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FEBRUARY 20 19
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THE POWER OF AI Competitive advantage through digital transformation
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Digital disruption of the supply chain JOHAN REVENTBERG, PRESIDENT, EMEA AT JDA, EXPLORES THE COMPLEXITY OF TECHNOLOGY AND DIGITALISATION
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WELCOME
H
ello and welcome to the February edition of Supply Chain Digital
Our cover star this month is JDA Software, as Johan Reventberg, President, EMEA, discusses the challenges and the complexity of the digitisation of the supply chain and procurement function. “Digitisiation is literally what everyone is talking about and it’s making companies ask the question as to how they can embrace digital in order to move forward,” says Reventberg. Elsewhere, we speak to Mike Landry, Senior Supply Chain Management Consultant at Genpact on how the transformation of the retail supply chain continues to be powered by technology. What is the true impact of Artificial Intelligence? Ed Cross, Executive Director of Odesma takes an in-depth look at the role of AI in monitoring and understanding changing trends and
habits in real-time in the manufacturing supply chain. With Brexit defining the political conversation, now more than ever is the time to ensure tighter supply chain management in order to avoid financial risk and operational downtime. We have an exclusive feature from Chris Robert03 son, CEO of Creditsafe as he believes effective supply chain management will prove key in an unstable climate. Our top 10 this month looks at the top 10 procurement professionals, as ranked by the CIPS Procurement Power List. We also have exclusive reports with AB InBev, Drexel University Procurement Services, OSM Maritime Group and Creation Technologies. Enjoy the issue! Dale Benton. dale.benton@bizclikmedia.com
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CONTENTS
10 JDA
Navigating the digital disruption of the supply chain and procurement landscape
22
32
Genpact:
UNCONSTRAINED BY THE PAST
EFFECTIVE SUPPLY CHAIN MANAGEMENT
42 AI in the manufacturing supply chain
54
62 Events & Associations
Top 10 US supply chain management courses
CONTENTS
66 LSC Communications
THE FLOW OF INFORMATION: LSC’S SUPPLY CHAIN TRANSFORMATION
Drexel University
84 102 Warehousing, Education and Reseach Council
PROCUREMENT TRANSFORMATION IN THE HEART OF PHILADELPHIA
Warehouse benchmarking study is a top tool for measuring performance
112
134 Creation Technologies
ACCENT GROUP A SUPPLY CHAIN TRANSFORMATION
COLLABORATION ACROSS THE DIGITAL SUPPLY CHAIN
152
174
OSM Maritime Group
Competitive advantage through digital transformation
Essilor
Delivering the gift of sight through a robust supply chain transformation
CONTENTS
66 LSC Communications
THE FLOW OF INFORMATION: LSC’S SUPPLY CHAIN TRANSFORMATION
Drexel University
84 102 Warehousing, Education and Reseach Council
PROCUREMENT TRANSFORMATION IN THE HEART OF PHILADELPHIA
Warehouse benchmarking study is a top tool for measuring performance
112
134 Creation Technologies
ACCENT GROUP A SUPPLY CHAIN TRANSFORMATION
COLLABORATION ACROSS THE DIGITAL SUPPLY CHAIN
152
174
OSM Maritime Group
Competitive advantage through digital transformation
Essilor
Delivering the gift of sight through a robust supply chain transformation
LEADERSHIP
10
Navigating the digital disruption of the supply chain and procurement landscape Johan Reventberg, President, EMEA at JDA Software, discusses the challenges and complexity of digitising the supply chain and procurement function WRITTEN BY
FEBRUARY 2019
DA LE BENTON
11
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LEADERSHIP
T
he supply chain and procurement function is changing and companies all over the world are waking up to the realisation that procure-
ment can be more than just a cost centre or a profit
driver, it can be the key to strategic growth. Defining this realisation, is technology and digital transformation. Companies all over the world are looking to provide an “Amazon-like” experience for both customers and suppliers alike and this has pushed digital to the very top of the table across supply chain and procurement. This is certainly the belief of Johan Reventberg, President, EMEA at JDA Software. “Digitisation is literally what everyone 12
is talking about and its making companies ask the question as to how they can embrace digital in order to move forward,” he says. “But what’s important is to realise that some companies aren’t normal retailers or manufacturers, they are IT companies with a very strong supply chain.” JDA Software is a world leader in delivering end-to-end supply chain solutions that enable companies to seamlessly connect their supply chains and profit more in “an omni-channel world.” Its very mission statement, which it delivers to more than 4,000 global customers is to seamlessly connect the supply chain so that companies can deliver for its customers. “We are a trusted advisor in the supply chain space. We sit in the core of our customers and provide services as well as advice on the FEBRUARY 2019
“ Digitisation is literally what everyone is talking about and it’s making companies how they can embrace digital in order to move forward” — Johan Reventberg, President, EMEA at JDA Software
strategic value that we can help them
best practice. Reventberg himself
achieve and how better to compete
describes JDA as a company that is
with competitors,” says Reventberg.
the good guy wanting to help both
“Through our software and our service,
existing and new companies to win in
we work with customers to take their
the marketplace by being supply chain
supply chain to the next level.”
focused. As the supply chain and
JDA works with companies to help
procurement landscape has evolved,
them navigate the digital world in order
this has placed greater pressure on
to extract value and to provide industry
companies to wake up to technology, w w w.suppl yc ha i ndi gi ta l. com
13
LEADERSHIP
but with this sharper focus comes
our customers understand it and they
added risk. Investing in technology
can start seeing the benefit and they
is a risk and if it goes wrong it
can start driving and using that in their
becomes a costly one at that. This is
businesses.”
where JDA comes in, working with its
14
As the conversation continues to
customer base to enable them to make
be defined by technology and its place
smarter and more precise decisions
in the industry, it can be easy to forget
and the key to that is data. “For us its
that the supply chain alone is a very
really about taking the data analysis,
complex space. Companies looking
understanding it and providing it to our
to compete and to gain an edge on
customers so they too can see true
competitors are at risk of running
value and opportunity in it,” he says.
before they can walk and Reventberg
“The thing with data is that we have lots
believes that in this regard, the industry
of it. It’s there today and we need to
should never underestimate the power
make sure we make it consumable so
of human interaction. Technology will
“ For us it’s really about taking the data analysis, understanding it and providing it to our customers so they too can see true value and opportunity in it” FEBRUARY 2019
— Johan Reventberg, President, EMEA at JDA Software
CLICK TO WATCH : JDA – DELIVERING A SEAMLESS SUPPLY CHAIN 15 always empower individuals, but he
and our associates and enable the
feels that if a company or a board’s
workforce of the future.”
expectations are unrealistic, it’s a recipe
An example that Reventberg high-
for failure. “It’s a lack of understanding
lights is that of the retail sector and
of the complexity of digitisation in the
how the traditional model of being
supply chain. It is still highly complex,”
stood behind a cash register evolved
he says. “The systems, the level of
into greater customer interaction, add-
support required and the suppliers
ing more value and upselling. He takes
and skills within the supply chain are
it further and points to the digital store
more sophisticated than ever before.
and how its key to train and get people
As a company, you have to educate
on board within the journey or fail to
and train your workforce otherwise
find the right balance and fail to adapt.
they become a risk to themselves
The key to understanding this
and to the company and mistakes
challenge, training and upskilling people
will happen. We must train our people
and embracing technologies, is knowlw w w.suppl yc ha i ndi gi ta l. com
C P O C S C O S T R AT E G Y
1985
Year founded
4,300 Approximate number of employees
16
42
Number of global offices
edge. As a passionate technologist,
share experiences and use cases and
Reventberg recognises the responsi-
bring that back to his role within JDA.
bility that he and JDA has in recognis-
But it doesn’t stop there. JDA has
ing and being privy to innovative new
a number of internal programmes and
technologies in order to be able to
training workshops centred around
work with customers and help them
educating the workforce. “For me it’s
implement. Through his role, Revent-
about how do we take internal knowl-
berg is exposed to technology
edge and spread it across. We spend
influencers and professionals from all
a very significant part on internal training.
over the world and this allows him to
We also have innovation weeks and in-
FEBRUARY 2019
17
novation workshops within the compa-
business and even modern life, the
ny,� he says. This also extends to its cus-
traditional lines or barriers between
tomer base, as JDA also works closely
technology adoption have begun to
with customers and creates a think tank
disappear. This is often referred to as
mentality with them in order to better un-
digital convergence, where once upon
derstand the technology requirements
a time, technology in the healthcare
and skills needed in order to drive value.
sector would have no use case in sup-
Technology is of course not exclu-
ply chain. But as Reventberg notes, he
sive to the supply chain industry and
and many others like him are looking
as it continues to redefine modern
at how other sectors are implementw w w.suppl yc ha i ndi gi ta l. com
LEADERSHIP
ing technologies and exploring how it can be replicated in the supply chain space. Ultimately though, it’s the customer that defines the digital roadmap. “We have industry experts that we work with out in the field that are driving ideas and looking at
“ We must train our people and associates and enable the workforce of the future”
trends,” says Reventberg. “They work across different verticals in
— Johan Reventberg, President, EMEA at JDA Software
different industries and together with our customers, our executive teams and our innovation team they feed back 18
and develop where we go next with our R&D spending in a very transparent way.” The digital transformation of the supply chain shows no signs of slowing down and JDA will continue to position itself as a key player in furthering this transforming landscape for some of the biggest companies in the world. Reventberg calls back to the company’s mission and vision. “Personally, I have an agenda to make JDA the best possible version of itself,” he says. “But it’s about continuing to deliver an autonomous supply chain promise and the vision around that. Taking our existing customers to the best they can be in their supply chain area.” FEBRUARY 2019
19
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PROCUREMENT INSIGHTS
22
The supply chains of the future unconstrained by the ones of the past Mike Landry, Senior Supply Chain Management Consultant at Genpact, discusses how the transformation of the retail supply chain continues to be powered by technology WRITTEN BY
FEBRUARY 2019
DA LE BENTON
23
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PROCUREMENT INSIGHTS
O
ver the last ten years, major companies all over the world have built their supply chains to be efficient. This
is particularly true in the consumer goods space due to the tighter margin pressures at play. As the supply chain conversation has shifted in recent years, these same companies are now facing the challenge of rebuilding or adapting those efficient and robust supply chains to be measured on agility. The key to this has been the disruptive nature of technology. Mike Landry, Senior Supply
Chain Management Consultant at Genpact, 24
believes that technology will ultimately prove to be both the key challenge and the key to overcoming it. “The question for businesses now is, how do they change the dynamics of the supply chain without disrupting the business?” he says. “The good news is that, the changing face of technology is inspiring agility. It’s changing and allowing companies to have a new perspective on the supply chain.” Genpact is a global professional services firm that “makes business transformation real.” It achieves this through digital-led innovation and digital-enabled intelligent operation for clients from Global Fortune 500 companies. Landry’s role sees him work closely with these companies to answer the digital supply chain question. Landry is FEBRUARY 2019
“ The good news is that the changing face of technology is inspiring agility. It’s changing and allowing companies to have a new perspective on the supply chain” — Mike Landry, Senior Supply Chain Management Consultant at Genpact
keen to point to the changing conver-
penalties as a consequence. Landry
sation of supply chain and looks at a
says that this has had a ripple effect
major consumer goods company like
on the industry, with a large number
Wal-Mart and the introduction of its
of companies now looking to repli-
On Time in Full (OTIF) standard which
cate this standard to their own sup-
has been applied to all of its suppli-
pliers. “More and more retailers are
ers. This new list of vendor guidelines
now introducing their own version of
and scorecard parameters is designed
these standards and penalties to their
to keep its suppliers in check in order
own suppliers,” he says. “It’s a sign
to ensure the company has the right
that as one company in the industry
products it has when it needs them, re-
or as the ecosystem gets better, the
duce overstocked inventory and most
expectation of others increases.”
importantly, improve the response to
“No one company can improve on
short orders. If a supplier fails to meet
its own and this spreads across the
these standards, then there are cost
industry as a whole where weak links
CLICK TO WATCH : GENPACT: TRANSFORMATION HAPPENS HERE
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25
PROCUREMENT INSIGHTS
will impact multiple companies. All of
26
With the changing landscape of
these dynamics are putting more pres-
supply chain, how has this changed
sure on companies to improve and to
the role of the procurement profes-
change, and technology is proving key.”
sional? As technology has evolved,
The major challenge with transform-
technology professionals have seen
ing a supply chain is the complexity of
their roles become much more en-
it all. There are a number of sub func-
grained within company strategy and
tions and sectors within a single supply
the same is happening to the Chief
chain and the trend across the industry
Procurement Officer and right across
is to break these various elements
the supply chain board. Landry notes
up and then connect them through
that with technologies such as au-
innovative and smart technology. De-
tomation, computing and the cloud,
mand planning, inventory planning and
entire organisational alignment will
production planning and scheduling as
look very different in the coming years
well as transportation and warehouse
as it “completely opens the door for a
and order management are all differ-
new way of running the supply chain”.
ent but very crucial parts of the retail
“We just have to have open minds. We
supply chain, and Landry believes that
can’t predict what it’s going to look like,
the way forward is to create a cognitive
but we know its going to be different,”
supply chain with end-to-end visibility.
says Landry. “Regardless of what the
“Traditionally you’ll find siloed ways
future holds and what technology will
of working in the supply chain and so
bring, people will always be involved in
our vision with Genpact is to be the as-
every step of it. We just need to figure
sembler of technology to better con-
it out. We can’t ever make it lights out.”
nect each part,” he says. “We’ll put in
Technologies such as the Internet
the plumbing and digital putty between
of Things (IoT), cloud computing and
each independent system and develop
machine learning are defining the cur-
a much more cognitive, learning, adap-
rent supply chain technology con-
tive and supply chain that will drive
versation. The commonality between
better decision making and profit.”
them all is data. In the supply chain
FEBRUARY 2019
27
“Traditionally you’ll find siloed ways of working in the supply chain and so our vision with Genpact is to be the assembler of technology to better connect each part” — Mike Landry, Senior Supply Chain Management Consultant at Genpact
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PROCUREMENT INSIGHTS
ecosystem, there is no shortage of data and Landry challenges people to look beyond the data that we automatically think of and look at the unstructured data. Unstructured data provides a sea of opportunity, but the key is unlocking that data. “When we start to get information from images and unstructured data and get real value from it, that will define the future,” he says. “Processing that data and turning it into information will help people achieve more. Right now, the data and the tools already at our disposal are phenomenal and its only going to get better.” 28
It’s easy to get carried away when discussing the possibilities of technology and data and despite organisations actively encouraging the digitisation of industry, there is still a mentality and a fear of potential failure. There is huge risk in being a first adopter and nobody ever wants to be seen to be lagging
“ There’s a whole set of infrastructures out there which will allow new companies to ramp up very quickly with not a lot of capital and implement the supply chain of the future without having to be constrained by the supply chain of the past” — Mike Landry, Senior Supply Chain Management Consultant at Genpact
FEBRUARY 2019
29
behind the competition and it is this
of industries and so, it’ll be interest-
space in the middle that companies are
ing to see innovation and competition
striving for. Most companies are look-
coming from places we don’t expect.”
ing to be a fast follower and preparing
“Those that don’t have a fixed infra-
the foundations in order to adopt tech-
structure built on efficiency can really
nologies fast and effectively, without
jump into things and leverage a lot of
the fear of failure and this creates an
infrastructure that’s there ready for
interesting market dynamic. “Some
them to tap into. There’s a whole set
believe that this gives the smaller com-
of infrastructures out there which will
panies an advantage over the bigger
allow new companies to ramp up very
ones,” says Landry. “They don’t have
quickly with not a lot of capital and
the same level of legacy and baggage
implement the supply chain of the fu-
that needs to change. This really kind
ture without having to be constrained
of lowers the barrier to entry for a lot
by the supply chain of the past.” w w w.suppl yc ha i ndi gi ta l. com
Step outside the four walls of your facility and discover inspiration from new sources across our dynamic industry. Join us at WERC 2019 and ямБnd a spark that will ignite new energy in you and your team.
THE SUPPLY CHAIN RUNS THROUGH US.
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TECHNOLOGY
32
EFFECTIVE SUPPLY CHAIN MANAGEMENT Chris Robertson, UK CEO at Creditsafe, explores how, with Brexit looming and finances becoming ever tighter, supply chain personnel at all levels need to understand how they can manage supply chains more effectively WRITTEN BY
CHRIS ROBERT SON
FEBRUARY 2019
33
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TECHNOLOGY
E
very year, KPIs within a business seem to become tougher and that
affects everyone along the entire
supply chain. Successfully and effectively managing the supply chain proves key.
HIGHLIGHT RISKS BEFORE THEY BECOME PROBLEMS Once a process is set up, it would be foolish to think it can be left to tick along by itself. Therefore, if you have carried out due diligence on a supplier, it doesn’t mean they will be forever creditworthy. 34
Circumstances change, and it is vital to monitor all your suppliers on a regular basis to spot any risks that could threaten your supply chain.
Credit reports for businesses can often point towards a possible problem a good deal of time before they become one. Due to the extensive amount of data collected and used in credit monitoring, you, as a business owner, can do your due diligence to actively understand the landscape you are operating in and continue to have ongoing insight on this. Key decision makers upstream and downstream should be assessing the risk they are involving themselves in by viewing credit history and letting accurate data tell you who to avoid, and who FEBRUARY 2019
“ WE NEED TO BETTER ASSESS OUR LIABILITY EXPOSURE IN 2019 REGARDLESS OF WHICH POINT IN THE SUPPLY CHAIN YOU ARE.” — Chris Robertson, CEO, Creditsafe
may require more in-depth research. Algorithms organise our social media feeds, serve us the most accurate search results and feed into credit data analysis tools, too. Businesses should utilise this information to help make informed decisions and can often provide an avenue for discussion regarding new suppliers.
BREXIT AS AN EXTERNAL FACTOR Brexit is coming whether you voted for it or not. Political uncertainty means that exchange rates are fluctuating constantly. To manage your international supply chain more effectively, a tip is to try and acquire fixed rates to keep your cashflow stable and accurate.
The media is often reporting on businesses stockpiling products in fear of the March deadline. Discuss this with your suppliers so you are not caught out if products are in excessively high demand. The Brexit stockpile need not affect your supply chain, but it would be wise to predict that this could increase supplier’s days beyond terms if others don’t manage their own supply chain as effectively as you are. This would mean you don’t have to worry about the next parliamentary meeting affecting your stock management. w w w.suppl yc ha i ndi gi ta l. com
35
TECHNOLOGY
ENSURE KPIS ARE MET AND ANALYSED FREQUENTLY
be a dangerous KPI if scrutinised too
KPIs in any industry are crucial for all
much. The last thing you want to do is
personnel to measure success and
cause pressures on a team of employ-
critique failures. Supply chain KPIs
ees already under large amounts of
shouldn’t be overlooked in 2019 if you
stress. Especially with the likes of Ama-
wish to keep an efficient and effective
zon coming under fire in recent months
journey. With Brexit’s uncertainty and
for its warehouse practices, it’s impor-
economic turmoil affecting the supply
tant we remember the human impact
chain, consider how this may become
of any KPI put in place.
Focusing on warehouse costs can
compounded along your own personal supply requirements.
Whilst every business will have their 36
ASSESS SUPPLIER AND CREDIT INSURANCE NEEDS
own internal KPIs, there are some that
Supplier insurance is there for a reason.
supply chain personnel should con-
There is only a small minority of people
sider for their team. To encourage the
that would not insure their home and
best service possible, first contact res-
goods, your business’ products should
olutions should be one. This helps to
not be considered any differently. We
develop better relationships with sup-
need to better assess our liability
pliers and customers whilst maintaining
exposure in 2019 regardless of which
a professional presentation of your own
point in the supply chain you are. Often
business, too.
in the industry, businesses can fall foul
“ 2019 COULD BE A TOUGH YEAR FOR MANY WITH INCREASED EXTERNAL PRESSURES. WITH THIS IN MIND. DON’T FORGET TO REMEMBER THE EMPLOYEES AND SUPPLY CHAIN PERSONNEL YOU ARE WORKING WITH ARE ALL HUMAN TOO” — Chris Robertson, CEO, Creditsafe FEBRUARY 2019
CLICK TO WATCH : CREDITSAFE: THE FACTS 37 of ignoring appropriate supplier
external personnel should be consid-
insurance, couple this with a lack of
ered to assist in this role.
financial research regarding potential
Regardless of how you decide to
new suppliers and your issues begin to
ensure your supply chain management
stack exponentially.
is more effective in 2019, ensure you do
If you are using adequate insurance,
your due diligence and assess all risks
don’t just stop there. Businesses need
appropriately. 2019 could be a tough
to be reassessing their policy renewal
year for many with increased external
periods and expiration dates to ensure
pressures, with this in mind, don’t for-
the protection can be sustained through-
get to remember the employees and
out the entire procurement period and
supply chain personnel you are work-
continue to be cost effective. Teams
ing with are all human, too.
should be clued up on this and if they cannot be trusted to maintain these buffers of protection themselves, then w w w.suppl yc ha i ndi gi ta l. com
Step outside the four walls of your facility and discover inspiration from new sources across our dynamic industry. Join us at WERC 2019 and ямБnd a spark that will ignite new energy in you and your team.
THE SUPPLY CHAIN RUNS THROUGH US.
ENTER ID CODE:
BIZCLIK TO RECEIVE $50.00 OFF ADVANCE REGISTRATION
REGISTER TODAY AT WERC.ORG/2019
TECHNOLOGY
40
AI in the manufacturing supply chain Ed Cross, Executive Director, Odesma, explores the true impact of Artificial Intelligence in the supply chain of manufacturing WRITTEN BY
ED CROSS
FEBRUARY 2019
41
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TECHNOLOGY
W
hen it comes to predicting future business trends numerical data has always been king; gathering as much of it as
possible and developing the most sophisticated algorithms to digest it. Artificial Intelligence (AI) has turned this on its head, and instead of being focused on figures, the whole idea revolves around it being trend or word-led. Rather than gathering as much historical data as possible to predict the future, AI can monitor changing trends and habits in real-time to give a more accurate, wider reaching view of what is to come for manufacturers. This includes
42
monitoring what is being said across social media and other print and digital media. In this way, AI is much more reactive to ever-evolving global conversations and can turn this into actionable insights for businesses to develop more intelligent strategies. But this is nothing new; when it comes to AI, manufacturing is much more sophisticated than many other sectors. For an industry challenged by tight margins, it has needed to become very tech savvy to deliver against targets. Many manufacturers are already way down the line with automated processes such as Robotic Process Automation (RPA), which removes the human element from decision-making. Many factories are adopting a ‘lights off’ approach and as a result, are seeing increased levels of FEBRUARY 2019
“Solutions must be developed that support every aspect of manufacturing procurement, from simple back office automation to complex market scanning” — Ed Cross, Executive Director, Odesma
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43
TECHNOLOGY
44
agility and leanness and time-consum-
priorities are creating a changing
ing back office processes are being
mindset, from focusing on the engine
automated, freeing staff up to concen-
of the business to the customer
trate on value-added activities.
experience, resulting in high-value rather than high-volume output.
TACTICAL VS STRATEGIC
Taking this strategic approach
AI and other digital innovations are
means organisations can now concen-
proving invaluable when it comes to
trate on the areas within their supply
the tactical aspects of manufacturing
chain that will deliver the greatest value
procurement, such as matching
such as managing the supply base,
Purchase Order numbers with
cyber security and staffing.
invoices, which in turn is enabling procurement leaders to focus on
MANAGING THE SUPPLY BASE
more strategic activities. These shifting
Arguably the manufacturing landscape
45
has never been more competitive, with
absolutely critical. As an experienced
businesses understanding the need to
procurement leader, you know how
create stand-out products. Identifica-
important traceability, record keeping
tion of and collaboration with new and
and human rights is and now that your
novel suppliers should therefore be a
back office has been automated, your
key focus for the manufacturing
focus now should be on cascading that
procurement leader.
same level of detailing throughout your
However, unless an innovative new supplier knocks on their door, or they are read about online or in a trade
supply chain to ensure they uphold your exacting standards. The challenge with all of this is that,
magazine, then it is as difficult as ever
while you have AI streamlining the
to find them.
tactical side of the business, from a
When it comes to managing reputation, managing the supply chain is
strategic point of view, the technology has simply not caught up. For example, w w w.suppl yc ha i ndi gi ta l. com
TECHNOLOGY
there is currently no technology available that will help monitor supplier reputation, including whether they are engaged in modern day slavery, or to alert you to new suppliers.
CYBER SECURITY While manufacturing procurement is mature when it comes to AI and RPA, its approach to supply chain cyber security is woefully neglected and of great concern. Now that they have moved away from tactical activities, leaders should be ensuring that the level of tech innovation deployed is matched only by 46
the level of cyber security within the organisation and throughout the supply chain. The more connected to the Internet of Things (IoT) a business and its products become, the more exposed they become E X E C U T I V E P R OF IL E
Ed Cross Ed is an executive-level business leader who previously ran the global procurement and HR outsourcing businesses for Xchanging plc. He has over 30 years’ global professional services experience with extensive consulting, outsourcing and functional experience in procurement, supply chain and change management. He previously worked for PriceWaterhouseCoopers and began in a line procurement role with ICL.
FEBRUARY 2019
“Leaders should be ensuring that the level of tech innovation deployed is matched only by the level of cybersecurity within the organisation and throughout the supply chain” — Ed Cross, Executive Director, Odesma
47
and the opportunities for attack they
will try to exploit. Procurement lead-
face. While many have robust internal
ers should be reviewing the security
policies in place for cyber security, the
processes throughout their supply
fact is, it might all be null and void if
chain to ensure every possible point
their suppliers do not share the same
of failure is identified and protected.
level of compliance. Most products have a digital ele-
INHOUSE SKILLS
ment – fridges, washing machines,
While AI and emerging technology
cars; that digital connectivity pre-
continue to enable a shift in focus,
sents new weaknesses that hackers
from the tactical to the strategic, many w w w.suppl yc ha i ndi gi ta l. com
TECHNOLOGY
48
“ Identification of and collaboration with new and novel suppliers should be a key focus for the manufacturing procurement leader ” — Ed Cross, Executive Director, Odesma
manufacturers do not have the talent and skills internally to really maximise upon the opportunities presented by them. Although automation is freeing leaders up, do they understand the sheer scope of these technologies and do they have the capability to draw upon and apply them in their new role? Is appointing a chief AI officer to the boardroom one solution?
WHAT NEXT? While technological advances have empowered the higher-volume, tactical aspects of manufacturing procurement, support for the strategic element of business is falling far behind. Solutions must be developed that support every aspect of manufacturing procurement, from simple back office automation to complex market scanning. For the manufacturing industry to realise the full benefits of advanced technologies, including AI, and its application to the supply chain, board members and other key decision makers must make it a priority area for training and upskilling. With increased connection comes increased hackability, it is therefore vital for manufacturers to take the threat of cyber security seriously, both within the business and throughout the supply chain. w w w.suppl yc ha i ndi gi ta l. com
49
Empower every person and every organization on the planet to achieve more. Microsoft Enterprise Services Enable every organization to become a digital business
d
Mitsubishi Fuso Truck and Bus Connected X by Microsoft AI & MR
T O P 10
Top 10 US supply chain management courses W RI T T E N BY
HARRY MENE AR
52
We explore the top 10 undergraduate supply chain programmes in American universities, according to a Gartner study. Programmes are evaluated based on ‘Programme Scope’, a measure of the number of attributes taught by the course; ‘Industry Value’, based on internship participation, starting salaries, and media presence; and ‘Programme Size’, taking into account both the number of students enrolled and the number of full-time professors
FEBRUARY 2019
53
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T O P 10
09
University of Western Michigan 23,914 Students UWM enrolled 23,914 students in 2014 and its Integrated Supply Chain Man-
10
University of Wisconsin 43,338 Students 54
agement Programme graduates 85-95 students annually. The programme was the first of its kind to integrate business and engineering courses in 1992. Software Advice ranked the programme at second in the United States in 2015 for
Located in Madison, the University
its emphasis on technology, software,
has a total student enrollment of
and quantitative tools. The ISM curricu-
43,338 as of 2016, with 17 enrolled
lum focuses on product assurance,
in the supply chain management pro-
managing and improving supply sys-
gramme. Seven of these students are
tems, and productivity techniques, as
international, with fewer than half
well as offering courses on international
being Wisconsin residents. UWM’s
business law. In 2016, 93% of ISM
course focuses on Logistics, Procure-
graduates achieved full-time employ-
ment, and Marketing courses, with
ment within three months, with salaries
opportunities to specialise further in
ranging from $55,000 to $60,000.
Product Development, Operational
Click here for the course overview
Analytics, and Service Operations Management. The average starting salary for graduates in 2014 averaged $53,000, with the average internship salary was $2,800 per month, placing it below the national average. Click here for the course overview FEBRUARY 2019
07
University of South Carolina 33,772 Students The University of South Carolina, in Columbia, enrolled 33,772 students in 2015. USC’s supply chain management programme is ranked joint-second by Gartner for programme scope, and joint-third for programme size. The programme focuses heavily on Lean
08
Ohio State University 66,046 Students
systems, Six Sigma methodologies and business re-engineering process improvement approaches, logistics, and management. Undergraduates also have an opportunity to apply these skills by means of a Capstone consulting
The OSU’s student enrollment in 2016
project. The average graduate earns
was 66,046, with 15.5% majoring in
a salary of $57,070, above the Gartner
Business at the Fisher College of Busi-
average.
ness. OSU’s supply chain management
Click here for the course overview
course is closely linked with logistics, with six available logistics classes out of 15, two of which are mandatory. 85% of supply chain management/ logistics students leave OSU with internship experience. Graduates have an average income of $52,295, putting it slightly below the national average. Click here for the course overview w w w.suppl yc ha i ndi gi ta l. com
55
T O P 10
05
Rutger’s Business School 68,942 Students Rutger’s Business School enrolled 68,942 students last year, with 726 undergraduates studying supply chain
06
Georgia Institute of Technology 56
26,839 Students
management. The college awards over 150 scholarships a year for supply chain management students. The programme’s participants have also placed first and third in the Rutgers Ten Plus Supply Chain Case Dual Challenge and
Gartner ranks The Georgia Institute
Sam M. Walton College of Business
of Technology, Atlanta, joint first in
International Graduate Logistics Case
the US for programme size, account-
Competition, respectively. Rutger’s sup-
ing for both full-time students and
ply chain management programme has
teaching staff. It is also joint-second
a yearly internship placement rate of
for industry value. GIT’s supply chain
over 95%, and counts IBM, Johnson
management course places empha-
and Johnson, Verizon among its intern-
sis on management, engineering,
ship opportunities. According to a 2012
and logistics. Students participate in
Bureau of Labor study, Rutgers supply
the Capstone project, identifying and
chain management graduates earned
solving real world industry problems
a median salary of $78,000.
in conjunction with external spon-
Click here for the course overview
sors. Upon graduation, Georgia Institute of Technology students earn upwards of $55,000 with a Bachelor’s degree in business. Click here for the course overview FEBRUARY 2019
03
University of Tennessee 250 Students
04
Arizona State University 71,946 Students
The University of Tennessee’s supply chain management programme is ranked first in the United States for programme scope, and is joint-second for programme size, graduating over 250 students in 2015. The programme
ASU had an attendance of 71,946 in
maintains its third-place position over-
2016, with 620 studying supply chain
all in the Gartner rankings from the
management in 2013. Gartner’s study
2014 survey. In addition to broad-
ranks ASU joint-second in programme
focus general studies over the first two
size and industry value, and joint-third
years, the UTK course (hosted by the
for programme scope. Arizona state’s
Haslam Business College) specialises
programme is also one of the top three
in Information Management, Human
upward movers on the Gartner list
Resource Management, and Interna-
since 2014. The programme is run
tional Business. Chad Autry, head of
through the W.P. Carey Business
the department of marketing and sup-
school, and emphasises a diverse cur-
ply chain management, claims: “Our
riculum, as well as extracurricular
faculty puts out relevant, innovative
involvement in over 45 business clubs
research and teaches students to
and organisations. Graduates typically
make an impact after graduation.”
earn between $40,000 and $60,000.
Graduates in Supply Chain Manage-
Corporations that commonly recruit
ment earn a mean salary of $52,000
from ASU include: Exxon, Intel, Gen-
per annum, with a comparably low full-
eral Electric and Motorola.
time employment rate of 55%.
Click here for the course overview
Click here for the course overview w w w.suppl yc ha i ndi gi ta l. com
57
T O P 10
02 58
Michigan State University 39,000 Students
Michigan State University enrolled over 39,000 undergraduates in 2017, with over 8,000 students at the Eli Broad College of Business. Supply Chain Management undergraduates comprise 44% of the student body. The programme is ranked first by Gartner for Industry Value and is joint-first for Programme Size. The MSU Supply Chain Management programme provides a curriculum focused on manufacturing operations, purchasing, transportation, and physical distribution into a unified programme. The Programme achieved a 100% internship placement rate in 2017, with an average base salary of over $6,000 per month. Broad College graduates have an 85% employment rate post-graduation, and the mean salary for Supply Chain Management graduates is over $101,000 per annum, placing the school far above the national average. Click here for the course overview FEBRUARY 2019
01
Pennsylvania State University 100,000+ Students
Pennsylvania State University enrolled almost 100,000 students in 2015 and accepted over 600 students into its Supply Chain & Information Systems programme in 2014. Gartner ranks the programme joint-second for Industry Value and Programme Scope, and joint-first in the Programme Size category. Established in the 1950s, PSU has evolved “from a post-World War II focus on the logistics of transportation, warehousing, and inventory management, to a broadened view incorporating sourcing and distribution, to a holistic vision of supply chain as an end-to end collaborative enterprise.� Classes still provide increased focus on logistics frameworks, but also explores statistical analysis and leadership techniques. As of 2016, graduates experienced an 86% employment rate, with an average salary of over $59,000, beating the national average. Click here for the course overview
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59
EVENTS & A S S O C I AT I O N S
The biggest industry events and conferences WRITTEN BY DALE BENTON from around the world 13–14 MARCH
Temperature Controlled Logistics in Biopharmaceuticals Europe 2019 [ MILAN, ITALY ]
62
04 APRIL
The Temperature Maintenance of
Procurex Ireland
Biopharmaceuticals returns to Milan,
[ RDS, DUBLIN ]
Italy for its 15th Annual edition after an
Procurex Ireland would like to thank all
extremely successful 2018 event. The
partners, sponsors, delegates and
2019 agenda will focus on providing a
exhibitors for their involvement this
holistic approach to temperature-con-
year which has helped make the event
trolled shipments whilst also helping
a success once again. Throughout the
address distributional obstacles and
day hundreds of delegates enjoyed the
regulatory compliance. The event will
free training opportunities and the
examine solutions to mitigate faults
wealth of innovation shown in the Prod-
within the cold chain for a more
uct Showcase. Held in Dublin, Procurex
streamlined and cost-effective supply
Ireland brings together the largest
chain. Both small biotechs and large
annual gathering of pan-sector public
pharma companies alike will be pre-
procurement professionals and market
sent at the ‘perfect platform to share
leading suppliers, from both the Repub-
challenges, network with over 400
lic of Ireland and Northern Ireland, who
industry peers and hear informative
contribute to the ongoing delivery and
case studies from leading pharmaceu-
strategic development of a combined
tical companies.’
annual spend of over €12bn.
Click to visit website
Click to visit website
FEBRUARY 2019
09-10 APRIL
ProcureCon Canada [ TORONTO, CANADA ] A leadership focused event with one shared goal - improving supply chain and procurement strategy across the globe. The Supply Chain Summit serves as an annual platform to
30 APRIL-02 MAY
impact of market dynamics and new
Women in Procurement & Supply Chain 2019
technologies for current and future
[ SYDNEY, AUSTRALIA ]
supply chain and operations leaders.
The annual Women in Procurement and
This year’s event will examine key case
Supply Chain conference is dedicated
studies on how workforce manage-
to advancing the opportunities for
ment, advanced analytics, process
female executives across supply chain
improvement and automation are being
and procurement. Looking to address
rolled out in the world’s best facilities.
specific industry challenges facing pro-
Other key discussions will focus on
curement stakeholders, the event is a
achieving innovation, maximising sup-
platform for procurement stakeholders
ply chain profitability and increasing
to share experiences, insights, stories
visibility and flexibility to mitigate risk.
and best practice-innovations.
Click to visit website
Click to visit website
‘exchange ideas and collaborate on the
w w w.suppl yc ha i ndi gi ta l. com
63
EVENTS & A S S O C I AT I O N S
16 MAY
64
World Procurement Awards 2019
20-21 MAY
Total Supply Chain Summit (UK) [ HEYTHROP PARK RESORT, UK ]
[ INTERCONTINENTAL LONDON, THE O2 ]
A highly focused event that brings
Redefining procurement excellence -
together logistics professionals and
the pinnacle of professional
key industry solution providers, the
achievement, each year the greatest
summit consists of one-to-one busi-
procurement organisations and thought
ness meetings, interactive seminars
leaders from around the world gather
and valuable networking opportunities;
for an evening of anticipation, entertain-
in less than two days. The Total Supply
ment, and inspiration at the World
Chain Summit is specifically organised
Procurement Awards. Competing for a
for senior professionals who are
spot on the prestigious list of finalists and
directly responsible for supply chain
winners, organisations are recognised for
within their organisation, and those who
being innovative and transformative
provide the latest and greatest prod-
players in the industry.
ucts and services within the sector.
Click to visit website
Click to visit website
FEBRUARY 2019
65
10-12 JUNE
09-11 JULY
Supply Chain Summit: Atlanta
Procurecon Asia
[ ATLANTA, USA ]
Asia’s premier gathering for global and
The Supply Chain Summit 2019 is the
regional CPOs and Asian heads of pro-
meeting place for the forces of innova-
curement. Procurecon Asia 2019 brings
tion, transformation and connectivity
over 200 attendees and more than 100
that will fundamentally reshape the sup-
CPO’s and Heads of Procurement to
ply chain industry over the coming years.
access and explore interactive case
Over 800 supply chain and procurement
studies, broad discussion on industry
representatives will meet to discuss
challenges and trends and network
digital transformation strategy and look
with some of the biggest names in the
at the supply chain of the future.
procurement space.
Click to visit website
Click to visit website
[ SINGAPORE ]
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66
THE FLOW OF INFORMATION: LSC’S SUPPLY CHAIN TRANSFORMATION WRIT TEN BY
JOHN O’HANLON PRODUCED BY
GLEN WHITE
USA
67
w w w.suppl yc ha i ndi gi ta l. com
L S C C O M M U N I C AT I O N S
LSC COMMUNICATIONS IS A VITAL PARTNER TO PUBLISHERS, PRODUCING THEIR PRINTED MATERIALS AND ALSO MANAGING AND DISTRIBUTING THEM THROUGH INNOVATIVE SUPPLY CHAIN SOLUTIONS AND EXCEPTIONAL SERVICE
68
FEBRUARY 2019
USA
I
n its present incarnation, LSC Communications is just over two years old having been created out
of the book, magazine, catalogue and office products printing businesses of RR Donnelley. That business was founded in 1864 and became recognized as the founder of the American high quality, high volume book printing industry. Its sought-after Lakeside Classics imprint is now maintained by LSC and is a benchmark for the impeccable attention to product excellence and design that epitomizes the company. Not so long ago, printing was thought to be a dying industry as electronic means of delivering content, whether educational or general, made inroads. Certainly, some impact was felt, however in the last year or two book sales have rallied and LSC’s President of Book Division, Dave McCree, is insistent that the fundamentals of the print market are healthy – a sound basis on which to build the many added value services the company is now able to offer. “Someone suggested to me the other day that we are a 155-year-old startup – I love that! We are a smaller, leaner and more agile organization focused on specific markets.”
w w w.suppl yc ha i ndi gi ta l. com
69
PRI YOU
Link
The time ha HP solution used to ma and engage
THE GRO
Counterfeiting and product diversion are everywhere—and growing.
IS YOUR BRAND PROTECTED?
Global co could rea Trillion
THE LI
Pro you
Int an
En wit
link
linkcreationstudio.com
1. Frontier Economic 2. Mark Monitor blog 3. World Federation o 4. Forbes, “Fake Wine 5. Licensed from Dig
INT THAT PROTECTS UR BRAND
k from HP
as come to combat counterfeiting and product diversion—and Link, an affordable n, is up to the task. Link from HP embeds products with an overt or covert digital fingerprint anage your products across their lifecycle. Protect your brand, track and trace products, e consumers with one digitally-printed mark.
OWING THREAT IS REAL
ounterfeiting ach US$2.3 n by 2022.1
1 in 4 US consumers have purchased counterfeit items online.2
Product diversion is eroding the profit and brands of the Direct Sales (MLM) $182B industry.3
Fake wine is prevalent and valued at roughly $3B annually.4
INK ADVANTAGE
otect and track our products
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ngage customers th the same mark
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cs and International Chamber of Commerce (ICC): “The Economic Impacts of Counterfeiting and Piracy,” June 2017. g, “Protecting Brands in a Digital World.” Chikada, Akino. April 2016. of Direct Selling Associations: 2017 Sales Report. e Is A Billion Dollar Market And Here Are The Ways To Identify Them.” February 2017. gimarc.
Learn How Link Works
L S C C O M M U N I C AT I O N S
“WE ARE BUILDING THE SERVICES SIDE OF OUR BUSINESS TO COMPLEMENT THE MANUFACTURING SIDE” — Dave McCree, President, Book and Directory Division, LSC Comminications
72
FEBRUARY 2019
USA
AN EVOLVING MARKETPLACE
The traditional core business model
Traditionally, most publishers have
of printers like LSC was to work with
tended to outsource the printing of their
publishers to help them find ways to
books or educational materials but have
reduce costs. Printing was regarded
kept marketing, distribution, warehousing,
as a production cost, to be pared down
order fulfillment and customer relations
wherever possible on the principle
in-house. Some, especially academic
of lean manufacturing. In those days,
presses, even printed their own books.
LSC won business through competitive
This mindset has been slow to change,
pricing, dependable quality and above
but increasingly the household names
all service – now, McCree insists that
in publishing are coming to appreciate
the same attention to the client is being
the advantage of outsourcing more of
extended right through to the supply
their non-core work – and LSC is keen to
chain. Responsibility no longer ends
seize this opportunity. “We have moved
with the finished product but goes right
from an old-style print manufacturer to
through marketing and sales, distribution
what you might call ‘Print Plus’. We are
and cash collection. “We help publishers
to complement the manufacturing side.”
sell more books as well as driving the
E X E C U T I V E P R OF IL E
Dave McCree is the President of the Book & Directory Group at LSC Communications and is responsible for Sales Leadership and strategic relationships within both platforms. Dave has been in the printing industry for close to 30 years with a rich background in leading the print sales and manufacturing divisions. Dave’s focus has been on expanding LSC’s innovative solutions and supply chain management services as well as supporting and promoting the evolving publishing industry.
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73
L S C C O M M U N I C AT I O N S
cost of their production down. That is
clients include educational giants like
really the focus of our strategy: saving
McGraw-Hill, Pearson, Houghton
cost and creating efficiency along the
Mifflin Harcourt, new edtech players
supply chain at the sales and market-
like Amplify, general publishers such
ing end also helps them to sell more
as Random House and HarperCollins
products. It’s a double winner for the
as well as niche players like Workman
client enabling them to sell more product
Publishing and Abrams. It is also a
while producing it faster through our
major printer of bibles and religious
proven print capability.”
books. “These are all very different
The conversation is no longer about
74
businesses, but they all need both
traditional offset versus digital printing
product and services,” says McCree.
– LSC can handle any volumes in either
“We set out to be more intimate than the
format – but more about e-services,
average large printing organization by
warehousing and fulfillment as well
making sure we are meeting the needs
as supply chain management. LSC’s
of each one of those clients wherever
E X E C U T I V E P R OF IL E
Michael Shea — Senior Vice President, Book Division, LSC Communications — is a seasoned printing and publishing executive with over 20 years of pioneering ventures in content management, custom publishing and book manufacturing. Throughout his career, he has demonstrated the vision and drive to capture high-growth opportunities in the rapidly changing publishing and printing industries. His early successes with technology-driven print solutions led to more comprehensive solutions spanning the entire spectrum of book manufacturing including content management, physical and digital production, distribution and inventory management. His most recent focus has been working with industry supply chain participants to combat book piracy.
FEBRUARY 2019
USA
CLICK TO WATCH : ‘XFROM FILE TO FINAL DESTINATION’ 75 that need might be. They knew we could
that despite the success of e-books,
manufacture a book for them; now we
the case bound books segment grew
are managing their warehousing as
by 6% while e-books declined by 4%.
well, distributing their product from our
While this trend sustains the core printing
warehouses across the USA, and even
capability of LSC, the biggest potential
handling the back-end collection and
lies in innovation: specifically, the
cash applications within their business.”
provision of value-added services that enable publishers to offload the purely
EXPLORING NEW PUBLISHING LANDSCAPES
administrative aspects of book delivery.
Surprisingly perhaps, confirms Books
constrained by a traditional mindset
Division SVP Michael Shea, the fastest-
but today, the benefits of consolidating
growing book sector last year was in
warehousing and order fulfillment are
hardbacks. In 2018, the American
driving change, no doubt stimulated by
Association of Publishers (AAP) reported
the Amazon model. LSC has expanded
Publishers may have previously been
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L S C C O M M U N I C AT I O N S
“WE ARE COMMITTED TO HELP PROTECT OUR CLIENTS’ INTELLECTUAL PROPERTY AND TO SUPPORT TECHNOLOGY INNOVATION WITHIN THE SUPPLY CHAIN” — Mike Shea, Senior Vice President, Book and Directory Division, LSC Comminications
76
its warehousing capacity to meet this demand and now has a spread of
the world’s leading publishing houses. Educational technology, or edtech, is
facilities over the Midwest and East
a fast-expanding and very fluid area of
Coast. The LSC book fulfillment
content delivery, explains Shea. “There
footprint now totals more than 3.7 million
are hundreds of new and disruptive
sq. ft. of operating space, serving clients
startups, attracting billions of dollars
in all of its market sectors. Most recently,
in investment, challenging established
LSC has acquired Elsevier’s warehous-
players like Amazon, Apple, Google
ing and distribution facility in Missouri
and Microsoft.” These companies are
to strengthen its full range of supply
seizing on technologies like virtual
chain services for publishers of both
reality (VR), artificial intelligence (AI) and
printed and electronic books. It’s a great
audio-visual (AV) tools delivered using
demonstration of the new service model,
cloud technology – but while this has
says McCree, in partnership with one of
disrupted print, it hasn’t replaced it.
FEBRUARY 2019
USA
77
E X E C U T I V E P R OF IL E
Brittyne Lewis — Product Development Director, LSC Publisher Services, LSC Communications — has worked directly with global publishers in various capacities at LSC Communications over the past 10 years. She has a diverse background in managing software and relationships with major retailers and publishers. In her role as Director of Product Development, Brittyne drives the development and strategy of new products and solutions to meet publishers’ needs by anticipating market requirements, working directly with publishers, and monitoring the industry trends. Apart from work, Brittyne enjoys spending time with her family, gardening, reading books to her children, and eating tacos and BBQ in Austin, Texas. w w w.suppl yc ha i ndi gi ta l. com
L S C C O M M U N I C AT I O N S
“We found there wasn’t the network infrastructure to support all this digital delivery. There was an ongoing request and requirement for printed material – as the digital curriculum develops it is supplemented with print, and the print component has continued to grow pretty dramatically. We are working with the most advanced clients and publishers in that space, at the school and college level, including the providers of open educational resource (OER) material such as California State University’s MERLOT project, which publish low-cost printed books to 78
supplement online content,” Shea adds. OpenStax, a nonprofit edtech initiative based at Rice University makes textbooks available in free digital formats and at a low cost in print. LSC prints a significant number of these core textbooks, mostly at the freshman and sophomore level, which sell at a fraction of the cost of the mainstream equivalents. “OpenStax has really changed the economics of making printed material available to students,” he explains. All of these initiatives benefit from LSC’s unrivaled digital print capacity. Even more importantly though, the very complexity and immediacy they have brought to the University Press underlines the need for the comprehensive service platform the company
FEBRUARY 2019
USA
has developed to manage the logistics and fulfillment aspects of the entire supply chain.
PARTNERSHIP IN TECHNOLOGY Brittyne Lewis, who looks after side of the business that deals with metadata, audio, artificial intelligence, retail data tracking, and digital technologies, was keen to explain the ways in which technology has disrupted the information market. “Every year something new comes up whether it’s from publishers’ prospectuses, how Amazon, Google and Apple are operating or new data being available,” says Lewis. “Data presents a big challenge. The retail industry, for example, has been able to capture a lot of customer data, but in the publishing space that hasn’t really happened to the same extent – yet. So I’d say we aim to help publishers to navigate the digital landscape.” To make this possible LSC is exploring and growing every opportunity. In the summer of 2018, it took the first step and investing in an AI tech start-up focused on the publishing and media industry, with an eye towards providing target audience data to drive marketing strategies. LSC has also developed a publisherfacing platform called HarvestView designed to increase book discoverability and help
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79
L S C C O M M U N I C AT I O N S
optimize books for sale online. This is key to publishers’ success both on Amazon and other e-tailers given the multitude of brick-and-mortar closures over the years. It will strengthen LSC’s leadership position in content logistics, distribution and monetization across all formats, channels and platforms. LSC has morphed into a solutions provider, Lewis continues. No longer simply the output partner for a printed book, it now provides tools that enable strategy formulation and efficiencies in 80
the supply chain. A good example would be the multi-year supply chain services agreement it signed in December 2018 with the United Church of Canada, under
delivering a platform for verifying
which it will provide a range of distribu-
textbook authenticity through the
tion services from LSC’s Newmarket,
scanning of secure unique identifier
Ontario location.
codes. The platform uses HP’s tried and tested Link Technology for
NIMBLE, AGILE – AND DEPENDABLE
product authentication to help protect
Michael Shea is determined that LSC
intellectual property and fight counter-
will continue to leverage best-of-breed
feiting throughout the entire supply
technology solutions to serve its clients.
chain. Publishers can apply an
To address the age-old problem of
IntercepTag serialized mark, a unique
piracy in global textbook publishing,
anti-piracy identifier code, on each book
the company worked with a long-stand-
at the time of production via a label or
ing partner in print and in July 2017
digitally printed cover. “It’s a tangible
LSC launched its IntercepTag solution,
demonstration of our robust Supply
FEBRUARY 2019
USA
$3.6bn Approximate revenue (2017)
2016
Year founded
23,000
Approximate number of employees 81
Chain as a Service (SCaaS) offering,”
as a printer. I don’t want to under-empha-
emphasizes McCree. “We are committed
size that. It is an important aspect of
to helping protect our clients’ intellec-
who we are and it is a critically important
tual property and to support technology
business that is growing strongly again
innovation within the supply chain.
after a flat period. That said, we are
As we look to roll out Phase II of our
looking at an incredibly exciting time over
IntercepTag solution, we will now be
the coming years. By capturing more
looking to help our clients link directly
and more of the supply chain services,
with their end customers, the consumers.”
fulfillment, distribution and warehous-
He summarizes his position with
ing side of our clients’ businesses, they
a powerful statement of the strategy that
can focus on their core business of
will define LSC in the digital age. “When
content creation, editorial and sales that
people think of LSC, and specifically
will only create more opportunities for
the LSC book business, they think of us
us to work in partnership with them as w w w.suppl yc ha i ndi gi ta l. com
L S C C O M M U N I C AT I O N S
“WE AIM TO HELP PUBLISHERS TO NAVIGATE THE DIGITAL LANDSCAPE” — Brittyne Lewis, Technology Executive, Book and Directory Division, LSC Comminications
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they attempt to utilize Amazon and other e-marketplaces. “The new entrants to publishing and the technology marketplace that we have been talking about only add to that excitement. Printing has certainly changed, and we are leading that change. There’s a significant change, with a move from long runs and putting stock into a warehouse to more dynamic, agile digital print. We see it as an inventory-on-demand scenario, which is a really good fit with our business. After all, we already have one of the largest digital print capability in the marketplace.� Thus, LSC retains its commanding position in the market as a dependable printer that anyone with a printed product needs to be talking to, while evolving into a very significant service partner, helping publishers around the world with whatever they need to get their product to market and into the hands of the end customer.
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PROCUREMENT TRANSFORMATION IN THE HEART OF PHILADELPHIA WRIT TEN BY
ANDRE W WOODS PRODUCED BY
DENITR A PRICE
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DREXEL UNIVERSITY
WE SPEAK TO ASSISTANT VICE PRESIDENT OF PROCUREMENT SERVICES JULIE ANN JONES REGARDING DREXEL UNIVERSITY’S PROCUREMENT TRANSFORMATION
P
rocurement is undergoing nothing short of a revolution right now, with technology transforming both
operations and capabilities far beyond merely 86
a back-office function. Purchasing goods and services strategically with an emphasis on value and cost savings has become a staple of modern business practice, and higher education is not exempt from this trend. Rising tuition costs and changes in enrollment patterns to more affordable options have caused budgets to tighten, leading to mergers and even closures among some smaller, private educational institutions. In this environment, colleges and universities are re-evaluating their purchasing policies and procedures in order to maximize the student tuition dollar, reduce expenses, and remain competitive. Drexel University, located in Philadelphia, Pennsylvania, is one such institution, having
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DREXEL UNIVERSITY
“ W E TRY OUR BEST TO PARTNER WITH DEPARTMENTS TO MAKE SURE THEY’RE GETTING THE BEST VALUE” — Julie Ann Jones, Assistant Vice President Procurement Services
USA
89 recently expanded its Procurement
involves an annual spend of approxi-
Services department under new
mately $350mn across a diverse range
leadership. Julie Ann Jones joined
of departments, and transitioning this
Drexel, the 15th largest private university
function through the prism of social
in the US, last January as Assistant
responsibility and economic inclusion
Vice President of Procurement Services.
is no small undertaking. However, Jones
What brought Jones to Drexel was the
has the necessary experience in spades
opportunity to build a procurement
– having engaged with suppliers during
department at a university that has the
her seven years working in IT and on
institutional will to make meaningful
supply chain systems at Philadelphia
change to the way it does business,
Housing Authority and while serving
including the development of a more
as Executive Director, Project Manage-
socially responsible and economically
ment & Procurement at La Salle University.
inclusive procurement strategy. The procurement space at Drexel
In effecting this institutional change, Jones placed a premium on pragmatism w w w.suppl yc ha i ndi gi ta l. com
DREXEL UNIVERSITY
and flexibility while still being mindful of her team’s core mission. “A lot of the changes in procurement have happened pretty fast,” she explains. “We had to begin to transition into new, creative ways of thinking. And with that kind of culture shift come policy and process updates.” Understanding the needs of Drexel meant not strictly adhering to a best price model. Instead, Jones reshifted the focus of the procurement function to what she calls ‘best value’. “We have to be budget conscious, of course, but sometimes you might also have to pay a little bit 90
more because the product or the service that you need is really represented better at a slightly higher price,” she explains. “We want to provide a quality service and get real results.”
SUPPLIER DIVERSITY AND ECONOMIC INCLUSION A key dynamic in instituting policy and process changes was Drexel University’s commitment to working alongside the local community. “It’s relationship building, essentially. Procurement’s not just an administrative function but also a customer service function while also being very strategic,” Jones explains. The university is a key member of Philadelphia Anchors for Growth and Equity (PAGE), FEBRUARY 2019
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91 E X E C U T I V E P R OF IL E
Julie Ann Jones is a Project Management and Procurement Strategist who partners with executives, cross-divisional teams, and external entities to strategically source and manage contractual engagements to the financial and product benefit of her sponsor. Julie has a history of transforming daily cross-functional operations through the development of innovative systems and enterprise architectures for organizations in diverse industries. She has significant strength in building, training and leading dynamic teams, inspiring ingenuity, creativity, accountability, and morale. Julie is currently serving as the Assistant Vice President of Procurement Services at Drexel University, where she oversees the University’s significant spend portfolio.
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DREXEL UNIVERSITY
92
which works to better connect large
universities within the city of Philadelphia.
institutional buyers to local suppliers and
The initiative is also hoping to create
their respective supply chains across
5,000 living wage jobs for local residents
what are termed the ‘eds and meds’
over the next 8-10 years. “The idea is that
– educational and medical institutions
we all come to the table to share data and
across the city. It’s a ‘buy-local’ program
strategies. We get really deliberate about
close to Jones’ heart; her late father was
this work to see if we can bring some of
a small business owner.
the spend dollars back into Philadelphia,”
The initial aim of the scheme is to
she explains. “Baltimore had a really
localize $500mn in goods and services
successful initiative and we’ve been
contracts across 13 city hospitals and
working closely with the team that heads
FEBRUARY 2019
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93
that up. I sat on the panel in October,
to truly help manage that aspect of any
and we had some really great conversa-
of these larger contracts and hold these
tions about how to do this work and how
suppliers accountable to it. We can then
to make it mean something. So, it’s an
see what that process looks like on a
interesting time.”
quarterly basis and how we quantify
Local suppliers are benefiting from an
and report that when we look at our
overarching supplier diversity program
diversity numbers,” Jones outlines. The
that plays a huge part in the new drive
Smart Source procurement system
at Drexel, with a dedicated Director of
at Drexel is also being utilized more
Supplier Diversity appointed last August.
rigorously to support the university’s
“We have the capacity on our team now
supplier diversity strategy. w w w.suppl yc ha i ndi gi ta l. com
DREXEL UNIVERSITY
Jones is fully invested in the local
94
“So, a lot of these programs have
and diverse economic impact of both
different goals. You have the commu-
the university and its partners. “We’re
nity partnership folks that are on the
not just checking boxes to make sure
relationship side of things, out in the
we’re hitting certain arbitrary goals or
community, hearing the problems. Then
numbers but focusing on how we are
there’s the business side of the house,
really impacting these businesses in
which I would consider to be procure-
our community. Are the businesses
ment, facilities and HR and now we’re
prepared? Do they have the capacity
starting to engage with our internal folks
to do business with the larger institu-
as well as with our external neighbor-
tions? And if they don’t, can we give
hoods. So, a big focus since the director
them smaller pieces, or can we put them
got in has been inserting ourselves into
in contact with people to help build their
these processes, into the community,
capacity so they’re ready next time?
into these conversations, talking about
FEBRUARY 2019
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CLICK TO WATCH : ‘AMBITION CAN’T WAIT. DREXEL UNIVERSITY.’ 95 how we affect all this, not just through direct purchase, but through other strategic things we can do.” Sustainability continues to influence many aspects of business strategy across numerous departments and it’s an influence behind the future of procurement at Drexel. “Sustainability is that last tier. Some of our partners already report in on it, but that’s the next pillar we’ll focus on. The Director (of Supplier Diversity) and I have spent a significant amount of time talking about what this program’s going to look like and how we’re going to engage in a very different and deliberate way.” w w w.suppl yc ha i ndi gi ta l. com
DREXEL UNIVERSITY
TEAM BUILDING To bring in the processes Jones saw as essential to Drexel’s strategy, adding headcount to the small existing team was a critical priority. Fortunately, Jones had both the support of Drexel and the ability to hire the majority of her now fully-staffed department while retaining existing talent. “The seat here at Drexel had been empty for about a year and several open positions on the team were deliberately left until my position was filled,” she says. “We’re 17 strong right now but of that 17 only four have been here 96
longer than 11 months. It’s a really young team, and of the folks we interviewed, hired and brought in, none came from higher education; not by design, just by the pool of candidates and their skillset and what they brought to the table. Having them come in fresh to higher education has actually been a gift because it’s all changing so fast, they get to be on the ground floor as we create this.” Jones introduced what she describes as a ‘think-tank environment’. “It’s working very well,” she enthuses. “I’m already getting a lot of positive feedback which I am extremely happy with. The last thing you want, especially when you’re trying to build a new team, is to have somebody coming in thinking they know exactly how to do it. Higher education culture FEBRUARY 2019
USA
is very unique in and of itself, and each institution will be very different to the next. So, what you think you know really doesn’t matter when you go to a new university.” The procurement system Jones inherited at Drexel was a procure to pay (P2P) system implemented back in 2014. However, the legacy system was not yet being fully utilized, which is not entirely uncommon. “We have a pretty robust system, and now we’re truly engaged in catching up with some of the maintenance items that make it a lot more user friendly. We’re also looking at how to most effectively capture data.” Jones’ goal for this year – “and we’re certainly on track to do that” – has been data scrubbing. “We’ve been standardizing our reporting, trying to be consistent and repeatable in the information and the data we share internally to make decisions, but also externally to be able to represent ourselves as a significant anchor institution in Philadelphia, which we are.” A key outcome of robust data capture is the ability to centralize pricing negotiations with suppliers where the university’s expenditures cut across multiple departments. “I’m very sensitive to the fact that we can make a big impact on those smaller departments, and they mean just as much to me as the w w w.suppl yc ha i ndi gi ta l. com
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DREXEL UNIVERSITY
15
Colleges and schools
1891
Year founded
98
24,190
Approximate number of students
university holistically, so I don’t always
help them run their own bids. Higher
want to talk about the university’s bottom
education procurement is generally
line.” Jones has just four strategic
pretty decentralized and we’re attempt-
sourcing specialists and one director
ing to restructure that a little bit and
able to facilitate RFPs across approxi-
offer some solutions university wide via
mately $350mn of spend. “We’re not
website portals and internal communica-
going to be able to facilitate every RFP,
tion, so these departments can benefit
but we try our best to partner with the
from the entire university spend.”
departments to make sure they’re
Jones sees procurement continuing
getting the best value, and then for the
to shift both at Drexel and in the wider
smaller ones we try to give guidance to
business community, as it transforms
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99
into a strategic function on a global scale.
whether it’s by budget savings or
“We’re really going to see it (procurement)
aggressive partnerships. Some of our
continue to move forward as a strategic
partnerships actually do result in money
business partner. I think we’re going to
coming back in to the university, and
see a lot of our executive level folks
into whatever entity you’re speaking of.”
turning to procurement with questions,
The procurement space at Drexel is
strategic partnerships and initiatives,
undergoing a massive recalibration
and asking us to be at those tables to
and eventually Jones wants to be able
come up with ideas and brainstorm with
to provide an annual report for pro-
them. Procurement is going to continue
curement at Drexel incorporating all its
to become more of a financial resource,
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DREXEL UNIVERSITY
“ H IGHER EDUCATION PROCUREMENT IS GENERALLY PRETTY DECENTRALIZED AND WE’RE ATTEMPTING TO RESTRUCTURE THAT A LITTLE BIT AND OFFER SOME SOLUTIONS UNIVERSITY WIDE” 100
— Julie Ann Jones, Assistant Vice President Procurement Services
FEBRUARY 2019
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as the university continues to nurture its clients as well as the local citizens and businesses of Philadelphia. “We want to talk about all the wonderful things that we do,” Jones says. “We want to highlight the extracurricular aspects of procurement and what we’ve participated in and how we’ve been impactful, not just financially, but also socially and civically within our community.” Year after year, Drexel’s Procurement department continues to make meaningful changes in its business model while exchanging value with the community to become a leading benchmark to other universities. Jones is proud to have demonstrated this and with a strong team and commitment to sustainability, this progress is set to continue.
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102
Warehouse benchmarking study is a top tool for measuring performance WRIT TEN BY
FEBRUARY 2019
TOBY GOOLE Y
USA
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WA R E H O U S I N G E D U C AT I O N A N D R E S E A R C H C O U N C I L
THE EXPLOSIVE GROWTH OF E-COMMERCE IS MAKING IT HARDER AND HARDER FOR DISTRIBUTION MANAGER TO PROVIDE EFFICIENT AND TIMELY PROCESSING, HANDLING, FULFILLMENT AND DELIVERY OF ORDERS
A 104
September 2018 CBRE report projects that U.S. warehouses will need 452,000 more workers this year and next to
handle soaring volumes of e-commerce shipments. Meanwhile, online buyers’ expectations for fast, low-cost, perfect service are raising the competitive bar. The need to measure performance both internally and against other companies will only grow. This reality makes an annual benchmarking study conducted by the Warehousing Education and Research Council (WERC) all the more valuable. Now in its 15th year, the “DC Measures” study polls warehouses and DCs on their performance on 35 operational metrics, or key performance indicators (KPIs). The metrics are grouped into five sets: customer, operational, financial, capacity/quality, and employee/labor. The study aims to identify which metrics are important to warehousing professionals as well FEBRUARY 2019
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105
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Nimble. You need to learn fast, stay lean and be gutsy to remain competitive in this brave new world. WERC has an unrivalled education program. We’ve got an in-depth online training, live webinars and self-guided learning choices to fit every schedule. Our annual conference offers exceptional peer-driven learning opportunities. You won’t find better education anywhere. werc.org
Better Everywhere.
USA
as how performance against KPIs
detailed report and at WERC’s annual
changes over time, according to re-
conference. (The 2019 conference will
searchers Dr. Karl Manrodt of Georgia
be held in Columbus, Ohio, April 28 –
College & State University, Dr. Donnie
May 1. For more information, click here.)
Williams of the University of Arkansas,
The primary report looks at perfor-
and WERC researcher and founder of
mance metrics for all respondents.
the consulting firm TSquared Logis-
Those statistics are broken out into
tics Joseph Tillman. It also provides
five classifications: “best-in-class,”
benchmarks that managers can use to
“advantage,” “typical,” “disadvantage,”
evaluate their performance on every-
and “major opportunity,” allowing
thing from order-picking accuracy to
managers to see where their own
capacity utilization, among many other
facilities sit on the spectrum. (The
metrics. The survey goes out to WERC
median is also included in the report
members and readers of study co-
but is not assessed.) They also have
sponsor DC Velocity magazine every
the option of purchasing an interac-
January; the results are presented in a
tive “comparison report” that lets them
E X E C U T I V E P R OF IL E
Joe Tillman Joe Tillman is the founder of TSquared Logistics and a WERC Researcher. Joe has a keen interest in all things supply chain and uses his high-energy approach to life to author articles for industry publications, and speak to supply chain industry groups. He co-leads the Warehousing Education and Research Council’s inf luential annual benchmarking study, “DC Measures.” Joe has over 15 years experience in inventory management, hazardous materials training, transportation, and warehousing.
107
WA R E H O U S I N G E D U C AT I O N A N D R E S E A R C H C O U N C I L
1977
Year founded
1,700+
Approximate number of employees
108
E X E C U T I V E P R OF IL E
Donnie Williams Dr. Williams teaches Master’s students to think critically and strategically about Logistics Management and how the Supply Chain must be integrated in order to gain competitive advantages in today’s global marketplace. Dr. Williams teaches undergraduates the principles of Operations Management and Supply Chain Management, and works to help them discover the career in business that they will flourish in.
FEBRUARY 2019
USA
deep dive into the findings to uncover trends and explore whether they have an impact on warehouse performance. They sometimes turn up surprises. For example, this year, five of the top 10 performance metrics respondents said they use most often were related to labor. Just two years ago, four of those (contract employees as a percentage of total workforce; overtime hours as a percentage of total hours; part-time workforce to total workforce; and percentage of employees who are cross-trained) were ranked at the bottom of respondents’ lists. Another surprise: Adoption rates for some efficiency-enhancing technologies has not grown as much as expected. For example, only 65 measure their own performance on
percent of respondents are currently
KPIs to that of respondents within the
using a warehouse management
same demographic, based on industry,
system (WMS), a long-established
type of customer served, type of picking
technology that’s generally consid-
operation, and other factors. “This will
ered to be a “must have.” Moreover,
help to answer questions like where
there was no statistically significant
should we make improvements, and
difference in performance between
what specific activities should we be
companies with and without a WMS.
looking at” in order to make those
In the team’s estimation, this prob-
improvements, Tillman explains.
ably reflects current users’ failure to
The research team also takes a
fully utilize the software’s capabilities, w w w.suppl yc ha i ndi gi ta l. com
109
WA R E H O U S I N G E D U C AT I O N A N D R E S E A R C H C O U N C I L
or possibly that they are overlaying
to reflect warehouse professionals’
the WMS on a manual system. There
current concerns. “At the heart of the
was, however, a correlation between
research is a conversation between
newer technologies and better perfor-
warehousing professionals and the
mance on relevant KPIs. “For exam-
researchers. We want to answer ques-
ple, if you’re looking at internal order
tions that are relevant and provide real
cycle time, then RFID helps. If you’re
benefits to the industry,” Manrodt says.
looking at on-time receipt and puta-
Warehouse and DC professionals
way, then a pick-to light system might
can get in on that conversation by at-
have an impact there,” Williams says.
tending a webcast of the DC Measures
The “DC Measures” study is any-
Study on January 10, 2019; WERC will
thing but static. Research questions
open the survey in January and those
and topics change from year to year
who take part will get a copy of the final
110 E X E C U T I V E P R OF IL E
Karl Manrodt Dr. Manrodt serves as a Professor of Logistics at Georgia College & State University, located in Milledgeville, Georgia. He is also the Director of the Master of Logistics and Supply Chain Management program, an on-line master’s program for working professionals. His degrees include a B.A. in Philosophy and Psychology, Wartburg College, M.S. in Logistics, Wright State University, and his Ph.D. at the University of Tennessee. Dr. Manrodt also had served the profession in several forums. He served on the Board of Directors for the Council of Supply Chain Management Professionals as well as other leadership roles with WERC.
FEBRUARY 2019
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CLICK TO WATCH : WERC’S ANNUAL CONFERENCE 2019
“At the heart of the research is a conversation between warehousing professionals and the researchers. We want to answer questions that are relevant and provide real benefits to the industry”
report. It also pay to attend WERC’s 42nd Annual Conference for Logistics Professionals, April 28 – May 1, 2019, in Columbus, Ohio. In addition to a presentation on the 2019 “DC Measures” study, the conference will include educational sessions, facility tours, networking opportunities, and the WERC Solutions Center exhibition. For more information, go to: www.werc.org/2019
— Karl Manrodt, Professor of Logistics
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ACCENT GROUP 112
A SUPPLY CHAIN TRANSFORMATION Accent Group LTD boasted record profits last year and moved 6.3 million shoes — that’s one in five in Australia – thanks to its recent supply chain transformation. Tim Greenstein, General Manager Supply Chain & Technology and Supply Chain Manager, Mark Rizza, reveal the secrets behind their omni channel strategy
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113
WRITTEN BY
NIKI WALDEGRAVE PRODUCED BY
GLEN WHITE
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A C C E N T G R O U P LT D
G
one are the days of successful retailers surviving on bricks and mortar alone. To be at the forefront
of retail now, businesses need a booming digital presence. Accent Group Ltd – formerly RCG Corporation Ltd – is on the ASX and delivered its FY18 results in August, revealing a record underlying net profit after tax of $47.1 million, up 17.9% on the prior year. The business – which has more than 460 stores across Australia and New Zealand – has delivered 114
strong returns over the past five years through its brands including The Athlete’s Foot, Platypus, Hype DC, Timberland, Vans, Dr. Martens, Saucony, Merrell, Palladium, Sperry Top-Sider, Stance, Supra, Subtype, and kids’ funky online brand The Trybe. Its recent success is thanks to a major collaboration across many business units involving a stunning digital transformation over the past 24 months, which involved a one key stream full supply chain transformation led by Tim Greenstein, General Manager Supply Chain and Technology, and Supply Chain Manager Mark Rizza.
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“We want to make sure we’re the best retailers out there. Our CEO always says we don’t do average”
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— Tim Greenstein, General Manager Supply Chain & Technology
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CLICK TO WATCH : ‘ADOBE EXPERIENCE : CUSTOMER SHOWCASE – MARK TEPERSON, CHIEF DIGITAL OFFICER, ACCENT GROUP LTD 116
“The rate at which business rolls out projects is really not matched anywhere else that I’ve seen in my time” — Tim Greenstein, General Manager Supply Chain & Technology
FEBRUARY 2019
“Our digital team led by Mark Teperson, our Chief Digital Officer, in conjunction with our technology team have effectively enabled 13 websites for the business in the last three years,” Greenstein reveals. “In terms of the space that we play in – athletic leisure footwear and general footwear – we’re fortunate that that space has been growing and we’ve been able to open up more stores across Australia and New Zealand, which has also contributed dramatically to our growth. “But so has listening to our customers.”
ANZ
Online sales are growing fast –
that to give it a bit of context, our
Accent’s FY18 digital sales are up 131%
business tradition started as a whole-
on FY17 and up c88%YTD in FY19
sale business and over the last decade
– with approximately 40 to 50 per cent
or so has ramped up its retail presence.
of online sales now coming directly
“As that footprint has got bigger, having
from the stores, of which the majority
more stores and hitting the market with
are omni-enabled. New functionalities
these technological capabilities is
including ‘click and collect’, ‘ship from
allowing the business to leverage its
store’, same day delivery and endless
460-store network to drive growth
aisle, are all now enabled
with a true omni channel strategy.
“We initially projected at 20 or 30%,
“We’ve also enabled new warehousing
so you can imagine the overflow of that,
capability which again, using state-
and what that means in store land…”
of-the-art automation at our new Toll
adds Rizza. “Adding another layer to
operated Preston facility in Sydney, will
E X E C U T I V E P R OF IL E
Tim Greenstein is the General Manager of Supply Chain and Technology at Accent Group Ltd — Australia’s largest footwear retailer with over 445 stores across Australia and New Zealand. Tim has extensive experience in a variety of retail disciplines, focused on Supply Chain, Technology and Ecommerce. Tim has developed a reputation as a change agent, leading several key high-profile change and strategic projects at Accent group through working with the business to deliver transformative change across The Athlete’s Foot, Hype DC, Platypus Shoes, Skechers, Vans, Merrell, Timberland, CAT, Saucony and Sperry. Tim holds a Bachelor of Commerce and is a Director of a not for profit board.
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A C C E N T G R O U P LT D
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E X E C U T I V E P R OF IL E
Mark Rizza is head of Supply Chain for the Accent Group Limited. Mark is responsible for procurement, international and local logistics as well Customer Care for Brands such as Platypus, Hype DC, Vans, Skechers, Dr Martens and Timberland. Mark has 15+ years of experience in this space and has worked for both local and global retail brands in an executive capacity such as Lululemon Athletica and Bras’n’Things. Mark is highly experienced in transformational projects using his passion for people an approach of simplifying complex issues to deliver what is best for consumers. Mark has completed his MBA through the Australian Institute of Business.
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“You have to have web and ERP platforms that are capable of handling complex integrations these days”
119
help us handle the business growth, increase volume and improve speed to market requirements, which ultimately advances the service to consumers.” Accent recently constructed a purpose-built digital hub of excellence in Melbourne, which concentrates the digital expertise under one roof. There’s not one all singing, all dancing system these days in a big business that handles things end to end, and so Accent has utilised its current providers, as well as new providers to
— Tim Greenstein, General Manager Supply Chain & Technology
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With Smart Omichannel Order Management
fluentcommerce.com
info@fluentcommerce.com
The Athlete’s Foot —
As fast as their customers with Fluent Commerce Fluent Commerce is an Australian software company, headquartered in Sydney. They offer smart omnichannel order management allowing retailers to be easier, faster and more convenient to shop with than their competitors. It means fulfilling orders in the most cost effective and quickest way possible whilst offering the customer as many delivery and pick up options as possible. Accent Group wanted to create a single, streamlined technology stack in their transition from multi- to omnichannel customer engagement. Fluent Commerce was chosen for their order management requirements as this allowed them to turn their stores into mini distribution centres, enabling click and collect and ship-from-store.
Digital sales increased by 170% in the first six months of implementing ship-from-store. The Athlete’s Foot now operates seamlessly across channels, its digital arm an extension of the store network. Through Fluent Commerce, they are also able to access real-time inventory throughout the entire operation. This opens up all available stock to all consumers no matter where they are and which channel they choose to shop on; not just the stock available in the warehouse. The Athlete’s Foot are making out-of-stock situations a thing of the past.
Taking things further, ship-from-store capabilities also ensures that Athlete's Foot can implement an endless aisle strategy, allowing in-store associates to ship out-ofstock items directly to the customer from another store the following day. This means breaking the pattern of discounting stock that doesn't sell in a particular store or losing sales altogether, by redistributing stock according to customer demand and location.
fluentcommerce.com
ANZ
“ Fluent Commerce is used for The Athlete’s Foot to manage click & collect fulfillment with their in-store technology” — Tim Greenstein, General Manager Supply Chain & Technology
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enable its omnichannel strategy. The
for orders to be taken online and sent
websites’ eCommerce platform is
to different stores or warehouses for
Magento and Accent uses three key
fulfilment, in a particular and ideally
enterprise resource planning (ERP)
seamless way, in particular sequences,
systems – Apparel 21 , Erplyand Pronto
based on certain rules that the business
across its group of stores.
requires in terms of being effective.
“You have to have web and ERP
“Another key system aspect, certainly
platforms that are capable of handling
for our store enablement, was the ability
complex integrations these days,”
to effectively use third party software
explains Greenstein. “From our core
(middleware) providing us with intelli-
systems, we needed to facilitate that.
gent shipping and fulfilment solutions
The technology must enable the ability
to assist us in handling the freight w w w.suppl yc ha i ndi gi ta l. com
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C OMPA N Y FA C T S
• Accent Group LTD has more than 446 stores across Australia and New Zealand • In 2017/18 total digital sales grew by 13% • Accent Group has delivered strong returns over the past 5 years • Accent is on the ASX, and its total shareholder return over the past 5 years is 177% • It has 13 new websites across Australia and NZ, with two launching next year • Omnichannel sales are on track to reach 15% target of total sales within two years • Accent’s online sales are growing fast — 131 per cent in 2017 124
• Approximately 40 to 50 per cent of online sales now come directly from the stores, of which the majority are omni-enabled • Customer care is front of mind going into 2019 • 24/7 coverage will include across live chat and email • Live chat launched in October across Vans, Skechers, Timberlands, Doc Martens and Platypus, with Hype DC and The Athlete’s Foot coming soon • In the past 12 months, 3.5million customers registered through its various loyalty programs • Platypus launched same day delivery service in July 2018, more will be rolled out 2019 •Accent has hubs in Melbourne, Sydney and Manila • In just the last two months, Accent secured the rights to the Supra brand and launched kids online brand, The Trybe
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and dispatch flow, particularly from our store network.” The middleware, in Accent’s case, have three applications, given the numerous business divisions – Temando, Fluent Commerce and Shippit – which allow for distributed order management at stores, as well as integrations with numerous freight providers to produce the freight labels and support the multi option freight requirements to make the store process more seamless. Fluent Commerce is used for The Athlete’s Foot to manage click & collect fulfillment with their in-store technology. Its successful next day and same day delivery services is due to its existing relationships with Australia Post’s StarTrack Courier and Direct Courier. Being one of the first businesses to roll this capability out nationally across all stores, Accent hopes to ensure its delivery capability is never far from the customer and will safeguard it from online competitors such as Amazon, which recently launched in Australia. “Interestingly, some of these purely online players are starting to play around with the physical stores,” muses Rizza. “Many Pure online players have or are w w w.suppl yc ha i ndi gi ta l. com
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A C C E N T G R O U P LT D
“ We’ll never lose focus on our roots here in Australia” — Tim Greenstein, General Manager Supply Chain & Technology
126 contemplating a physical store presence, with Catch of the Day launching a pop-up recently. “We’ll look to cover everywhere, and because we’re utilising our store footprint to assist in the fulfilment process, our aim of faster delivery nationwide will be greatly assisted by this capability. “We have a really good opportunity, given our current enabled capability across stores and digital, at solidifying, growing this further and continuing to build on our digital and store strategy, so that we can stay at the forefront of the marketplace.” FEBRUARY 2019
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Customer care is also front of mind going in 2019, with 24/7 coverage, including across live chat and email. Live chat launched in October 2018 across Vans, Skechers, Timberland, Doc Martens, Platypus, Hype DC with The Athlete’s Foot coming soon. “Two and half years ago, we had one team member that looked after retail and ecommerce,” laughs Rizza. “Now, we have more than 25 people based at the hubs in Melbourne, Sydney and Manila, and that’s only going to get bigger. It’s driven by consumers demanding out attention and demanding increased support, and also our stores’ demands for support. “We started live chat with some of the smaller brands and in a short space of time it’s taken off quickly. To put in perspective, over the last few weeks, it went from being a few tickets to now being nearly a quarter of overall volume through the chat channel, and that’s with us currently really only covering business hours, so we know for a fact that consumers want to talk to us.” Obviously, such a digital transformation has been a huge culture change in the business, with the technological w w w.suppl yc ha i ndi gi ta l. com
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“Our digital transformation strategy included Temando, a multi-carrier shipping solution that supports our vision to provide our customers with a great way to submit returns online –– helping us deliver consistent customer experience no matter how busy it gets.” — Tim Greenstein, General Manager Supply Chain & Technology
Find out more: bit.ly/DemoTemando Temando, a Neopost Shipping company
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improvements putting increased onus onto the store teams, and what their day to day roles look like. In some cases, staff have
“Part of the learning for us is that we’ve created roles that we didn’t expect to create,” says Greenstein. “We had a view of how
gone from being purely
some of the requirements,
salespeople to having to
monitoring procedures
manage order fulfil-
and some of the
ments, and the group
operational processes
ensures that with every innovation that’s rolled out and executed, full training programmes and mechanisms are
would work, but what it’s actually led to wasn’t quite what we thought. “As a result, we’ve had to tweak
there to support the team, who still
and create new roles to deliver and
need to be able to trade and fulfil the
help with the process management
consumers’ needs.
of all these functionalities that we’ve built on, as these roles never existed in our business before. So, it’s been understanding and navigating the training path well.
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A C C E N T G R O U P LT D
“ We’re definitely in the phase of a growing businesses; new digital presence, opening new stores, acquiring businesses, as well as looking for brand opportunities that we can bolt on to our 130 existing business” — Tim Greenstein, General Manager Supply Chain & Technology
“The business has a strong focus
“We want to make sure we’re the best
on stock integrity and stock trade
retailers out there,” explains Green-
mechanisms, as this is key to ensuring
stein. “Our CEO always says we don’t
the end to end omni channel experience
do average – we try to be different and
is effective and accurate.”
really make a difference and it’s part of
They both concur that in order to succeed at Accent, employees need commitment, drive and a “can do” attitude. FEBRUARY 2019
the ‘make it happen’ culture to make sure we try and recruit the right people. “It’s very important to retain talent and give people the opportunity to grow
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Promotional banner for The Athlete’s Foot
131
within the business. We also need people that can
“Certainly, from the supply chain point of
be very agile. The rate at
view, if you’re coming here
which business rolls out
just to have a day to day job
projects is really not matched
of one task, that’s not going to fly
anywhere else that I’ve seen in my time,
because our business continues to
so you need people that can come in
grow and evolves so quickly that you
and be ready to move, depending on
need to have people that can thrive in
your role of course.
that environment – it’s not for everyone.” w w w.suppl yc ha i ndi gi ta l. com
A C C E N T G R O U P LT D
Accent’s footprint and capabilities
set to increase when Accent moves “Part of the are at some point internationally potentially learning for to Asia in 2019. “We’ll never lose focus on our roots us is that here in Australia,” adds Greenstein, “as we’ve created demonstrated by our recently opened Platypus Superstore in roles that we 600sqm Melbourne Central and a Pitt Street didn’t expect Sydney Superstore opening mid-2019. But we’re starting to explore how we to create” broaden our footprint is the next stage,
— Tim Greenstein, General Manager Supply Chain & Technology
132
especially as the digital economy continues to grow.” The long-term visions of the AGL Supply Chain team are focusing on that speed to consumer portion. At board level, it’s to create greater opportunities from a vertical product perspective too. Accent recently secured the rights to the Supra brand, launched kids’ specific online brand, The Trybe, and also purchased premium footwear brand Subtype, which plays in the premium space with one store and an online presence. “Our strategy at the moment is very much to continue to invest in store infrastructure where it makes sense and where we see growth, while obviously driving all the other channels
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$676mn Approximate revenue
1981
Year founded
5,000+
Approximate number of employees 133 at the same time,” adds Greenstein. “Our CEO and board are very proactive in finding brands that are going to
and speed, is becoming more and more critical. “We must make sure that we can keep
align with us and help us solidify that
up with the requirements of what the
leadership space in the athletic
customer wants while always being
footwear or the leisure footwear space.
flexible and able to make sure that we
“We’re definitely in the phase of a growing businesses; new digital presence, opening new stores, acquiring
deliver and meet their requirements,” he surmises. “Customers these days have a diffe-
businesses, as well as looking for
rent way of operating and engaging,
brand opportunities that we can bolt
and what’s convenient for one is not
on to our existing business.”
actually the same for another, so the
From the market perspective, the
time to be able to keep up with the
consumer continues to come up with
demand and need is going to be a critical
new ways and new requirements of
factor going forward.”
wanting product – how they purchase, w w w.suppl yc ha i ndi gi ta l. com
134
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WRIT TEN BY
CATHERINE S TURM AN PRODUCED BY
ARRON R A MPLING
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C R E AT I O N T E C H N O L O G I E S
Creation Technologies has digitally overhauled its supply chain capabilities and sought to upskill its talented workforce to become future supply chain leaders
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lobalization and digitization are fully disupting the supply chain industry, where connectivity and demands for rapid, efficient
solutions are driving continuous change. From utilizing predictive analytics to unlock greater value from 136
large volumes of data, to the implementation of automation, robotics, Internet of Things (IoT) and cloud computing, the industry is undergoing a seismic shift. In order to garner further insights in remaining agile and to guarantee customer trust, industry leaders have sought to reshape traditional supply chain models. Providing exceptional end-to-end solutions for original equipment manufacturers (OEMs) worldwide, Creation Technologies is no stranger in delivering bespoke solutions for those who in need of a responsive design and manufacturing partner. Amidst an evolving technology landscape, the company has partnered with more than 200 OEMs worldwide since its inception, accelerating time-to-market, reducing customer operating costs, while sharing innovative ideas FEBRUARY 2019
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Know sooner. Act faster. Eliminating volatility in your supply chain is impossible. Managing it doesn’t have to be. Kinaxis® helps the world’s top brands keep customer promises by solving complex supply chain problems with simple, innovative and measurable solutions people love to use. Plan for any future. Monitor threats and opportunities. Respond in real-time. It’s all possible with Kinaxis. www.kinaxis.com
Keep customer commitments in an unpredictable world Delivering fast, accurate response with Kinaxis RapidResponse
In today’s non-stop high-stakes world of complex global commerce, companies thrive or fail by the responsiveness of their supply chains. Commitments must be met, margins maintained and market share fiercely protected. Responding to customers with the correct answer at the right time can be a big challenge when shifting trade regulations, devastating events and unexpected market demands threaten supply chain stability. Creation Technologies, a global provider of transformative end-to-end solutions for OEMs, understands how critical fast and accurate responses are for customers. It’s why the company chose the Kinaxis® RapidResponse® platform. Leveraging RapidResponse’s supply chain planning applications, concurrent planning technique and what-if scenarios, Creation Technologies is highly responsive and agile in the face of any supply chain challenges that arise. Concurrent planning delivers a supply chain that’s completely connected and synchronized. The company also has increased visibility and flexibility to yield supply chain opportunities, and is able to leverage economies of scale in procurement while reducing landed cost. “With RapidResponse, we can predict, monitor and respond to supply chain challenges proactively from a single concurrent point of view,” said Ana Cantu, Executive Vice President of Supply Chain, Creation Technologies. “This enables us to mitigate risk, control volatility, shave cost and increase value for our customers every day. And that’s what we’re all about – building tangible value for our OEM customers.”
Making the right planning decisions with confidence From demand planning to capacity planning to supply balancing and more – all powered by empirical data and predictive analytics – RapidResponse’s cross-functional collaborative applications help Creation Technologies enhance process planning, minimize constraints and enhance supply chain performance.
C R E AT I O N T E C H N O L O G I E S
“ One of our biggest challenges is the complexity of our business. We serve higher mix, low to mid-volume markets, which drives very high mix in our supply chain” — Ana Cantu, Executive Vice President of Supply Chain
140
which can ultimately lead to increased annual revenue. Leading the company’s USD 500mn+ global supply chain function across Canada, Mexico, China and the United States, Executive Vice President of Supply Chain, Ana Cantu admits that she remains fiercely passionate about “not only adding value to the businesses, but to the individuals that are the heart of the partnerships between Creation Technologies and its customers.” Stepping into her first leadership FEBRUARY 2019
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141
role aged 25, Cantu has been a sign-
steady price increases previously
ificant force in driving the digital
unheard of.
transformation of Creation’s supply
With nine manufacturing facilities,
chain, where over the last few years,
two design centers, a rapid prototyping
high growth market segments, such
center and a global materials sourcing
as automotive, medical and Internet-
group at the business, Cantu has sought
of-Things (IoT) products have caused
to overhaul its end-to-end product
a number of supply constraints across
supply and demand planning capabilities,
all markets. This, combined with supplier
as well as its distribution and logistics
consolidation in several component
divisions for all business units. Taking
markets such as ceramic capacitors,
a deep dive into its business model and
has created a complex dynamic, where
the number of suppliers at the business,
such constrained supply has led to
Creation has retained the suppliers w w w.suppl yc ha i ndi gi ta l. com
C R E AT I O N T E C H N O L O G I E S
with which it can develop vital synergies and build an open dialogue and environment to bring forth an innovative business approach which is not only mutually supportive, but more effective in meeting customer needs. “One of our biggest challenges is the complexity of our business. We serve higher mix, low to mid-volume markets, which drives very high mix in our supply chain,” she explains. We have nearly 100,000 active component part numbers and ship over 15,000 finished goods 142
from all nine sites. Developing tools and processes that standardize practices and consolidate activities where synergies can be realized are a critical piece of our supply chain transformation journey.” Building a deep understanding of its customers’ needs and providing highly responsive tailored solutions, Creation is the optimal partner for the high complexity, low to mid volume products of mid-sized and smaller OEMs with well-established market positions. B2B data interfaces with suppliers and customers are increasingly common for Creation, where it has looked to unlock the opportuniFEBRUARY 2019
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143 ties available across an increasingly agile supply chain. “During 2018, Creation saw growth with customers across all market sectors. Technologies, such as IoT are driving growth, along with a strong economy. Creation is particularly strong in the medical and industrial market, which are both experiencing strong growth,� she adds. Nonetheless, as global competition continues to rise, it is clear that technology alone cannot be the sole area of investment to ensure success across the supply chain. Faced with opportunities to collaborate with w w w.suppl yc ha i ndi gi ta l. com
C R E AT I O N T E C H N O L O G I E S
C OMPA N Y FA C T S
• The US Bureau of Labor Statistics has reported that jobs in logistics in particular are estimated to grow by 26% between 2010 and 2020 • Globalization and digitisation are fully disrupting the supply chain industry, where connectivity and demands for rapid, efficient solutions are driving continuous change • Amidst an evolving technology landscape, the company has collaborated with more than 200 OEMs worldwide
144
• Cantu has sought to overhaul its end-to-end product supply and demand planning capabilities, as well as its distribution and logistics divisions for all business units • Creation has therefore turned its attentions towards high complexity, low to mid volume products for mid-sized and smaller OEM’s with well-established market positions
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145
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C R E AT I O N T E C H N O L O G I E S
“ Technologies, such as IoT, are driving growth. Creation is particularly strong in the medical and industrial market, which are both experiencing strong growth” — Ana Cantu, Executive Vice President of Supply Chain
other market leaders in order to build on its competitive edge, Creation has 146
partnered with Kinaxis and deployed the company’s Rapid Response software to improve its responsiveness and ability to remain nimble as consumer demands evolve. “Rapid Response is a best-in-class and well-established tool for this purpose. After reviewing several options, Rapid Response was the clear choice for Creation,” explains Cantu. “More than anything, Rapid Response allows us to be much more responsive. Analysis that used to take days now takes minutes. We can quickly evaluate changes in demand and associated constraints, allowing us to make decisions much faster.” FEBRUARY 2019
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Presently in its implementation phase, three out of Creation’s nine business units have utilized the software and witnessed significant improvements in responding to customer demands, as well as identifying supplier constraints. This has also filtered into its ability to share essential findings with customers and propose new solutions which would best fit the specific business situation. Further, Creation’s supplier portal increasingly allows the firm to consolidate all its procurement activities across nine sites into a single location, leading to complete end-to-end visibility and strong operational efficiency. “Communication with our suppliers is now automated, eliminating the need for our procurement team to manually generate material requirements planning (MRP) signals to our suppliers,” adds
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C R E AT I O N T E C H N O L O G I E S
Cantu. “We are in the early stages of
Creation will continue to stay on the
implementing the software, but the
leading edge of these developments.”
signs are good and we expect to achi-
148
Although supply chain management
eve the savings outlined in our original
remains a vital component to any
business plan. The capabilities of B2B
successful organisation, global supply
tools will also continue to expand, allo-
chain labor shortages will continue to
wing supplier and customer ERP sys-
feed into increased demands for talent
tems to interface directly, with fewer
worldwide. The US Bureau of Labor
layers of human interpretation and action.
Statistics has reported that jobs in logis-
“ Rapid Response allows us to be much more responsive. We can quickly evaluate changes in demand and associated constraints, allowing us to make decisions much faster” — Ana Cantu, Executive Vice President of Supply Chain
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tics in particular are estimated to grow
skillset as a result of increased digitiza-
by 26% between 2010 and 2020.
tion and strategic thinking.
A report by DHL, ‘The Supply Chain
“The ideal employee has both tactical/
Talent Shortage: From Gap to Crisis’ has
operational expertise and professional
also found that demand for supply chain
competencies such as analytical skills,
professionals exceeds supply by a ratio
but 58% of companies say this combi-
of six to one. Not only are increased
nation is hard to find. Additionally,
numbers retiring from the workforce,
tomorrow’s talent must excel at leader-
workers are now asked to have a varied
ship, strategic thinking, innovation and high-level analytic and technological capabilities,” the report explains. Passionate about upskilling the workforce to counteract these challenges, Creation Technologies succeeds in attracting and developing its workforce, due to its vision of making its employees their customers trusted partner and investing in its team members, moulding them into professional supply chain leaders of the future. “We are a growing company with great opportunities for our people. We have a strong purpose, which is to enrich lives by sustaining strong profitable growth in an enjoyable and caring culture. I enjoy our fast-paced environment with its many challenges and the opportunity to constantly learning new things,” notes Cantu. “However, what I enjoy most is being able to spend time with my team to develop w w w.suppl yc ha i ndi gi ta l. com
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C R E AT I O N T E C H N O L O G I E S
150
“ The capabilities of B2B tools will also continue to expand, allowing supplier and customer ERP systems to interface directly, with fewer layers of human interpretation and action” — Ana Cantu, Executive Vice President of Supply Chain
FEBRUARY 2019
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and coach them, as well as spending time with customers, consulting them on their needs. Ultimately, I suppose I enjoy helping those around me to succeed.� Creation partners with OEMs to deliver and scale the results that matter most to them – across the entire product lifecycle. To achieve such impact, Creation promotes technology leadership, cross-functional collaboration, and a responsive supply chain network founded on a robust digital infrastructure. Working hand in hand with its customers Creation provides tailored supply chain solutions to bolster their market competitiveness. Creation will continue to invest in its workforce and deploy innovative digital tools; continue to grow, continue to lead, and deliver the high level of performance demanded by the evolving needs of its clients.
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Competitive advantage through digital transformation WRIT TEN BY
HARRY MENE AR PRODUCED BY
MIK E SADR
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OSM MARITIME GROUP
We sit down with OSM Maritime CTO Chakib Abi-Saab to find out how the company is using AI, machine learning, IoT, drones, augmented reality, blockchain and automation to empower its 11,000-strong workforce
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ounded in 1989, OSM Maritime has grown from a single crew-management contract to a fleet of over 500
vessels managed from 26 offices around the 154
globe. Business Chief sat down with OSM’s Chief Technology Officer, Chakib Abi-Saab to find out how one of the world’s largest maritime management companies is using breakthrough technologies to empower and unite its 11,000 employees. “Technology is not the solution to everything,” says Abi-Saab, “but it is a very important toolset that enables us to provide better and more reliable services, and facilitate greater transparency with our clients.” He explains that “as a whole, the industry has not adopted technology on a large scale. I think at OSM we have been very aggressive. We believe that business gains, transparencies and improvements in relationships, and efficiencies that we gain from technology FEBRUARY 2019
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Empowering tomorrow’s digital winners
Simplifai is your in-house automation partner, through the use of Artificial Intelligence we automate routine tasks in offices such as customer service, accounting and HR.
Find out more here www.simplifai.ai | Email: sales@simplifai.ai Phone: +65 9044 4716 (Asia) +47 4150 3263 (Europe)
EUROPE
equal a competitive advantage”. At the
access to correlations that we, as
heart of the company’s technological
humans, might not be able to see. We’re
transformation is its Maritime Opera-
expecting to move to the next level with
tions Centre, located in Singapore.
machine learning, so that we can perform
Abi-Saab presided over the Centre’s
predictive analytics and predictive main-
creation in 2018 and will oversee the
tenance which will become a cost
construction of a second facility in
savings to us and to our customers.”
Arendal, Norway in 2020. The Centre
As Chief Technology Officer, Abi-
enables OSM to monitor and manage
Saab is currently overseeing the adop-
the company’s global fleet 24 hours
tion of several new technologies to
a day. Abi-Saab explains that, with the
further enable OSM’s technical manag-
Centre in operation, “We not only have
ers to perform their roles. At the core
information that used to take weeks to
of each new technology, he empha-
gather, but the computer also gives us
sises, is the ethos that “technology is
E X E C U T I V E P R OF IL E
Chakib Abi-Saab Chakib is a business leader and technologist with 20+ years of experience aligning technology with operational goals. Chakib has led significant global projects in multinational environments and has played several key roles in global organizations like Baker Hughes Inc. and Bumi Armada Berhad. Chakib is now the Chief Technology Officer of OSM Maritime Group. Chakib’s main focus is always on the utilization of technology as a driver to optimize costs, improve productivity, increase returns, reduce risks, and create new revenue streams. His technology expertise is in connected assets, analytics, automation, and predictive environments. He is also experienced leading complex multinational digital transformations.
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OSM MARITIME GROUP
a way to give people the right informa-
best possible people to manage our
tion so that they can make decisions
ships. But the reality is that you cannot
based on what’s happening at that
have experts for everything on every
particular time, operationally and fin-
ship.” This is where one of OSM’s latest
ancially”. New initiatives that OSM is
pieces of technology comes into play:
aggressively testing or already using
augmented reality goggles. Allowing
include machine learning and AI, edge
on-ship staff to display in real time the
computing, augmented reality, drones
repair process enables OSM to “take
and blockchain.
advantage of the 11,000 people in the
“Imagine you are managing a ship
company for expertise that can walk
and one part of the engine breaks,”
our engineers through the solution,
says Abi-Saab. “Well, we in OSM do
because we can see what they see
the best possible job we can to hire the
and we can send diagrams that they
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CLICK TO WATCH : ‘#TRENDSPOTTING WITH OSM & OUR AMAZING PARTNERS’ 159 see through the augmentative reality goggles,” explains Abi-Saab. “We expect that having these augmentative reality goggles on our ships will mean that challenges that could, today, disable a ship would be dramatically reduced. We will have people with the right expertise helping us resolve those problems. So, the efficiency gains will be dramatic.” OSM also operates a number of offshore oil & gas facilities. In the past, an operational event that required an underwater inspection would result in halted production for prolonged periods of time, while trained divers w w w.suppl yc ha i ndi gi ta l. com
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“ Simplifai has proven to have deep understanding or processes combined with RPA, among other skills” — Chakib Abi-Saab, CTO OSM Maritime
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OSM MARITIME GROUP
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“We believe that IOT is going to be the key to preventive maintenance” — Chakib Abi-Saab, CTO OSM Maritime 163
would be deployed for surveillance and
“Part of the immediate efforts to build
repairs. Now, Abi-Saab says, that
efficiencies through digitalization
could change. “When you stop a rig
includes working very closely with our
operation, you’re talking about hun-
partners of Simplifai to completely
dreds of thousands of dollars lost on
evaluate and re-engineer processes
an hourly basis. If you have a drone in
with the objective of then using Robotics
the water that can do the same job, you
Process Automation (RPA) to speed
do not have to stop the operations.
up the execution of repetitive tasks and
So, it not only increases safety but it
reduce manual intervention,” adds
increases profitability.” OSM is consid-
Abi-Saab. Simplifai is a holistic artificial
ering the adoption of drones for both
intelligence solutions company head-
underwater and aerial inspections in
quartered in Oslo, Norway. By using
combination with video analytics on its
Simplifai’s technology to automate
rigs and ships under management.
routine tasks, Abi-Saab estimates OSM w w w.suppl yc ha i ndi gi ta l. com
OSM MARITIME GROUP
C OMPA N Y FA C T S
• OSM: 11,000 employees, 25 office locations, a fleet of 500 vessels, and a 90% customer retention rate • Simplifai: OSM’s new partner, experts in AI solutions, particularly Robotics Process Automation
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will be able to increase efficiency in
of machine learning, AI, IoT and edge
those areas by up to 50%. The adoption
computing to record the most relevant
of RPA will also bring scalability and
information from its fleet and parse it for
improved data quality due to the error
insights into operational solutions. “We
reductions inherent to automation.
believe that IoT is going to be the key to
“We are now an organization that takes
preventive maintenance,” Abi-Saab
advantage of data and business
says. “But we need to approach it very
intelligence to make better decisions,
smartly. You can find sensors for every-
and having error-free data means better
thing, but not everything that can be
decisions, and having only one version
measured should be measured and not
of the truth,” says Abi-Saab, adding
everything that should be measured
that “Simplifai has proven to have deep
can be measured. So we’re currently
understanding of processes combined
working to identify what are those areas
with RPA, among other skills.”
that, if we measure, would give us the
As well as tools for gathering and
efficiency gains that we are looking for.”
redistributing knowledge and raw data,
Uniting information from every indi-
OSM is dedicating itself to the adoption
vidual system OSM has in operation
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OSM MARITIME GROUP
166
within a centralised database, the
functions as a single harmonious
Operations Centre helps to prevent
ecosystem. “Having all the information
the company’s solutions from becom-
in a centralized database will give us
ing siloed. “We have experienced the
several advantages,” notes Abi-Saab.
same challenges as everybody else
“First is the ability to properly monitor
in the industry,” admits Abi-Saab. “Part
security. Second is the ability to properly
of the creation of the Operation Center
back up our data and restore it in the
comes in a second phase where we
event of an emergency or disaster so
will create a fully centralized database,
that we have proper business continu-
which holds information from every
ity. And third, it will give us the ability
system we have in the organization,”
to have smart algorithms of artificial
helping to ensure company’s tech
intelligence from our machine learning
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167
software going through the data, so
edge computing, and machine learning
that we can get correlations that would
as part of a centralised database will,
possibly not be imagined by humans‌
Abi-Saab believes, lead to significant
Similarly, we are looking at edge comp-
efficiencies for OSM, as the company
uting technology so that, not only
gains insights into preventative main-
will we have analytics onshore in the
tenance strategies. “Imagine that you
operation center, but the people who
have a fleet of ships around the world.
manage the ships also have access
Normally, the way maritime companies
to real-time analytics so they can
work is you have Vessel Managers
make better decisions.�
onshore and you have the Captains in
Identifying trends in ship maintenance using this combination of IoT,
the ships who are the people responsible for the operations of the ship. Now, w w w.suppl yc ha i ndi gi ta l. com
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“ Pursuing technology solutions will help us create technical ability,security, reliance and efficiency gains in everything we do” — Chakib Abi-Saab, CTO OSM Maritime
FEBRUARY 2019
EUROPE
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OSM MARITIME GROUP
if a ship breaks in Brazil and then another breaks in Africa and another stops working in Europe, under normal circumstances each incident might be seen as an isolated case. But, if you have all the information in one centralized database, artificial intelligence can detect a trend, ships that are similar, or parts that are similar that are breaking. Then it starts telling you, based on the past history of Ships A, B and C that we should change a particular part of this type of ship because it’s about to break. That’s when you truly create value.” 170
OSM Maritime’s exploration and adoption of digitally transformative technologies is comprehensive and happening at speed. A large part of Abi-Saab’s role is to ensure the company’s slogan, “It’s all about people,” is respected and adhered to. “We believe that technology, without the support and knowledge of the people, would not be as efficient and would not give you the value that you need,” he explains. “We are focusing on aggressive change management plans that not only choose the proper technologies but also communicate to everyone in the organization that will be affected what is happening, why that is happening, and how that will affect them. Because the better people understand FEBRUARY 2019
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the positive impact the adoption of technologies has on their job, the more their resistance to it is reduced.” For example, OSM is currently examining the possibility of a partnership with a company specialising in blockchain technology. The digital ledger technology would address a challenge faced by OSM crew members: paper certificates and documentation. “If those certificates are lost, it’s going to take them weeks, potentially months, depw w w.suppl yc ha i ndi gi ta l. com
OSM MARITIME GROUP
$100mn Approximate revenue
1989
Year founded
11,000+
172
Approximate number of employees
FEBRUARY 2019
EUROPE
ending on where in the world they are, to get them back. Without those certificates, they cannot board a ship,” explains Abi-Saab. “If we have a blockchain solution that enables them to produce real time information about their training and certificates to ship owners anywhere in the world, then it would become quite an interesting solution.” 2019 and 2020 promise to be exciting years for OSM Maritime. Abi-Saab predicts that the next year will see a tipping point for the company, where “pursuing technology solutions will help us create technical ability, security, reliance and efficiency gains in everything we do today, with the aim to become a highly-predictive analytical, artificial intelligence and machinelearning-based organization in 2020.”
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Delivering the gift of sight through a robust supply chain transformation WRIT TEN BY
L AUR A MULL AN PRODUCED BY
CHARLOT TE CL ARK E
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ESSILOR
Tasked with taking care of one of our most vital senses, Vladimir Zhirnov, Global Sourcing and Procurement Director of Supply Chain & Transport at Essilor, is ensuring the company’s supply chain is up to the challenge 176
8
0% of the sensory informa-
Every day, Essilor manages more
tion that the brain receives
than 3,000 lens flows and over one
comes via sight, making
million product references, relying on
vision one of our most important
an expansive network of 34 produc-
senses. However, our eyes are complex
tion sites, 14 distribution centres and
organs and are rarely perfect: in fact,
481 prescription labs. This means that
nearly two out of three people suffers
efficient supply chain management
from vision problems. The invention of
is crucial. One professional at the
lenses has been an invaluable aid, and
helm of this robust supply chain is
with a streamlined, agile supply chain,
Vladimir Zhirnov, Global Sourcing
Essilor, is ensuring that customers
and Procurement Director of Supply
can get these vital solutions as quickly
Chain & Transport.
as possible. FEBRUARY 2019
With over a decade of experience
ASIA
177
working at Essilor, Zhirnov has been
supply chain function to align it with
there every step of the way as the firm
the firm’s global vision. As a result,
has expanded its footprint through
Essilor’s network footprint now able
organic growth and local acquisitions.
to support more than 2mn unique
By drawing upon his expertise at
stock keeping units (SKUs).
Essilor from a local, regional and eventually a global level, Zhirnov says
A ROBUST, DATA-DRIVEN SUPPLY CHAIN
it’s given him “an entire understanding
Digitalisation drives Essilor’s global
of how the company functions, what
supply chain which is dedicated to
the current trends are, as well as the
producing and delivering over 540mn
needs of different countries”.
lenses a year with a high degree of
During this period, Essilor had to restructure its procurement and
personalisation for individual wearers. Over the past two decades, Essilor w w w.suppl yc ha i ndi gi ta l. com
ESSILOR
has developed a robust digital backbone linking its ecosystem of production sites, prescription labs and distribution centres with over 350,000 customers, to its lens design, ordering and fulfillment systems. It’s a highly data-driven operation, requiring millions of rapid digital exchanges between customers and every part of the value chain from receiving prescriptions and fitting details to sending manufacturing instructions to a lab. To ensure optimal speed, performance and reliability, Essilor has migrated certain steps as cloud-based services, for 178
example, a powerful calculator capable of generating lens designs to the more advanced personalized measures linked to the Group’s latest Varilux® X series™ progressive lenses. Essilor is already exploring the future of data-driven manufacturing with the creation of a concept Lab 4.0 at its Dallas campus, as well as exploring how artificial intelligence, machine learning, and collaborative robots can improve planning, production, and customer service. The secret behind Essilor’s explosive growth lies in its commitment to R&D, with more than €200mn dedicated each year to research and innovation. This allows the firm to offer exclusive products that distinguish it from its competitors, but with swathes of FEBRUARY 2019
“ Essentially, the supply will be doubled, the external logistics will be doubled and we’ll also have two different systems and organisations that needs to be combined” — Vladimir Zhirnov, Global Sourcing and Procurement Director of Supply Chain & Transport at Essilor
ASIA
customised products comes more logistical challenges. This is where Essilor’s worldclass supplier network lends a helping hand. “We have more than 30,0000 suppliers, of which 1,000 are logistics and supply chain vendors,” explains Zhirnov. “We classify these suppliers into three grades whereby we have 14 strategic vendors, 500 preferred vendors and the rest classified as others.” With such a complex network of partners, supplier relationship management is critical and as such Essilor has developed a thorough relationship management program which ensures that its strategic vendors have a mutually beneficial partnership. “It helps us understand what the partnerships are going to achieve, what our plans are, and how we can support each other to complete these missions,” he says. But why is supplier sustainability so important for Essilor? “We believe that if we work hand in hand with our suppliers, together we can increase the positive impact of our business in the communities where we work,” notes Zhirnov. “For the past two years in our Sourcing and Procurement team, we’ve set out to involve our network of suppliers in different ways. In addition to driving compliance with Essilor’s responsible business practices, we engage suppliers in three key areas: promoting visual health through awareness raising w w w.suppl yc ha i ndi gi ta l. com
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ESSILOR
and screening actions; responsible
and his team. To tackle this, Essilor has
sourcing from economically vulnerable
developed a shrewd strategy to drive
populations; and positive environmen-
down freight costs in the form of regional
tal initiatives through sharing best
docking hubs. In essence, this means
practices and implementing eco-re-
that all products heading to Asia, for
sponsible approaches.�
instance, have one point of arrival by air freight. They are then distributed by
A GLOBAL POWERHOUSE, WITH REGIONAL EXPERTISE
road and air within the continent with
As is the case for any procurement or
“The concept is that we are entering
supply chain professional, managing
one continent by air freight at one
costs is a key consideration for Zhirnov
point and then we are leveraging our
help from local or regional partners.
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E X E C U T I V E P R OF IL E
Vladimir Zhirnov Vladimir Zhirnov, who began his career as a part-time sales rep while in college, serves currently as Global Sourcing and Procurement Director of Supply Chain & Transport at Essilor International. Based from Singapore, he helps to deliver value across the organization with global footprint in over 100 countries, 600 entities, and 33 manufacturing plants including wholly owned businesses, joint ventures and partnerships. Previously in his career, he helped to lead the transportation/ freight strategy for Europe.
FEBRUARY 2019
ASIA
partners to distribute our products throughout the country,” Zhirnov says. “If you have 30 plants and you are sending products to smaller markets, Malaysia for example, it’s quite costly to continuously feed into the country directly from across the global plants. Therefore, we send upstream shipments to our regional docking hubs and distribute products from there.”
“ We have more than 30,000 suppliers, of which 1,000 are logistics and supply chain vendors” — Vladimir Zhirnov, Global Sourcing and Procurement Director of Supply Chain & Transport at Essilor
Similarly, Essilor distributes all its Middle Eastern products from Dubai 181
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and all its European products from
Group’s capital is held by employees
Paris. Employing over 67,000 people
who are also involved in the com-
and developing its production and lo-
pany governance. “This decentralised
gistics footprint globally, this extensive
decision-making offers us transparen-
presence is a key accomplishment for
cy and the responsiveness to different
the firm. “We’re really helping to con-
regions,” he explains.
tribute to skills development in different countries,” Zhirnov says. Today, Essilor
CONCENTRATING ITS EFFORTS
has a global footprint spanning around
As well as selling a variety of lenses,
100 countries and as it continues to
Essilor has also claimed a portion of
grow this logistical challenge will only
the consumables market – providing
get greater. A key factor for Zhirnov is
vital tools and items needed to solder
ensuring regional needs are being met
parts and edge lenses, for example –
and this is in part achieved by giving
but this hasn’t come without its
employees a voice – 65% of employees
challenges. In the US market, for
are shareholders and around 4% of the
example, there were several players
FEBRUARY 2019
ASIA
183
within the group competing for a slice of the pie which threatened Essilor’s margins. By working closely with a third-party logistics (3PL) network design consultant, however, the firm has found data analytics to be a useful tool to tackle this hurdle. “We analysed all the inbound data, the sourcing data, and the customer-based data
“ We’re really helping to contribute to skills development in different countries” — Vladimir Zhirnov, Global Sourcing and Procurement Director of Supply Chain & Transport at Essilor
to identify our core areas in the US,” reflects Zhirnov. By redesigning its w w w.suppl yc ha i ndi gi ta l. com
ESSILOR
“ We ensure that the materials we are buying are not manufactured through child labour and don’t come from regions where minerals are extracted in an improper way” 184
— Vladimir Zhirnov, Global Sourcing and Procurement Director of Supply Chain & Transport at Essilor
consumables network, Essilor recon-
company’s merger with Italian eyewear
figured its distribution centre locations
company Luxottica, which owns brands
in the US and focused its efforts on
including Ray-Ban, Oakley and Sunglass
areas where it was needed most. This
Hut. This will not only propel Essilor’s
helped to drive labour, capex rationali-
and Luxottica reach farther into the
sation, reduce freight costs and more.
various markets, but it will also undoubt-
“It offered us better costs, lower
edly impact the firm’s sourcing logistics
investments and at the same, it ensured
and supply chain. Although this deal is
we designated channel champions so
still in its early stages, there’s a lot to
to avoid competing against each other.”
consider. “Essentially, the supply will be doubled and we’ll also have two
A HISTORIC MERGER
different systems and organisations
Another project which Zhirnov has a
that needs to be combined”, Zhirnov
keen eye on revolves around the
observes. So whilst this transition is
FEBRUARY 2019
ASIA
factured through child labour and don’t come from regions where minerals are extracted in an improper way,” Zhirnov adds. On top of this, the firm has also set itself another impressive task: to eradicate poor vision by 2050. “It’s the most honourable part of why we go to work every day,” asserts Zhirnov, pointing out how 2.5bn people still lack vision correction today. Through forging partnerships with NGOs, national governments and the private sector as well as facilitating the development of local social entrepreneurs networks, Essilor hopes to understand local in its early stages, Zhirnov is confident
needs and barriers so that it can create
that the integration will be seamless.
vision care infrastructure that is both
Knitted into the fabric of Essilor’s core
purposeful and sustainable. In the
mission is its sustainable approach,
coming years, Essilor may grow its
and this hasn’t gone amiss when it
supply chain and procurement function
comes to the company’s supply chain
further, but it seems the top item on
and logistics management. As part of
Zhirnov’s agenda can be best summa-
its 2020 sustainability strategy, 100%
rised by the firm’s mission: “improving
of Essilor’s strategic suppliers will re-
lives by improving sight”.
ceive an external CSR audit and 100% of its preferred supplies will acknowledge Essilor’s Supplier Charter. “As part of this, we ensure that the materials we are buying are not manuw w w.suppl yc ha i ndi gi ta l. com
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