supplychaindigital.com

SUPPLY CHAIN

Rajesh Dhuddu TITLE: SVP & GLOBAL BUSINESS HEAD, EMERGING TECHNOLOGY COMPANY: TECH MAHINDRA INDUSTRY: IT & PROFESSIONAL SERVICES Dhuddu is a thought leader in the areas of blockchain, Web 3.0, the metaverse and other emerging technologies.

Mahindra, and was involved in a recent blockchain project with a multinational automobile manufacturer. One goal of the project was to help the auto-maker achieve efficiency around its minimum viable product (MVP), which is the version of a product that has just enough features to be usable by early customers, who can then provide feedback for future versions of that product. Dhuddu says: “For the MVR run, we on-boarded five global suppliers, a logistics provider, a customs clearance authority, and a trading company to consolidate orders and send the shipment to manufacturing plants in South Africa. “The onboarding process was templated to enable stakeholders to be onboarded quickly and effectively. This also meant that they had a business case to take to the extended ecosystem.”

This, he says, is the building blocks for enterprise AI, and for UST’s platform, called SmartOps. This, says Masood, “is automation on steroids”. He adds: “SmartOps is an AI-powered intelligent operations platform built with the pillars of automation – knowledge management, intelligent monitoring and autonomous operations. “Businesses are evolving faster than ever, and to stay they need to focus on highimpact priorities,” Masood told his audience. “But that can be difficult with the backlogs of data, internal processes, and endless administrative tasks. “Many companies seek products to solve this challenge, but a one-size-fits-all technology solution doesn’t account for the uniqueness of every business.” Masood adds that he and his UST colleagues combine strategic business

“The onboarding process was templated to enable stakeholders to be onboarded quickly and effectively” RAJESH DHUDDU GLOBAL BUSINESS HEAD, EMERGING TECHNOLOGY, TECH MAHINDRA

expertise with knowledge management, automation, and AI “to unlock your company’s human ingenuity. When it comes to your business there is no greater advantage than empowering the ingenuity of your workforce,” he says, adding: “By reimagining your business operations, we empower your people to focus on those opportunities with the highest impact potential.” supplychaindigital.com

SAP’S JOULE TAKING SUPPLY CHAIN AI TO THE NEXT LEVEL WRITTEN BY: SEAN ASHCROFT PRODUCED BY: GLEN WHITE

December 2023

supplychaindigital.com

SAP

Darcy MacClaren, Chief Revenue Officer for SAP Digital Supply Chain, on why Joule takes AI out of the sandbox and places it at the heart of businesses

n launching Joule – SAP’s naturallanguage, generative AI ‘co-pilot’ – SAP CEO Christian Klein spells out how it has the power to redefine both the way businesses and people work. “Joule will know what you mean, not just what you say,” Klein tells the world. Joule will be embedded throughout SAP’s cloud enterprise portfolio, and is aimed at the estimated 300 million enterprise users around the world who work with SAP cloud solutions. It is built to deliver proactive and contextualised insight from across the breadth and depth of SAP solutions and third-party sources – and one area in particular is set to reap huge benefits from it: supply chain. Darcy MacClaren, Chief Revenue Officer for SAP Digital Supply Chain, says: “AI has the potential to revolutionise supply chain management because it’s going to enable better decision-making, improved efficiency, reduced costs and meaningful sustainability initiatives. As AI becomes more accessible, we will see increased adoption and integration of it across supply chain operations. It’s a game changer.” Based on an understanding of a customer’s processes, Joule is able to provide the customer not only with intelligent insight, but can also make recommendations designed to deliver outcomes faster.

December 2023

“This capability is now available across the SAP portfolio, and it’s going to be incredibly important to supply chains,” she says. “You can interrogate Joule. You can ask questions such as, ‘Were there any issues in my last supply planning run?’ Joule will then let you know what’s going on in your planning cycles, and what you need to do about it. It will make suggestions by comparing different planning runs.” SAP ‘will become the largest AI enterprise bar none’ Because AI is embedded across its solutions, MacClaren explains that Joule “is set to make SAP ‘the largest AI enterprise out there, bar none’.” “Supply chain is the key area where folks are using AI for,” she adds. “Joule can contextualise data from multiple systems. This results in insights that help people get work done faster and drive better business outcomes in a secure, compliant way.” “Think of well-known consumer apps that have AI embedded, such as Siri, Uber and Microsoft Office,” says MacClaren. “We have that now in SAP. Our mission is to enable and accelerate the adoption of AI to create business value. It’s infused in the business process, and that’s what SAP’s business AI is. It’s an integrated feature. “We are also exposing business AI to extend services through our business technology platform.”

supplychaindigital.com

SAP

WATCH NOW

MacClaren is in no doubt that Joule – and SAP’s wider business AI offerings – are milestone events for supply chain, a discipline in which she has been involved for more than 25 years. She joined SAP 12 years ago. Unlike many in the supply chain, MacClaren has an economics rather than engineering background, and also gained an MBA early in her career when she was with Hewlett-Packard, where she worked in the manufacturing technology space. At SAP, MacClaren is responsible for the go-to market for SAP’s digital supply chain solution set. “It’s what we call ‘design to operate’,” she says. “It’s basically everything from how a company designs its products to how it plans, schedules, manufactures, delivers and operates.” 38

December 2023

Making supply chains resilient ‘is our goal’ She and her team are responsible for working with SAP customers to help transform their supply chains to be resilient, risk proof, and agile. “We’re the point of contact between SAP and our audience,” she says, adding: “As Chief Revenue Officer, I am on the customer side of things. But there is also a solution and marketing aspect to what we do, and we’re also involved with engineering product development. We work together to determine the go-to market for the supply chain at SAP globally.” Throughout her career, MacClaren has developed deep experience in building and scaling niche supply chain companies. She started out with a planning and scheduling company, whose solutions

“ SAP’S ALWAYS BEEN POSITIONED BETWEEN TECH AND BUSINESS, AND WE’RE NOW APPLYING THAT TO REALLY SEIZE THE OPPORTUNITY OF AI” DARCY MACCLAREN

CHIEF REVENUE OFFICER, SAP DIGITAL SUPPLY CHAIN

DARCY MACCLAREN TITLE: CHIEF REVENUE OFFICER INDUSTRY: S OFTWARE DEVELOPMENT LOCATION: UNITED STATES Darcy MacClaren is a strategic global leader who has spent 30 years growing, differentiating, and improving businesses through technology transformation with a focus on supply chain. She has held various leadership roles at SAP over the last ten years, most recently serving as the Senior Vice President of Digital Supply Chain and Industry 4.0 for SAP North America. Today, she serves as Chief Revenue Officer of SAP Digital Supply Chain, overseeing the global supply chain business.

supplychaindigital.com

SAP

December 2023

“ A BUSINESS MUST CONSTANTLY BE WORKING ON ITS DATA. IT’S A JOURNEY, NOT A DESTINATION” DARCY MACCLAREN

CHIEF REVENUE OFFICER, SAP DIGITAL SUPPLY CHAIN

now reside at Oracle, and has also worked across most of the ‘design-to-operate’ pillars, including planning, transportation, and design. MacClaren finds the potential of Joule “exciting and inspiring,” and feels the same way about supply chain in general. “From the beginning, I just loved supply chain,” she says. “I loved the mathematical complexity of it, and I loved how it could be optimised and the strategic decisions that are made. It made me realise how powerful and important the supply chain is in any business.” At SAP, MacClaren is on a self-declared mission to work with customers to transform their supply chain – something she sees as a global imperative. “Supply chain always was very important,” she says, “but the pandemic brought it to the forefront of people’s thinking, both at boardroom and government level.” Continuing with this theme, MacClaren points out that the release of Joule comes at a time when the stock of supply chain executives has never been higher – their influence at board level never stronger. “CEOs are now being recruited from the supply chain side of the business because supply chain execs understand the entire supplychaindigital.com

Activate your purpose In a changing world, organizations require adaptive digital supply chains. Transform your organization into a Kinetic Enterprise™—anticipate change, adapt swiftly and empower your transformation journey. Activate your purpose with Deloitte + SAP

Learn more

Use more image captions as often as possible

organisation and what runs it,” she says. “A study we did recently with Oxford Economics shows how important it is in today’s world for businesses to make supply chain the heart of any business strategy, because of the seemingly never-ending run of disruptions. It must never be an afterthought.” With Joule now turbo-charging SAP’s solutions, senior supply chain executives are set to bring a greater degree of insight and control to the boardroom. SAP solutions have AI and ML at their core MacClaren reminds us that SAP’s solutions have for some time been built on AI and have offered machine learning capabilities.

“If you look at our warehouse management solutions, we use AI for intelligence slotting,” she says. “This optimises warehouses through stock replenishment, based on product characteristics, product demand and sales forecasts.” She adds: “Then if you look at generative AI in transportation, it examines goods received and delivery notes, and optimises which loads you should unload first. So it’s quite powerful. “Demand planning customers, meanwhile, are using market data promotion, weather calendars, and tens of thousands of data points with machine learning to create forecasts by country, which makes it far more efficient.” supplychaindigital.com

SAP

Of course, SAP does not work in a vacuum, but within a collaborative ecosystem far greater than the sum of its parts. One key SAP collaborative partner is Deloitte, who recently expanded its deployment of SAP Business Technology Platform, an open cloud solution with data management, analytics, AI, IoT, blockchain and application development services to help connect companies. Deloitte has also expanded its SAP RISE deployment so companies can access

innovation across their supply chain. SAP RISE is a complete offering of cloud solutions, infrastructure and services that helps businesses migrate SAP ERP. Deloitte now has RISE Premium Supplier designation, which increases the breadth of the SAP cloud services that the company is able to bring to its clients. “We have a deep commitment to working closely with SAP to empower

supply chain transformation in pursuit of business agility and resilience,” a Deloitte spokesperson says. “We look forward to continuing to support our joint clients through the waves of industry change, with SAP as a prized collaborator.” Pointing out that Joule takes the power of SAP’s solutions to another level. MacClaren Echoing Klein that Joule knows what you mean, not just what you say, she explains that Joule

means AI “is no longer just a sandbox pilot but the beating heart of your business.” SAP partner – IT implementation specialist, LeverX – also lauds the power of Joule, with company Chairman and Co-founder Victor Lozinski saying that Joule “provides new-found capabilities that enable SAP customers to improve the decisionmaking process, accelerate problem resolution, and determine the sustainability quotient of their delivery operations.”

supplychaindigital.com

SAP

`He adds: “The world of logistics faces several hurdles throughout the delivery process, impacting efficiency, transparency, and overall costs. “The growing and dynamic power of AI can address these challenges and bring to life groundbreaking solutions that revolutionise the entire supply chain landscape. By leveraging SAP Digital Supply Chain, companies can orchestrate and monitor all delivery cycles in real-time.” Another SAP partner to welcome the introduction of Joule is Camelot ITLab, a leading SAP consultancy for digital supply chain management. A Camelot ITLab spokesperson said: “The impact of AI in supply chain is not limited to a specific function, but offers transformative benefits across the entire design-to-operate process. “With its generative AI application Joule, SAP will dramatically change how businesses run, and it marks a new era of transformation and innovation. Joule will be a game changer for SAP’s Digital Supply Chain customers.” But of course, many businesses currently have no access to this game-changing AI power, because they are behind the

“ JOULE MEANS AI IS NO LONGER JUST A SANDBOX PILOT BUT THE BEATING HEART OF YOUR BUSINESS” DARCY MACCLAREN

CHIEF REVENUE OFFICER, SAP DIGITAL SUPPLY CHAIN

technological curve – marooned in a world of siloed data and offline spreadsheet analysis. For MacClaren and her team, guiding such business through their transformation journeys is central to what they do. “Like many areas of business, supply chain practitioners are very comfortable with Excel, which they use for offline data manipulation,” says MacClaren. “This is why SAP uses Excel-like interfaces, the big difference of course being that our solutions are dealing with live data accessible in the cloud when the business user needs to make game-time decisions.” She adds that as well as weaning supply chain folk off Excel, SAP solutions help them move away from departmental silos, to be more collaborative – both within their own organisation and externally. “If you are a demand planner, you need to be communicating with supply planning,” says MacClaren. “Design needs to be supplychaindigital.com

communicating with manufacturing, which needs to communicate with logistics – and they all need to be communicating with one another as part of a digital thread.” Disparate technologies can affect data quality As for the many businesses that have already embarked on transformation, they too face barriers to progress. “A business must constantly be working on its data,” she says. “It’s a journey, not a destination, and the more a company uses disparate technologies the more important it is that it keeps that data clean.” 50

December 2023

“ AI HAS THE POTENTIAL TO REVOLUTIONISE SUPPLY CHAIN MANAGEMENT” DARCY MACCLAREN

CHIEF REVENUE OFFICER, SAP DIGITAL SUPPLY CHAIN

SAP

One of the most important things SAP helps its clients with, says MacClaren, is clean data. “Look, data is never going to be 100% clean but you have to start the journey of cleaning it as soon as possible, and of course we have a lot of machine learning tools to help here.” Whatever stage a business is at on its transformation journey, MacClaren says her team’s aim is the same: “We want to delight the end consumer, and do it in a sustainable and cost-effective way. “We have a strong sense of ownership and responsibility in helping companies

do that, and we take it very seriously. That’s what I really enjoy about it. The impact supply chain has across society, globally. “When you add our existing capability to natural-language AI it is going to be truly transformational. “SAP has always been positioned between technology and business, and we’re now applying that to our long standing customers to really seize the opportunity of AI.

supplychaindigital.com

TOP 10

REVERSE LOGIST

IS SEASONAL SUP CHAIN CHAMPION Reverse logistics is not only vital for the circular economy but also for managing returns during the holiday season WRITTEN BY: SEAN ASHCROFT

December 2023

everse logistics is the process of returning goods back up the supply chain to recapture value (reuse, recycling, repair or disposal). With the pressing need to hit global net zero targets, such services are vitally important for helping create circular economies. But during the holiday season, reverse logistics services see a massive spike in activity. In the era of one-click purchases and money-back guarantees, consumers can shop impulsively, in the knowledge there’s nothing to lose if they change their minds – or if the recipient of the hastily bought gift is less than impressed with it! The following companies are among the leaders when it comes to offering reverse logistics and returns services.

TICS

PPLY N

supplychaindigital.com

CH Robinson Worldwide

Nippon Yusen

CEO: Hiroyuki Okamoto Japanese shipping company Nippon Yusen is owned by the Mitsubishi Corporation. Alongside its main shipping operations, the company provides end-to-end logistics solutions. Now based in Tokyo, it owns and operates 800 shipping vessels, making it one of the world’s largest shipping firms. Yusen has developed an end-toend reverse logistics program that provides a system for managing product returns, allowing customers “to recoup revenue while limiting environmental impacts, including a zero-landfill solution”, it says. “Our expert management of products’ aftermarket lifecycle ensures the maximum recovery value for reused goods and that recycling is handled responsibly.” 54

December 2023

With around 100K customers in 150 countries across six continents, US-based CH Robinson is one of the world’s largest reverse logistics companies. Its services in this area are designed to help businesses minimise waste and cut down on inefficiencies. In the weeks following the holiday period, the company’s reverse logistics expertise helps businesses maintain control over the reverse flow of items, by offering comprehensive reporting, and smart solutions built on a network of 85,000 contract carriers, through a multimodal transportation management system.

CREDIT: CH ROBINSON WORLDWIDE

CREDIT: NIPPON YUSEN

David Bozeman

TOP 10

XPO Logistics

Geodis

CEO: Marie-Christine Lombard France-based Geodis is a global freight management and logistics provider. It manages sea and air cargo across five continents. The company allows customers to optimise reverse logistics, by offering a “proven returns model and international network”. It says that it “designs reverse flows to protect both your profits and the shopper experience”. Its reverse logistics and returns service includes: product returns management; collection at customer site; sorting, grading, refurbishing, & repair management; omnichannel remarketing; and analytics to optimise product recovery.

XPO is a leading innovator of transport services in Europe, serving an estimated 48,000 customers across 554 locations. XPO offers a streamlined reverse logistics solutions that, it says, “improves customer service, increases customer loyalty and retention, and maximises the value of returned goods”. It adds that its “technology-focused approach is backed by years of experience managing return for clients across the globe”. In total, XPO processes more than 170 million returns annually, with these peaking during the holiday season.

CREDIT: XPO LOGISTICS

CREDIT: GEODIS

CEO: Mario Harik

supplychaindigital.com

Take a tour

BOOK A DEMO

TOP 10

DSV Panalpina

DSV has become a world-leading provider and manager of supply chain solutions, and sees reverse logistics as a strategic area for growth. To complement its reverse logistics offering in the technology sector, the company has entered into a strategic alliance with Hong Kong-based company, Spread Logistics. Working closely together, the two companies now pick up faulty consumer electronics at origin, do failure analyses and – if need be – return them to the original manufacturer in mainland China. “The customer gains visibility of all return materials in the supply chain and can make data-based decisions on the reuse, repair, disposal or even redesign of its products,” it says.

Jens Bjørn Andersen, CEO of DSV Panalpina CREDIT: DSV PANALPINA

CREDIT: CEVA LOGISTICS

CEO: Jens Bjørn Andersen

CEVA Logistics

CEO: Mathieu Friedberg CEVA has 750 warehouses worldwide, and offers end-to-end supply chain solutions. At CEVA returns centres, the company says that over 90% of items “are processed within 24 hours and are ready for shipment to consumer”. In addition, it adds that 95% of processed items are “graded to sellable condition and are ready for re-selling, and we offer additional salvage services when needed”. Unrecoverable items, meanwhile, are sent to secondary markets or recycled. It also handles first mile, as well as transport of returned items to its scalable fulfilment and returns centres, covering more than 40 countries across Europe. supplychaindigital.com

DB Schenker

DB Schenker is a German logistics company, and a subsidiary of Deutsche Bahn, the German railway company. It is responsible for land, sea, and air transport and contract logistics. Globally it has around 76,000 employees in 750 locations, and warehouses across 50 countries. The company recently launched its new Circular Economy Logistics product line, bundling its experience in reverse operations and investing in the future of returns, repairs and refurbishment of electronic devices. “This underlines our ambition to excel in modular reverse management operations and to provide a one-stop-shop for our customers,” the company says.

Kuehne + Nagel

CREDIT: DB SCHENKER

CEO: Stefan Paul

December 2023

Kuehne+Nagel says that delivering customers’ goods – especially allpervasive consumer electronics – “is only part of the puzzle”. In addition to order fulfilment and inventory management Kuehne+Nagel offers reverse logistics, which it says “is another crucial aspect that can have an impact on your margins”. It adds: “Through streamlined processes, you can reduce costs and drive better customer satisfaction. We offer comprehensive support for reverse logistics, to take the pressure off your organisation.”

CREDIT: KUEHNE+NAGEL

CEO: Jochen Thewes

TOP 10

WATCH NOW

UPS

President (Europe): Susanne Klingler-Werner

CREDIT: UPS

Logistics multinational UPS is set to become a major reverse logistics player following its recent buyout of PayPal’s Happy Returns, the US software and reverse logistics company that enables frictionless, no-box, no-label returns for merchants and consumers. Happy Returns, which has around 800 merchant customers, allows users to access a returns portal, and to make a boxfree return at the most convenient location and have their item shipped, sorted and returned to the merchant. The service is designed to reduce the cost of e-commerce and create a more efficient, sustainable supply chain. “Joining the UPS team allows us to harness the power of the UPS network to transform the returns industry,” said Happy Returns CEO and co-founder David Sobie. supplychaindigital.com

In Association with:

CSCO s THE TOP 100

OUT NOW Championing CSCOs from global organisations, celebrate those who elevate the industry day in, day out.

Read now

TOP 10

WATCH NOW

FedEx

CEO: Rajesh Subramaniam Sending a package back needs to be straightforward, believes FedEx. “That means providing clear, no-nonsense steps for our customers,” it says, and to that end the company created FedEx Global Returns. Of this service it says: “We want international returns to be a straightforward solution for businesses and an easy process for their customers. We designed FedEx Global Returns to provide clear guidance on creating

December 2023

labels, preparing shipments, and clearing customs. Using the service, customers can: link returns to the original shipment; get expert guidance from FedEx team members; and manage returns across more than 200 countries and territories.

IMAGE: AMAZON

CREDIT: FEDEX

TOP 10

supplychaindigital.com

The Portfolio

WORK WITH US

BALANCING LAST-MILE COST CONTROL

WITH PERSONAL SERVICE FedEx Express Managing Director Eric Tan discusses the role modern fulfilment plays in controlling costs while still giving customers what they want WRITTEN BY: SEAN ASHCROFT

December 2023

LOGISTICS

supplychaindigital.com

December 2023

LOGISTICS

ith cost cutting now a major objective for organisations, supply chain is one area that many organisations target. In pre-pandemic times, cost cutting was largely the domain of procurement departments, but now every facet of the supply chain is becoming more agile, efficient and cost effective. Logistics is key among these areas, with the last-mile always having been the most complex and costly part of delivering goods. These days, businesses are not only seeking to reduce supply chain costs, they are also doing so while adapting to market uncertainty. A recent EY report declared that although there is a great deal of urgency around cost cutting, the methods behind the measures ought not be short-sighted, “especially

“ Fulfilment in Singapore has been shaped by evolving consumer expectations” ERIC TAN

MANAGING DIRECTOR FEDEX EXPRESS

considering that the goal is not just savings for now but adding resilience in the longer term”. Here, FedEx Express Managing Director Eric Tan, who is based in Singapore, discusses the role the company’s fulfilment strategies in the region plays in helping deliver a better service at a lower cost. What has shaped fulfilment in Singapore? It is important to first understand the current state of fulfilment in Singapore, which has been shaped by evolving consumer expectations. While consumers in Singapore have always expected best-in-class order fulfilment, marked by timely and transparent deliveries, the COVID-19 pandemic reshaped expectations to now include elements of personalisation. As a result, logistics providers had to re-evaluate the way they operated, so they could continue empowering businesses to keep up with consumer expectations. In the backdrop of increasing shipping volumes driven by the growth of e-commerce many logistics providers have shifted away from the traditional one-size-fits-all approach of reducing costs and optimising processes, to meet the growing customer demand for personalisation. In our What’s Next in ecommerce survey, we found that, to improve the ecommerce experience, consumers expect personalisation, which includes choice and convenience in terms of deliveries. For the supplychaindigital.com

CREDIT: FEDEX

LOGISTICS

business, this also means reduced missed deliveries and delivery attempts. As part of efforts to increase the personalisation experience, we integrated WhatsApp into our FedEx Delivery Manager International platform, providing customisable delivery options and alerts, such as flexibility to pick the timing and location for deliveries. We also collaborated with third-party partners to expand last-mile delivery options through 24/7 self-collection with more than 2,000 retail touchpoints across the country. Lastly in July this year, we introduced picture proof of delivery for express residential deliveries in Singapore

Eric Tan TITLE: MANAGING DIRECTOR COMPANY: FEDEX EXPRESS INDUSTRY: LOGISTICS LOCATION: SINGAPORE Tan says of himself: “I am an accomplished and goaldriven professional offering more than 20 years of extensive experience in a Fortune 500 organisation with specialisation in operations management and tactical leadership.”

supplychaindigital.com

Cost control against backdrop of uncertainty In the face of spiralling cost inflation, supply chain leaders must prioritise efficiencies that are targeted and sustainable, EY says. With cost cutting now a major objective for organisations, EY warns that such programmes should not be confined to the procurement function. The report explores in depth how organisations can reduce supply chain costs, while adapting to market uncertainty. It says that, although there is a great deal of urgency around cost cutting, the methods behind the measures must not be short-sighted, “especially considering that the goal is not just savings for now but adding resiliency in the longer term”. EY adds: “Ideally, executives identify specific cost-reduction steps and timelines to be applied across the organisation. Rapid cost reduction strategies in supply chains can net value in a single quarter or six months, and these quick wins can be used to propel further actions. EY lists short-term cost-reduction initiatives that include the following: n PLAN n SOURCE n MAKE n DELIVER EY says: “Global market uncertainties and disruptions continue to put pressure on supply chains. “Supply chain executives already tasked with navigating bottlenecks and materials shortages are now facing demand fluctuations, trade tension, talent shortages and tight margins.”

– giving customers the assurance that their packages have been delivered with visual confirmation. How do you ensure efficient fulfilment for international markets? Several crucial fulfilment factors contribute to the success of businesses in international markets, helping to ensure efficient operations and customer satisfaction. One of these is affordable, time-definite and reliable deliveries. Meeting the demand for timely and reliable deliveries is paramount in international markets. Customers expect

LOGISTICS

“Having an extensive global warehousing network reduces shipping times and costs” ERIC TAN

MANAGING DIRECTOR FEDEX EXPRESS

their shipments to arrive on time and in good condition. In recent years, there has been an increasing call for more-affordable shipping options that offer the same level of reliability, especially for non-time-critical deliveries. In response to this demand, we introduced our FedEx International Economy services, connecting APAC to 170 markets worldwide. This service allows us to deliver parcels within two to five business days in APAC, and to major markets in Europe and the US in four to five business days. The availability of affordable shipping options is also helping businesses, especially online retailers, manage cost, with order

returns a standard component of e-commerce. For example, return orders are generally considered non-time-critical shipments and businesses can reduce costs by arranging such orders to be shipped by non-priority arrangements. What role does a global warehousing network play? Having an extensive global warehousing network is critical when operating in international markets. Such networks enable logistics providers to strategically store and distribute products across different regions, optimising supply supplychaindigital.com

LOGISTICS

FedEx Express Singapore WATCH NOW

chain efficiency and reducing shipping times FedEx Express and costs. Singapore has a Understanding the workforce of importance of a wellplanned warehousing and a vehicle network to support fleet of our global logistics operations, we have 1,750 FedEx Express stations strategically positioned near key international markets. These stations serve as pivotal hubs for sorting, processing, and dispatching shipments to various destinations worldwide. In Singapore, our South Pacific Regional Hub acts as a regional consolidation point for trans-shipments in and out of Australia, New Zealand, and Southeast Asia.

1,276 154

December 2023

How does the balance between efficiency and sustainability affect fulfilment strategies? Balancing between efficiency and sustainability can have a significant impact on fulfilment strategies for logistics providers. Fulfilment strategies are designed to optimise the process of delivering products to customers while keeping costeffectiveness and customer satisfaction top of mind. However, in today’s environmentally conscious world, sustainability has become a crucial consideration for logistics providers who are expected to be reducing their environmental impact and meeting the expectations of socially responsible consumers. Achieving sustainability goals often entails substantial investments in practices and technologies that reduce environmental impact.

“Meeting the demand for timely and reliable deliveries is paramount in international markets” ERIC TAN

MANAGING DIRECTOR FEDEX EXPRESS

LE ADING THE WAY ON ENTERPRISE SUSTAINABILIT Y MANAGEMENT AD FEATURE WRITTEN BY: HELEN ADAMS PRODUCED BY: JONATHAN MOORE

December 2023

supplychaindigital.com

SAP

Sophia Mendelsohn & Gunther Rothermel discuss sustainability at SAP, being Co-General Managers and why they are excited to be in sustainability today

AP was founded in 1972 when computers filled an entire room and were connected to monochrome CRT displays. This group of early technology pioneers went on to become the global leader in enterprise resource planning (ERP) software. SAP built and installed solutions that help run critical business functions from finance to supply chain to human resources. Ninety-nine of the 100 largest companies run SAP solutions, also 97 of the greenest companies. The company’s reach into global business is impressive – SAP customers account for US$46tn, or 87% of all global commerce. SAP’s mission now is to embed sustainability into the core business of its customers. Using its formidable scale and reach, SAP connects sustainability data with other cloud-based corporate data so that companies have a more complete, accurate and actionable understanding of their sustainability performance. By bringing sustainability into finance, procurement and business networks, the aim is to make sustainable business the standard operating procedure. While SAP has offered sustainability management solutions for many years, only a few years ago did it make the strategic move to develop a portfolio of specialised,

December 2023

Gunther Rothermel is Chief Product Officer for SAP Sustainability. He’s been with the company for 25 years leading development teams. Sophia Mendelsohn is Chief Sustainability and Commercial Officer for SAP Sustainability and has focused on advancing sustainable business for 20 years.

supplychaindigital.com

SAP

cloud-based software solutions to help customers tackle difficult sustainability challenges at industrial scale. These solutions cover a number of areas, including climate action, circular economy, social sustainability, as well as holistic steering – the evaluation of corporate impacts on society and wider economy – and reporting. Under a co-general management structure, a team was formed within SAP to build and help customers adopt the new solutions. Together, Rothermel and Mendelsohn are Co-General Managers for Sustainability at SAP. Rothermel spent most of his career in SAP. “I work more on the technology platform side of the house,” he says. Alongside his personal interest in the topic, Rothermel realised that there was a massive data challenge in corporate sustainability and this is why he began solving problems in this area. Meanwhile, Mendelsohn cut her sustainability teeth in China. “That’s where I really became committed to the idea of marrying up free-market solutions with sustainable outcomes,” she says. “I’m often called an OG in corporate sustainability. Before, we called it EHS and then CSR, then sustainability and then ESG. Now, we are moving towards business integration.” A co-general manager structure makes sense for SAP and sustainability solutions, Mendelsohn adds: “I think what Gunther and I combine very well at SAP is my understanding of the market need with his understanding of sustainability data and integrating it with other corporate data.” This is exactly where SAP combines ambition with reality. 80

December 2023

WATCH NOW

ESG data management foundation “We cover a broad range of sustainability challenges for our customers,” he says. “A lot of things are coming fast. It’s an exciting time because there’s a lot of new ways we are applying advanced technology to sustainability management while at the same time there’s a lot of regulatory changes happening.” One major challenge, however, is to find solutions for the problems at hand, while some of the standards and industry regulations are not there yet, he said. For Mendelsohn, SAP’s ESG data management strategy and solutions, like the SAP Sustainability Control Tower, is about creating the best data foundation so companies can level up to holistic, enterprise-wide sustainability management. “One thing Gunther has taught me at SAP is that there is still a huge amount of uncertainty with sustainability data,” supplychaindigital.com

SAP

GUNTHER ROTHERMEL TITLE: C HIEF PRODUCT OFFICER AND CO-GENERAL MANAGER INDUSTRY: S OFTWARE DEVELOPMENT LOCATION: GERMANY Gunther Rothermel helps businesses on their transformation journey with a new set of sustainability related capabilities offered by SAP. As Chief Product Officer and Co-General Manager for SAP Sustainability, Gunther and his team deliver product innovations on sustainability addressing four dimensions: holistic steering & reporting, climate action, circular economy, and social responsibility. A seasoned leader with a future oriented, strategic mindset, Gunther has an impressive track record in product development and delivering cloud services. Principles like agile development, design-led innovation, DevOps and cloud engineering are essential parts of Gunther’s leadership approach. Gunther was key in defining and delivering SAP’s platform technology and the overall integration and orchestration portfolio of SAP.

“ BECAUSE MORE THAN 80% OF CARBON EMISSIONS ARE SCOPE 3 EMISSIONS LOCKED AWAY IN YOUR SUPPLY CHAIN, YOU FUNDAMENTALLY NEED TO GET ACCESS AND AGGREGATE THIS DATA” GUNTHER ROTHERMEL

CHIEF PRODUCT OFFICER AND CO-GENERAL MANAGER, SAP SUSTAINABILITY

says Mendelsohn. “With so much of the regulation and ambition oriented around reporting and transparency, our challenge is to make reporting easier so they can focus on transitioning their business activities to be more sustainable.” Data is core to the overall ESG foundation, she adds. The data has to be accessible, accurate and stable to be effectively integrated with other corporate data and used for strategic planning or in-the-moment operational decisions. “What the sustainability stack at SAP does is go from data aggregation to data analytics,” she says. “The ability to connect the data, see it and use it from supplychaindigital.com

“ WE ARE NOT ONLY USING THE STRONG CAPABILITIES THAT WE HAVE IN-HOUSE IN SAP, BUT WE ARE ALSO INCORPORATING AND USING THE VERY SPECIALISED CAPABILITIES FROM DIFFERENT PARTNERS” GUNTHER ROTHERMEL

CHIEF PRODUCT OFFICER AND CO-GENERAL MANAGER, SAP SUSTAINABILITY

the boardroom to the shop floor, is what can help people make more informed, more sustainable business decisions.” Tackling Scope 3 emissions across supply chains When it comes to climate action and accounting for carbon emissions, SAP wants to help companies move past estimates and error-prone spreadsheets to effectively calculate overall corporate carbon footprints, and then move to calculating footprints at the individual product level. Because SAP helps companies run their global supply chains, SAP is ready to get down to the data details when it comes to Scope 3 accounting. Upstream and downstream carbon emissions transparency, however, remains a challenge for companies

SAP

across industries. One of SAP’s key approaches is to enable companies to share accurate emissions data along the supply chain, instead of everyone making oftenincorrect assumptions and calculations. Enterprises need an accounting system for their emissions data that is as auditable, transparent and reliable as their financial data. The current accounting system for supply chain emissions is severely flawed as it relies on data that often lacks access, accuracy, granularity and comparability, Rothermel added. SAP’s transactional carbon accounting capabilities focus on recording, reporting and acting on carbon emission data and ultimately syncing the emissions data with financial data leading to a “green ledger”. “We envision carbon to be accounted for in a green ledger, just like your financials are

maintained in a financial ledger,” he says. “But companies still have a big challenge to deliver data of a quality worthy of a green ledger. “There are two key parts to SAP’s greenhouse gas protocol coverage across all scopes,” he says. The first is SAP Sustainability Footprint Management which is a solution that increases accessibility by pulling data from many sources, and then uses the data as a basis for footprint calculations. “Because more than 80% of carbon emissions are Scope 3 emissions locked away in your supply chain, you fundamentally need to get access and aggregate this data,” he adds. “If we don’t, we will continue to work with averages instead of actuals.” Gathering and calculating emissions data more accurately is one thing, but companies supplychaindigital.com

SAP

happen in the cloud,” she says. “It’s going to happen with AI with the amount of data we’ll have to synthesise. We’re talking about envisioning a supply chain that shares sustainability related information more openly and fluidly than they share financial information. “There’s a gap between where the regulations are envisioning what’s possible and where we see technology delivering.” Moving to a circular economy The co-GMs both made the point that we can only deal with about half of global emissions by moving to renewable energy. We have to tackle the other half by designing out waste, keeping materials in use longer, and adopting regenerative practices across all areas of production. One hundred billion tonnes of materials are used each year in our current “linear” economy. Just 7.2% is reused or recycled. The SAP team wants to change this and aims to help need to move the data from one supplier to another. “We want to rely on real data that customers can share,” says Rothermel. “This is why we cover carbon sharing capabilities in our SAP Sustainability Data Exchange solution, for example, that uses standards and protocols established by the World Business Council for Sustainable Development’s PACT programme, the Pathfinder framework, and other standards over time.” Mendelsohn sees the need for companies to move to the cloud to accelerate how they can take advantage of next-generation carbon accounting. “The reality is that the energy transition and the materials transition are going to 86

December 2023

“ THERE’S A GAP BETWEEN WHERE THE REGULATIONS ARE ENVISIONING WHAT’S POSSIBLE AND WHERE WE SEE TECHNOLOGY DELIVERING” SOPHIA MENDELSOHN

CHIEF SUSTAINABILITY AND COMMERCIAL OFFICER, SAP SUSTAINABILITY

SOPHIA MENDELSOHN TITLE: C HIEF SUSTAINABILITY AND COMMERCIAL OFFICER FOR SAP SUSTAINABILITY INDUSTRY: S OFTWARE DEVELOPMENT LOCATION: UNITED STATES As Chief Sustainability and Commercial Officer and co-GM for SAP Sustainability, Sophia and her team oversee SAP’s corporate sustainability and bring sustainability to market for customers. Sophia’s long-standing area of focus is in guiding organisations on how to balance immediate financial goals with sustainability and ESG governance for long-term business viability. She has deep expertise in sustainability and specialises in executive stakeholder engagement. She designed and taught the first ESG at Harvard Extension School, is a recognised public voice on ESG, and was chosen as one of the top 10 sustainability leaders of the year. Sophia has a master of science in sustainable management from Columbia University.

supplychaindigital.com

companies build a more circular economy using the SAP Responsible Design and Production software. Rothermel built this cloud-based solution based on SAP’s Business Technology Platform, its flexible development and customisation platform. The solution helps companies react to quickly changing plastics taxes, for example, and adapt product packaging specifications to respond to new Extended Producer Responsibility policies. Ensuring social sustainability SAP’s social sustainability software and ESG packages are an important part of its offering, which SAP has been investing into for years and covers more operational aspects of sustainability. 88

December 2023

“Customers use this for the operational compliance on a plant level for emissions management and waste management related topics, but it also has a strong health and safety component,” explains Rothermel. “It covers incident management, because SAP operates in many industries that are also very regulated.” Mendelsohn emphasises that sustainability can’t all be about carbon emissions. “Fundamentally, we still talk too much about carbon and climate as an environmental problem, as if this is something separate than social. At SAP, we have the ability to measure the social elements. What I want to emphasise is that when we talk about treating carbon

SAP

like money or the importance of accurate carbon data, we see it as a social issue for communities, for our customers and for our own employees.” “We support other important metrics, such as women in management positions, D&I related components and human rights,” adds Rothermel. Collaborating for Impact SAP is also supported by a global network of partner companies helping to customise and install SAP solutions. It’s a big ecosystem. Partners are an intrinsic part of SAPs strategy and how they go to market and build solutions. “Our partners play several important roles,” says Rothermel. “They help us to

bring the software to our clients. They help us implement the software and of course they also advise our customers on their strategic transformation journey. “We are not only using the strong capabilities that we have in-house in SAP, but we are also incorporating and using the very specialised capabilities from different partners. They co-innovate with us because we believe nobody can solve these tough issues of sustainability alone.” SAP will continue on its mission to embed sustainability across the businesses it works with and Rothermel and Mendelsohn will lead the sustainability team together. Over the next year, there’s a lot in store for the company. supplychaindigital.com

SAP

“ WHAT THE SUSTAINABILITY STACK AT SAP DOES IS GO FROM DATA AGGREGATION TO DATA ANALYTICS. THE ABILITY TO CONNECT THE DATA, SEE IT AND USE IT, FROM THE BOARDROOM TO THE SHOP FLOOR” SOPHIA MENDELSOHN

CHIEF SUSTAINABILITY AND COMMERCIAL OFFICER, SAP SUSTAINABILITY

“Big sustainability transformations are really just beginning. It’s what I am here for and why I get up in the morning,” Rothermel added. “I want to help customers solve problems with the help of good software in the sustainability space.” “It’s a very important year for us at SAP, but also for the whole industry and for sustainability,” says Mendelsohn. “I’m looking forward to 2024 when we deliver new capabilities and help customers really take advantage of technology and data and speed up their transitions. It’s going to be a year of new proof points and ultimately positive impact. That’s what I am looking forward to.”

December 2023

supplychaindigital.com

IT’S TIME TO GET NOTICED 24T H S E P T E M B E R BUSINESS DESIGN CENTRE, LONDON

ENTER NOW

SPONSORSHIPS

In Association with:

M AG A Z I N E

D I G I TA L

EXTREME WEATHER PROMPTS SUPPLY CHAIN ACTION AT MONDELĒZ 94

December 2023

SUSTAINABILITY

Mondelēz International’s AMEA supply chain chief Cloris Zhang on how the company mitigates against the perils of climate change in the region WRITTEN BY: SEAN ASHCROFT

supplychaindigital.com

December 2023

SUSTAINABILITY

limate change is becoming a bigger problem by the year for those who have to manage risk in supply chains. A recent Harvard Business Review study suggests just 11% of suppliers are fully prepared for weather-related disruption. The study also found half (49%) of surveyed US companies had experienced an increase in climate volatility, with this figure jumping in China and Taiwan to a massive 93%. Extreme weather events are a global phenomenon and are becoming more problematic. As climate change gathers pace, we are set to face more-frequent and severe extreme weather events, including hurricanes, tsunamis, forest fires, and floods. Inevitably, these will interrupt production, increase sourcing costs, and cut into corporate revenue. Here, we speak to Cloris Zhang, SVP of Integrated Supply Chain, AMEA, at multinational snacks giant, Mondelēz International. The company owns iconic global and local brands such as Oreo, Ritz, LU, Clif Bar and Tate’s Bake Shop biscuits and baked snacks, as well as Cadbury Dairy Milk, Milka and Toblerone chocolate. Zhang speaks about the impact climate change is having on the company’s operations in the APAC region. supplychaindigital.com

E X C L U S I V E W H I T E PA P E R

How to Achieve Sustainability in the Global Electronic Supply Chain KE Y THEMES: The Elements of a Sustainable 1 Global Electronics Supply Chain

How Companies Fall Short in Supply Chain Sustainability

Solutions to Help Solve Supply Base Sustainability

D OW N LOA D N OW

SUSTAINABILITY

Cloris Zhang

CREDIT: MONDELEZ INTERNATIONAL

What extreme weather is affecting the APAC region? We have seen a rise in extreme weather events in many markets, including floods in Australia, Thailand and India. It has impacted the supply chain in a big way. With global supply chains disruptions in one area can create a ripple effect globally. The floods in Australia last year impacted the local logistics industry causing significant delays in our product delivery to customers. The floods in Thailand caused hard-disk supply shortages globally and eventually caused our new-equipment fabrication delay. This underscores the importance of building greater end-to-end resilience in our supply chains, which is a key priority for us at Mondelēz.

Cloris Zhang TITLE: SVP, INTEGRATED SUPPLY CHAIN, AMEA COMPANY: MONDELĒZ INTERNATIONAL INDUSTRY: SNACKS REGION: AMEA Zhang has 19 years of end-toend supply chain experience across manufacturing, planning, business operations, logistics and customer service. She also has expertise in lean and 6 sigma manufacturing, demand & supply integration, supply network design and endto-end supply chain synchronisation. supplychaindigital.com

“ We are addressing our carbon footprint through initiatives for renewable energy and energy efficiency” CLORIS ZHANG

SVP, INTEGRATED SUPPLY CHAIN, AMEA MONDELĒZ INTERNATIONAL

100

December 2023

How is extreme weather affecting operations? We have an extensive supply chain operation in APAC catering to consumers in 70 markets, including manufacturing sites and RDQI Technical Centres. Weather events such as floods, severe storms and drought that are partially caused – or exacerbated by – climate change have the potential to disrupt our business operations, our suppliers, our external manufacturing partners, distributors or other business partners.

SUSTAINABILITY

How do you minimise disruption from extreme weather? We are investing in digital and technology innovations to build responsive, scalable supply chains that allow our business to stay ahead of new snacking trends and deliver snacks even during challenging times. We have established our first data-driven and remotely operated lights-out factories in manufacturing, with a focus on stability, productivity, and predictability. Our Sri City factory in India is a certified World Economic Forum Lighthouse plant.

Here we deploy end-to-end digitalisation, predictive analytics, AI and automation to increase labour productivity and reduce manufacturing costs. This allows us to have real-time visibility on plant operations, which enables much faster reaction in the case of emergency. We have similar supply chain operations in Suzhou, China, including two plants and two distribution centres. These have reduced lead times by 32%, which improves the resilience of the end-to-end supply chain, which was proven during COVID. supplychaindigital.com

101

SUSTAINABILITY

WATCH NOW

Another key focus for us is to build a stronger business contingency plan. The challenges we face are not only extreme weather but we have to qualify back-up suppliers, build multi-sourcing capability across plants and develop an agile, multiskilled operation team. How are you future-proofing APAC operations against extreme weather events? Firstly, we’re strengthening our supplier partnerships. We work closely with our partners to streamline processes for cost efficiencies, to measure their performance, and to diversify our supplier network. We’re also using machine learning-driven statistical forecasting to improve accuracy in forecasting, to enhance customer service, to optimise inventory performance, and to reduce waste. For instance, in India, we’ve launched a pilot program to install IoT devices in our 102

December 2023

“We have seen a rise in extreme weather events in many markets, including floods in Australia, Thailand and India” CLORIS ZHANG

SVP, INTEGRATED SUPPLY CHAIN, AMEA MONDELĒZ INTERNATIONAL

Extreme weather events rise in Europe in 2023 The number of extreme weather events in Europe increased 9% in the past year, from 36,280 in to 39,660, says international procurement and supply chain management consultancy INVERTO. These extreme weather events threaten European food production, reducing crop yields, causing huge surges in prices and risking the availability of products on shelves. The past year has seen several periods of extreme weather across Europe, from heatwaves to torrential rainfall. Severe droughts hit Southern Europe in countries such as Spain and Italy whereas Scandinavia, Italy and recently Greece have been affected by heavy rainfall causing flooding. The UK, meanwhile, experienced its driest February in 30 years, followed by the wettest July on record later in the year. These weather events have severely impacted Italian rice, wheat, barley, corn and soybean crops as well as livestock. Food production in Spain was also impacted by extreme heat this year. Olive and tomato crop failures due to drought caused supply disruptions in the region and fed into shortages across Europe. Katharina Erfort, Principal at INVERTO says: “Weather events affecting one area that is a significant grower can quickly result in a shock to global supplies – this will cause prices to surge and impact the availability of products.”

product transportation trucks. This allows us to track their movements and monitor temperatures inside the vehicles, ensuring complete traceability throughout our cold chain. How are you cutting carbon emissions across operations? Most importantly, we embed sustainability into our operations and supply chains to drive innovative, more sustainable growth the right way for people and the planet. Globally, we have committed to a target of net zero greenhouse gas emissions across our full value chain by 2050. We align our plans with the Science Based Targets initiative (SBTi), and take an end-to-

SUSTAINABILITY

“With global supply chains, disruptions in one area can create a ripple effect globally” CLORIS ZHANG

SVP, INTEGRATED SUPPLY CHAIN, AMEA MONDELĒZ INTERNATIONAL

end approach to ensure that we are using natural resources more efficiently and renewably in our operations We address the carbon footprint of our operations through initiatives that promote the use of renewable energy and measures for energy efficiency. Our manufacturing plants across South Asia, China and Southeast Asia are powered by renewable energy sources such as solar or biogas. Two sites in India now secure 100% of their electricity from renewable sources, while our sites in Malaysia, Indonesia and Thailand are now consuming between 20% and 33% of their electricity from renewable sources. Our Reduce, Reuse and Recycle strategy extends

to supply chain logistics management practices. Our owned and third-party warehouses are powered by renewable energy which reduces our emissions from these facilities. We also manage our water and waste as effectively as possible. In line with our goals to reduce water use, we support initiatives throughout our value chain to conserve water. In India, we succeeded in saving approximately 29,000 m3 of water in the manufacturing process and additionally harvested 98,000 m3 of rainwater. We reduce the contribution of packaging to our carbon footprint by designing for circularity and making our packaging light and right. supplychaindigital.com

105

HALMA: DEDICATED TO A SAFER, CLEANER, HEALTHIER FUTURE WRITTEN BY: GEORGIA WILSON PRODUCED BY: GLEN WHITE

106

December 2023

HALMA

supplychaindigital.com

107

HALMA

Halma, a provider of innovative products and services offering life-saving technology, holds sustainability at its core, driving growth and positive change

or half a century, Halma has been a provider of innovative products and services offering life-saving solutions to some of the key problems faced in the world today. Driven by its purpose to ‘grow a safer, cleaner, healthier future for everyone, everyday’, Halma’s group of 45 companies operates across three core market areas: safety, environment, and health. “We have been a purpose-led business for 50 years. It powers every decision we make, from choosing our markets to finding the right talent. It attracts people who want to solve the same problems as we do, and keeps us focused on the things that matter to our business,” explains Halma. Halma’s sustainability growth model A core principle for Halma is sustainable action. The group operates a Sustainable Growth Model acquiring small to mediumsized companies that align with its overall purpose driving long-term growth. Actively managing its portfolio of companies through investment and acquisitions, Halma seeks new opportunities to grow through mergers and disposals where market conditions change. With this approach, Halma’s strengths are resilience, diversity, growth and earnings, while maintaining a conservative capital structure and delivering high returns.

108

December 2023

supplychaindigital.com

109

HALMA

How our companies grow Our companies look at growth opportunities that are aligned with our purpose across three dimensions of Core, Convergence and Edge.

Core focuses on growing through new product development, including digital offerings and products and solutions addressing sustainability opportunities, and international expansion, and through acquisitions aligned to our purpose.

Growing a safer, cleaner, healthier future for everyone, every day

“ Our purpose is to grow a safer, cleaner, healthier future for everyone, every day, by making innovative technologies that help solve global challenges” CONSTANCE BAROUDEL

DIVISIONAL CHIEF EXECUTIVE OF THE MEDICAL & ENVIRONMENTAL SECTOR FOR HALMA PLC

110

December 2023

Edge focuses on developing and investing in disruptive new business models and solutions, which have the potential to scale exponentially.

Convergence enables us to go faster by combining existing Halma technologies and capabilities in new ways, and by partnering with others who want to solve the same problems as we do.

“We continually invest in our business and our people to maintain strong positions in our markets. The highly cashgenerative nature of our companies allows us to fund this investment, both to support organic growth and drive growth through acquisitions,” says Halma. “Talent, innovation, technology and sustainability are core elements of our growth strategy. This includes investment in developing our people, our products and services (including through research and development), our intellectual property, and our knowledge of the markets we serve.” Water for Life Launched in partnership with WaterAid in 2020, Water for Life raises awareness of the

Water for Life WATCH NOW

daily challenges millions face in accessing clean and safe water. In particular, the campaign focuses on a network of villages in northern India where the groundwater is contaminated with arsenic. “Water is the most critical resource on the planet, yet millions worldwide still don’t have access to clean water close to home [...] The partnership will highlight the global issue of access to safe water by providing 8,000 people in India with clean drinking water,” explains Halma. “The increasing role of technology to support sustainability is something that Halma believes in, and sees increasing demand for, in the long term. If we are to live up to our goal of making the world a safer, cleaner, healthier place there seems no

better time to bring our life-saving technology to a global challenge,” says WaterAid. Within its group, Halma has six water companies – HWM, Palintest, Sensorex, Minicam, Hydreka and UV Group - they all focus on solving different parts of the global water challenge. Constance Baroudel, Divisional Chief Executive of the Medical & Environmental Sector for Halma plc, says: “Our purpose is to grow a safer, cleaner, healthier future for everyone, every day by making innovative technologies that help solve global challenges. Having access to clean, safe drinking water and basic sanitation is central to living a healthier life, and the current global pandemic has only served to demonstrate its importance. supplychaindigital.com

111

HALMA

“ Talent, innovation, technology and sustainability are core elements of our growth strategy” HALMA

112

December 2023

“We look forward to drawing on our technological expertise, as well as the passion of our employees, in supporting WaterAid to provide the communities of Bhagalpur and Buxar with a clean water supply, which is a basic and essential everyday requirement for children to grow up healthy and families to earn a living.” Scope 3, supply chain and procurement “Sustainability has always been at the core of our growth strategy. We acquire and grow businesses in safety, environmental and healthcare markets that solve real problems

As part of Water for Life, Palintest – a water testing technology specialist – has donated portable testing kits and over 18,000 arsenic tests to the campaign. Halma has raised over £400,000 to support the building of new water infrastructure and provide training for local volunteers. Through its partnership with WaterAid, Halma has transformed the lives of over 10,000 people. In addition to providing access to safe, clean water, the campaign has trained 1,800 community volunteers and installed new water filter systems in 70 schools and healthcare facilities.

With this in mind, Halma has a three-pillar approach to its sustainability: 1. Driving growth in sustainability 2. Supporting its people 3. Protecting the environment “For our companies, our three sustainability pillars together translate into a challenge to ‘do more good’ and ‘do less harm’,” says Halma.

DID YOU KNOW...

in the world – enabling our customers to provide safer environments, protect life-critical resources, and deliver better healthcare,” explains Halma.

Research is forecasting the global logistics market to be worth around US$12tn in 2023, almost triple its 2018 value. Each loading dock accident is estimated to cost US$189,000 and for every accident, there are 600 near misses.

supplychaindigital.com

113

A more sustainable PCB Our focus is on creating value for our customers and taking responsibility throughout our value chain. This approach helps us to identify opportunities to drive positive change and minimize negative impact. Since 2014 we have used the ISO 26000 standard to identify the issues that are most important and the improvements we can achieve.

Together with our suppliers and customers we want to create a more sustainable industry. We believe that strong relationships and transparency are key to achieving this. Let´s meet and see what we can do together! Contact us

Call us on +44 1380 736 140 or visit us at www.ncabgroup.com or Unit 1-3, Hopton Industrial Estate, London Road, Devizes, SN10 2EU, UK ISO 26000 provides guidance on how businesses and organizations practice social responsibility to improve their impacts on their workers, their natural environments and their communities.

HALMA

“ The increasing role of technology to support sustainability is something that Halma believes in, and sees increasing demand for, in the long term” HALMA

When it comes to protecting the environment, Halma drives its focus towards sustainable product design and reducing emissions. “The majority of our environmental footprint arises within our wider value chain and is often embedded in the design of our products and services,” notes Halma. “We are also committed to reducing our own emissions while supporting our companies to pursue climate-related opportunities.” Looking closer at Halma’s Scope 3 emissions in particular, the group has spent the last year – 2023 – completing a full estimate of its Scope 3 baseline, and begun the process of setting appropriate short and long-term targets. supplychaindigital.com

115

HALMA

Fortress: helping customers reduce their carbon footprint WATCH NOW

“ Research is forecasting the global logistics market to be worth around US$12tn in 2023, almost triple its 2018 value” HALMA

116

December 2023

Key focus areas for the group include: • Integration of sustainability into procurement and supplier engagement systems • Use of Halma’s group-wide EcoVadis tool to engage suppliers • Efficiency of transport and logistics including refighting choices • Integration of sustainable design into NPD • Development of life cycle analysis (LCA) capability and understanding • Business travel protocols Helping customers reduce their carbon footprint Outside of its own operations, Halma has been looking at ways in which it can also

Use more image captions as often as possible

help its customers reduce their supply chain emissions (Scope 3). With a large portion of environmental impact coming from the manufacturing and shipping of products to customers globally, Fortress – a Halma company – has been working on finding a more sustainable material for its products while maintaining their robust quality. Knowing that changing the material – from zinc – to a more sustainable metal could have a significant impact. As such the company moved to a recycled material that is lighter to ship resulting in significant carbon savings.

“The team began designing a new casing for their flagship Amgard product range using recycled aluminium. It is a lighter metal that, crucially, is 100% recyclable forever. After rigorous testing to ensure it met Fortress’s high safety standards, they have designed a new aluminium casing that is 90% lighter than the original and just as durable,” explains Halma. Keeping workers and drivers safe in global logistics In the wake of COVID-19, the shift to digital business models has rapidly expanded the ecommerce and global logistics industries. supplychaindigital.com

117

HALMA

“Research is forecasting the global logistics market to be worth around US$12tn in 2023, almost triple its 2018 value. This rate of growth has put additional pressure on the transportation and warehousing industry to move goods quickly, safely, and efficiently,” explains Halma. “The most recent statistics reported 819 deaths and 270,000 injuries occurring in the USA in one year. Of these, more than 25% of accidents happened at loading docks, with accidental drive-aways accounting for around a quarter of these accidents. Each accident is estimated to cost US$189,000 and for every accident, there are 600 near misses.” With most accidents caused as a result of misunderstanding or miscommunication, SPS – a Halma company – has designed an innovative solution using technological advancements to remove the need for verbal communication when it comes to loading updates. As such this solution prevents accidental drive-aways by locking the delivery vehicle to the loading bay door for safe loading and unloading. “Initially developed in response to a customer request, the Salvo Loading Dock Safety System is now installed at tens of thousands of loading bays globally. Once implemented, customers report no accidental drive-offs, keeping workers and drivers safe and ensuring compliance with all Health and safety regulations,” explains Halma.

supplychaindigital.com

119

TECH & AI

THE FUTURE IS AL

WAREHOUSE

120

December 2023

LREADY HERE FOR

E ROBOTICS

Robotics rather than drone tech is gaining serious traction, and Gartner’s Dwight Klappich says cloud-based integration platforms are vital to their success WRITTEN BY: SEAN ASHCROFT

supplychaindigital.com

121

TECH & AI

arehouse automation is nothing new; it goes back as far as 120 years, to the first conveyors, while automated storage and retrieval systems were first deployed in the 1950s. But with robotics beginning to feature more heavily than ever, many of today’s warehouses can have a sci-fi vibe. A recent Gartner supply chain study found that deployment of mobile robots is expected to move faster than that of drones, because the technology is more established – and it is warehouses that are the main 122

December 2023

area of deployment for such robots. The report, Hype Cycle for Mobile Robots and Drones, shows that around three-quarters of companies plan on using some type of robotic warehouse automation. Gartner also says machine learning will become mainstream over the next five years, creating greater demand both for mobile robots and drones. Standardised automation software is also a factor driving robotics, says the report, with so-called multi-agent orchestration platforms increasing in 2023.

The warehouse robotics market is predicted to reach

US$15bn by 2032

124

December 2023

TECH & AI

Dwight Klappich is a Research Vice President and Gartner Fellow in Gartner’s Logistics and Customer Fulfilment team. His research focuses on the strategic role logistics plays in leading-edge supply chain management organisations. He is a recognised authority on logistics technologies. Upon the publication of the report, Klappich said that workplace challenges are fuelling the adoption of automation within supply chains, “and it’s likely there will be thousands more mobile robots working in supply chains over the next three years”. He added: “Labour shortages and challenges retaining talent – coupled with technology advances such as machine learning and AI – will continue to drive adoption of smart robots. By 2027, more

Dwight Klappich TITLE: RESEARCH VP & FELLOW, LOGISTICS & CUSTOMER FULFILMENT COMPANY: GARTNER INDUSTRY: SUPPLY CHAIN Klappich’s research focuses on the strategic role logistics plays in leading-edge supply chain management organisations. He is a recognised authority on logistics technologies.

“As many as 96% of businesses say they either are – or are planning to – look at robotics” DWIGHT KLAPPICH

RESEARCH VP & FELLOW, LOGISTICS AND CUSTOMER FULFILMENT GARTNER

than 75% of companies will have adopted some form of cyber-physical automation in their warehouse operations.” Of drones, Gartner’s report says that, while increasingly in use, they are being deployed in more targeted ways, including location inspections or to ensure the delivery of critical goods, like medicines to remote areas. For example, Walmart has the largest drone-delivery system in the US, as it seeks a competitive advantage in last-mile delivery. The retail giant has expanded drone deliveries to six US states, and up to 4 million households currently have food, groceries and supplies from Walmart delivered by remote-controlled drones. But the report notes that robots are nearing what Gartner calls the “peak of inflated expectations,” whereby “early publicity produces success stories”. Speaking at Gartner’s annual Supply Chain Symposium & Expo this year, Klappich said that as many as 96% of businesses they spoke to say they either are – or are planning to – look at robotics. supplychaindigital.com

125

TECH & AI

“These are across all industries, geographies and company sizes,” he said. “When we asked them what their primary motivation was for looking at robotics, 59% said labour availability; they just can’t not get enough people. But this doesn’t mean they’re looking at robotics to replace people.” Klappich added: “In terms of heightened investment in this type of technology, we expect exponential growth over the next year. When we asked people what their expansion plans for robotics are, over 90% of customers say they plan to increase the size of their fleet.” He says that customers are looking for different areas in which to deploy robots.

“You can pick up a robot for a thousand dollars a month, which means companies of any size can have them” DWIGHT KLAPPICH

RESEARCH VP & FELLOW, LOGISTICS AND CUSTOMER FULFILMENT GARTNER supplychaindigital.com

127

TECH & AI

WATCH NOW

Three of the biggest robotics manufacturers Automation is revolutionising all parts of the supply chain. The following are three of the leading robotics manufacturers. ABB ABB is a Swedish-Swiss multinational corporation headquartered in Zürich, Switzerland. ABB’s Robotics Division is a pioneer in robotics and digital services, providing innovative solutions for a diverse range of industries, from automotive to electronics to logistics. As one of the world’s leading robotics suppliers, ABB has shipped more than 500,000 robot solutions globally.

DENSO DENSO is a market leader in the small industrial robots segment, with over 120,000 robots installed worldwide. As well as its robotics – which are used heavily in the automotive supply chain – the company helps streamline and automate logistics operations, with its RFID scanners for warehouse management and transport, which can read up to 700 RFID tags per second. This helps avoid inventory surpluses and shortages.

YASKAWA ELECTRIC Established in 1915 in Kitakyushu, Japan, Yaskawa Electric has transformed from a motor manufacturer to an automation company and now a mechatronics company. Its industrial robots are used in a wide range of industries, including logistics. Its robots add versatility to materials handling and high-value fulfilment automation solutions, such as piece picking and mixedcase palletising.

“Maybe they started with collaborative picking, but are now looking at truck unloading or at basic transport uses,” he said. “The long and short of it is starting to look at using robots across their entire operations.” And it is not just large, monied companies that are looking to adopt robotic technologies; small to medium-sized enterprises are also getting in on the action. Klappich conceded that warehouse automation generally has been the domain of big companies “with 50 to 100 hundred million dollars to invest in automation”. But now, he points out, “you can pick up a robot for a thousand dollars a month, which means companies of any size can have it”.

He adds: “If you look across a warehouse operation there is a need for different robots to perform different things. Take truck unloading, for example. I might have one kind of robot that unloads palletised goods, and a different kind of robot that unloads case goods. “What this means is that companies will have robot fleets composed of robots from different vendors, and this creates another challenge, in terms of how to orchestrate the work between these different companies, which are multiplying in number very quickly.” So what do these companies need to help support these fleets of varied robots? supplychaindigital.com

129

TECH & AI

130

December 2023

TECH & AI

“To support fleets of varied robots businesses need a multi-agent orchestration platform” DWIGHT KLAPPICH

RESEARCH VP & FELLOW, LOGISTICS AND CUSTOMER FULFILMENT GARTNER

Klappich says the answer is a ‘multi-agent orchestration platform’. This is a software system that sits between warehouse management software and its automation, which enables the coordination and interoperability between multiple autonomous agents in a warehouse. These agents might be robots, conveyors, elevators, traditional automation equipment, or IoT devices that need to work together to perform tasks in the warehouse. The AI-driven platform coordinates and communicates between the agents, ensuring that they work together efficiently and effectively. It uses AI and machine learning to optimise workflows, allocate tasks and resources, and solve problems in real-time. “These platforms allow organisations to integrate different types of robots, and assign work to them, to coordinate their activity,” says Klappich. “Without an orchestration platform, a warehouse operation with robots from multiple vendors will be faced with siloed solutions, and this can lead to inefficiencies.”

supplychaindigital.com

131

WRITTEN BY: HELEN ADAMS PRODUCED BY: JAMES BERRY

ARXADA

ARXADA’S SHORT-TERM DELIVERY AND LONG-TERM CAPABILITY supplychaindigital.com

133

ARXADA

Randy Willis of Arxada discusses synchronising supply chains with people, processes and tools to transform short, medium and long-term planning

n In the modern world, science-led solutions that claim to protect the health and wellbeing of people and our planet are under increased scrutiny. Arxada is a global specialty chemicals company, with a clear track record of industry innovations which range from Microbial Control Solutions to Professional Hygiene. The 3,000-strong Arxada team is headquartered in Basel, Switzerland and aims to be the preservation go-to within the industry, by solving the world’s toughest preservation challenges. “We are focused on delivering superior products and services to our customers by leveraging our strength in science and innovation, our manufacturing process development capabilities, and our regulatory sciences organisation,” says Randy Willis, Vice President of Supply Chain for Arxada. A keen chemical engineer, he studied the subject at Lamar University, before taking up process engineering role in a management development programme for DuPont. Willis then went on to work at Axalta, Materion, and AkzoNobel, before joining Arxada in September 2022. “I worked across different sites and then moved into various operations and supply chain leadership roles in several companies – DuPont, Axalta, and now Arxada.” 134

December 2023

Randy Willis TITLE: VICE PRESIDENT OF SUPPLY CHAIN COMPANY: ARXADA Randy Willis joined Arxada in 2022 as Vice President for Supply Chain and Integrated Operations. Randy brings more than 25 years of experience to the role, previously serving as North America Supply Chain Director for AkzoNobel. He is a supply chain expert, specifically within the specialty chemicals industry with a particular concentration in coatings. He has held positions at high profile industry leaders including Axalta and DuPont. Randy has a BS in chemical engineering from Lamar University, Beaumont, TX. He has lived in nine U.S. states as well as abroad in Duesseldorf, Germany. He currently resides in Nashville, TN with his wife Carla and Bella, their Great Dane, where they enjoy hiking, camping and fishing and attending concerts.

ARXADA

The biggest challenge in his role at the moment is managing his team’s time. “Just like every leader, the big challenge is balancing short-term delivery versus longterm capability and building a property and excelling team over time. It’s the balance between now and the future.” Willis is most proud of the team he has built. “I’ve been in a few transformative roles over my career, but I think the one I’m most proud of is the last year, my first year at Arxada, where we have transformed the supply chain and generated huge business improvements while building a winning culture and a winning team.” Arxada’s Evolution: Transforming supply chains with the right people, process and tools Willis is improving end-to-end synchronisation and collaboration capabilities from customers through to suppliers, despite limited planning tool capabilities.

“We have a weekly process, where we have a cross-functional team from the commercial, manufacturing, supply chain, and procurement,” Willis says. “We are all working off the same set of books and numbers and plans, to make sure they’re all aligned.” One of Willis’ next steps is getting tools that will help the team do just that. Three companies were brought together to make Arxada and, as a result, they have three different ERP systems, manufacturing networks and most important, workcultures. The team uses core ERP to complete its planning. “We need to evolve and start doing our planning using modern tools. But that is in the future, not today. We decided to start with people and processes and follow with tools. Our processes have improved dramatically. Our team’s capabilities have improved dramatically. Now we’re going to start working on tools and digital enablement.” Willis is improving forward visibility to enable upside and downside supply supplychaindigital.com

137

ARXADA

capability. Arxada is starting to look at order intake frequency trends in the short, medium and long term, as well as efficiently managing feedback from key customers. “We run our supply chain at varying sales to capacity ratios based upon how quickly we can respond up or down, based on an individual asset. So we’re using all those processes to manage up and down and make sure that we keep a constant supply and manage cash and cost effectively,” adds Willis. Arxada’s journey to optimise short, medium and long-term planning Arxada’s strategy throughout 2021 and 2022 saw its inventory and back orders continue to rise, while service levels deteriorated, but Willis saw this as no different than most in the industry. “Between all the supply chain disruptions, staffing shortages and unpredictable demand, it caught us a little bit flatfooted,” Willis says. So, in September 2022, the team took a reset and backed up to look at the whole system and completely redesign it. “We made it much more fit for purpose,” notes Willis. “To make sure that we’re prepared for the short, medium and long-term, to meet the needs of both the business and our customers, more efficiently.” Arxada has two time-phased work streams, Fix and Iterate. “In short, that was all about here and now, making sure our ERP system was set up properly, making sure our planning 138

December 2023

practices were state-of-the-art and that we were monitoring and complying with the short-term needs of the business.” Using these two time-phased work streams ensures that Arxada’s short-term orders are filled, midterm orders are planned and back orders are being covered. “This also makes sure that our inventories turn back the other way and start getting under control,” says Willis. The team has built the basics for organisational execution capability. “We found the processes we wanted to run as an organisation from end to end and then designed the organisation to effectively manage and control that process.” Willis and his team have completely retooled the planning organisation, realigned

“We need to evolve into this century and start doing planning using more modern tools” RANDY WILLIS

VICE PRESIDENT OF SUPPLY CHAIN ARXADA

the way they do work and readjusted the way that they collaborate with other functions in the company. “As a result, we’re getting much better outcomes.” Arxada defined the path to first quartile five chain capability by starting with a cross-functional strategy meeting in Basel, facilitated by Ernst and Young (EY). “We decided what we wanted to be when we grew up and what ‘good’ looks like for our particular company. Then based on that, we looked at where we are, where we want to be and did a gap analysis at the detailed level.” This created 55 projects, to get from point A to point B. Arxada then put them in logical work streams.

“We time phased them from urgent and important, to important but not as urgent. We built the path from here to there,” said Willis. In September 2022, Arxada leadership and EY formed a team to reverse the trends and build sustainable capability to improve things. “We use EY’s supply chain practice to enable and accelerate our transformation and deliver results in weeks, not months. EY works well with our internal team and provides industry best practice. Insight helped build our multi-year roadmap and EY became our trusted advisors. “We openly discussed options regarding short-term priorities, developed the results-oriented organisation and closely supplychaindigital.com

139

ARXADA

WATCH NOW

monitored the overall performance of the supply chain and developed a winning organisational mindset.” The results are quite remarkable. Arxada has: • Reduced back orders by 70% • Reduced inventory by 14% • Reduced manufacturing cost by 5% “That happened very quickly – in the first 90 days. In one year, backorder reduction has gone from 70% to 86%, a 39% reduction in order delivery failures and a 29% inventory reduction.” Arxada has built KPI driven processes and people capabilities to set the stage for the next journey and has been sharply focused on its externally benchmarked force quartile supply chain performance. 140

December 2023

“We looked at supply chain performance in a variety of ways, both from the number of people required to do it, inventory turns, supply market service levels – the full suite of what you would expect the top quartile supply chain to do,” says Willis. “Then, we looked at it from a more subjective view of the characteristics of a top quartile supply chain, which are important for us and which are not.” Arxada made conscious decisions on what the first quartile should look like. Over the next year, Arxada intends to implement a fit for purpose end-to-end supply chain planning tool, with asset optimisation and full financial scenario planning capability. “We plan to improve our end-toend synchronisation and collaboration capabilities with suppliers and customers,

“We have a cross-functional team, all the way from the commercial manufacturing supply chain, back to suppliers” RANDY WILLIS

VICE PRESIDENT OF SUPPLY CHAIN ARXADA

ARXADA

as well as provide forward visibility to support upside and downside supply capability. This will ensure sustained excellence for service to our customers while improving cost, networking and capital productivity. “Last and most importantly, we intend to achieve an externally benchmarked first quartile supply chain performance, making our supply chain a competitive advantage for our company.” Within the next year, Arxada is going to work on four things. “We’re implementing a fit-for-purpose end-to-end supply chain planning tool, that will enable us to continue the journey of improving networking, capital cost and market service level or customer service level going forward,” says Willis. The company is going to improve its endto-end synchronisation, using tools to make sure that its suppliers and customers are all working on the same base plans. “We’re going to work on forward visibility using leading indicators,” Willis adds. “There are a few of our products that tend to lead the drop and the recovery. We’re using those as bellwethers to understand what the general economy is going to do.” Arxada is going to be more proactive in staffing up, as well as down, to make sure they are meeting their objectives and maintaining good supply to the market. “Last but not least, we are going to achieve first quartile supply chain capability and performance and the corresponding KPIs associated with that.”

142

December 2023

“We looked at supply chain performance in a variety of ways, both from the number of people required to do it, inventory turns, supply market service level – the full suite of what you would expect the top quartile supply chain to do” RANDY WILLIS

VICE PRESIDENT OF SUPPLY CHAIN ARXADA supplychaindigital.com

143

rd r Bi ffe rly O 95 t Ea ke £2 c Ti 95 £4

6 - 7 M ARCH 2 024 QEII CENTRE, LONDON

2,000+ IN-PERSON & VIRTUAL ATTENDEES

60+ INTERNATIONALLY ACCLAIMED SPEAKERS

2-DAY NETWORKING, CONFERENCE & EXHIBITION EVENT

Connect with The World’s Net Zero Leaders

Sean Jones Chief Sustainability Officer

Virginie Helias

Ulrike Sapiro Chief Sustainability Officer

Chief Sustainability Officer

EARLY BIRD TICKETS

BECOME A SPONSOR IN 2024

EXPO • CONFERENECE • WORKSHOPS • NETWORKING