The importance of visibilit y and artif icial intelligence in logistics
FEBRUARY 2020
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Driving toward a world-class supply chain
Digital transformation in the supply chain Hicham Nehme, Senior Supply Chain Manager at Vodafone Qatar, discusses the ever-increasing importance of supply chain to the telecommunications industry
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FOREWORD
W
elcome to the February edition
it was rare to see a company with a
of Supply Chain Digital!
CPO role,” explains Lee.
In our cover feature this month, we speak
Elsewhere in the magazine, we interview
with Hisham Nehme, Senior Supply
Mike Bristow, Managing Director of
Chain Manager of Vodafone Qatar, to
Manufacturing Logistics at DHL Supply
discuss the ever-increasing
Chain, and there are in-depth research
importance of supply chain to the
features on digital warehouses and Big
telecommunications industry.
Data and analytics.
“Companies, and telecom companies
You also won’t want to miss features
specifically, must work on cost efficiency
with HMD Global, Golden Hippo,
and how to manage their spend by using
Wayne Farms LLC, Trinity Industries,
proper sourcing and negotiation plans,
EY, BP, and more!
and planning ahead in collaboration with all other stakeholders and departments,” says Nehme. This issue’s leadership column hears from James Lee, Chief Operating Officer of SAP Ariba and SAP Fieldglass, who discusses how the
Finally, this month’s Top 10 zones in on the biggest logistics brands worldwide. Would you like to be featured in the next edition of Supply Chain Digital? Get in touch at sean.galea-pace@bizclikmedia.com
role of procurement has transformed
Enjoy the issue!
supply chain strategies in the industry
Sean Galea-Pace
over the past few years. “I’m a strong believer in the importance of a procurement organisation. In the past, www.supplychaindigital.com
03
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Click the home icon (top right of page) to return to contents page at anytime EDITOR-IN-CHIEF
SEAN GALEA–PACE EDITORAL DIRECTOR
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CONTENTS
36 Setting the bar in spend management
46
SUPPLY CHAIN: TECHNOLOGY IN MANUFACTURING LOGISTICS
60
72 54 80 94 Events & Associations
100 CONTENTS
HMD Global
116 Golden Hippo
CONTENTS
142 Wayne Farms
166 PepsiCo
156 Trinity Industries
170 EY
CONTENTS
188 BP
BP
206 Arriva UK Bus
CONTENTS
222 Vodafone Procurement Company S.a.r.l
240
254 166
Rohit Darodkar
Transdev PepsiCo Australasia
12
FEBRUARY 2020
Digital transformation in the supply chain WRITTEN BY
WILLIAM SMITH PRODUCED BY
K ANE WELLER
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13
V O D A F O N E Q ATA R
14
Hicham Nehme, Senior Supply Chain Manager at Vodafone Qatar, discusses the ever-increasing importance of supply chain to the telecommunications industry FEBRUARY 2020
V
odafone Qatar is a member of multinational telecommunications conglomerate
Vodafone Group’s partner market programme, and is one of two operators in Qatar. Hicham Nehme is Senior Supply Chain Manager at Vodafone Qatar and has 18 years of supply chain experience. “I’ve worked in different organisations and industries. Facility management, IT, manufacturing and,
15
for the last eight years, I’ve special-
The telecommunications industry
ised in telecom procurement. I’ve
is in flux globally, with changes in
been CIPS-certified since 2013 and
finance requiring variations in strategy.
am a holder of an MBA and busi-
“Telecom operators around the world
ness administration system degree.”
are facing financial pressures, due to
Nehme’s work has taken him to a num-
the shrinking of their profit margins
ber of countries in the MENA region
and rising operating costs and invest-
and he has managed projects in India,
ment demand,” Nehme explains. “What
Europe, and the United States. It’s not
telecom companies realised is that to
just his work keeping him busy, how-
overcome many of these challenges
ever. “I’m also the father of three lovely,
it is necessary to reduce costs, and to
beautiful girls – triplets.”
achieve these goals, we must empower w w w.suppl yc ha i ndi gi ta l. com
Connected world, connected experiences. Learn more
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V O D A F O N E Q ATA R
the supply chain role. The supply chain
in recent memory, 5G. “We’re proud to
has become a critical department
be one of the first operators in the world
across any telecom company. Our
deploying 5G technology and making
involvement starts with the planning
it commercially available for customers
stage, not just the execution. We can
– an achievement we are really proud
help the decision-makers to build
of.” Implementing 5G requires upgraded
their strategy and to properly put their
infrastructure, and “Vodafone Qatar is
plans in place.”
taking the lead to be part of that growth
Aside from financial flux, the indus-
in the coming years,” says Nehme. “The
try has also experienced changes in
telecommunications industry is critical
technology, and Vodafone is at the fore-
for any country, and that’s where we
front of implementing one of the most
play our role in supporting the growth of
potentially transformative technologies
the economy.”
18
FEBRUARY 2020
CLICK TO WATCH : ‘THE FUTURE OF THE TELECOM INDUSTRY’ 19
“ We’re proud to be the first company providing 5G for their customers in Qatar” — Hicham Nehme Senior Suopply Chain Manager Vodafone Qatar
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To ensure the efficiency of the supply chain in an evolving industry, Nehme has highlighted the importance of having a clear strategy. He
“ The development that’s happened to this country in the last 10 years is magnificent” — Hicham Nehme Senior Suopply Chain Manager Vodafone Qatar
emphasises that “to build a successful strategy we need to depend on a number of essential factors. First we need to understand our core business, future objectives and goals by analysing our procurement and spend reports. We also monitor financial and political changes in the world and forecast the direct or indirect effects of any new technology to understand
E XE CU T I VE PRO FI LE
Hicham Nehme Hicham Nehme is an experienced Procurement professional. Having worked for 18 years in Procurement and Supply across different industries, Hicham is responsible for oversight of the procurement operations, strategic sourcing and digital transformation in supply chain. Hicham was instrumental in developing procurement policies and procedures and implementing procurement strategies, managing projects in the MENA Region, Europe and USA. Hicham is CIPS and CPPM Certified, with a BA in Business Administration Systems, and a father of three girls.
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23
V O D A F O N E Q ATA R
how this might influence our strat-
Nehme adds. “This helps us to build
egy. Based on the outcome of these
a clear strategy for the supply chain,
analyses we can build our strategy.
achieving our goals and objectives in
The main pillars of any procurement
the long and short term. VPC’s role
strategy are global sourcing, risk and
is to maintain a level of world class
supplier management and digital
procurement, giving us access to a
transformation. The main objective
landscape of advanced tools and
is to focus on cost reduction without
robust processes to smoothly facili-
impacting the quality of the service or
tate the interaction with our suppliers.
the products we are procuring.
They help us to work faster, more
At Vodafone, we are fortunate to have Vodafone Procurement 24
securely and more simply.” The supply chain’s influence has
Company (VPC) – one of the largest
also expanded beyond its usual remit
procurement organisations in Europe,”
to take a seat at the decision-making
“ The main pillars of any procurement strategy are global sourcing, risk and supplier management and digital transformation” — Hicham Nehme Senior Suopply Chain Manager Vodafone Qatar FEBRUARY 2020
CLICK TO WATCH : ‘STRATEGIC SUPPLY CHAIN PARTNERSHIPS’ 25
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table. “Companies, and telecom
our strategy – first planning is vital for
companies specifically, must work on
the supply chain,” Nehme emphasises.
cost efficiency and how to manage
“We collaborate with our partners and
their spend by using proper sourcing
suppliers from outside and with inter-
and negotiation plans, and planning
nal stakeholders. What is the best form
ahead in collaboration with all other
of planning to do? What can we opti-
stakeholders and departments,” says
mise for our three and five-year plans?
Nehme. Thanks to its involvement in an
This is the key part of any successful
early stage, Vodafone Qatar’s supply
procurement strategy.”
chain team can more easily align its
At the same time, another important
strategy with the company’s overall
factor to consider is risk mitigation.
goals and objectives. “We assess
“Risk is critical for supply chain man-
what the company needs to develop
agement, in all terms,” Nehme says. 27
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CLICK TO WATCH : ‘MANAGING RISK IN THE SUPPLY CHAIN’ 29 “Supplier risk, fraud risk, bribery risk,
important tasks for a supply chain
delivery risk. Even managing risk in
department. “Making suppliers and
contracts is important. Coordinating
business happy is the key to suc-
with the legal department to achieve
cess for any supply chain expert or
decreased risk or payments, all of
professional,” Nehme explains. “The
this impacts supply chain decisions.”
partners we have locally and inter-
Another risk is spending outside the
nationally are why we are successful.
normal procurement policy, which
We build relationships with suppliers
Nehme refers to as ‘dark purchasing’.
in different industries, focusing on
“We successfully managed to reduce
encouraging local suppliers to invest
this by helping internal stakeholders
more in the telecom industry. Mannai
realise the importance of aligning with
is a strategic partner in IT, lately it
SCM and avoid this type of purchasing.”
has been choosen as Best Oracle
Supplier relationship management (SRM) is undoubtedly one of the most
Partner at Oracle Open World in Dubai. We also have suppliers in the w w w.suppl yc ha i ndi gi ta l. com
V O D A F O N E Q ATA R
telecom industry like Hayat, which we count on for a lot of projects. HATCOM is another strategic partner
“ Making suppliers and business happy is the key to success for any supply chain expert or professional”
working across many projects from our side. Tech Mahindra is one of the international suppliers that you will always find when you need them.” Alongside the external implementation of 5G, internal technology transformation has also been a focus. “We changed our enterprise resource planning (ERP) system recently and moved to Oracle Fusion,” says 30
— Hicham Nehme Senior Suopply Chain Manager Vodafone Qatar
Nehme. “That, I think, is a big step for the company. We used to use many software systems to manage our
PART N ERS
Tech Mahindra “Tech Mahindra offers innovative and customer centric IT experiences, enabling enterprises to develop their technological capabilities and deliver tangible business value. I visited Tech Mahindra in
FEBRUARY 2020
India and saw the importance of the human factor and how they invest in creating a professional business environment for their employees. As a supply chain expert, I always look for partners like Tech Mahindra”.
operations across different functions, some of which involved paperwork. But we’ve decided that, by June 2020, the supply chain at Vodafone Qatar will be completely paperless. We’ve digitalised all our processes and procedures. Supplier prequalification, supplier evaluation, supplier proposal evaluation, e-auctions, e-sourcing. These are all tools linked to the ERP, helping us to change the way we manage procurement activity within the organisation.” The introduction of new technology tends to require a process of change management, and in this case it was no different. “It was a little bit difficult to explain to someone who was used to using the same system for a long time how this move from a system they’d been using for the last 10 years was going to change their life and make it easier,” Nehme remembers. “But we worked to simplify the process and procedures to ensure that the delivery was successful from our side. ERP was our first step in digitalisation, and it was a critical step. Any organisation needs to have a proper ERP system to manage their processes, ensure w w w.suppl yc ha i ndi gi ta l. com
31
V O D A F O N E Q ATA R
PART N ERS
Hayat Communications “Hayat Communications’ service and products are the benchmark for quality and security. As a partner, Hayat maintains a high quality of professional service and integrity. Health and safety is a critical concern for Vodafone,
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CLICK TO WATCH : ‘TAKING THE LEAD WITH 5G’ 33 transparency and make sure that eve-
supply chain plays in any organisa-
rything is streamlined.”
tion – I believe digital transformation
While the ERP was the first step, going forward, Nehme sees technol-
is the future of SCM.” Qatar’s growth is also something
ogy playing an ever-more crucial
Nehme has had a hand in, having
role in the supply chain. “Operators
previously worked on a number of
across the world are investing
large projects in the country. “I’ve
more and more in the supply chain,”
been working in this part of the
Nehme concludes. “We’re closely
world for the last 13 years, mainly in
monitoring, for instance, blockchain
Qatar. It’s been growing at break-
and the impact it’s having on our
neck speed. People here are really
industry and others. In the future,
welcoming and they’re closely tied
we’re going to be using innovative
to their culture. It feels like home. I’ve
tools and technologies like block-
participated in a lot of projects, and
chain in the future to improve the role
when I’m driving passed and I know w w w.suppl yc ha i ndi gi ta l. com
V O D A F O N E Q ATA R
34
“ The supply chain has become a critical department for any organisation” — Hicham Nehme Senior Suopply Chain Manager Vodafone Qatar that I was involved, I feel very proud. The development that’s happened in Qatar over the last 10 years is magnificent. I’m proud to have played a small role in this and wish the very best for this country.”
FEBRUARY 2020
35
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LEADERSHIP
36
Setting the bar in spend management James Lee, Chief Operating Officer at SAP Ariba and SAP Fieldglass, discusses how the role of procurement has transformed supply chain strategies in the industry over the past few years WRITTEN BY
FEBRUARY 2020
SEAN GALEA-PACE
37
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LEADERSHIP
R
ecognised as the leader in spend management and the go-to place for organisations to connect and get business done, SAP
Ariba is considered one of the largest software organisations worldwide and ranked first in Supply Chain Digital’s Top 10 Largest Software Companies Worldwide in November. James Lee, Chief Operating Officer (COO) at SAP Ariba and SAP Fieldglass, believes the organisation is truly one of a kind. “SAP Ariba is the only true procure, source-to-settle, end-to-
38
end solution provider, that also addresses all of the expense categories. We also possess the largest B2B network in the world,” he explains. “We have more than 4mn suppliers and buyers in over 190 countries connected to our network and nearly US$3trn in commerce is flowing through it annually. Based on commerce value, we’re larger than eBay, Alibaba, and Amazon combined — that’s a pretty incredible number.” The success of its Ariba Network is unrivalled. With its platform achieving such significant growth, Lee puts it down to several key reasons. “When you’re the market leader, both buyers and suppliers recognise that this is where you’re more or less a de facto standard,” says Lee. “Our network is for suppliers who are looking to expand their business and find more buyers, while it’s also for buyers who FEBRUARY 2020
39
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LEADERSHIP
40
“ Based on commerce value, we’re larger than eBay, Alibaba, and Amazon combined — that’s a pretty incredible number”
are looking to upscale their supplier network too. We make it very seamless and adaptable for our suppliers and buyers to transact over our network. If you think about all the different communication mediums, there’s a lot of thought and investment that has gone into ensuring our platform is as streamlined as possible for both buyers and suppliers.”
James Lee Chief Operating Officer, SAP Ariba & SAP Fieldglass
Managing spend successfully is critical. In order to achieve this, it takes more than just increasing compliance and decreasing costs.
FEBRUARY 2020
CLICK TO WATCH : ‘WELCOME TO INTELLIGENT SPEND MANAGEMENT’ 41
SAP Ariba has leveraged Intelligent
to have one space and one product.
Spend Management (ISM) to enable
Under ISM, we have Ariba, Fieldglass
spend data to come together from
and Concur as one family. Combining
across all sources and categories
these three organisations together is
and allow for smarter, faster spending
the best way to serve our customers.”
decisions. “Our customers expect
Procurement has transformed
to see a unified strategy, product
significantly over the past few years.
roadmap and go-to-market interface
Traditionally recognised as a back
that addresses all of the spend cat-
office function, companies are begin-
egories,” says Lee. “We don’t want
ning to unlock the true value of the
to deal with one team that looks at
procurement function. Lee believes
indirect, another at services and
that the supply chain industry is waking
one that deals with travel expenses.
up to the requirement for a dedicated
You’re one company, so it’s important
CPO position. “I’m a strong believer w w w.suppl yc ha i ndi gi ta l. com
LEADERSHIP
in the importance of a procurement organisation. In the past, it was rare to see a company with a CPO role,” explains Lee. “Usually procurement was a function that was under the COO or CFO’s remit and was primarily considered a cost-cutting department. They were essentially there just to ensure that they were getting the best deals and squeezing every dollar and cent out of the negotiation process.” However, Lee recognises that due to the advancement of technology, pro42
curement professionals are now freer to focus on making relationships with suppliers more strategic. “Technology is having a major influence. Now, all of a sudden, procurement is helping factories minimise stock outs and allowing supply chains to run more efficiently,” he says. “I’ve been talking to lots of customers recently and there’s an increasing number of organisations beginning to understand that you need a CPO function separate from the CEO. The scope is much broader than just cost-cutting.” With digital transformation shaking the supply chain industry up considerably, Lee believes digitalisation is centered around insights. FEBRUARY 2020
“ Digital transformation goes beyond automation or processes moving from paper to online transactions� James Lee Chief Operating Officer, SAP Ariba & SAP Fieldglass 43
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LEADERSHIP
“Digital transformation goes beyond automation or processes moving from paper to online transactions,” explains Lee. “It’s important to question: how can I rely on a platform like Ariba to provide information to me from all over the world? This could be from regulators, suppliers, my users or trade partners. Finding out how to harness all that information to ultimately make better decisions is vital.” Lee also believes in “procuring with a purpose” and maintains that compa44
nies such as SAP Ariba should drive responsibility in the supply chain. “We believe procurement isn’t just dollars and cents,” affirms Lee. “Organisations need to use third party data and intelligence to proactively identify risks and then respond to protect their brand and minimise disruption. Profitability is only one aspect. Sustainability is also in our spectrum as a supplier, so it’s important to adopt ways to manufacture the goods in a sustainable manner,
“ The only way to achieve long-term success is to provide solutions that are meaningful and better serve customers”
in terms of energy efficiency, greenhouse gas emissions and so on.” With the supply chain industry in a state of flux due to the influential impact digitalisation is having on FEBRUARY 2020
James Lee Chief Operating Officer, SAP Ariba & SAP Fieldglass
45
companies’ operations worldwide,
provide solutions that are meaningful
organisations must remain lean and
and better serve customers,” sum-
agile in a bid to achieve sustained
marises Lee. “We will continue to
success in the space. With customer-
work with our own customers to bet-
centricity at the heart of many
ter improve our solutions offering and
businesses’ strategies, Lee affirms
see how we can further engage with
that listening to the changing demand
them in a bid to upscale.”
of customers and observing how to demonstrate the most value for them is the central focus. “The only way to achieve long-term success is to w w w.suppl yc ha i ndi gi ta l. com
D I G I TA L I S AT I O N
SUPPLY CHAIN: TECHNOLOGY IN MANUFACTURING LOGISTICS 46
Mike Bristow, MD of Manufacturing Logistics at DHL Supply Chain UK & Ireland, discusses how the company and industry are evolving amidst significant technological change WRITTEN BY
SE AN GA LE A-PACE
FEBRUARY 2020
47
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D I G I TA L I S AT I O N
A
s the world’s leading contract logistics provider, DHL Supply Chain is well-renowned in the supply
chain space. DHL is one of the largest 3PL providers in the sector and covers a range of industries such as automotive, planes,
trains, boats, general engineering and construction. Supply Chain Digital speaks with Mike Bristow, MD of Manufacturing Logistics at DHL Supply Chain UK & Ireland, to find out more about Manufacturing Logistics at DHL and the current state of 48
the industry.
CAN YOU WALK US THROUGH YOUR ROLE AND WHAT IT ENTAILS? I’m responsible for a wide customer base across the broad manufacturing sector in the UK. The focus of my role boils down to four key areas. Firstly, it’s important that we look after our colleagues and effectively engage them in the business. Secondly, we need to listen to our customers, anticipate their business challenges and understand how the supply chain can add value to their overall organisation in pursuit of their objectives. Thirdly, we need to deliver for our shareholders and grow the DHL business sustainably. And finally, we need to act FEBRUARY 2020
49
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D I G I TA L I S AT I O N
CLICK TO WATCH : ‘DHL SUPPLY CHAIN LEAD LOGISTICS PARTNER – IT INTEGRATION’ 50
“ I ’M PASSIONATE ABOUT DELIVERING SOLUTIONS TO BRITISH MANUFACTURERS TO INCREASE THROUGHPUT AND EFFICIENCY, WHILE IMPROVING THE ORDER-TO-CASH CYCLE” — Mike Bristow, MD of Manufacturing Logistics, DHL Supply Chain UK & Ireland
FEBRUARY 2020
responsibly, minimising our impact on
right up to the point of fit, which
the environment and the local commu-
includes sequencing and pre-assem-
nities in which we operate.
bly of parts. This significantly improves manufacturing efficiency, as well as
CAN YOU TALK US THROUGH YOUR MANUFACTURING SOLUTIONS? I’m passionate about delivering solu-
helping control inventory, build variation and complexity. The scale of DHL enables us to
tions to British manufacturers to
group network supplier collections and
increase throughput and efficiency,
the transport flows for our various cus-
while improving the order-to-cash
tomers. Many component suppliers will
cycle. In its simplest form, we offer
produce parts for multiple manufactur-
solutions across the entire supply
ers and our network drives significant
chain. We manage the inbound flow
efficiencies by joining the volumes
of materials from around the world
together. We also move finished
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51
D I G I TA L I S AT I O N
“ WHEN IT COMES TO HIRING AND RETAINING TALENT, EXPECTATIONS ARE CHANGING” — Mike Bristow, MD of Manufacturing Logistics, DHL Supply Chain UK & Ireland
products from the point of manufacture to the end customer. As part of our finished goods expertise we also manage fleets on behalf of our clients, from com52
pany cars to press and test vehicles, covering everything from inspection and preparation, to delivery and repair. This is a significant area of opportunity
productised, scalable technologies.
for the industry to improve the whole
This starts with ‘problem definition’
order to production to cash cycle.
then moves through research and proof of concept and into pilot, product
IN WHAT WAYS ARE YOU LEVERAGING NEW TECHNOLOGY AT DHL SUPPLY CHAIN? There are a number of new technologies
development and finally into industrialisation and commercialisation. IoT devices are helping us to find
and solutions which we are leverag-
new efficiencies in warehousing opera-
ing in our business that support us
tions as various digitalisation projects
and our customers’ operations. When
provide us with the opportunity to
it comes to deciding which emerging
gather and analyse new data. For
technologies to develop, we focus
example, operational data aggregated
on our innovation funnel to create a
from sensors on scanners and materi-
framework to move the problem to
als handling equipment allows us
FEBRUARY 2020
53
to monitor operational activities in real-
understand their impact on accuracy
time through a graphical visualisation.
and efficiency through optimised driv-
Within our warehousing operations,
ing, lifting and routing processes.
we’ve deployed a number of robotic
They continually charge so there is no
autonomous systems. In the US we’re
downtime and can move full pallets at
piloting a collaborative, autonomous
height and put away. We are estimat-
robotics solution to work alongside
ing a 20% productivity improvement
our colleagues as warehouse picker
using this solution.
companions, reducing walking diswhere the robots come to the pickers
HOW IMPORTANT IS A ROBUST CHANGE MANAGEMENT STRATEGY?
who remain in the pick zones/aisles.
This is a critical area for me that starts
Similarly, we are piloting automated
and ends with people, with a host of
forklift trucks in several locations to
best practice process in-between.
tances by switching to zone picking
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D I G I TA L I S AT I O N
When we look at this from an implementation of technology perspective, it’s critical that we stay focused and use technology to effectively address an issue that exists in the organisation, rather than trying to retrofit a problem to a great new piece of technology that we have found. In our experience, most of the problem definitions come from the shop floor and the teams who are experiencing it day in and day out. Once the issue is identified, it’s very 54
important that we reflect on the “what’s in it for me” element for the stakeholders and ensure that they are onboard throughout the process.
are key ‘moments that matter’ in an employee’s journey that form an inte-
RECRUITING AND RETAINING THE RIGHT STAFF IS VITAL TO ALL SUCCESSFUL ORGANISATIONS, WHAT DOES DHL’S TALENT MANAGEMENT STRATEGY LOOK LIKE?
gral aspect of how we manage and maintain talent. When it comes to hiring and retaining talent, expectations are changing. We’re finding an increasing number of candidates
It is important that our talent strategy
who want to work for more than just
ensures DHL hires and manages its
the pay cheque – they want a flexible
people effectively in order to develop
career, clear progression and manag-
their skills and progress them within
ers who act as mentors.
the business. To do this, DHL uses a lifecycle approach that clearly maps out the colleague’s journey. There FEBRUARY 2020
WHAT DO YOU ANTICIPATE THE FUTURE OF THE SUPPLY CHAIN INDUSTRY TO
55
LOOK LIKE AS WELL AS THE FUTURE OF YOUR DIVISION OF DHL?
implications for operations including
I expect the supply chain industry to
cesses and subsequent reduction in
further embrace technology at pace
cost, waste and risk when transporting
with the recent advances in the devel-
and delivering goods.
improved monitoring of logistics pro-
opment of hardware and software.
Another stage of development is
For example, enterprise VR has been
around implementing digital twins.
recognised as an important logistics
Digital twins offer unparalleled capabili-
asset, capable of enhancing planning,
ties to track, monitor, and diagnose
resource allocation and decision mak-
assets. They can change traditional
ing. This has been enabled through VR
supply chains, with a range of options
applications in logistics such as virtual
to facilitate data-driven decision mak-
training, virtual concept creations and
ing and collaboration, streamlined
digital twins. These have far-reaching
business processes and new business w w w.suppl yc ha i ndi gi ta l. com
D I G I TA L I S AT I O N
56
“ I EXPECT THE SUPPLY CHAIN INDUSTRY TO FURTHER EMBRACE TECHNOLOGY AT PACE WITH THE RECENT ADVANCES IN THE DEVELOPMENT OF HARDWARE AND SOFTWARE” — Mike Bristow, MD of Manufacturing Logistics, DHL Supply Chain UK & Ireland
FEBRUARY 2020
models, and we are keen to work with our customers and partners to jointly explore applications in our industry. When it comes to our role, we have an important part to play. We are fortunate to have a wide customer base and our aspiration is to bring manufacturers together to discuss current and future challenges and how we as a collective can overcome them. We want to create more value for our customers and also hear back what they want from us. Some of the most successful operations we run are when we are a true partner and can invest in our customers. We also want to lead the way in giving something back to society and the planet. But this is not separate from our everyday business; our responsibility is not a ‘nice to have’ but an integral part of our strategy, driven by our purpose of connecting people and improving lives.
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57
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CONTRACT MANAGEMENT
60
T U F E H T I G O L OF H E R A W FEBRUARY 2020
E R TU S C I T IS S E S U HO ook at l r e s o l c a takes l a t i how g i d D n a n i s a e i h n C a comp Supply s c i t s i g o l uses ing o d h a e e r l a e w e r r i h t ing the s i l a t i g i d e they ar W R IT T E N B
Y
IL SON GEORGI A W
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61
CONTRACT MANAGEMENT
W
arehousing and logistics, an industry with complex operations in need of flexible and innovative solutions.
Currently within the world of warehousing and logistics, companies are lining up to jump on the digital transformation bandwagon.
Taking a look at some of the major companies in warehousing and logistics, we examine Amazon, XPO Logistics and DB Schenker’s successful deployments of innovative technology on their journey to becoming more digital. 62
AMAZON Amazon is a multinational company that has many strings to its bow. Founded in 1994, the company has flourished into one of the biggest players within technology, web services, logistics and warehousing. Furthering its development, Amazon has been innovating its use of robotics and artificial intelligence (AI) within its logistics and warehousing operations.
ROBOTICS When it comes to robotics, Amazon envisions a future where “humans and robots work harmoniously to get packages to customers on time.” The company started using robotics in 2012, and currently has 26 of its fulfillment centres worldwide using robotics and people FEBRUARY 2020
63
together. Ultimately, Amazon strives to harness robotic automation to make the lives of its associates easier by removing tedious, and strenuous tasks such as carrying pods of inventory and transporting pallets, from their duties. “Amazon fulfillment centres are busy places, with packages and people w w w.suppl yc ha i ndi gi ta l. com
CONTRACT MANAGEMENT
moving around constantly. In centres
grippers. These robots identify
equipped with robotics, employees
and grab totes, to stack them for
now lift and walk less. Robots pick
shipping and stowing. Currently,
up heavy items to prep them for ship-
Amazon has 30 globally.
ping or for stowage. Employees who help pick customer orders are able
lifts pallets to different levels
to easily identify items, rather than
within a fulfillment centre or places
looking for them on shelves. Products
them on drive units to be carried
now come directly to employees,”
to their destination. Currently,
says Amazon.
Amazon has six around the world.
• Amazon has several types of
64
• Robo-stow — a robotic arm which
• Drive unit — a robot unit that
robots currently operational within
can transport packages around
its warehouses including:
the fulfilment centres. Currently,
• Palletisers — robotic arms with
Amazon has 100,000 worldwide.
“ AMAZON FULFILLMENT CENTRES ARE BUSY PLACES, WITH PACKAGES AND PEOPLE MOVING AROUND CONSTANTLY, IN CENTRES EQUIPPED WITH ROBOTICS, EMPLOYEES NOW LIFT AND WALK LESS” — Amazon
FEBRUARY 2020
CLICK TO WATCH : ‘THIS IS THE FUTURE OF LOGISTICS: AUTOMATED GUIDED VEHICLES AGVS — MODERN LOGISTICS AND WAREHOUSING’ 65
ARTIFICIAL INTELLIGENCE AND MACHINE LEARNING The software behind the machines. Within an Amazon fulfilment centre there can be between 1-4mn bins, with 10mn items, Russelll Allgor, Chief Scientist at Amazon Worldwide explains the company’s adoption of AI and machine learning (ML), in order to efficiently optimise its robotics in real time. By harnessing AI and ML in the form of decision engines, decision logic, computer vision systems and a transportation execution w w w.suppl yc ha i ndi gi ta l. com
CONTRACT MANAGEMENT
system, Amazon can build warehouse predictions based on: the likelihood of needing access to pallets again; travel time; what needs to be picked at the same time; and minimised travel distance.
XPO LOGISTICS When it comes to technological innovation, XPO Logistics — a leading American logistics services provider — invests US$55mn a year to deploy industry leading innovations across 66
its operations in North America and Europe.
ROBOTICS Currently, XPO Logistics is harnessing robotics technology within its warehouses to improve security and work productivity. C3-XPO — an autonomous security
incidents at its Atlanta facility to zero.
robot that monitors the car parks and
“We’re taking the lead in integrat-
exterior of XPO Logistics’ sites, 24
ing emerging technology throughout
hours a day. The robot was a joint
our business, including lesser-known
venture between XPO Logistics and
areas such as security. By working
Knightscope to develop a physical
with Knightscope to deploy C3-XPO,
presence that can interpret data in
we’ve been able to achieve 100%
real-time. Within the first six months
external security at our Atlanta site,
of operations C3-XPO reduced
while delivering significant savings
FEBRUARY 2020
67
“ XPO LOGISTICS, INVESTS US$55MN A YEAR TO DEPLOY INDUSTRY LEADING INNOVATIONS ACROSS ITS NETWORKS IN NORTH AMERICA AND EUROPE” — Troy Cooper Chief Operating Officer, XPO Logistics
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CONTRACT MANAGEMENT
“ THIS IS A TECHNOLOGICAL LEAP. SELF-DRIVING MACHINES, POWERED BY VISION AND AI” — Matija Kopic, CEO and Co-Founder of Gideon Brothers
68
for our customer,” commented Troy
Logistics has deployed thousands
Cooper, Chief Operating Officer of
of intelligent robotics throughout
XPO Logistics.
its operations in North America and
The security robot was designed to
Europe. Designed to collaborate with
be weatherproof, with a 360-degree
its existing human workforce, the col-
HD, low light camera, that can use
laborative robots can move a rack
visual and audible alarms to deter
weighing roughly 1,000 — 3,500 lbs,
potential threats, detect loitering cars
to a workers station to reduce walk-
and exterior fires. In addition, the robot
time and manual errors.
has two-way communication allowing operators to communicate with poten-
CLOUD TECHNOLOGY
tial threats without placing a life at risk.
Alongside these robots, XPO Logistics
Collaborative robots — partnering with GreyOrange Pte. Ltd., XPO FEBRUARY 2020
has developed a cloud-based, mobile software platform for rapid deployment
and integration of automation and robotics. The software known as WMx is a single solution for warehouse inte-
— for logistics processes in its warehouses to drive productivity. “In our drive to offer strategic advan-
gration, combining key supply chain
tages for our clients in the increasingly
elements into one application.
complex digital environment, DB
“Our WMx platform is the future
Schenker continuously explores
of warehouse management. It tur-
opportunities to integrate innovations
bocharges our operations through
from visionary start-up companies,”
greater connectivity, brings innova-
commented Xavier Garijo, Member
tions on line more rapidly than ever
of the Board for Contract Logistics at
before, and supports distributed order
Schenker AG.
management for greater efficiency
The robots provide next generation
in multi-site and multi-channel environ-
robotic vision with its visual percep-
ments,” commented Cooper.
tion based robotic autonomy system that combines deep learning and ste-
DB SCHENKER
reoscopic cameras. In addition, the
With over 140 years of experience,
robots can move 800kg, with a hot-
DB Schenker is committed to “provid-
swappable battery system to minimise
ing innovative supply chain solutions
downtime.
to challenge the status quo.” DB
“This is a technological leap. Self-
Schenker has experience in support-
driving machines, powered by vision
ing the global exchange of goods
and AI, will succeed where earlier
via land transport, air freight, ocean
technology failed — it will become
freight, contract logistics and supply
ubiquitous in industrial environments,”
chain management.
commented Matija Kopić, CEO and Co-Founder of Gideon Brothers.
AI-POWERED ROBOTICS DB Schenker is utilising the flexible solution of Gideon Brothers — a global manufacturer of autonomous robots w w w.suppl yc ha i ndi gi ta l. com
69
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TECHNOLOGY
HOW IS 72
TRANSFORMING THE SUPPLY CHAIN
FEBRUARY 2020
N?
73
With Big Data’s influence on companies growing, Supply Chain Digital explores the effect it is having on the industry WRITTEN BY
SE AN GA LE A-PACE
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TECHNOLOGY
74
B
ig Data. It’s one of the hottest
of reasons. Through Big Data, busi-
topics in the supply chain in-
nesses can decrease costs, enhance
dustry right now and has pride
efficiency and ultimately make smarter
of place alongside artificial intelligence
decisions. Supply Chain Digital takes a
(AI), machine learning (ML) and auto-
closer look at three of the companies
mation. It’s the new kid at school, the
that have implemented Big Data into
latest film in the cinema and the state-
their operations.
of-the-art phone everyone’s talking about all rolled into one - and everyone
WHAT IS BIG DATA?
wants to get involved. In a bid to gain
Big Data essentially refers to the vast
a competitive advantage, companies
amounts of data, structured and un-
are leveraging Big Data for a host
structured, that helps businesses to
FEBRUARY 2020
75
establish trends and patterns in human
In 2001, Doug Laney, former vice
behaviour and interactions. This allows
president and distinguished analyst
companies to leverage that informa-
of Gartner’s Chief Data Officer (CDO)
tion to enable better decision-making,
research and advisory practice, intro-
thanks to the knowledge of what their
duced the 3Vs which are considered
customers require. With technology
the defining properties or dimensions
becoming increasingly influential in
of Big Data. The idea behind the 3Vs;
companies’ strategies, it is fundamen-
volume, variety and velocity, is that the
tal that new processes such as Big
challenge of Big Data management
Data, AI and ML are introduced into op-
revolves around accelerating all three
erations, or they run the risk of falling
of those categories, rather than just
behind to other competitors in the field.
volume alone. In the subsequent years w w w.suppl yc ha i ndi gi ta l. com
TECHNOLOGY
that followed, there has also been the introduction of additional V’s, such as variablity and value.
AMAZON The ecommerce giants use Big Data to better meet customer demands. By analysing what a customer has recently bought, items in the shopping cart and what products a customer has searched for, Big Data enables Amazon to offer suggestions to the customer in a bid to generate more 76
revenue. Its personalised recommendation system is thought to account for 35% of the company’s annual sales. Amazon has a drive to deliver its orders to customers faster than its rivals. In 2019, this was taken a step further through the launch of One-Day Delivery. Amazon collaborates with manufacturers to track their inventory before opting for the warehouse closest to the vendor and the customer in order to decrease costs by 10-40%.
STARBUCKS With 90mn transactions made weekly across more than 25,000 stores, Starbucks is a renowned brand worldwide. FEBRUARY 2020
“ Amazon has a drive to deliver its orders to customers faster than its rivals”
CLICK TO WATCH : ‘HOW AMAZON USES BIG DATA – FUTURE OF TECH’ 77 The introduction of rewards apps via mobile devices has allowed the company an insight into its customers spending habits. Starbucks’ mobile app is popular among customers with over 17mn active users, while its rewards app sees around 13mn active users. These apps provide Starbucks with a plethora of information about their customers’ favourite drinks and entices them to use the app through complimentary drinks. Another way that Starbucks reaches customers is through targeted and personalised marketing. This is done by sending an w w w.suppl yc ha i ndi gi ta l. com
TECHNOLOGY
78
email to a customer who hasn’t visited
all other fintech banks, cybersecurity
a store recently and advertising a new
is considered the main priority and,
product similar to one they’ve previ-
as a result, American Express has
ously ordered in a bid to re-engage
positioned data analytics and ML at
them with the company.
the heart of the company’s strategy to combat this. The firm has deployed a
AMERICAN EXPRESS
ML model that combines a variety of
US-based bank American Express is
different data sources, such as card
leveraging Big Data to track customer
membership information, spending
behaviour. With more than 110mn
details and merchant information, to
American Express cards in operation
detect suspicious events in order for
and over 1trn transactions processed,
a decision to be made in milliseconds
the bank handles around 25% of US
and prevent fraud. American Express
credit card activity. As is the case with
seeks to connect cardholders to prod-
FEBRUARY 2020
“ The era of digital transformation is here; the future is digital” ucts and services. To that end, it can recommend a customer a restaurant that they are likely to enjoy based on previous purchase data. It’s clear that new technology such as Big Data is transforming how companies operate. Digitalisation is everywhere in the supply chain industry and beyond, and thus it has become vital that the latest technology and processes are implemented into operations — or companies risk being left behind. Big Data is ultimately enabling smarter decisions and tracking the latest consumer trends to ensure firms don’t miss out. As the world continues to evolve, the reliance on Big Data and analytics will grow. It’s a tool that observes customer behaviour 24/7 and is an eye that is never closed. The era of digital transformation is here; the future is digital. w w w.suppl yc ha i ndi gi ta l. com
79
T O P 10
Logistics Brands
80
Supply Chain Digital examines the top 10 biggest logistics brands worldwide by number of employees WRITTEN BY
SEAN GALEA-PACE
FEBRUARY 2020
81
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T O P 10
10 82
Amazon Logistics [ HQ: SEATTLE, US ]
Kicking off the list is Amazon. The e-commerce giant is a company like no other and as a result is in 10th place on this list because it offers a variety of different services and isn’t restricted to only logistics. Amazon splits its businesses into several key areas: Amazon Logistics, Amazon Web Services, Amazon Prime and Amazon Retail. Its services include e-commerce, cloud computing, digital streaming and artificial intelligence (AI). Amazon’s warehouse and distribution centres total 386 facilities in the US alone, and include 159 fulfilment centres, 47 inbound and outbound sortation hubs as well as 52 Prime Now hubs and 115 local delivery stations. Founded in 1994 by CEO Jeff Bezos, it is now considered one of the ‘Big Four’ alongside Facebook, Google and Apple. Amazon is primed to compete with the biggest logistics companies in the world over the next few years, however, it remains unclear whether it considers itself primarily as a logistics firm. FEBRUARY 2020
CEO
JEFF BEZOS
$232.9bn APPROXIMATE REVENUE (US)
750,000 NUMBER OF EMPLOYEES
09
CH Robinson Worldwide
83
[ HQ: EDEN PRAIRIE, US ]
CEO
US-based Fortune 500 company, CH Robinson, provides freight transportation, transportation man-
ROBERT BIESTERFIELD
agement, brokerage and warehousing. CH Robinson
$16.6bn
solves logistics problems for companies worldwide and across industries, from the simple to the most
APPROXIMATE REVENUE (US)
complex. With $20bn in freight under management and 18mn shipments annually, it is considered the
15,262
world’s largest logistics platform. The firm offers a range of different logistics services such as truckload, ocean shipping and air freight, serving a number
NUMBER OF EMPLOYEES
of different industries.
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T O P 10
84
08
J.B. Hunt Transport Services [ HQ: LOWELL, US ]
As one of the largest transportation logistics firms in North America and a Fortune 500 company, J.B. Hunt offers an integrated, multimodal approach and provides capacity-orientated solutions which are centred on driving customer value and industry-leading service. Its solutions include intermodal, dedicated, truckload, final mile, refrigerated, flatbed, less-than-truckload, single source, expedited and international. Its intermodal service operates the largest fleet of company-owned 53’ containers and drayage fleets in North America, showcasing over 85,000 containers in its fleet.
FEBRUARY 2020
CEO
JOHN N. ROBERTS III
$7.1bn APPROXIMATE REVENUE (US)
24,681 NUMBER OF EMPLOYEES
07
85
Union Pacific [ HQ: OMAHA, US ]
Recognised as a leading American transportation company, Union Pacific Railroad Company as it is legally known, serves 23 states across the US and is North America’s premier railroad franchise. With technology starting to redefine the logistics sector, the railroad replaces around 3mn and 4mn railroad ties annually. The railroad ties are the foundation of which the company’s rail is built and are perpendicular pieces that support the rail and keep it upright. They run along Union Pacific’s entire train line, which
CEO
LANCE M. FRITZ
$22.2bn APPROXIMATE REVENUE (US)
41,967 NUMBER OF EMPLOYEES
is around 32,000 route miles in total.
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T O P 10
86
06
DB Schenker [ HQ: ESSEN, GERMANY ]
Considered one of the world’s leading logistics providers, DB Schenker offers a range of solutions such as land, air and ocean freight while also offering contract and lead logistics. DB Schenker values efficiency and has 430 land transportation branches across Europe. The company’s value-added services ensures the flow of goods continues seamlessly and encourages supply chains to stay lean and optimised for success. DB Schenker’s air freight network reaches 700 locations in 130 different countries worldwide.
FEBRUARY 2020
CEO
JORCHEN THEWES
$18.3bn APPROXIMATE REVENUE (US)
72,000 NUMBER OF EMPLOYEES
05
KUEHNE + NAGEL
87
[ HQ: SCHINDELLEGI, SWITZERLAND ]
Founded in 1890, Kuehne + Nagel is recognised as one of the world’s biggest logistics providers. Considered
CEO
DR. DETLEF TREFZGER
the number one global sea freight forwarder, the firm
$19.3bn
has more than 7,500 sea freight specialists worldwide available to meet customer requirements. Kuehne +
APPROXIMATE REVENUE (US)
Nagel offers several industry specific solutions such as: automotive, drinks logistics, forest logistics, oil
75,876
and gas logistics and project logistics. Alongside sea freight, the company also offers air freight and over-
NUMBER OF EMPLOYEES
land services. Kuehne + Nagel places huge value on sustainability and has established a “Net Zero Carbon” strategy to reduce CO2 in transport and logistics services globally. The company aims to be completely carbon neutral by 2030.
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T O P 10
88
04
XPO Logistics [ HQ: GREENWICH, US ]
XPO Logistics works closely with companies to evaluate the entire supply chain. The firm has a range of transportation solutions such as: drayage, expedite, full truckload, global forwarding, intermodal, last mile, less-than-truckload and managed transportation. XPO Logistics is one of the largest logistics providers worldwide with around 202mn sq.ft of facility space. The organisation invests approximately US$550mn in technology annually as it continues to fund its logistics drive. Over the upcoming years, XPO Logistics seeks to expand its focus on robotics, autonomous vehicles, automated sortation systems and other state-of-the-art technologies as the supply chain continues to harness new technology.
FEBRUARY 2020
CEO
BRADLEY S. JACOBS
$17.2bn APPROXIMATE REVENUE (US)
100,000 NUMBER OF EMPLOYEES
03
FedEx
89
[ HQ: MEMPHIS, US ]
CEO
The US-based company operates a host of solutions, such as its Express, Ground, Freight, Services,
FREDRICK W. SMITH
Logistics and Office divisions. By connecting busi-
$65.4bn
nesses with over 99% of the world’s GDP, FedEx handles over 7mn customs transactions annually
APPROXIMATE REVENUE (US)
for all customers. The organisation serves a global transportation network and provides solutions that
425,000
help to streamline businesses’ supply chains and enhance efficiency, accuracy and cost savings. It has
NUMBER OF EMPLOYEES
three main international freight forwarding solutions, featuring its ocean and air freight as well as its Global Order Logistics solution.
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T O P 10
02 UPS
[ HQ: ATLANTA, US ] As one of the world’s leading package delivery organisations in the world, UPS has transformed from a messenger company in 1907 to delivering 5.2bn 90
0000 YEAR FOUNDED
$0.0bn REVENUE IN XXXXXXXXX DOLLARS
0,000 NUMBER OF EMPLOYEES
packages and documents in 2018. The organisation offers several different solutions such as UPS Supply Chain Solutions, UPS Freight and Freight Brokerage Services. Over the past few years, the organisation has significantly expanded through the acquisition of over 40 companies, including industry leaders in trucking and air freight, retail shipping and business services, customs brokerage, finance and international trade services. With US$72bn in revenue in 2018, UPS is renowned as a major player in the logistics space.
FEBRUARY 2020
CEO
DAVID P. ABNEY
$71.8bn APPROXIMATE REVENUE (US)
481,000 NUMBER OF EMPLOYEES
91
CLICK TO WATCH : ‘DELIVERING HOPE’
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T O P 10
01
Deutsche Post DHL Group [ HQ: BONN, GERMANY ] Deutsche Post DHL Group is the world’s largest courier company and has a total group revenue of US$68.6bn. With clear intentions for the future, the organisation
92
has established Strategy 2025 as it seeks to build a positive trajectory over the next five years. The strategy will focus on Globalisation, Digitalisation, E-Commerce and Sustainability. Deutsche Post acquired DHL in 2002. DHL operates several different divisions. These are: DHL Express, DHL Parcel, DHL eCommerce, Deutsche Post International, DHL Global Forwarding, DHL Freight and DHL Supply Chain.
CEO
FRANK APPEL
$68.6bn APPROXIMATE REVENUE (US)
547,459 NUMBER OF EMPLOYEES
FEBRUARY 2020
93
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EVENTS & A S S O C I AT I O N S
The biggest industry events and conferences WRITTEN BY SEAN GALEA-PACE from around the world
21 FEB 2020
IRU Logistics and Innovation Forum [ LONDON HEATHROW, UNITED KINGDOM ] Offering road transport companies 94
and stakeholders the opportunity to network with like-minded professionals in the industry, the event will play
26–27 FEB 2020
Defence Supply Chain and Logistics [ LONDON, UNITED KINGDOM ]
host to experts in the transport and
The event is set to address the
logistics industry. Recognised as “the
challenges to both logistics and
new networking hub for innovative
engineering commanders to ensure
road transport solutions,” the meetup
mobility and capability is maintained
will provide attendees with insight
within the combat force. The two-
into the newest solutions driving the
day conference will centre around
industry forward. There are a number
enabling mobility, momentum and
of key themes set to be discussed this
capability through identifying
year, such as fleet management and
innovative, cost-efficient solutions
the digitalisation of the supply chain,
to modernise operational capabilities
which includes distribution and ware-
such as robotic and autonomous sys-
house systems.
tems in the supply chain.
FEBRUARY 2020
17–18 MAR 2020
17–19 MAR 2020
Supply Chain Conference
Logichem 2020
[ LONDON, UNITED KINGDOM ]
Bringing more than 350 supply chain
Now in its 17th year, the event welcomes
leaders from the world’s leading chem-
over 200 professionals and provides
ical companies together, LogiChem
the opportunity to network, learn and
2020 provides the opportunity for
connect fellow supply chain and logistics
practical insights on how to increase
professionals together under one roof.
end-to-end visibility, drive customer-
The Supply Chain Conference will zone
centricity and achieve integrated
in on how to maximise efficiency, reduce
digitalisation. The three-day event will
costs and future proof supply chain
play host to 120 senior procurement
operations in the industry. Thought
executives, 50 thought-leading speak-
leaders like Laura Bacon, Integrated
ers and provide eight hours of
Business Planning & Operations
networking. Considered the “most
Manager of Nando’s, and Tom Rose,
interactive LogiChem to date,” the
Head of International Operations at
event will showcase solutions to sup-
SPAR International, are scheduled
ply chain challenges through over 60
to speak at the event.
interactive case studies.
[ ROTTERDAM, NETHERLANDS ]
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EVENTS & A S S O C I AT I O N S
24–26 MAR 2020
Women in Procurement & Supply Chain 2020 [ SYDNEY, AUSTRALIA ] Providing an inclusive, supportive environment, Women in Procurement & Supply Chain 2020 is a highly96
anticipated event. With a mantra to
1–2 APR 2020
Pharma Supply Chain & Security World 2020 [ LONDON, UK ]
empower women to advance their
Now in its third year, the event focuses
careers and transform the procurement
on optimising supply chain challenges
function, the three-day meeting is
to ensure an agile, responsive,
renowned for the high level speakers,
streamlined and secure supply chain.
relevant content and networking
The exhibition will allow pharma
opportunities on offer. This year’s event
industry experts to work together and
is expected to cover hot topics in the
share new strategies, case studies and
supply chain space, such as: social and
innovative ideas with fellow attendees.
sustainable procurement, diversity
The conference will also provide the
measures in the supply chain, technology
ideal platform for collaboration and will
for more efficient and agile transactions
allow for innovative technologies,
and collaboration, as well as how to
transformation strategies and
develop and improve leadership and
collaboration methods to be discussed
people skills.
over the two-day event.
FEBRUARY 2020
1–3 APR
MegaTrans 2020 [ MELBOURNE, AUSTRALIA ] MegaTrans facilitates cross-industry collaboration in a multi-dimensional and
14–15 MAY
Digital Supply Chain & Logistics 4.0 Summit [ AMSTERDAM, NETHERLANDS ]
integrated conference and exhibition for
The two-day event will provide a venue
the freight and logistics industry. For the
for professionals from a range of
very first time, MegaTrans2020 will be
industries and companies to meet and
held in conjunction with the specialised
partake in presentations, panel
bulk handling expo, Australian Bulk Han-
discussions, workshops, breakout
dling Expo 2020, side-by-side with a one
sessions and more. The role of
ticket entry into both exhibitions. With
technology in the supply chain is
technology continuing to transform the
anticipated to be heavily featured, with
industry, MegaTrans2020 is set to show-
supply chain risk management and
case the latest in artificial intelligence
intelligent supply chain for a
(AI), robotics, automated racking, telem-
connected world all set to be
atics and route optimisation, warehouse
discussed. The exhibition will also
automation, intelligent fleet systems,
showcase AI and robotic process
blockchain, internet of things, big data
automation and how it can be
and advanced analytics.
successfully utilised into operations.
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97
March 19-20, 2020 | Eden Roc, Miami USA
DRIVING THE PACE OF BUSINESS IMPACT 300
130
50
30
Senior Procurement Attendees
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Industries
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100
HMD GLOBAL
The importance of visibility and AI in logistics FEBRUARY 2020
101
WRITTEN BY
GEORGIA WILSON PRODUCED BY
K ANE WELLER
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HMD GLOBAL
Noha Samara, Head of Customer Logistics at HMD Global, discusses the importance of endto-end visibility and artificial intelligence within logistics
N
oha Samara, Head of Customer Logistics, started her career as an electronics engineer before finding her
footing in the supply chain function where she 102
has spent most of her career. Having worked at various companies such as Procter and Gamble and Microsoft, she settled in 2016 at HMD Global as the business began its journey. Samara explains that HMD global is a unique Finnish startup founded in 2016. HMD Global designs and delivers innovative and trusted products to bring back one of the most loved and trusted brands globally, as the sole licensee of the Nokia brand. In its first year of operations, the company became a unicorn startup with offices in 50 countries. “Our vision is to make mobile technology accessible for all, with devices that continue to evolve for the better. This is our brand promise; the promise we’re keeping, today, for all our Android phones. According to Counterpoint’s FEBRUARY 2020
103
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HMD GLOBAL
research, nearly 96% of Nokia
“ End-to-end visibility is critical for our business” — Noha Samara, Head of Customer Logistics, HMD Global
smartphones are already running on Android Pie or have had an Android Pie update issued to them, making it the fastest brand to reach this level. Unlike any other Android phones out there, all of Nokia smartphones will benefit from regular security updates for three years, OS updates for two years and will come with the latest Google designed software and innovations, from AI to security. This promise is what sets us apart from other brands in the market. We
104
believe in purposeful innovation and not just innovation for the sake of innovating, and this mindset fuels our determination to provide devices that are accessible to anyone and to be among the top five mobile sellers in the world.” Since its inception, Samara feels evolution has been a constant for the firm. “HMD Global has a very dynamic culture, we are passionate about challenging the status quo.” Since 2016, the company has launched more than 30 new phones, receiving the title of number one feature phones player and ranking FEBRUARY 2020
CLICK TO WATCH : ‘NOKIA 7.2 – GO AND CREATE’
ers in the MENA region. Moreover,
THE IMPORTANCE OF END-TO-END VISIBILITY
the company is very proud to have
When it comes to HMD Global’s
been recently ranked on the top
logistics operations, “end-to-end
world’s 25 fastest growing brands
visibility is critical for our business,”
of the past five years and second
says Samara. “It enables us to make
best performing in Europe. Through
more informed decisions at exactly
its partnerships with Verizon and
the right time, in a dynamic and agile
Cricket Wireless, the company has
industry.” In its efforts to achieve
also expanded into North America.
100% end-to-end visibility, HMD
With these global expansions HMD
Global has been investing in the
Global has adopted a multi ODM
development of internal systems.
strategy to meet demands and
“To provide such service and vis-
improve competitiveness.
ibility, we think it is best to have the
among the top five smartphone play-
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105
HMD GLOBAL
106
CLICK TO WATCH : ‘WITH NOKIA SMARTPHONES, YOU’RE IN CONTROL’
latest cloud ERP system. We have
intelligence (AI). “New and innovative
developed both a global and regional
technologies are already impacting
dashboard to provide visibility to
the existing supply chain operat-
internal stakeholders, in addition to
ing models. With this digitisation
developing a supply chain system for
of the supply chain, companies are
both distributors and retailers to con-
able to address customers’ evolv-
duct order placement, processing,
ing requirements. In recent
shipment tracking and invoicing.”
months, we have seen a rise in customers expecting
ARTIFICIAL INTELLIGENCE AND AUTOMATION IN LOGISTICS
these technologies to be
Samara emphasises that regional
Currently, the company is
markets are being driven by emerg-
utilising automation and AI
ing technologies such as artificial
within its internal operations,
FEBRUARY 2020
in the palm of their hands.”
as well as in its devices. “We use auto-
framework strategy that leaves room
mation in our dashboards, customer
for flexibility and agility for the specific
reporting, SKU planning, shipment
requirements of each region. “For
planning and supply allocation plan-
example, automation varies across
ning,” Samara elaborates.
customers and distributors. Therefore,
MENA is a dynamic region for
we need to be aware of the levels of
logistics, and Samara emphasises the
flexibility and capability available. To
importance of a standardised global
combat this challenge we need to
E XE CU T I VE PRO FI LE
Noha Samara A seasoned supply chain professional with a well-rounded experience in supply chain transformation, category and initiatives planning, demand planning and customer logistics. Samara has a strong track record of leading and building up operations within both big MNC as well as rising unicorn startups. She spent most of her career at the FMCG Giant Procter and Gamble working on different categories (Baby Care, Beauty Care and Luxury Cosmetics) before moving into the consumer electronics industry with Microsoft followed by HMD Global. She has led several supply chain transformation projects throughout her diverse career, and possesses great team leadership skills with a high level of discipline, process improvement and standardisation. Samara has an electronics engineering background with an MBA from the American University in Cairo, and has three published cases on operations management and corporate strategy.
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107
109 jointly develop and build both our capability and the customers’ in order to find solutions that allow us to be compatible together.”
THE CHALLENGES OF INNOVATION When it comes to the challenge of innovation, Samara explains that remaining relevant is a core challenge. In order to combat this, HMD Global “tracks the latest innovations and encourages the teams to attend global w w w.suppl yc ha i ndi gi ta l. com
HMD GLOBAL
2016
Year founded
50
Offices established in first 12 months
1,000 110
Number of employees
FEBRUARY 2020
111
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HMD GLOBAL
112
FEBRUARY 2020
“Our vision is to make mobile technology accessible for all, with devices that continue to evolve for the better” — Noha Samara, Head of Customer Logistics, HMD Global
conferences. HMD Global works to stimulate new ideas that can be implemented within the business.” Samara explains that the company has implemented bi-weekly meetings to discuss current projects for data and innovation changes that need to be implemented. “In these meetings we also encourage our employees to put forward innovative ideas that grow the business. This ensures that the rhythm of change and the rhythm of the business are always dynamic and touching the needs, issues and changes that need to be addressed.” Reflecting on the company, Samara attributes the its success to its passion, entrepreneurial mindset w w w.suppl yc ha i ndi gi ta l. com
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HMD GLOBAL
114
and its partnerships with other organisations. “We have a wide reach across multiple regions and continents, hence why we rely heavily on our logistics partners, which we work with closely to ensure on time deliveries for all of our markets. For example, Agility is one of our biggest logistics partners in the MENA region. We have built together a supply network design that meets our business aspirations of growth in our FEBRUARY 2020
“We believe in purposeful innovation and not just innovation for the sake of innovating” — Noha Samara, Head of Customer Logistics, HMD Global
different markets where they are operating our Hub DC in Hong Kong.” Ultimately, we are building partnerships to last. With our partners, such as Agility, DHL, and DB Schenker, we have a clear set of mutual and aligned KPIs, goals and objectives that we share. We consider them as one of our driving forces for success and a window to new markets. Ultimately, the more we grow, the more they will also grow.
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115
GOLDEN HIPPO
116
GOLDEN HIPPO DRIVING TOWARDS A WORLD-CLASS SUPPLY CHAIN WRITTEN BY
MATT HIGH PRODUCED BY
DENITRA PRICE
FEBRUARY 2020
117
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GOLDEN HIPPO
FAREEN MEHRZAI, THE ARCHITECT BEHIND GOLDEN HIPPO’S SUPPLY CHAIN TRANSFORMATION, TELLS US HER STORY
T
he most exciting thing about a career in supply chain is that you’re never done. You’re always striving to optimise, to
improve, to gain an advantage and understand the opportunities that are out there in order to get bet118
ter and continue learning,” says Fareen Mehrzai, Director of Supply Chain at Golden Hippo. For the past year Mehrzai, a highly experienced supply chain and operations director with a proven track record for leading integrated operations programmes for globally recognised brands, has been doing all those things at Golden Hippo. The business is one of the United States’ leading direct response marketing organisations, building and marketing category-leading brands and unique, best-in-class products direct to consumers in three areas: supplements, beauty, and pet food. Each of these is driven by Golden Hippo’s overarching vision of helping as many people as possible, capitalising on its unique organisational culture to provide the highest quality of service, and focusing on sustainable health and wellness. FEBRUARY 2020
119
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GOLDEN HIPPO
“ THE MOST EXCITING THING ABOUT A CAREER IN SUPPLY CHAIN IS THAT YOU’RE NEVER DONE”
Since 2018, Golden Hippo has been on a significant supply chain transformation journey built around three key elements of people, service and cost, and driven to achieve a supremely strong and well-performing operational engine. Mehrzai, who joined the business in August 2018, has led this
Fareen Mehrzai, Director of Supply Chain, Golden Hippo
transformation, building, mentoring and leading a team that both embodies the company’s culture and is resilient and agile enough to manage the change process. “The last year has been really
122
exciting,” she states. “You never fully understand what you’re getting into when you take on a new role, but the opportunity to join Golden Hippo at this point in its evolution was an intriguing one. We’re on a strong growth trajectory, and there is an energy and synergy rooted within the company’s culture unlike any other. In many roles, you either join a business to maintain or to create – here we get to maintain the foundations we have and build for the future at the same time.” Expanding on those foundations, there is a culture of openness, collaboration and innovation that underpins every aspect of its operations and has FEBRUARY 2020
CLICK TO WATCH : ‘GOLDEN HIPPO COMPANY VIDEO’
ensured an enviable level of strength
which thrives on values such as test
in depth. “We have experts in every
everything and fail fast, allowing the
field,” she affirms. “Whether that’s
best idea to win regardless of its origin,
brand ideation and creation, product
being responsible for and learning
development, copywriting, media buy-
from mistakes, and mentoring and
ing, video production and editing, right
educating others.
through to reputation management
“When I was building my team, I real-
and SEO, distribution and fulfilment.”
ised relatively quickly that I could find
The company’s founders and sen-
the best technically sound and profi-
ior management team embody the
cient individuals in whichever role I was
culture that has made this possible.
hiring for,” Mehrzai comments. “But, if
For example, Mehrzai describes an
they don’t embody and embrace those
environment that fosters ideas and a
aspects of our culture that make us so
creative approach to operations, and
strong, then it will be really difficult for w w w.suppl yc ha i ndi gi ta l. com
123
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126
them to thrive here. We’ve built a team
supply chain transformation in order
of strong supply chain professionals
to take it “from transactional to world-
who are agile and flexible, and who
class” – a task she likens to changing
consistently go above and beyond
the wheels on a car while it continues
to service our internal and external
on its journey. “We didn’t have the
customers. I attribute that in part to
luxury of stepping back, observing for
great recruiting, a strong onboarding
three months and developing a plan of
programme and a culture that strives
attack, it was all hands on deck from
to be employee-centric.”
the very start,” she explains. Initially,
A lot has changed for Mehrzai in the
Mehrzai set out the key elements of
12 months since. Principally, her role
driving towards a world-class supply
has been the driving of Golden Hippo’s
chain: people, service and cost. These
FEBRUARY 2020
E XE CU T I VE PRO FI LE
Fareen Mehrzai Fareen Mehrzai is Supply Chain leader who develops and executes integrated operations programs to expand her organisations’ footprint while optimising all aspects of commercial operations. Mehrzai is a strong people leader with a proven track record of mentoring and developing top tier talent. In order to ensure cost reduction, she fosters an environment supportive of continuous network optimisation, maximizing vendor and co-manufacturing relationships and financial terms for mutual benefit, driving inefficiencies out of internal and external processes and challenging norms for step function cost improvements. A staunch proponent of continuous improvement, as a matter of routine Mehrzai instills a ‘Zero Waste’ mindset in individuals and teams around her. Examples of how she has optimised costs, streamlined process flows, and led large-scale initiatives include: Strategic planning: led the re-design and re-launch of a marketing procurement operational master plan, enabling 150%+ of savings targets. Process improvement: spearheaded the development of a framework to adopt business improvement tools and methodologies by leveraging extensive Six Sigma knowledge, leading to savings of $60M. Global team engagement: enhanced efficiency, transparency, and resources while leading a diverse team of directors, managers, associates, and direct and indirect reports including finance, and sales.
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129
factors led to the forming of defined
her team’s customers are all present
teams within the supply chain group
in the same working environment.
based around planning, procurement,
A significant part of the transforma-
analytics and more.
tion, she notes, has been around
“Supply chain, in any organisation,
changing the supply chain team’s role
is not a revenue driving function, it’s
in these relationships from one that
a support function,” she states. “Every
was defensive or reactive to being
day, the goal for my team and I is to
proactive and forward looking. “The
provide more value to the business
approach that we take with all our
and always question how we are
vendors or partners is ‘their success
servicing every brand, team and indi-
is our success’,” says Mehrzai. “As
vidual.” Golden Hippo’s ownership of
a result, many of the key milestones
its brands provides a unique supply
in our transformation journey so far
chain challenge, in that Mehrzai and
have been centered around fostering w w w.suppl yc ha i ndi gi ta l. com
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stronger partnerships, particularly for our supplier partnerships, and setting out a framework and roadmap for progressing from a transactional relationship to being more agile and forward-looking.” Mehrzai is a highly experienced
“ THERE’S A REALLY STRONG STRUCTURE IN PLACE, AND AN ENERGY AND SYNERGY ROOTED WITHIN THE COMPANY’S CULTURE UNLIKE ANY OTHER”
enabler of change, with a proven record of strategic planning, process management and team management at companies including Nestle,
Fareen Mehrzai, Director of Supply Chain, Golden Hippo
where, over her tenure she held various leadership roles in supply chain, 131
procurement and process improvement. Despite that experience,
Reflecting on this aspect, Mehrzai
Mehrzai concedes that embarking on
credits her varied career experience
Golden Hippo’s transformation jour-
with providing several skills that are
ney has provided a new challenge.
transferable to Golden Hippo’s working
“What it takes to be successful in a
environment. In particular, she points
150-year old organisation is very dif-
to two pivotal moments: having the
ferent to the way in which you apply
opportunity to build a strong process
yourself in a younger business,” she
improvement mindset during her early
explains. “You have to be more flex-
career, and spending the next years
ible in how you approach problems,
in “one of the best supply chains in the
but not necessarily with regards to
world” at Nestle, which she describes
what you’re trying to achieve. When
as a great training ground. On the
people join our team, for example, I tell
former, Mehrzai says that having the
them that I absolutely don’t want them
opportunity to earn Six Sigma Black
to go with the flow, I want them to
Belt certification early in her career
create their own waves.”
“forever changed how I think about and w w w.suppl yc ha i ndi gi ta l. com
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“ WHEN PEOPLE JOIN OUR TEAM, FOR EXAMPLE, I TELL THEM THAT I ABSOLUTELY DON’T WANT THEM TO GO WITH THE FLOW, I WANT THEM TO CREATE THEIR OWN WAVES” Fareen Mehrzai, Director of Supply Chain, Golden Hippo
133
approach any problems I face. It’s a par-
that this kind of culture already existed
ticularly important mindset to adopt if
at Golden Hippo when I joined,” she
you work in a supply chain-related role”.
explains. “Our cross-functional collabo-
Leadership is an important skill to
ration, for example, has been one of the
Mehrzai. As a strong people leader with
key aspects of our success. There’s
a record of mentoring and developing
little bureaucracy and the timely shar-
top tier talent, she enjoys sharing those
ing of knowledge and expertise is really
skills learned over her career with oth-
important to how we operate.”
ers at Golden Hippo. When it comes
On a more personal level, Mehrzai
to team building, she is a proponent of
enjoys the opportunity to educate
continuous improvement and a ‘zero
and mentor new or younger members
waste’ mindset, and always looks to
of Golden Hippo’s team. Outside of
foster an environment that is both sup-
her role, she is a proud faculty mem-
portive and collaborative. “I’m lucky
ber of the California State University w w w.suppl yc ha i ndi gi ta l. com
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135 Northridge, Systems and Operations Management Department, where she
and educate us.” Mehrzai seeks to encourage and
teaches future operations leaders.
build relationships in an organic fash-
She admits her passion for educating
ion. “Really, it should be about having
comes as a result of how much she
people in your life that you can learn
enjoys her work, explaining that “the
from, go to lunch with or reach out to
opportunity to translate even a frac-
when you have any issues. We have
tion of that energy and passion to
an amazing mentorship programme
tomorrow’s supply chain leaders is so
at Golden Hippo that I encourage
exciting to me. The best leaders I’ve
everyone to be a part of. Whether part
worked for in my career were not only
of a formal mentorship programme or
great at producing results, but also
not, sharing, encouraging and building
teaching and nurturing as they pro-
advocates around you that can ignite
gressed; we’re all capable of so much
your passion are so important, what-
if we have people around who support
ever level or role you operate in.” w w w.suppl yc ha i ndi gi ta l. com
QUALITY FIRST Ion Labs is a Custom Contract Manufacturing facility that is vertically integrated and located in Largo, FL with core competencies in Capsules, Tablets, Powders, Liquids, Liquid Capsules, Capsule-In-Capsules, Gummies as well as Skin Care.
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www.ionlabs.com
Lief Labs Lief Labs is a leading innovator in product ideation and formulation for the dietary supplement market. The company is driven by a passion for collaboration, maintains a drive to offer only the best ingredients and possesses an innovative and adaptable mindset. The business has formulated more than 1,000 products for a host of dietary supplement categories and worked with industry leaders across several industries. Today, Lief ’s world class supply chain operation encompasses sourcing hundreds of ingredients from a dozen countries and a quality control system that is a standout in the industry. “The key to successful supply chain management is maintaining a consistent f low of quality ingredients without interruption that our customers can rely on,” says Jeohvan Montoya, Lief ’s Director of Supply Chain Management.
“The challenges of sourcing ingredients are numerous and include weather, crop shortages, plant shutdowns and, more recently, tariffs,” Montoya adds, “which means we have to be prepared to buy from many countries, to buy in bulk and to warehouse it in the US.” Just recently, there was a shortage of the herb rhodiola, an ingredient used in many supplements manufactured by Lief. However, as a result of careful sourcing, none of Lief ’s customers experienced shortages. That’s because Lief sources every ingredient from at least three approved suppliers. “Our logistics assures that our customers receive the best pricing, at the end of the day, we are value driven,” Montoya confirms.
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GOLDEN HIPPO
With that sentiment in mind, Mehrzai highlights how Golden Hippo’s supply chain has been driven by every individual in the organisation. Top-down leadership is naturally a key facet of any change management process, she states, but empowerment across each level of the business has been key to implementing new practices. “Every idea might not always be possible,” she adds, “but for an employee to really feel free to voice their opinion is part of what makes this organisation unique”.
Comprehensive and customizable product development We develop and manufacture everything from skin, hair, and dental care products to nutritional supplements and OTC products. Founded in 1998, our continued goals are to provide high-quality products with outstanding service.
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139 This sentiment is carried over in Mehrzai’s advocacy of Golden Hippo’s ‘operational engine’, as she explains. “Often you look at businesses like ours from the outside and you see the obvious success factors, which are undoubtedly impressive. What’s not always seen is the work of those behind the scenes, which in many ways is the fundamental basis on
“ E VERY DAY, THE GOAL FOR MY TEAM AND I IS TO PROVIDE MORE VALUE TO THE BUSINESS AND ALWAYS QUESTION HOW WE ARE SERVICING EVERY BRAND, TEAM AND INDIVIDUAL”
which all other successes are built.” Golden Hippo’s operational engine, she says, is built for B2C operation. “When you already have an engine
Fareen Mehrzai, Director of Supply Chain, Golden Hippo
that is built with the inherent flexibility w w w.suppl yc ha i ndi gi ta l. com
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“FOR AN EMPLOYEE TO REALLY FEEL LIKE THEIR VOICE IS HEARD IS PART OF WHAT MAKES THIS ORGANISATION FEEL TRULY SPECIAL” Fareen Mehrzai, Director of Supply Chain, Golden Hippo 141 and responsiveness that ours has,
supplier partner relationships. “We’re
you have a significant competitive
well on the path to becoming a world-
advantage when exploring new oppor-
class supply chain organisation, but
tunities. In terms of our evolution, it will
we’ve many milestones ahead. Some
play a significant contribution to our
examples include looking to continue
growth in 2020 and beyond.”
building our process for scale, further
On future growth, Mehrzai is a firm
developing and nurturing key supplier
believer that a supply chain has no
relationships and supporting the
beginning or end and, instead, contin-
organisations objectives by enabling
ues to be an evolutionary process.
cost competitiveness. There are always
There is, she confirms, still some dis-
opportunities to improve, to learn and
tance to go in Golden Hippo’s
to work more effectively. That’s what
transformational supply chain journey,
makes the job so rewarding.”
particularly in terms of improving processes, digitising more of its supply chain and continuing to nurture its key w w w.suppl yc ha i ndi gi ta l. com
142
WAYNE FARMS: THE VALUE OF EXPERIENCE WRITTEN BY
SHANNON LEWIS PRODUCED BY
DENITRA PRICE
FEBRUARY 2020
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W AY N E F A R M S
GLENN SMITH, DIRECTOR OF FEED INGREDIENT PROCUREMENT AT WAYNE FARMS, DISCUSSES HOW LONG-STANDING EXPERIENCE CAN BE A VALUABLE TOOL IN ENSURING THE SUCCESS OF YEAR-TO-YEAR SUPPLY CHAIN TRANSFORMATION
I 144
n 1965, Continental Grain, a family company run to this day by the Fribourg family in New York, acquired a majority share of
Allied Mills, breaking off a division dedicated exclusively to poultry that officially became Wayne Farms. Subsequently, Wayne Farms grew into the powerhouse it is today — the sixth largest fully integrated poultry company in the United States with seven feeds mills, seven processing plants, and US$2.2bn in sales. With a vision of being the partner of choice for customers, colleagues, and farmers alike, its mission statement centres around executing the behaviours that lead to meaningful success, including integrity, teamwork and leadership. Glenn Smith is the Director of Feed Ingredient Procurement. His role oversees purchasing all feed ingredients for the feed mills across the country, from corn, soy, and distillers’ grains, to bone meal, bakery meal, fats and micro-ingredients like amino acids, enzymes and antibiotics. He joined FEBRUARY 2020
145
1965
Year founded
$2.2bn Sales in US dollars
9,000 Number of employees
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TRUSTED GRAIN SUPPLIER At Gavilon, we are honored to work with companies like Wayne Farms to provide procurement and logistical solutions to the feed mill industry. Wayne Farms prides itself on being known for quality and innovation from the farm to the kitchen and we are proud to be their top supplier of feed grains.
About Gavilon: Gavilon has more than 100 grain locations across the U.S., as well as numerous international origins and destinations strategically located on major railroads, rivers, and ports. This vast network makes Gavilon a strong and reliable partner, allowing us to efficiently move product to the right destination, at the right time, and at the right price. Gavilon has built strategic relationships with producers and consumers of grain, oilseeds, and feed ingredients. We have the resources and infrastructure to provide competitive values across these agribusiness supply chains. Behind every transaction is a team of experienced professionals you can count on, ensuring flawless execution at every turn. Visit www.gavilon.com to learn more about how we can benefit your operations, or call us at 402-889-4000.
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CLICK TO WATCH : ‘WAYNE FARMS INTERNSHIP PROGRAM’ 147 Wayne Farms in 2011, bringing with
Smith’s experience has also allowed
him profound industry experience.
him to establish deep-rooted connec-
Not only has Smith been in the feed
tions across every level of the industry.
and grain industry since 1992, his
Wayne Farms was initially a client
father, grandfather, and great-grand-
of his, buying the corn that he sold.
father before him were grain brokers.
Whether seller or buyer, good relation-
This deep well of experience is impor-
ships are key. “It’s a two-way street,”
tant in the industry, as Smith’s role
explains Smith. “You have to form
requires constant vigilance. “Working
partnerships and really work as a team
with live animals means there can’t
in order to both survive.” Within the
be a break in the supply chain,” says
company, relationship building focuses
Smith. “If the ingredients don’t show
on establishing close employee ties.
up, you can’t feed the animals and then
Not being a public company gives
they suffer. We never want that to
Wayne Farms greater control over its
happen, or even come close.”
internal operations. “Even with 9,000 w w w.suppl yc ha i ndi gi ta l. com
W AY N E F A R M S
148 employees,” Smith says, “it still feels
Understanding different levels of
like a family atmosphere.” Externally,
the industry allows Wayne Farms to
strong partnerships rooted in trust are
be flexible towards change. Since
important to ensure a steady, high-
Smith joined, the company went from
quality supply chain. Omaha-based
running nine to seven feed mills, an
the Gavilon Group is Wayne Farms’ top
adaptation to new demands by long-
corn supplier, in terms of both volume
term railway partner CSX corporation.
and service. On the soybean meal
Wayne Farms had three feed mills on
side, Wayne Farms can turn to its long-
the CSX line when the railway company
standing relationships with Cargill and
announced it would be upgrading from
Riceland Foods Inc. “These companies
65-car trains to 90-car trains and
are the best at what they do as far as
offered more streamlined service and
customer service and taking care of
improved rates for the latter. Wayne
Wayne Farms,” affirms Smith. “It’s about
Farms was proactive in combining the
working closely together every day.”
three feed mills into one that not only
FEBRUARY 2020
“ T HE DIGITAL AGE HAS ABSOLUTELY MADE WHAT WE DO SO MUCH EASIER” — Glenn Smith, Director of Feed Ingredient Procurement, Wayne Farms
E XE CU T I VE PRO FI LE
Glenn B. Smith Glenn B. Smith is a fourth generation feed and grain executive with 27 years of experience in the industry. Glenn has been the Director of Feed Ingredient Procurement since 2011 for Wayne Farms LLC, Oakwood, GA, purchasing and coordinating delivery for all bulk feed ingredients via barge, rail, truck, tote and bag delivery for 7 feed mills as well as overseeing risk management reporting and strategy for the 6th largest fully integrated poultry company in the United States. Glenn resides with his family in Cleveland, GA. He holds a BA in European History from Washington and Lee University.
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149
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CO MPAN Y FACT S
• Wayne Farms grew to the powerhouse it is today: the sixth largest fully integrated poultry company in the United States with seven feeds mills, seven processing plants, and US$2.2bn in sales • They have reduced demurrage costs by over 60% since 2012. In 2012, it was $1.6mn; last year, it was just over $600,000
produced more than the three com-
Supply chain within the poultry
bined but became the largest poultry
industry provides a unique challenge:
feed mill in America. A mutually benefi-
both cyclical and evolving. Crop prices,
cial decision, it is symptomatic of how
railway deals, weather conditions,
experience can be valuable in under-
barge costs; these can vary year-to-
standing the future. “The year after,
year. This means the ability to monitor
CSX completely pulled its 65-car train
and foresee changes is key in staying
program from the rotation,” explains
on top of the supply chain. There are
Smith. “Other companies were left
maintenance costs in the industry
stranded, but we had already made the
that are unavoidable. For these, such
investment to upgrade, looking ahead
as demurrage on barges and trains,
at sustainability.”
Smith says it is about reduction not w w w.suppl yc ha i ndi gi ta l. com
151
ROM THE THE FFROM
GR AIN UP BY FAMIL FAMILIIEES, S, FFOR OR FAM FA MIIL BY L IIEESS
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Visit Riceland.com to find products at a store near you.
“ W E’VE BEEN ABLE TO REDUCE DEMURRAGE COSTS BY OVER 60% SINCE 2012” — Glenn Smith, Director of Feed Ingredient Procurement, Wayne Farms FEBRUARY 2020
ITED
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USA
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Supporting local farmers and their families through carefully grown, quality grain.
E G
avoidance. “It’s just the cost of doing
have a saying in the poultry business:
business,” he says. “Monitoring and
everything is used but the cluck,” says
closer surveillance can help. We’ve
Smith. “Profitability is hard. Everything
been able to reduce demurrage costs
is useful. Nothing goes to waste.” The
by over 60% since 2012. Back then,
internet presented a major shift in the
the figure was $1.6mn; last year, it was
industry in terms of monitoring capabil-
just over $600,000.” One way Wayne
ity. Back in the 1990s, much of Smith’s
Farms keeps costs down is by recy-
role was monitoring train shipments,
cling everything, an industry standard.
making phone calls to find out exactly
The meat is sent to be processed as
where his shipment was. Now, railways
food, but any indelible by-products are
have apps that let him track exactly
repurposed into meal that is sold into
where every element of his supply chain
animal feed distribution channels. “We
is anytime in the day. “The digital age 153
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W AY N E F A R M S
“ T HEY SAY YOU NEED THREE THINGS IF YOU’RE GOING TO BE A GOOD SALESMAN: A QUALITY PRODUCT, GREAT SERVICE, AND THE BEST PRICE”
154
— Glenn Smith, Director of Feed Ingredient Procurement, Wayne Farms
has absolutely made what we do so much easier,” he adds. “It’s a much more streamlined role. This allows you to spend time on other more productive areas.” Despite how the industry has evolved, its fundaments remain unchanged. “They say you need three things if you’re going to be a good salesman: a quality product, great service, and the best price,” explains Smith. It is not enough to be the cheapest on the market, according to Smith. Long-term relationships mean communication and FEBRUARY 2020
the assurance for a steady high quality supply, worth a bump in price. Stability, after all, is the root of success within the poultry business. Wayne Farms processes 7mn birds a week, feeding around 80mn chickens on any given day. “It’s not just cost,” says Smith. “It’s making sure the quality products are getting there as you need them.” Continuity of service is a point of pride at Wayne Farms, particularly at its feed mill in Guntersville, Alabama, which has managed to go two years without any feed ingredient substitutions. On the whole, the industry has grown 1.5-2% over the past few years. Throughout, Wayne Farms, not being a major retail seller, has kept close ties to its customer base: restaurants and processing companies. “I think in five years’ time, we’ll maintain our commitment to quality and grow as the customer asks of us,” concludes Smith. “The future is bright.”
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155
156
TRANSFORMING MANUFACTURING STRATEGIES WRITTEN BY
WILLIAM SMITH PRODUCED BY
DENITRA PRICE
FEBRUARY 2020
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TRINITY INDUSTRIES
MIKE HEGEDUS, VICE PRESIDENT OF SUPPLY CHAIN MANAGEMENT AND PROCUREMENT OF TRINITY INDUSTRIES, REVEALS THE ORGANISATION’S EVOLVING APPROACH TO MANUFACTURING RAILCARS
T
rinity Industries’ operations extend across a broad range of railcar related services, as Mike Hegedus explains: “Trinity is a
full service railcar provider. We provide leasing services, new car building and maintenance ser158
vices. We’re an integrated provider and it gives us a lot of flexibility in what we offer to our customers. Increasingly we’re focusing on differentiating our products and our services in the marketplace.” As Vice President Supply Chain Management, Hegedus’ role encompasses several key functions. “My role is leading the supply chain, which includes procurement, supplier quality, supply planning and logistics.” Hegedus’ attention is currently directed towards an ongoing evolution in the business. “We’ve traditionally been fairly vertically integrated, making a lot of sub-assemblies and parts, but that is changing. We are becoming more innovation-focused, doing more final assembly and moving more and more each year to outsourcing sub-assemblies.”
FEBRUARY 2020
159
1933
Year founded
$2.51bn Revenue in US dollars
11,515 Number of employees
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TRINITY INDUSTRIES
“ TECHNOLOGY HAS BEEN KEY IN IMPROVING VISIBILITY, SYNCHRONISATION AND COLLABORATIVE PLANNING WITH SUPPLIERS” — Mike Hegedus, Vice President Supply Chain Management and Procurement, Trinity Industries
Much of that evolution has been in strategy. As with many manufacturers, offshoring is increasingly becoming a crucial part of the mix. “We segment our supply chain and certain parts make sense for offshoring such as commodity parts. We really leverage, for example, the low cost of steel and castings and forgings in China.” The attendant process of nearshoring is also increasingly a focus. “The larger the parts and sub-assemblies need to be, the more efficient it is to use nearshore suppliers. We’ve migrated
160
our production from the U.S. to Mexico and we continue to manufacture more in Mexico every year. We’re not just nearshoring to take advantage of low cost labor and manufacturing, it’s really about localising to get them near to our manufacturing plants. “In fact, we’ve gone a step further, where we’re now moving into a phase where we are co-locating suppliers on our facilities for even larger subassemblies – things that might not be effectively shipped on a truck. Making railcars, some of these subassemblies can be very large, so it makes sense for us.” FEBRUARY 2020
CLICK TO WATCH : ‘TRINITY CRAFTSMANSHIP’ 161 With a finished item as complex
hatches to load on the top and then
as a railcar, individual components
gates to discharge in the bottom,
demand differing approaches and
totally different to a rail car that car-
treatments. “Standard parts go on
ries automobiles, which has its own
many dozens of different types of
specialty items. All those are very car
railcar,” says Hegedus. “Every railcar
specific and those I can’t put on VMI.
has, for example, eight wheels, four
I just have to really monitor the lead
axles, brakes – basically the under
times. Our overall supply chain lead
part of the car is fairly consistent. That
times are defined by those specialty
is a supply chain where we can and
items.” Outside of these considera-
do set up vendor managed inventory
tions are raw materials such as steel,
(VMI) programs so those parts flow
and the aforementioned outsourced
in.” Specialty parts, those specific to
sub-assemblies, which he describes
different car types, prove trickier.
as “probably the fastest growing seg-
“A hopper car, for instance, will have
ment of our sourcing supply chain.” w w w.suppl yc ha i ndi gi ta l. com
TRINITY INDUSTRIES
162
“ WE’VE TRADITIONALLY BEEN FAIRLY VERTICALLY INTEGRATED, MAKING A LOT OF SUB-ASSEMBLIES AND PARTS, BUT THAT IS CHANGING” — Mike Hegedus, Vice President Supply Chain Management and Procurement, Trinity Industries
FEBRUARY 2020
163
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TRINITY INDUSTRIES
164
Enabling the increasing complexity of
Partners vital to the ongoing
an outsourced and co-located supply
transformation include the likes of
chain has required the assistance of
Expeditors International. “They’ve
technology, as Hegedus explains. “We’ve
been influential in helping us with our
put in RapidResponse from Kinaxis.
first foray into global logistics,” says
There’s a module within that which helps
Hegedus. “Offshore Asian Business
us to collaborate more closely with
Consultants has been our partner in
suppliers. That technology has also
setting up virtual sourcing offices. I’m a
enabled all of our VMI processes. A
believer that when you offshore sourc-
significant part of our supply chain is on
ing you still need someone local on the
VMI, but we’re still going down that path.
ground to proactively manage the qual-
Technology has been key in improving
ity.” The first supplier to be co-located
visibility, synchronisation and collabora-
on site was Amsted Industries. “They’re
tive planning with suppliers.”
providing truck assembly, the wheels,
FEBRUARY 2020
165
E XE CU T I VE PRO FI LE
Mike Hegedus Mike has been Vice President of Supply Chain Management and Procurement at Trinity Industries since 2013. Mike helps organisations transform their supply chains to meet strategic priorities. He connects the end to end supply chain from suppliers and procurement through logistics. Mike started his 25+ year career at IBM. Prior to Trinity, Mike was the supply chain and procurement executive at the Chamberlain Group and general manager of Sears’ home delivery and repair parts business. He holds a Ph.D. in industrial Engineering from Northwestern University where is major was optimisation.
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It’s what’s inside that keeps us at the forefront Celebrating 125 years of leadership in railcar components. Learn more at: minerent.com
axles, side frames, completely assembled to our lines right on site. They’ve paved the way.” Another key to Trinity’s enduring success can be found in its close collaborative relationship with key railcar component suppliers such as Miner Enterprises, Inc. Founded in 1894, Miner is renowned for its product development expertise, as well as its highly responsive global supply chain. “For Trinity and Miner, this relationship is a personal commitment on every level,” explains Ric Biehl, Miner’s
“ INCREASINGLY WE’RE FOCUSING ON DIFFERENTIATING OUR PRODUCTS AND OUR SERVICES IN THE MARKETPLACE” — Mike Hegedus, Vice President Supply Chain Management and Procurement, Trinity Industries
president and general manager. “Both
167
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TRINITY INDUSTRIES
168
FEBRUARY 2020
companies share an innovation-driven mindset that’s focused on perfecting railcar performance. And as one of the few privately owned, global suppliers of railcar components – from draft gears and outlet gates to hatch covers, side bearings, running boards, brake beams and more – Miner is able to be flexible, agile, and responsive to the changing market and customer needs. We work hand-in-glove with Trinity to make it easy for customers to do business.” The future will see Trinity continue on its journey, while also exploring new avenues. “We’ll continue outsourcing sub-assemblies so that we can focus on final assembly and convert our resources to focus on other parts of the value chain such as product innovation,” says Hegedus. “At the same time, our lease fleet and maintenance network has grown which has seen our aftermarket parts business become more important than ever. We’re embarking on creating an integrated supply chain across all those different parts of the business. That’s going to be fundamental.”
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Helping accelerate China’s transformation journey
170
WRITTEN BY
SEAN GALEA-PACE
FEBRUARY 2020
PRODUCED BY
CAROLINE WHITELEY
171
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EY
Rodrigo Cambiaghi, EY Asia-Pacific and Greater China Supply Chain and Operations Leader, discusses the EY acceleration in China and how the firm helps reshape supply chain strategies
C
onsidered one of the “Big Four” consultancy companies worldwide, EY is certainly well renowned in the
supply chain and manufacturing space. Offering guidance on best-practice supply chain strategies, EY has grown significantly over the past decade. Rodrigo Cambiaghi, 172
Asia-Pacific & Greater China Supply Chain and Operations Leader of EY, has been with the company since 2012 in several different roles and has experienced the firm’s growth first-hand. “11 years ago, we weren’t operating a consulting arm so we decided to rebuild it,” he explains. “Since then, it’s been an incredible journey — we grew $11bn in 11 years.” Born in Brazil before moving to Germany after college, Cambiaghi’s career path has taken him worldwide. “Germany was where my supply chain career started and I worked for large automotive OEMs to define their global manufacturing strategy. After a few years, I moved into consulting,” he says. From there, Cambiaghi’s career took him further into Europe and then onto Canada. “Together FEBRUARY 2020
173
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EY
174
“
Since then, it’s been an incredible journey — we grew $11bn in 11 years — Rodrigo Cambiaghi, EY Asia-Pacific & Greater China Supply Chain and Operations Leader, EY
with some friends, I started a boutique consulting firm that had a client portfolio of fast-growing global corporations. The reach and complexity of our clients forced us to scale quickly and to branch into different markets, one of those being the United States,” explains Cambiaghi. “My role was to establish and grow the business in the North American market and we became successful quite quickly. In 2012, we got an offer to sell the business to EY so I initially joined the organisation through acquisition and I’ve been here ever since.”
FEBRUARY 2020
CLICK TO WATCH : ‘EY SMART FACTORY’
With such a diverse background,
have always been important in China
Cambiaghi now operates in China as
but the complexity of the environment
well as across all regions in Asia-Pacific
has changed. China has become a
and possesses a deep understand-
vast market with high growth and a lot
ing of what it means to be successful
of emerging technology at its disposal.
in different markets. He points to the
It’s clear that speed is the greatest dif-
several differences across main global
ferentiator in China; starting with the
markets and the uniqueness of running
speed to serve consumers and clients all
supply chains in China. “China offers a
the way to how it transforms its partners
vibrant and diverse consumer market
landscape and internal operations with
that requires strong customer-centricity
technology.” Due to the acceleration
and innovative business models that
of new technologies and the existing
now can be enabled by advanced
global economic and political landscape,
technologies,” he says. “Supply chains
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175
EY
Adv
176
FEBRUARY 2020
vert
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EY
178
are turning to consultancies like EY for
by technology and will continue to do so
advice on how to set up a successful
for the foreseeable future. The end-to-
transformation agenda for the years to
end supply chain is where most of the
come. Cambiaghi affirms technology
companies generate their competitive
has become paramount to success
advantage through new technologies
industry-wide and beyond. “Technology
available today that we didn’t have a few
is reshaping every business in all indus-
years ago.”
tries,” he says. “From how you establish
With customer requirements subject
your sourcing and manufacturing
to frequent change, consultancies
platforms, to driving efficiency from
such as EY must remain prepared to
manufacturing sites through automa-
respond. “What consultancies like us
tion or harnessing data, all the way to
bring is the ability to work with com-
distribution connectivity and real-time
panies to reshape their strategy and
visibility. Everything has been impacted
then successfully transform their
FEBRUARY 2020
179
E XE CU T I VE PRO FI LE
Rodrigo Cambiaghi Rodrigo Cambiaghi is EY’s Asia-Pacific & Greater China Supply Chain and Operations Leader. In his role, Cambiaghi advises senior executives on supply chain and manufacturing strategies and acts as EY’s leader in complex transformational projects. Currently based in Shanghai, he has lived and worked in several countries across North America, Europe, Asia and Latin America. At work, he is widely known by his strong client centricity and his passion for talent development. He is married to his wife Anja and has three kids: Annie, Junior and Julie.
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Leading supply chain solutions powered by AI & ML JDA Software provides the leading AI-driven supply chain management (SCM) platform. Our end-to-end solutions span supply chain and retail planning, execution, delivery and workforce management. Our mission is to empower companies to better predict, make and deliver exactly what their customers want – when, where and how they want it. JDA delivers Autonomous Supply ChainTM for 4,000 of the world’s leading companies. Running JDA, you can plan to deliver. TALK TO US TO LEARN MORE info.china@jda.com / Greater China infoap@jda.com / Asia Pacific info@jda.com / Worldwide VISIT US www.jda.com
JOIN THE CONVERSATION
READ OUR BLOG blog.jda.com
“
The main difference is speed because China is undergoing a significant transformation at the moment
— Rodrigo Cambiaghi, EY Asia-Pacific & Greater China Supply Chain and Operations Leader, EY
With the importance of retaining the right staff just as crucial as recruiting, EY has around 270,000 employees globally and Cambiaghi believes that talent management is at the heart of EY. “We have a large talent pool and people are at the core of our business. You’re only as successful as the people who work for you and we’re extremely proud that we’re recognised as a top employer in all the markets,” he says. “Our values are aligned to the market and our brand not
operations for today’s business needs,”
only showcases a trusted organisation
says Cambiaghi. “We have been invest-
but also innovation. We’re able to attract
ing heavily on the development of digital
the best talent because of the opportuni-
assets that speed up the transformation
ties we have for our people to grow.” The
process for our clients. Those assets
size of EY’s supply chain talent work-
can leverage advanced technology to
force doubles every eight to nine months
quickly analyse the client’s data and
in countries like China, a statistic that
therefore provide more granular and
Cambiaghi is delighted with. “Today’s
specific feedback in early stage of the
market conditions are perfect because
transformation journey. Companies turn
there’s a lot of room for growth in our
to us to provide that market perspective
business,” affirms Cambiaghi. “Talent is
and see what’s going on in the industry
what we’re looking for and it’s everyone’s
and beyond, but they also want things
job. In China, I’m pleased how quickly
that can be fixed today without waiting
we’ve built such a strong reputation and
for a broader transformation to happen.
brand in the market because it allows us
For this challenge, we have highly expe-
to attract and retain top talent. It’s part of
rienced people with industry knowledge
our DNA.”
working for us. Having the right balance is the secret.”
Having formed key strategic business relationships with Microsoft, Stratasys, w w w.suppl yc ha i ndi gi ta l. com
181
EY
182
FEBRUARY 2020
1989
Year founded
$36.4bn+ Revenue in USD dollars
270,000
183
Number of employees
w w w.suppl yc ha i ndi gi ta l. com
A global leader in applied additive technology solutions Mass customization that redefines customer expectations and experiences. Low-volume production that creates extraordinary efficiencies. Redesigned production parts that transform supply chain dynamics. Prototypes that actualize your vision more rapidly and accurately than ever before. The 3D printing revolution sparked these possibilities. Now they have become a reality. Stratasys is advancing our customers and their industries through complete 3D printing expertise and solutions.
S T R ATA SYS .C O M
185 JDA and SAP, partnerships are a key
perspective because they’re well aligned
focus area for Cambiaghi. “A company
to meet our culture, values and how we
such as EY, which has the ambition to
drive relationships in the market to deliver
not only serve leading companies but
better value to our clients.”
also transform them too, we understand
“Stratasys is a leading company in 3D
that we can only do this by having an eco-
printing and their solutions and ability to
system of good partners. Our strategy
transform companies through additive
is to find partners that can complement
manufacturing is outstanding. We don’t
our services and way of doing business,”
just advise companies on what exists in
he explains. “We’re a trusted advisor for
the market today, but we also consider
large organisations’ transformations and
what comes next. Stratasys has been an
are taking them on a journey to transform
important part of driving differentiation
and upscale their strategy and business
in areas like product development and
model with technology at the forefront.
manufacturing,” affirms Cambiaghi. “JDA
Our relationship with Microsoft provides
and SAP are also both key components
that level of trust from a technology
of our ecosystem because they allow w w w.suppl yc ha i ndi gi ta l. com
EY
our clients to leverage leading solu-
connected worldwide and that allowed
tions in the most effective way possible.
us to come up with such an impactful
Partnerships are crucial to us but it
value proposition. It not only brings
needs to be right. There needs to be
leading practices by sectors, but also
that alignment of value and how we see
real solutions that can be a differentiator
the market in order to establish a recipe
on how transformations are strategised
for mutual long-term success.”
and executed. As we bring these solu-
Looking to the future, EY has con-
tions to our global cloud platform it
solidated its global knowledge and
enables every local market to use it
experience into a supply chain rein-
consistently unleashing a vast oppor-
vention framework which Cambiaghi
tunity for benchmarks and insights for
affirms is becoming a global standard
our clients” he explains. “Our Supply
for companies looking to transform
Chain Reinvention framework is also
their supply chain. “We’re extremely
very comprehensive. It covers aspects
FEBRUARY 2020
“
Our strategy is to find partners that can complement our services and way of doing business
— Rodrigo Cambiaghi, EY Asia-Pacific & Greater China Supply Chain and Operations Leader, EY
With a drive to maintaining its position at the fore of the consulting space, Cambiaghi understands the necessity of continuing to thrive in the supply chain space long-term through collaboof value chain intelligence and how
ration with clients. “It’s clear there’s lots
to obtain and leverage data from the
happening in all industries and having
extended value chain; through the
a trusted and experienced partner to
strategic architecture of the entire
rely on when needed is paramount
supply chain in areas like supply chain
for all senior executives today,” adds
segmentation and strategy, integrated
Cambiaghi. “That’s why our strategy is
operating model and supply chain
to continue to be the most trusted and
network and trade flow optimisation.
distinctive professional service organi-
It also goes all the way to the core of
sation in order to support our clients
supply chain operations excellence
to achieve their strategic objectives for
and aspects related to the supply chain
their supply chains in Asia and across
resilience like circular economy, sup-
the globe.”
ply chain risks and sustainability. It’s extremely comprehensive.” w w w.suppl yc ha i ndi gi ta l. com
187
188
Charting a course for the energy transition through procurement WRITTEN BY
MARCUS LAWRENCE PRODUCED BY
CHARLOTTE CLARKE
FEBRUARY 2020
189
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As BP’s procurement transformation goes from strength to strength, we speak with Mark Smith and Alex Thomson to discuss the pivotal role that Compass is playing on its enhanced operations
P
rocurement and digital transformation have become intrinsically linked in recent years. While the former has become more
central to business operations for organisations around the globe, the latter seeks to disrupt dated strategies and technologies that have become 190
increasingly incompatible with the demands of modern business. The combination of the two delivers profound benefits for organisations that can master such fine alchemy; offering agility, flexibility, leanness, sustainability and readiness for both business and geopolitical landscapes that are evolving faster than ever before. At BP, the launch of its proprietary Compass platform forms the backbone of procurement transformation within and beyond its Global Business Services (GBS) division. The platform, developed with scalability and flexibility in mind, enables integrated, end-toend, digitalised procurement processes. Offering ease of use, visibility, artificial intelligence (AI), automated source-to-pay (S2P) functions and a portal for external stakeholders, Compass is revolutionising the way procurement operates at BP. FEBRUARY 2020
Server room at the Center for High-Performance Computing. Photo © BP Images
191
Formulating BP’s new ACTIVE fuels. Photo © BP Images
Serving as the glue of the transformation, Compass brings vital components together from across the organisation to foster collaboration and visibility like never before. “Procurement and supply chain have been thought of as linear processes in the past,” says Mark Smith, Head of Strategy and Transformation for BP’s GBS Procurement organisation. “You start with a strategy, you end with a contract, you place an order and then, at some point, you’ll go back and restart. In the modern world, you’re w w w.suppl yc ha i ndi gi ta l. com
“ You’ve got to be efficient, but you’ve got to be effective. A number of companies have gone for efficiency – and that’s very good for function – but you’ve got to balance out the effectiveness of the output” 192
— Alex Thomson, Head of Procurement Services, BP GBS
constantly in all parts of that process. “There might be new and emerging technologies that force you to rethink a strategy you devised six months ago; there might be changes to your demand patterns that come out of your ordering behaviour, necessitating a review of your supplier portfolio.” Enabling effective management of these concurrent processes, Smith says, is Compass’s raison d’etre. “The process’s execution may exist in different systems, such as SAP Ariba or some of our legacy environments, but Compass provides end-to-end digital integration of all elements of procurement in one place.” Highlighting other factors driving the firm’s procurement transformation, Smith begins with the seismic shifts in the global energy market. “The world will require significantly more energy to support population growth and the prosperity that everyone is looking to drive,” he says, “but that energy needs to come with lower carbon. To do this, BP needs access to new ways of doing things, disruptive thinking and new technologies.” In procurement, this challenge can be tackled by optimising
FEBRUARY 2020
CLICK TO WATCH : ‘BP GBS – MARK SMITH, HEAD OF PROCUREMENT STRATEGY ON PROACTIVE OPERATIONS’ 193 the mechanics of its supplier inter-
technologies emerge, such as new
actions – a key component of the
battery technology or alternative forms
Compass platform.
of power and energy.” Smith summa-
Another considerable factor is the
rises: “The thrust of the procurement
attraction and retention of top-tier
transformation is around three things.
talent, both internal and external to
The first is people, the second is about
the organisation; the training and
enabling the organisation with the
development of whom can drive the
with the correct tools, and the third is
sharpest innovations which will assist
about combining both people and
in future-proofing the company as
tools together in order to harness BP’s
the wider industry evolves. “As the
data to drive value.”
world changes, the requirements are
Unlocking the nascent power and
changing,” says Alex Thomson, Head
enabling qualities of BP’s data has
of Procurement Services. “We must
required innovative but pragmatic
be agile and able to adjust as new
thinking, and Compass is the result w w w.suppl yc ha i ndi gi ta l. com
of such an approach. “We’ve thought
a similar fashion to a sale, with the
innovatively about our entire end-to-
related work being distributed to the
end process,” says Smith. “If you think
stakeholders concerned promptly and
about it, sales is the mirror image
accurately. In sum, the sales-esque
of running a procurement exercise,
process delivers vital data to the
and so we’ve used a sales platform
right specialists as required, provid-
repurposed in reverse to run our pro-
ing both democratisation of data and
curement processes.” Opportunities
enhanced visibility.
are funnelled through Compass in
While the benefits to efficiency are
E X ECU T I VE P RO FI LE
Mark Smith 194
Mark Smith is the current Director of Strategy and Transformation for GBS Procurement in BP (having previously held a similar position in Downstream Procurement since 2012), driving the Procurement operating model, systems and process transformation. Overall, Mark has over 17 years’ experience in functional strategy and business transformation, specialising in Procurement within oil and gas. Working with organisations such as Shell, Chevron, Babcock, Centrica, Taqa, Husky and Seadrill, Mark has experience across the Procurement lifecycle from Category Management to Source to Pay in Upstream, Downstream and Corporate and Functions supply chains. Mark holds an LLB (Hons) and Masters degree in IT from the University of Nottingham. He is married to Jackie and has two children, and recently completed his fifth marathon.
FEBRUARY 2020
clear, Thomson stresses that focus-
of the output. What you then enable
ing solely on making processes more
from the supply market to the users
efficient is tantamount to wasting
is appropriate for the output quality
opportunities. “You’ve got to be effi-
you need.” Through Compass, BP is
cient, but you’ve got to be effective,”
able to connect the end-to-end chain
he explains. “A number of companies
from strategy and category strategy
have gone for efficiency – and that’s
through to execution and the place-
very good for function – but you’ve
ment of commitment in the supply
got to balance out the effectiveness
market. “That adds efficiency to
E X E CU T I VE PRO FI LE
Alex Thomson Alex Thomson is currently the Global Head of GBS Procurement in BP. He leads a cross-regional, crossfunctional team that manages BP’s global Corporate categor y demand, covering areas such as IT and Business consulting, as well as being accountable for BP’s source-to-pay activities. Alex has over 30 years’ business experience in BP in a wide range of business roles. These include managing the performance of chemical businesses, leading strategic change in IT and Procurement and executing the delivery of major M&A projects. Immediately prior to his current role, Alex was Head of Country for BP in Malaysia and led the GBS Asia operation in Kuala Lumpur, supporting BP businesses and functions worldwide.
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195
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Mitigate risk through robust supply channels to maintain technical integrity and timely delivery
PROCUREMENT 4.0 – ARE YOU READY? Procurement has been at the forefront of adopting cloud-based digital platforms enabling efficient transacting processing. This transition to cloud that started with indirect purchasing has accelerated to direct materials. Key purchasing functions have gone a step further by building an ecosystem of solutions offering rich automation and intelligence lowering transaction costs by an average of ~30%. Some industries like oil and gas have lagged in digitalization due to a mix of high regulations, significant variations between upstream and downstream and history of acquisitions. Figure 1. lists some of the typical challenges these industries face in their procurement value chain.
• • • •
• Under-exploited early payment discounts • Delayed payments
• Blocked invoices • Lack of invoice status visibility
• • • •
• Supply Chain Financing • P-cards
• Receipt Settlement • 2-3-4-way match
Supply chain disruption due to supplier risks Incorrect spend categorization Poor savings visibility / category Absence of fraud prevention Dashboards Categorization Spend Analysis Sourcing Strategy
Process Activity Capability
• eRFx
• Challenges
Resolve • Lack of control in text based requisitions
• e-Invoicing • PO-flip
Pay
Identify
Assess
Receive Invoice
Pay
Source
Transact
Procure
Contract
Approve
Request
Evaluation
• Tender Mgmt • Qualification
Enable
• Limited category strategy • Unstructured cost reduction initiatives • Lack of collaborative platform • Insufficient buyer productivity
• Cumbersome vendor collaboration • Vendor Managed Inventory
• Lack of decision support for approvals
In our experience, such companies can accelerate their digital transformation journey by adopting an approach based on four key principles – a clear view of applications at the core, automating and optimizing in parallel, AI as a central part of data operations and building an agile culture. Digital Core: Transitioning from a jigsaw of legacy applications to a user-friendly digital platform starts with a clear definition of process that need to be part of the core and those that need to be part of the surrounding ecosystem. User experience needs to be at the center of this decision and supported by seamless data and process flows. We recommend associating productivity and cycle time KPIs with user experience to make this a quantifiable benefit. Automation: Process variability and disjointed workflows are prevalent in most organizations. While in an ideal scenario, streamlined processes are first developed and implemented, driving automation in parallel can release investments and capacity required to drive larger transformation programs. Looking ahead, these automated KPI driven processes form the cornerstone of the new solution. AI and data: The challenge of combining meaningful data for analysis and transaction processing has long existed. A bill of material that is common across supply and demand, item master with the right attributes, and supplier masters with well-defined descriptions are examples of elusive essential building blocks. This is one area where AI is playing a significant role in both helping clean current data sets and merging information from new data sets to provide meaningful reporting with a significant positive impact across procurement KPIs. Agile mindset: Most large companies have followed a traditional waterfall approach with multi-year timelines and complex program structures. Even companies claiming to
• Automated Approval Workflow • Exception Management
• e-Requisition • Guided Procurement
• Performance Management • Classification
Negotiate
• Bidding Process • Reverse Auction
• Rudimentary quote comparison • Manual sourcing process • Poor identification of sourcing opportunities
Contract • • • • •
Onboarding Contract Lifecycle Mgmt. Digitize Contracts Clause Standardization Approval Workflow
• Low contract compliance • Cumbersome contract obligation mgmt. • Long contract lead time
Fragmented process • • • • •
Maverick buying Non-compliant spend Disparate / fragmented landscape Un-intuitive UI Ineffective knowledge-sharing
• Supplier performance not linked to procurement decisions • Poor supplier risk assessment
© Infosys Consulting
adopt agile are largely adopting the waterfall-based QA stage-gate process. Adopting agile requires the upfront allocation of the right team with end users, solution developers working in close co-operation and acceptance of imperfect product versions as a natural part of developing the solution. This fast iterative cycle and close co-operation cuts the project delivery time significantly and has been proven to enable radical simplification of end-to-end processes. In summary, a mix of clear vision, new technologies, and an agile mindset is already enabling leading purchasing functions to accelerate procurement digital transformation. The timing is right for all organizations to accelerate their journey to procurement 4.0.
Robin Goswami Senior Vice President, Global Head – Energy (Oil and Gas) Practice, Infosys Ltd.
Robin Goswami is a Senior Vice President and heads the Energy (Oil and Gas) practice in Infosys. Goswami has been instrumental in building the oil & gas practice in the organization since its inception to its current stature. He is a transformative leader with over two decades of experience in the IT industry. He is also a member of the board of directors of two companies - an IT consulting firm acquired by the Infosys Energy practice, and a global consortium that sets data exchange standards for the Upstream Oil & Gas industry.
© 2019 Infosys Limited, Bengaluru, India.
“ The world will require significantly more energy to support population growth and the prosperity that everyone is looking to drive, but that energy needs to come with lower carbon. To do this, BP needs access to new ways of doing things, disruptive thinking and new technologies coming from the supply market” — Mark Smith, Head of Procurement Strategy, Performance and Transformation, BP Downstream
198 processes and visibility of information
is to move to a world where we’re using
as to where work is progressing along
much more guided buying, with con-
that continuum, as well as improving
sumer-like technology that allows end
the output because you can see
users to self-serve,” he says, noting
the quality and whether it’s meeting
that such innovations are revolutionis-
users’ needs.”
ing procurement’s position within the
The modular aspect of Compass
wider organisation. “Like many procure-
means that this solid foundation can be
ment organisations out there, we’ve
built upon and modified to reflect trends
really struggled with the notion that,
for years to come. One such element
every time you need or want some-
to be infused into the platform’s
thing, you have to go to procurement
capabilities is automation, with Smith
and they will slow the process down.
highlighting the S2P function as one
While we still have a way to go on that
area to benefit from the emergent tech
journey, we’re starting to see more use
thus far. “The intent of automating S2P
of self-serve catalogues, quoting and
FEBRUARY 2020
CLICK TO WATCH : ‘BP GBS – MARK SMITH, HEAD OF PROCUREMENT STRATEGY ON ACCESSING INNOVATION’
O U R PART N ERS
200
“Infosys are our partners responsible for developing and maintaining two key modules of our Compass platform: opportunity and case planning. The huge advantage we get from those two modules in Compass is in our ability to workforce plan, prioritise and operate our activities at scale. From those modules, we are able to assign resources to those activities, track them to completion and check their status. One of the things we’re really excited about as a development for this year, and into next year, is our work with Infosys to improve the user experience around the way cases f low through the procurement operation.” — Mark Smith
“App Orchid, with its AI capabilities that automate parts of the contract cycle, is a great example of BP using new ideas from smaller companies to increase effectiveness and efficiency in an agile way. BP has scale while companies like App Orchid have more agility and ideas of what’s possible with emerging technologies, and co-venturing brings together the best of both worlds.” — Alex Thomson
FEBRUARY 2020
201
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buying. The net effect of that is the creation of more space in the organisation to work through the innovation agenda.” While the automated S2P features have been in operation for a few years, the firm has more recently incorporated intelligent contract reading and analytics-focused AI into Compass, enabling seamless document scanning and archiving in a way that draws value from the respective data. “We’ve been working out a proof-of-concept to allow you to conduct those searches 202
with natural language processing. For example: ‘What was my caustic soda usage in the last ‘X’ months?’.
extra-organisation communications
Compass gives us a platform to inno-
with suppliers, the intricacies of pro-
vate from while adding capacity to the
curement have evolved to the extent
organisation,” adds Smith. “We’ve also
that multiple teams, with complemen-
added collaboration technology that
tary capabilities, are found along the
allows people to work on documents
operational chain. This increases the
together in real-time, along with 360
risk of silos with poor communication
degree views of all our interactions
which in turn hamper progress. “In the
with particular strategic suppliers.”
past, you would have your procurement
Collaboration at scale is an ascend-
team who were down the corridor, and
ant necessity for organisations, but
they would have conducted the entirety
Smith says that this is particularly
of the procurement process,” Smith
acute in increasingly complex pro-
explains. “In reality, much of that now
curement environments. Whether it is
is, and should be, operated at scale
internal teams liaising for a project, or
on the behalf of the entire enterprise.
FEBRUARY 2020
Since the implementation of
“ A lot of the effort that goes into procurement is effort that most of our workforce would rather not expend” — Mark Smith, Head of Procurement Strategy, Performance and Transformation, BP Downstream
Compass, our teams have seen innumerable benefits, including: the effective distribution of work, improved management of team activity backlogs and the balance of resources. Compass has created a better experience for all those working in and around procurement. The fresh degree of visibility and comparability that BP gains between its vendors and suppliers affords it opportunities to optimise costs and quality through partner selection, while simultaneously illuminating more sustainable options. “We
have been working specifically with some of our IT suppliers on reducing their carbon impacts,” says Smith. “Some of our cloud providers, for example, are big power users, and so we can work with them to understand the source of that power and whether renewable is an option.” Thomson echoes this sentiment, adding that growing data demands from all industries will see data centre power consumption continue to rise. “It’s not a binary case of using this w w w.suppl yc ha i ndi gi ta l. com
203
visibility to decide who we will and won’t deal with,” he says. “It’s about being conscious of footprints as we buy closed requirements, and encouraging sustainable strategy.” Compass, through its document scanning functions and end-to-end digitalisation, has also seen a marked shift towards paperless operations,
“ It’s not a binary case of using this visibility to decide who we will and won’t deal with, it’s about being conscious of footprints as we buy closed requirements and encouraging sustainable strategy”
the sustainability benefits of which speak for themselves. 204 “We have been able to elimi-
— Alex Thomson, Head of Procurement Services, BP GBS
nate what amounts to around a million paper invoices from suppliers each year,” enthuses Smith. “That’s a very tangible example of
in reacting to things we would have like
how Compass is reducing our envi-
to have better foreseen, or in manually
ronmental impact.”
collecting information that allows us to
Implementing such an exhaustive overhaul of procurement functions
make better decisions.” This effort, he enthuses, is better
naturally conjures concerns around the
spent on creativity and value added
ease with which a workforce will cope
tasks. “The organisation is somewhat
with the shift, but Smith is confident
frustrated by the drains on its ability to
that BP’s procurement teams have
act in a creative capacity because of
been receptive and supportive. “A lot of
the challenges in the data landscape
the effort that goes into procurement is
and the manual activity required
effort that most of our workforce would
to keep our operations running. We
rather not expend,” he says. “Such as
want to be orchestrating rather than
FEBRUARY 2020
205
executing those processes. As we
communication, collaboration, sus-
enter this world, we’re extremely pas-
tainability, and vendor management.
sionate about using technology to
Thomson says that flexibility, however,
move us into that creative space while
is the chief boon of the GBS-led pro-
helping the organisation to upscale in
curement transformation. “Being able
a way that, where necessary, supports
to adjust as requirements evolve is vital,
that journey.”
especially as supply markets around the
The sum of all these factors, Smith
world change pretty fast. Being able to
and Thomson highlight, is a shift in
take advantage of that through procure-
procurement’s capacity to enable
ment is a hugely positive change.”
the energy transition. Compass has revolutionised procurement within BP in many aspects: visibility, ease of use, w w w.suppl yc ha i ndi gi ta l. com
206
Transforming the procurement approach in transportation WRITTEN BY
SEAN GALEA-PACE PRODUCED BY
CHARLOTTE CLARKE
FEBRUARY 2020
207
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A R R I VA U K B U S
Ian Jones, Head of Procurement at Arriva UK Bus, discusses his company’s procurement transformation journey in the transport sector
W
ith a drive to deliver value-adding innovative procurement and supply chain solutions, Arriva UK Bus harbours clear
procurement transformational goals in the supply chain space. Ian Jones, Head of Procurement at Arriva 208
UK Bus, oversees the company’s procurement strategy and believes that sustainable long-term improvement within procurement and the wider supply chain is fundamental for success. “Over the past five years, we’ve really focused on transformation. When I first joined Arriva, there was a centralised procurement team in its infancy and a regionalised purchasing function,” he explains. He commenced building a synergised category management procurement team with supporting programme management, data extraction and categorisation underpinned with proactive analytics. “All the transactional activity was undertaken in five regions, each with their own purchasing team,” says Jones. “However, we felt we could achieve more leverage, control and compliance by centralising all activity through one location, FEBRUARY 2020
209
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A R R I VA U K B U S
“ Our journey isn’t at an end yet; it’s fix and fly. The plane is in the air and you’re fixing it as you go — we haven’t stopped” 210
— Ian Jones, Head of Procurement, Arriva UK Bus
FEBRUARY 2020
harnessing the power of strategic procurement in collaboration with purchasing. By implementing that, it enabled us to drive spend to first and second tier suppliers because of the control from the central location.” Prior to Jones’ tenure, Arriva UK Bus operated with five regions all creating Purchase Orders (POs). However, since switching to its centralised purchasing approach, Jones acknowledges its influence and believes it has enhanced efficiency significantly. “Our current approach drives process
CLICK TO WATCH : ‘MAKE YOUR BUS START’ 211 efficiency and we’re consolidating POs, providing greater ability to expedite,” explains Jones. “By communicating with the supply base instead of sending multiple POs at different times of the day, we can drive supply chain efficiencies via defined order cut off times which provides the opportunity for greater organisational alignment and ensuring resource availability at optimal times. The supplier then has the ability to pick for the consolidated order and then sub-pack, rather than pick, pack and dispatch on multiple occasions.” w w w.suppl yc ha i ndi gi ta l. com
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As part of Arriva’s procurement
it’s all about the ‘why’ and ‘how’ strat-
transformation journey, the first step
egy. The first thing we did was develop
was to get the right procurement
a why. We took inspiration from Simon
environment in place. This meant
Sinek, and we aligned our mantra with
a focus on people, data, holistic
his. His reasoning was that organisa-
spend management, process and
tions and people that understand their
policy. Secondly, Arriva looked at the
‘why’ are very successful,” explains
purchasing side of the organisation
Jones. “People in procurement can
before finally considering further
often give you the what, which is the
supply chain optimisation. Jones
delivery. However, they often scratch
believes that establishing these core
their heads on the why and the how.
first steps was essential to laying the
We’ve developed that why and how
groundwork for his company’s trans-
and linked it to the business’s strategic
formation journey to succeed. “To us,
pillars. There’s been lots of work and
E XE CU T I VE PRO FI LE
Ian Jones Ian Jones BA (Hons) MCIPS is Head Of Procurement at Arriva UK Bus. The role assumes responsibility for the management of all the business’ direct and indirect spend. He has more than 20 years’ Procurement experience within the profession after undertaking senior roles in Local Government, Manufacturing, Retail and Transportation. Prior to joining Arriva he was in the Procurement Leadership Team at Home Retail Group. He has an extensive track record of delivering multimillion pound/euro benefits for organisations whilst transforming teams.
w w w.suppl yc ha i ndi gi ta l. com
213
A R R I VA U K B U S
214
FEBRUARY 2020
this is ongoing to develop category managers and help them acquire softer skills to aid in the transition towards our strategic contract management programme as it’s linked to our journey through the stages of the procurement maturity curve.” Jones believes that strategic contract management is a core component to optimising the supply chain in order to better understand supply chain performance and manage risk. “The way to do that is by managing contracts in the right way and talking about innovation,” he says. “Our journey isn’t at an end yet; it’s fix and fly. The plane is in the air and you’re fixing it as you go — we haven’t stopped, we continue to deliver value for the organisation.” With technology becoming increasingly influential to operations in the supply chain space, Jones believes that procurement and purchasing teams can’t operate effectively without harnessing data efficiently. “We’ve developed a range of inhouse bespoke solutions in terms of technology,” says Jones. “We have a data scientist who has helped us develop these solutions. We operate w w w.suppl yc ha i ndi gi ta l. com
215
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217
a comprehensive project tracking
“ We’ve developed a range of inhouse bespoke solutions in terms of technology” — Ian Jones, Head of Procurement, Arriva UK Bus
tool, running circa 100 projects every year. This supports programme management, business communications, financial reporting and automated MI. It’s a key conduit between finance and procurement portraying the breakdown of the value that’s delivered by region.” Such bespoke equipment includes a sophisticated spend categorisation tool and an engineering parts usage anomaly tracking tool. “The spend categorisation tool is intelligent enough to w w w.suppl yc ha i ndi gi ta l. com
A R R I VA U K B U S
“ The benchmark in the retail industry is set; people want things and they want them now” — Ian Jones, Head of Procurement, Arriva UK Bus
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objective is to examine these positive and negative ‘outliers’ using the various views available to ultimately establish if an efficiency opportunity exists. This enables all the standard questions to be taken out of the equation because fleets vary by volume, variant and specification.” In a bid to provide the company with an added layer of control, procurement has also built a part number extraction tool. The tool provides us with the ability to ensure that parts are purchased from contracted suppliers, thus driving compliance and ensuring extract and categorise spend infor-
the right part and quality are delivered,
mation from free text strings, from this
this is in addition to other tools we
we build automated MI dashboards
utilise.“This tool is vital because safety
that deliver pertinent spend informa-
is essential and this helps to ensure
tion in a range of formats to support
the first tier preferred suppliers
category management and the busi-
secure the volume,” says Jones.
ness. It’s extremely sophisticated,”
Arriva places considerable trust on
explains Jones. “With our parts usage
its supplier relationships as it seeks
anomaly tool, it allows us to identify
to drive continual value, more than
extraordinary usage of engineering
just transactional interactions. “This
spare parts within particular depots,
is the next stage of the transforma-
vehicle types, and events relative to
tion,” says Jones. “We have built a
other depots, across various different
supplier contract management pro-
views using statistical significance
gramme focused on 25 segmented
to three standard deviations. The
suppliers. In order to achieve this, w w w.suppl yc ha i ndi gi ta l. com
219
A R R I VA U K B U S
Arriva are working with suppliers such as Cordant Cleaning, PSV Glass and SSE in a bid to drive innovation, continuous improvement, enhanced quality and environmental standards. “We’re looking to work together with our partners on key initiatives,” says Jones. “For example, we have a big waste and recycling agenda and with Cordant being an extension of our business they can support us in further increasing our recycling volumes because lots of our recycling comes 220
from vehicles. It’s about health and safety as well as corporate social responsibility. All of our supplier
“ We were proud to be the first major transport operator in the UK to purchase 100% renewable electricity” — Ian Jones, Head of Procurement, Arriva UK Bus FEBRUARY 2020
partnerships are important and we were proud to be the first major transport operator in the UK to purchase 100% renewable electricity from SSE Business energy.” Looking to the future, Jones has a clear idea of what he anticipates the future of the supply chain space to look like. “The future will be about immediacy, with products delivered to locations just-in-time in a cost-effective and efficient manner through sophisticated technology,” he says.
221
“The benchmark in the retail industry is
significant area of interest. Over the
set; people want things and they want
next few years, we’re going to be con-
them now. It’s the same for us - if
tinually assessing our fleet as the
we’ve got a vehicle off the road and we
industry moves towards more zero
need a part, we want it sooner rather
or low emission vehicles or zones.”
than later.” With ambitions on becoming the mobility partner of choice, Arriva strives for its customers, passengers, public transport authorities and partners to choose the firm every time because of its trust to deliver high-quality, reliable and sustainable services. “The environment is another w w w.suppl yc ha i ndi gi ta l. com
222
FEBRUARY 2020
Vodafone Procurement Company: transforming the approach WRITTEN BY
SEAN GALEA-PACE PRODUCED BY
CHARLOTTE CLARKE
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V O D A F O N E P R O C U R E M E N T C O M PA N Y
Ninian Wilson, Global Supply Chain Director and CEO of Vodafone Procurement Company, discusses his organisation’s transformation journey and procurement strategies in the supply chain space
T
ransformation. It’s the major trend of the supply chain industry. And with good reason — it is essential to achieving sus-
tained long-term success. Ninian Wilson, Global Supply Chain Director and CEO of Vodafone Procurement Company, has been with the organi224
sation since 2009. He initially joined in an IT role before transitioning into his current role in 2016. As one of the first objectives upon his arrival, Wilson helped establish a transformation strategy for the organisation. The strategy, called ‘Our House’, was created with a clear mission statement: to be the best digital supply chain management (SCM) team in a connected world, powered by people and partnering to create value through innovation and ecosystem management. There are four main rooms of the house: the kitchen, games room, garage and dining room. “The kitchen is owned by the Chief Operating Officer. The best things happen in the kitchen, so naturally that’s where we run operations from,” explains Wilson. “In the garage, we have our innovation centre where we incubate small companies that can create value, whether FEBRUARY 2020
225
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V O D A F O N E P R O C U R E M E N T C O M PA N Y
“ Our House’ is built on solid foundation blocks around health and safety, purpose and inspiring our people” — Ninian Wilson, Global Supply Chain Director and CEO, Vodafone Procurement Company
that’s increased revenue, profit or taking costs out of Vodafone. The games room allows us to trial new things. For example, we try new technology to use internally in supply chain management. If it works, we scale it. If it doesn’t, then
226
we simply turn it off. Finally, we have the dining room, which represents our supply chain management sales. We work with external clients; not just for Vodafone. We invite those external clients into the dining room to see what we’ve developed and to support them in their procurement activities.” With that clear plan in place, Wilson believes the reason the house strategy has been successful is because it allows the different categories to be split up and looked after individually, while also enabling staff to take responsibility for their respective areas. “‘Our House’ is built on solid foundation FEBRUARY 2020
CLICK TO WATCH : ‘ARCH SUMMIT 2019_NINIAN WILSON – CEO, VODAFONE PROCUREMENT COMPANY’ 227 blocks around health and safety, pur-
With technology beginning to take a
pose and inspiring our people,” he
firm hold in the supply chain industry,
explains. “When I first joined, our staff
Vodafone Procurement Company has
decided to renovate the house, took
become more data-focused, building
ownership and transformed it by chang-
inconsiderable digital visibility into
ing some of the themes. It’s great when
supply chain operations. “We’ve built
people feel that the whole SCM organi-
a procurement control centre here in
sation is their house and they own it.”
Luxembourg that gives us a view of
Vodafone Procurement Company
every single purchase order from the
oversees its procurement opera-
operating companies in near real-time.
tions in Luxembourg via a centralised
We can then map all of our perfor-
procurement model. The organisa-
mance metrics into that near real-time
tion manages 83% of Vodafone’s
platform,” says Wilson. “We’ve added a
overall spend and supports all 24
tremendous amount of digital visibility
of Vodafone’s operating companies.
into our supply chain operations, AND w w w.suppl yc ha i ndi gi ta l. com
VMware helps power Vodafone’s network cloud of the future.
telco.vmware.com VMware is part of Dell Technologies. © 2019 VMware, Inc. VMware and Realise What’s Possible are trademarks of VMware, Inc.
Vodafone: Building a Network Cloud of the Future Worldwide, communications service providers (CSPs) are adopting software-defined virtualised platforms and services as they evolve their mobile networks for the upcoming introduction of 5G. That’s because Network Functions Virtualisation (NFV) streamlines the design and deployment of networking services and automates their operation—all while enabling scale and cost-efficiency. Vodafone Group—with mobile operations in 25 countries and fixed broadband operations in 19 markets—is working with VMware to support its global rollout of virtual network functions. Vodafone is using NFV and software-defined networking technologies across apps and networks to accelerate its delivery of cloud-based network functions. “Virtualised, cloud-native network functions are a critical element of our Group-wide program as we continue to transform how we build, operate and evolve our networks and services,” says Matt Beal, director of technology strategy and architecture at Vodafone Group. “Reducing the time and cost to deploy and operate services, using automation and convergence in standardised cloud environments for both our network and IT businesses, is a critical part of our technology and operational transformation strategies.” VMware helps CSPs like Vodafone create new revenue streams, open new industry opportunities, drive down costs and improve overall customer satisfaction by enabling them to become nimbler and more responsive. VMware provides an optimal infrastructure for all telco applications and services: customer-built, packaged, virtualised, cloud-native and software as a service (SaaS). With this infrastructure, CSPs can deliver those applications securely to any endpoint across a telco distributed cloud, including private and public cloud, branch/edge, micro data centre, gateway or end user. Companies like Vodafone can roll out multiple applications on a common NFV infrastructure, rather than building new platforms for each innovative service. The VMware-based virtualised infrastructure also provides a common architecture spanning network and IT operations, further improving operational efficiencies and overall economics. With VMware, CSPs have the flexibility to choose from several certified VMware Ready™ for NFV virtual network functions, providing confidence in pretested and pre-certified solutions that can reduce deployment risk. “Vodafone’s selection of VMware to support network transformation highlights how we are a proven, strategic software innovator that can help CSPs successfully deliver new services faster while driving down costs,” says Shekar Ayyar, executive vice president and general manager, Telco Group at VMware. “Our VMware vCloud® NFV™ platform is an agile and flexible virtualised infrastructure platform. Combined with Carrier-Grade Support, this will provide Vodafone with an open platform for new service development today, with an architecture that will support 5G deployments in the future.”
V O D A F O N E P R O C U R E M E N T C O M PA N Y
230
to help create that capability we’ve
we have a separate budget to try new
employed several data scientists. It’s
things which may or may not work,”
a truly international operation and the
explains Wilson. “Once we’ve seen,
team helps us to remain focused on
understood and analysed a specific
digitalising everything we do in the
technology, we then create a business
supply chain.”
case for implementation and are rigor-
Although Wilson recognises the
ous on how we implement that new
value of implementing technology,
technology and capability within the
he believes it’s important to not just
organisation.” Over the past few years,
introduce new processes for the sake
Vodafone Procurement Company has
of it. “There are things you should
sharpened its focus on digitalisation
try to see if they work, because it’s
significantly. To Wilson, operations are
important to improve your capabilities
centred around ‘performance manage-
and knowledge. That’s why we ensure
ment and metrics’. “If you think of that
FEBRUARY 2020
E XE CU T I VE PRO FI LE
Ninian Wilson, Ninian joined Vodafone on 1 June 2009 as SCM IT Director, and was appointed to the board of the Vodafone Procurement Company in November 2009. From 2014-16 Ninian held the role of SCM Technology Director, and was responsible for all technology sourcing in Vodafone including networks, IT and new product development. In March 2016 he was appointed as Director of Group SCM and CEO of the Vodafone Procurement Company. Prior to joining Vodafone, Ninian held the position of Operations Director for Royal Mail plc, managing the largest workforce in the United Kingdom with full accountability for the delivery of Royal Mail’s customer promise and its transformation programme. Previously, Ninian held senior positions in Cable & Wireless plc. (Chief Procurement Officer & Group Property Director) and was a member of the board of the Caribbean Business Unit and Trustee of the Pension Scheme. Ninian was educated at Aberdeen University and holds a Bsc Hons degree in Geography. He is also a member of the Chartered Institute of Purchasing & Supply and a life member of the Institute of Directors. Ninian lives in Luxembourg with his wife Philippa.
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V O D A F O N E P R O C U R E M E N T C O M PA N Y
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FEBRUARY 2020
233
2008
Year founded
250
Number of employees
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Making the difficult feel easy Delivering significant savings and strategic insight into your tactical and tail spend, reducing risk and increasing managed spend across your supply chain.
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transactional activity, it’s all digitalised
With continuous improvement a key
and metric driven. The next step we’re
component of Wilson’s mantra, he
working on is adding artificial intel-
believes that you can’t afford to stand
ligence (AI) into our processes,” he
still. “If you win a gold medal at the
says. “In our procurement organisation,
Olympics, you’ve done very well in your
everything is digitally presented on
particular sport, but the people who
scorecards. There’s no PowerPoint
really stand out are the ones who win
presentation. Over the past year, we’ve
consistently and keep on breaking
slowly increased our interest in AI
world records,” he says. “This applies
and machine learning (ML), which is
to us because we want to have a mental-
centered around category manage-
ity where it’s about being excellent at
ment and the tender process. It’s a
what we do and continually improving
work in progress and will enable us
all of our metrics, costs and perfor-
to ensure we’ve covered all the pieces
mance. It’s a mindset which we have
of the value stream and digitalised over
here in the leadership team and in
a three to five year journey.”
supply chain management.” While Wilson believes his organisation is in a great place, he also understands the necessity of striving to be better every year. “It’s so important that we all have the mindset around improvement
“ It’s a truly international operation and we remain focused on how they can help digitalise everything we do in the supply chain” — Ninian Wilson, Global Supply Chain Director and CEO, Vodafone Procurement Company w w w.suppl yc ha i ndi gi ta l. com
235
V O D A F O N E P R O C U R E M E N T C O M PA N Y
236
FEBRUARY 2020
and excellence, because we can always do better every year,” says Wilson. “Everyone else in procurement improves, so you’ve got to keep trying to enhance yourself, team and function. I’m a great believer in continuous improvement and striving for things that seem impossible.” Vodafone Procurement Company values its collaboration with other companies. Wilson points to the 12 strategic partnerships which exist
— Name of Person, Position and company
as key network and IT vendors. “Our partnerships are grounded in strong commercial foundations. For example, if we’re working with a technology partner with state-of-the-art technology, then we think about how we manage those relationships so that we both get mutual benefit,” he explains. “Every two months there will be a 90-minute check-in for some of the key technology partners. There are two parts to the agenda; there’s a review of performance and then there’s new releases that the vendor would like to come and talk to us about.” Looking to the future, Wilson believes that Vodafone is built for success in the ever-evolving supply chain industry w w w.suppl yc ha i ndi gi ta l. com
237
V O D A F O N E P R O C U R E M E N T C O M PA N Y
238
“ I’m a great believer in continuous improvement and striving for things that seem impossible” — Ninian Wilson, Global Supply Chain Director and CEO, Vodafone Procurement Company FEBRUARY 2020
239
over the next few years. “We have
and that’s a really positive develop-
a tremendous European platform
ment for the industry. Ultimately,
now, following the acquisitions which
digitalisation and transparency will
we completed last year in Germany
walk hand in hand together and con-
and central and eastern Europe,” he
tinue to transform the supply chain
explains. “In terms of future evolution
over the next five years.”
of the industry, I think we’re seeing more automation of the menial tasks and more AI and ML being leveraged. Blockchain is also becoming more important in the supply chain space w w w.suppl yc ha i ndi gi ta l. com
240
THE POWER OF THE PERSONAL IN SUPPLY CHAIN MANAGEMENT
FEBRUARY 2020
WRITTEN BY
MARCUS LAWRENCE PRODUCED BY
CAITLYN COLE
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241
ROHIT DARODKAR
Supply chain thought leader Rohit Darodkar discusses the strategic approaches that generate success in the sector
T
he nature of supply chain operations is as diverse as business itself. For every country of operations, international rela-
tionship and industry or sector, the complexities of procurement, logistics and supply chain morph and shift. Executives in the space often settle within 242
their niche, but one who has not only led operations in multiple industries but in wildly different territories is Rohit Darodkar, currently Global Procurement and Logistics Manager at Tritium, an Australian firm dedicated to EV charging infrastructure. Having begun his career in India in a graduate supply chain role at Tata Motors, Darodkar moved to Australia to complete his master’s in Mechanical Engineering at Queensland University of Technology, then his master’s in Business Management at Griffith University, majoring in Aviation. After that, Darodkar joined the newly instated Australian operations of Indian car manufacturing giant Mahindra & Mahindra where he remained for over six years. “I worked in positions from warehouse manager to spare parts manager and operations manager and, in those roles, I developed strategies and FEBRUARY 2020
243
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ROHIT DARODKAR
“ You’ve got the challenge of generating demand for a particular product, having a proper strategy in place to support that demand, and ensuring the cost of the product still makes sense for it to be developed, manufactured and sold in Australia” — Rohit Darodkar, Global Procurement and Logistics Manager 244 a dedicated focus on continuous
“The Australian market is very different
improvement of end to end supply
to other corners of the world,” he says.
chain management,” says Darodkar,
“The majority gets manufactured in
reflecting on his early career.
China, Korea or Thailand; very little
“In Australia, Mahindra was estab-
is local. The supply chain therefore
lished in 2007 and I joined in 2010,
becomes a strategic challenge because
so it was a really new organisation for
you cannot simply store these parts on
the Australian market whilst already
your shelf. You have to order a certain
having a huge domestic footprint in
amount to make it logical to pay freight
India.” During his time with Mahindra,
charges on particular parts.” The ques-
Darodkar was deeply involved in
tion, Darodkar elaborates, is how to
post-system development and the
justify bulk orders from overseas when
establishment of effective supply chain
the demand for the related parts isn’t
strategies for the company’s work in
there. In addition to that, the lead time
Australia, a drastically different busi-
for such orders, along with the cost,
ness environment to its native India.
must also be carefully balanced to avoid
FEBRUARY 2020
245
shortfalls in vital stocks for manufac-
making this balancing act far less chal-
turing. “You’ve got the challenge of
lenging to maintain, but the importance of
generating demand for a particular
robust strategies cannot be overstated.
product, having a proper strategy in
For Darodkar, effective relationships
place to support that demand, and ensur-
with vendors and employees are
ing the cost of the product still makes
among the most potent tools a supply
sense for it to be developed, manufac-
chain executive can access. He says
tured and sold in Australia. An excellent
it is important to remember that “every-
storage strategy needs to be in place
one’s in this business to make money”,
and maintained through Order Pattern
and that holding this reality at the front
Method, Reorder Point Process Method
of his mind when managing vendor
and Control Rhythm Method.”
relationships is vital to striking the bal-
Technology is increasingly providing
ance between cost and quality. “The
the answers, with data-driven insights
more you squeeze on cost, the more w w w.suppl yc ha i ndi gi ta l. com
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it is reflected by the supplier in the
will buy the end product, and everyone
product quality they deliver.” Of course,
will go out of business.” There is a com-
pricing strategies must reflect market
petitive edge to this as well, as
viability — as everyone is in the busi-
manufacturers are rarely short of
ness to generate value, costs must be
options when it comes to vendor selec-
in line with the feasibility of selling the
tion. “You must always check where
end product. “You need to be open
you stand in the market,” Darodkar
from a business perspective, negotiate
says. “You cannot just rely on one sup-
those costs and manage the supplier
plier for a product. Supply chain is a
by explaining that, if they cannot
demanding and continuously evolving
reduce the cost of a product, nobody
sector — you need to keep your eyes
E XE CU T I VE PRO FI LE
247
Rohit Darodkar With more than 15 years’ management experience in supply chain, logistics, transport and FMCG industries, Rohit Darodkar possesses a unique range of skills and experience delivering best practice management and leadership to a wide variety of international organisations. An experienced and commercially driven supply chain professional with demonstratable and proven experience in people management, process planning and information technology transformation, he is an expert at synchronising supply with demand and developing supply chain strategies that significantly impact profitability and increase the total value of a business. He demonstrates excellence in working through the 3 Cs of supply chain leadership — Communication, Collaboration and Change — and turning the business model into a profitable one.
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“ You need to accept that you won’t ever have 100% support, and you need to accept that you cannot make decisions alone simply because you are the boss” — Rohit Darodkar, Global Procurement and Logistics Manager
industries. All of these factors are being affected by rapid shifts in customer and consumer buying-behaviour. Many markets which used to be purely local or
open to new developments and offer-
regional have now become global, as
ings.” Reflecting on this not only enables
have the supply chains that serve them.
the best value in product acquisition, but
As a supply chain leader, you need to
also ensures suppliers do not rest on
focus on what lies ahead and, to some
their laurels when it comes to appealing
extent, be able to predict it. This can
to their own clients. He continues: “The
only be possible with a thorough under-
supply chain world is changing rapidly,
standing of market dynamics.
sometimes unpredictably, in line with the market dynamics across many
“Another thing,” Darodkar adds, “is to be mindful of the professional relationship with vendors. You need to maintain the bond with them that their product is not only required but is at the heart of your operations. They need to know they are important to your organisation, that their quality is good and that you expect that quality to be maintained. You must set KPIs for that quality, for deliveries and so on, but it’s a two-way relationship. If you give freedom for them to set KPIs for you as well, such as sales targets, w w w.suppl yc ha i ndi gi ta l. com
249
ROHIT DARODKAR
timely payments and the like, it becomes a more open relationship and they take more interest in the business’s success and how they can influence it.” Internally, Darodkar says a keen focus on managing change is also imperative to effective supply chain operations, particularly in the age of digital transformation. “People come to do things their own way, and there’s always a resistance to learn new things,” he says. “As the world evolves, 250
you need to evolve, and change is the only thing that’s constant. As soon as you accept that change and believe that it’s important to your organisation, resistance goes down.” In manufacturing, it is not only changing technologies
“ If you give freedom for vendors to set KPIs for you as well, such as sales targets, it becomes a more open relationship and they take more interest in the business’s success and how they can influence it” — Rohit Darodkar, Global Procurement and Logistics Manager
FEBRUARY 2020
251
that necessitate a pro-change mindset,
“You need to accept that you won’t
as the iterative nature of products
ever have 100% support, and you need
means processes are similarly prone
to accept that you cannot make deci-
to alteration and optimisation. Instilling
sions alone simply because you are
this vital cultural component is one of
the boss,” he explains. “You need to
the leading challenges faced by execu-
have confidence in your people to
tives in every department of every
ensure that the decisions you make
industry undergoing transformation,
are effectively communicated and that
but Darodkar believes the answer to
everyone is on the same page. At the
the riddle lies in the personal.
end of the day, no organisation is run w w w.suppl yc ha i ndi gi ta l. com
ROHIT DARODKAR
252
FEBRUARY 2020
“ Flexibility will ensure that change will not faze you or cause you undue stress. In turn, your team will be encouraged to embrace, rather than resist change” — Rohit Darodkar, Global Procurement and Logistics Manager
by one person, it’s always a team effort. You need to understand your people and your resources, what works for them and what doesn’t, and from there you can better understand how to convince someone to come on board. Sometimes a simple coffee table discussion works, sometimes you need to take someone out for a beer, sometimes you need to be a strong authority, but often you don’t need to be pushy. Flexibility will ensure that change will not faze you or cause you undue stress. In turn, your team will be encouraged to embrace, rather than resist change. If what you are doing is right, people just need time and they will come on board.” w w w.suppl yc ha i ndi gi ta l. com
253
Keeping communities moving
254
WRITTEN BY
DAN BRIGHTMORE PRODUCED BY
CAITLYN COLE
FEBRUARY 2020
255
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TRANSDEV AUSTRALASIA
Transdev’s mobility team is tackling change management to navigate huge improvements across its Australasian public transport operations
“
W
e’re managing over 2,000 passenger train services each week on 154km of train track running on a 1,500 volts DC system,
operating 83 Matangi class electric multiple units and loco hauled coaches across five lines.” The scope of Jonathan Tulitt’s role at Transdev 256
Wellington is vast. Recently taking up the Wellington-based post of General Manager of Operations, Tulitt oversees the day-to-day operations of the Greater Wellington regional passenger network, ensuring that it runs to timetable with minimal disruption. Looking at the whole scope of business elements from leadership of the Onboard teams (Locomotive Engineers, Train Managers and Passenger Operators), maintaining a high level of network performance, management of the Service Control Centre and Network Facilities, as well as service planning functions, Tulitt draws on a wealth of experience across a decade in the rail sector. “I first joined Transdev as a Fleet Controller working inside the control room at Britomart Train Station in Auckland as a frontline staff member monitoring rolling stock movement,” recalls Tulitt. FEBRUARY 2020
257
14mn
Passenger journeys per year
2,000+
Passenger services per week
5,700 Number of employees
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TRANSDEV AUSTRALASIA
“ Whether it be new technology, or improvements to back end operations, we’re introducing new systems to better track performance and ensure it’s at 258 the forefront of what we do” — Jonathan Tulitt, General Manager, Operations, Transdev
“I moved into a project management role delivering electronic train protection across old rolling stock, and from there I took on depot operations management — overseeing service operations of a new depot when we transitioned into electric train operations.” Since then Tulitt has progressed through several roles, including Acting COO in Auckland, which sees him well placed to drive new initiatives and innovations as the company embraces transformation. Tasked with turning under-performing business functions around, such as disruption management, and keen to re-engage staff to ensure Transdev delivers a consistent high performing service, Tulitt’s achievements in his first six months in Wellington are already evident. “I’ve introduced a comprehensive performance improvement plan in Wellington, focused on lifting levels of service performance back up from the previous high 80s into the high 90s,” he says. “Whether it be new technology, or improvements to back end operations, we’re introducing new systems to better track performance and ensure it’s at the forefront of what we do.”
FEBRUARY 2020
CLICK TO WATCH : ‘APPLY NOW TO BECOME A TRANSDEV DRIVER IN WELLINGTON’ 259 Tulitt is working with all of Transdev’s
and transparent work ethic through my
internal and external stakeholders to
management and leadership team,” he
develop a concise plan while support-
says. “To me, it means doing what I say
ing additional upgrade work across
I’m going to do, following through on
the network so that, when new infra-
my commitments and ensuring that I
structure comes online, his team can
involve my staff, and our internal stake-
utilise it to its maximum capability via
holders, in all of the decisions we make.
timetabling, optimised staff utilisation
It’s been a tough culture shift, and a
and rolling stock management.
trust building exercise not just for my
As Tulitt’s team execute his improve-
frontline staff and management team,
ment plan, the importance of having
but for me too. I’ve had carte blanche
the right culture to achieve Transdev
to run things as I see fit, and that brick
Wellington’s goals cannot be over-
wall of trust that I’ve chosen to rebuild
stated. “At Transdev Wellington I’ve
in the short time that I’ve been here is
tried to instill an inclusive, open, honest
really paying off.” w w w.suppl yc ha i ndi gi ta l. com
TRANSDEV AUSTRALASIA
260
Tulitt admits it’s been a challeng-
mould that vision with the staff so they
ing process for frontline staff, but
understand where we’re trying to go
they’ve risen to the challenge. “It’s a
and bring them on the journey. It’s been
well-established, heavily unionised
a key piece of the puzzle that’s been
business where perhaps it’s not always
missing previously.”
been easy for staff to trust manage-
Technology has played a role in that
ment, but our commitment to being as
culture shift. “Introducing new technol-
honest and transparent as possible
ogy is always a challenge,” maintains
is helping us move away from an ‘us
Tulitt. “We have an older workforce
and them’ mentality so we can deliver
that are actively embracing the new
initiatives together.” He stresses the
technology; the driver tablets we’re
importance of using the right forums
introducing essentially replace the
to get feedback and incorporate that
paper function of the business. When
with company strategy. “We’ve got to
a locomotive engineer books on they
FEBRUARY 2020
E XE CU T I VE PRO FI LE
Jonathan Tulitt Jonathan Tulitt joined the Air Force fresh out of school where he spent 10 years working as an Armament Technician. It’s an experience he credits with nurturing his belief in the importance of building trust in teams. “It really set me up for where I am today,” he confirms. “It’s essential in my role to build a solid trust network around you, not just in your frontline staff, but with your leadership colleagues too. We need to be able to lean on each other as required, bounce ideas off each other and take a collaborative approach.” Tulitt brings expertise in management gained from different sectors. “Just because we’ve always done something a certain way it doesn’t mean we have to keep doing it that way. Is there a better, safer or more efficient way to progress? I’ve hired people from aviation to retail and beyond to bring a wide cross section of experience to our network, enabling us to innovate more smoothly than we used to. It’s been really valuable to remove those blinkers and make sure we can see the wider picture across multiple industries to make what might seem like simple decisions with far reaching and positive outcomes.”
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must have all of their paperwork (bulletins, rules, procedures) – it can weigh up anything from three to six kilos! We’re now giving them access through a digital portal so they can synchronise each morning when they turn up, and at the start and end of each of their journeys. They will have the latest information at their fingertips wherever they are, in real time. The feedback from trials has been really positive.” Tulitt is also managing the transition of manually produced rosters to an electronic
Promoting business excellence throughout rail operations Proud to be working with Transdev Australasia
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Captures the right information at the right time from the right people Sets, tracks and reports on actions ensuring delivery of all business critical activities Instills best practice through consistent behaviours Drives business improvement by giving a comprehensive understanding of performance
Mobile Application Industry Systems
Additional Modules Asset Management Audit Management
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Reporting
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263 scheduling system called Hastus.
personal rosters, news, staff sharing,
“That’s going to enable us to automate
chat and digital forms for incident
processes to make simple changes to
reporting, standard admin processes
timetables for special events or even
and other cumbersome processes
whole new timetables, in a fraction of
now digitised in one app.”
the time currently required.” Tulitt’s team in Transdev Wellington
When Tulitt’s frontline staff out on the network find an issue with a piece
benefits from synergies with the
of infrastructure they can take a photo
group’s global business. “Our big-
and post it directly to the app, allowing
gest group innovation has been the
management and critical service pro-
MyTransdev app,” he says. “It gives us
viders across the business to comment
a business portal from all across the
directly. “It’s particularly useful as a
world directly into the hands of our
group tool for disruption management,”
frontline staff which allows them to
says Tulitt. “We can push real-time
have a voice. The app’s facilities cover
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TRANSDEV AUSTRALASIA
app users and tell them exactly what’s happening and how any issues are being mitigated. Each business within the Australasian group has its own bespoke version of the app, but the framework is generic.” While technology is supporting Transdev’s staff, it’s also helping to monitor and guide overall performance. “One of our most important partners is Tracsis,” reveals Tulitt. “They’re supporting us to introduce a performance attribution system which will essentially 264
replace the system currently in use by Transdev Wellington and our client, the Greater Wellington Regional Council (GWRC). We’ve committed to delivering the Compass system, which will become the primary attribution tool for our service performance in Wellington. It’s a big task to handle all of our contract abatement requirements in one piece of software, so we’ve been working with Tracsis to deliver that to GWRC’s specific standards.” Transdev faces a challenge to deliver high performing and consistent service while upgrades to facilities and infrastructure in the region are ongoing, such as Wellington’s 1960s signalling FEBRUARY 2020
“ We’re making sure we push out more information to our staff while bringing in our third-party stakeholders to brief them, build that trust, and ensure the change management we’re going through is collaborative and everyone understands the ‘why’ behind the change” — Jonathan Tulitt, General Manager, Operations, Transdev system, antiquated overhead line structures, and single to double tracking projects. “We’re going through a big upgrade project on our network, led by our key partners KiwiRail and GWRC,” explains Tulitt. “As the network is upgraded, we’re making sure we push out more information to our staff while bringing in our third-party stakeholders to brief them, build that trust, and to make sure the change management we’re going through is softened and staff are well informed.” Managing change successfully is something Tulitt has achieved in his w w w.suppl yc ha i ndi gi ta l. com
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previous role in Auckland where the EMU fleet was rolled out across the network, replacing old diesel with electric rolling stock. “It was like putting a PlayStation in front of someone that’s never really used a computer to do their job before,” he jokes. “It’s all about how we communicate that new technology with our staff and how we bring them on the journey.” Tulitt notes that staff in Auckland, particularly drivers, took on supervisory roles as people leaders across the network to better offer sup266
port to the wider team. It’s a transparent approach that’s paying off in Wellington,
“ The app’s functions cover personal rosters, news, staff sharing, chat and digital forms for incident reporting, admin processes and other cumbersome processes now digitised all in one app” — Jonathan Tulitt, General Manager, Operations, Transdev FEBRUARY 2020
where the recently completed bargaining on a multiple collective agreement was concluded in principle in a matter of weeks. “There was no need for strike action and the agreement was settled with the highest ever ratification (over 98%) of any collective in this particular union,” he explains. The continued push for transformation sees Transdev monitoring the latest trends and keen to meet the future needs of its passengers. “We’re seeing more automation of manual systems, particularly onboard systems,”
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says Tulitt. “When we introduced the
84% renewable energy,” he says of the
electric rolling stock in Auckland we
company’s efforts to reduce its carbon
went from having no onboard signalling
footprint. “Patronage growth is driven
system to utilising the European Train
by environmental factors and it’s been
Control System (ETCS) that actually
interesting to meet the challenge of
tells the driver what’s ahead of them.
capacity outstripping our rolling stock
In Auckland, we’ve been using it suc-
capability. We’ve been on a tough road,
cessfully for over three years now.”
but we’re managing to do it.” For Tulitt
Tulitt points out that Transdev is com-
and his team, the signals Transdev’s
mitted to operating sustainable modes
transformation is sending show the
of transport with Wellington being
track ahead is clear.
one of the greenest networks in the country. “Wellington offers a very clean mode of transport, running on around w w w.suppl yc ha i ndi gi ta l. com