Au g u s t 2016 • w w w.s u p p l yc h a i n d i g i t a l.c o m
Special Reports: DB Schenker and SUPERVIA
6 WAYS
to modernise the industry
DHL Supply Chain
EXECUTION through collaboration SMBs supplier security
Learn More
EDITOR’S COMMENT
H E L L O A N D W E L C O M E T O the
August issue of Supply Chain Digital. For our lead feature this month, Damian Pike, Vice President for Innovation & Transformation at DHL Supply Chain explains why businesses need to cooperate across the entire supply chain and break away from the fragmented models of the past. Following recent research suggesting that up to 40 percent of small-to-medium businesses worry about supplier security, Tony Anscombe, Senior Security Evangelist for AVG Business offers some tips to increase data security. And following the wake of widespread digitisation and “always on” business models, Marcell Vollmer, COO at SAP Ariba develops six ideas on how to modernise the supply chain to keep pace with these changes. We also profile a number of exciting companies this month including Du, NSW Trains, and DB Schenker.
Enjoy the read Nye Longman Editor Nye.Longman@bizclikmedia.com 3
CONTENTS
F E AT U R E S
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PROFILE
Execution through collaboration
TECHNOLOGY
Ensuring supplier security
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LIST
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Top 6 ways to modernise the supply chain
C O M PA N Y PROFILES du
Middle East
30 50 78
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DB Schenker Asia
NSW Trains (Transport for NSW) Australia
Supervia Brazil
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PROFILE
EXECUTION THROUGH COLLABOR Damian Pike, Vice President for Innovation & Transformation at DHL Supply Chain explores how businesses operate and interact across the supply chain
Writ ten by: Damian Pike, Vice President, I n n o v a t i o n & Tr a n s f o r m a t i o n , D H L S u p p l y C h a i n
ON RATION THE WAY BUSINESSES operate is changing. A transformative business model is emerging that will redefine not only how your business operates but how you interact with external actors. At present, most organisations conduct business in a piecemeal fashion: separate entities interacting transaction by transaction, project by project. Relationships pit
one company or partner against the other, with winners and losers. That worked in the past but not anymore. This realisation has paved the way for a new business model in which businesses no longer act alone but, instead, operate as a collective. At its simplest, this new approach to business melds multiple companies in the supply chain together to
PROFILE THE WAY BUSINESSES operate is changing. A transformative business model is emerging that will redefine not only how your business operates but how you interact with external actors. At present, most organisations conduct business in a piecemeal fashion: separate entities interacting transaction by transaction, project BUSINESS COLLECTIVE 1.0: by project. Relationships pit one PARTNERING REBORN company or partner against the 1. Birth of the ecosystem 2. Stuck in the status quo approach other, with winners and losers. That worked in the past but not anymore. This realisation has paved the 3. BUSINESS COLLECTIVE 1.0 - a NEW model defined way for a new business model in which businesses no longer act alone but, instead, operate as a collective. At its simplest, this new approach to business melds 4. Moving from the OLD to the NEW paradigm multiple companies in the supply chain together to face the market as one single commercial entity. Business Collective 1.0 eliminates the barriers that traditionally separated 5. Where are companies at today with Business Collective 1.0? not just internal departments, but With SUPPLIERS With CUSTOMERS external partners - up and down the 70% 74% supply chain. In this new ecosystem, 6. What’s the payoff? a collective of organisations align on a shared mission and competitive 1+1=3 strategy, working together to Click here capitalise on their strengths to download and overcome weaknesses. Most organizations still conduct business as separate entities that interact transaction by transaction. Relationships are us versus them – with winners and losers.
Business Collective 1.0, the new partnering model in which everyone wins, will drive true business transformation.
Multiple organizations meld together to face the market as a single commercial entity with the customer as the focal point.
Partnering is not about winning alone; it’s about winning together.
Aligning on a shared mission and competitive strategy; and working together to capitalize on strengths and overcome weaknesses.
OLD
BREAK DOWN BARRIERS
Companies conduct business by looking inside out
NEW
Companies conduct business by looking outside in
Internal focus
Use data analytics to understand customers
Customer focus
Transactional relationships
Design and configure the value-chain network
Create value for all partners
Just starting to explore or partnering at a transactional level only.
Source: DHL Supply Chain Survery
From cost cutting to breakthroughs…
The POWER of Business Collective 1.0 – EVERYONE wins.
Moving beyond the traditional efficiency goals to a more strategic objective – business transformation. Making a real difference in a company’s performance and position in the market.
For all original sources for content above please view the white paper.
DOWNLOAD WHITEPAPER AT WWW.DHL.COM/BUS-COLLECTIVE
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the DHL whitepaper
E X E C U T I O N T H R O U G H C O L L A B O R AT I O N
‘A transformative business model is emerging that will redefine not only how your business operates but how you interact with external actors’ To some, the Business Collective concept may appear to be just another way of saying collaboration. But that would be selling it short. The Business Collective is something different: it’s about creating an end-to-end, mutually-executed
process that extracts waste from your business and creates sustained value for the end customer and other parties in the supply chain. It blurs the formerly rigid boundaries that separates your business from others within your sector and beyond. 9
PROFILE
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HEADLINE
Business need to change, but why? This emerging and transformational business model is enabled by technology and talent, driven by the speed of business, and necessitated by competition. This approach dovetails into and draws on the evolution of organisations from reactive to predictive enterprises. Organisations are no longer relegated to running their business by looking in the rear-view mirror and managing their operations based on weeks’ or months’ old information. Thanks to new technologies and new management science, organisations are starting to anticipate and even predict the future. They then direct their global operations accordingly. The new paradigm reverses the old ‘inside-out’ focus to ‘outside–in’. It views external players and forces as opportunities and not necessarily threats. This means operating your business in a way that is in tune with the trends impacting the automotive industry and collaborating with players to drive value to your own business and to your customer.
Current state of affairs This new strategy is based on one simple premise: the only reason businesses exist is the customer. Everything starts with the customer. Organisations must use data analytics to truly and completely understand the customer, and then design and configure the whole value chain network in a way that creates value for all the partners as they work together to serve the customer. Everyone is aligned around the outcome of better serving the customer. No longer are companies just competing for commodity tasks. Instead, they are working together to tackle complex problems based on a shared understanding and prioritisation. Research we conducted at DHL confirmed that some companies are beginning to embrace the Business Collective approach, but most still have a long way to go. More than 70 percent of respondents are either only just starting to explore new partnering models with suppliers or are still partnering at a transactional level. The results for customer collaboration are similar, with 74 percent of respondents either just starting to explore partnering, or partnering 11
PROFILE
DAMIAN PIKE Vice President for Innovation & Transformation at DHL Supply Chain
‘Business Collective 1.0 eliminates the barriers that traditionally separated not just internal departments, but external partners up and down the supply chain’ 12
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on a transactional basis only. Only 5 percent claim to have reached a fully integrated partnering model with customers, however this figure is set to grow. For those companies that are considering or are already exploring this new business model, the opportunities are particularly significant in the areas of talent, resources and capabilities. Businesses that are willing to bring their best to the table for such partnerships
E X E C U T I O N T H R O U G H C O L L A B O R AT I O N
must seize the opportunity. In order to successfully explore these opportunities, businesses must open their books and doors in ways they never did before. In order for the Business Collective to be fully effective, trust is fundamental. Once this trust has been formed all parties must step up their level of investments – in systems, people, process and infrastructure to support this strategy. We are talking about transformational, not incremental, change.
No one would argue that for most businesses the supply chain is only as strong as the weakest link. This is no different for the Business Collective. The model is an exacting master – it demands the best of every business involved. Because we are working together towards a common goal, no business holds back. Working collectively, each business does what it does best, but better through partnership and collaboration.
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TECHNOLOGY
Ensuring supplier securit
A recent industry report has made some concerning findings supplier security; Tony Anscombe at AVG Business explores the alongside a range of readily available solutions that businesses to solve them
W R I T T E N B Y: T O N Y A N S C O M B E , S E N I O R S E C U R I T Y E VA N G E L I S T AT AV G B U
ty
around ese issues s can use
USINESS
TECHNOLOGY
NEW RESEARCH CONDUCTED by Ponemon Institute – an independent organisation conducting research on privacy, data protection and information security policy – suggests that four out of 10 small businesses worry that contractors, supply chain partners and service providers won’t tell them if they suffer a data breach or get hacked. It’s understandable, but concerning. If a supplier reveals they’ve been hacked and their client’s data has been exposed, corrupted or stolen it raises all manner of questions. At the very least it would call attention to the integrity of their data security systems. The client might also question the supplier’s suitability and capabilities. If the supplier was targeted by a hacker deliberately to get access to the client’s data, sticking with that supplier might not seem like such a good idea. For suppliers it appears keeping quiet might preserve the contract and allow time to repair any damage behind the scenes. But not alerting a client could appear dishonest or incompetent if they learn about the breach from another, possibly public, source. 16
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The other side of the story As concerning as that is, six out of 10 small businesses also say they never check on a supplier’s data security before sharing confidential information with them. So even if some suppliers are reluctant to inform them of a breach, clients aren’t perhaps being as proactive as they should be in seeking out confirmation that a supplier’s systems
S U P P L I E R M A N A G E M E N T W I T H C L O U D P O R TA L S
are up to the required standard. It’s a double-edged sword: suppliers are hesitant to admit a breach and clients aren’t reviewing their suppliers’ data security systems. It cuts both ways too. Regardless of the formal status
of each partner – supplier or client – data travels in two directions. A supplier could be sharing their own confidential business data with a client which, unbeknown to them, might have been corrupted or contain a Trojan horse or malware. Both sides 17
TECHNOLOGY
of the equation need to be addressed to solve the data security problem. A practical solution in sight So which side of the equation are you on? And how can you be confident that your suppliers and other business partners are as prepared as they can be against online threats? Hackers can find their way into big brands via small company suppliers where security may be weaker, so it’s important to state in service level agreements that the right levels of security must be in place and what those levels are. Suppliers – for their own sake as much as their customers’ – need to be doubly certain they 18
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have the right security measures in place before they connect to any customer systems, onsite or remotely. Quality assurance As one UK Government-backed report concluded last year, one good place to start is ISO Standards – the international accreditation that operating best practice has been met across a variety of business disciplines. In the case of data security, two series of standards are relevant: ISO 27000 series about information management, and ISO 31000 about risk management. Does your business have that accreditation?
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Do your suppliers, contractors and other partners, especially if they handle your business data or you’re receiving data from them? It can be time consuming and costly to gain these accreditations but when weighed against the damage of losing a client and loss of reputation, gaining accreditation may be a very wise investment. It may even attract new business because it demonstrates you’re taking security seriously. 5 cybersecurity priorities to focus on There are other sources of useful information about best practice. In 2014, the UK Government introduced the Cyber Essentials Scheme
which describes five priority areas when working in a supply chain: 1. Boundary firewalls and internet gateways – these devices are designed to prevent unauthorised access to or from private networks 2. Secure configuration – ensuring that systems, devices and software are configured in the most secure way in relation to business need 3. Access control – this means making sure only the people who should have access to systems, devices and data have the right 19
TECHNOLOGY
TONY ANSCOMBE AVG S EN I O R S EC U R I T Y E VA N G EL IST
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S U P P L I E R M A N A G E M E N T W I T H C L O U D P O R TA L S
access at the right time and to the appropriate degree. E.g. some people might only need temporary “view” access, while others may need permanent “view and edit” permissions 4. Malware protection – install up to date anti-virus and malware software and keep it updated 5. Patch management – make sure your software applications are up to date and all the necessary patches supplied by the vendor been applied Certification is offered at two levels: verified self-assessment and external assessment. Which one is appropriate will depend on the nature of your business and supply chain. In 2015, Google published its interactive Vendor Security Assessment Questionnaire (VSAQ) to help companies bidding for contracts understand what standards of security were required. Simple mistakes sometimes cost the most But as we all know, a certificate
doesn’t make up for poor practice. Making sure staff remain qualified, and receive regular training and support can ensure bad security habits don’t creep in, like using weak passwords, or not logging off or attaching the wrong files to an email. If bad security habits exist at global tech giants like Sony, who you’d think would have better passwords than “ABCDE” and “12345”, bad habits can exist in small businesses too. The desire for convenience and the false belief that “it won’t happen to me” still seems to override the basic and quick task of generating a secure password. Small steps to get you started However small your business is, double checking your own data security and asking suppliers to confirm theirs doesn’t have to involve huge costs, lengthy analysis or large scale changes. Strengthening your passwords, for instance, can be a very quick but critical step in bolstering your defences. Reading and digesting the UK Government’s scheme and Google’s questionnaire will also allow you to improve security – and make sure suppliers don’t let the hackers in. 21
TLOIPS1T 0
Top 6 ways to moder
the supply chain Like the rest of the world, procurement has gone digital. According to a survey conducted by Oxford Economics, the function is undergoing a radical modernisation, leveraging technology to improve processes and transform the way work gets done. Written by Marcell Vollmer, Chief Operating Officer at SAP Ariba
WHEN WAS THE last time you encountered a supply chain professional or colleague who didn’t have a smartphone or social media account? Today’s supply chain professionals are part of an “always-on” culture. And they need to be empowered with technology and insights that enable them
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keep pace. To discover, connect and collaborate with their trading partners and peers across the street and around the globe. To work anywhere, anytime from any device. To create new value that spans the enterprise.
How can you enable this within your organisation?
rnise
n
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1 Supply chain management isn’t a set of discreet tasks performed in silos, but a connected one carried out across many functions and geographies. And the key to executing it well is in linking multiple parties and systems 24
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Rethink the Process using a common platform that supports the entire source-tosettle process and provides a gateway for collaboration both within and beyond the enterprise on a global scale. Networks are a great way to do this.
2 Every day, billions of consumers around the world use social networks to manage their personal connections. To shop, share and consume. Why? Because they make things easy. The same is true of business networks, which provide an equally easy and consumer-like way for companies to manage their trading relationships and commerce activities. With a few clicks, you can shop for the goods and services you need to run your business, order and have them shipped. When it comes to payments, you can kill the paper checks and transfer the funds electronically.
Get Connected Or you can review your receivables and decide whether you want to offer a discount in return for early payment. You can view and manage your spend across all major categories and find opportunities for savings. You can manage your entire workforce – temporary and full-time employees alike – and empower them to do their jobs anywhere, anytime from any device. And you can engage your customers across multiple channels and create personalised experiences along every step of their journey that delight and keep them loyal.
So get connected. 25
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3 Digitisation is the first step most companies take to improve the efficiency and effectiveness of their supply chain operations. And while it’s a good start, automating processes such as procurement, orders, invoicing and payment doesn’t in-and-of itself create value. Where the real value of digitisation lies is in enabling new processes that drive more collaborative, intelligent and transparent ways of operating. Processes like dynamic discounting that allow buyers to secure discounts that can be reinvested in research 26
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Don’t Just Automate, Innovate and development or sellers to lock in funding to expand their business. Or contingent workforce management through which companies can identify and manage highly-specialised resources needed to develop that next-generation product and open new revenue streams. Such processes can change the game. And networks make them possible by providing a common platform from which all parties can in connect and collaborate – regardless of the backend systems they may be using.
Work Smarter Like their social counterparts, business networks house incredible amounts of insights and data that can be used to learn in context and act in smarter ways. You can, for instance, access performance ratings on potential trading partners along with recommendations from the community to determine who to do business with or detect risk in your supply chain. You can combine in-the-moment
4 purchasing data with historic trends to predict stock outs before they happen and direct replenishment. Or gain real-time insights into invoice approval status to more efficiently manage your cash. Engage in these communities and unleash the power of this information to optimise your supply chain decisions and accelerate innovation and growth.
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5 Run Simple Complexity is the enemy of business. Every year, it costs the 200 biggest companies in the world an estimated $237 billion. That’s ten percent of profits buried under a mountain of waste, inefficiency and 28
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missed opportunity. Digitisation can remove this complexity by enabling new, more efficient processes that allow you – and your supply chain – to run more simply than ever.
Get Moving In today’s economy, digitisation is the onramp to innovation and success. With the right strategy and solutions to support it, you can transform your supply chain and create entirely new levels of value for your organisation. So get on the highway and go fast. Or your competition may pass you
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Working sma
art
Written by Tom Wadlow Produced by Heykel Ouni
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DU
UAE telco du is providing services beyond traditional telecoms, taking the lead role in transforming Dubai into the world’s first truly smart city
I
n 2006, the thought of starting a new telco in the UAE - a country where mobile market penetration was already over 120 percent - and competing against a very strong incumbent player while growing to take almost 50 percent mobile market share may have seemed unthinkable. Fast forward seven years and du has achieved precisely this. With a mission to bring people and businesses together by offering mobile and fixed telephony, IPTV and broadband to homes and offices, du now conducts over AED 12 billion’s worth of vital communications work a year with a strong EBITA of AED 5.4 billion.
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This translates into 7.7 million mobile customers, with 674,000 fixed line subscribers on its books. Mobile data exceeded 33 percent of its total Mobile revenues. Delivering its broad scope of services is a 1,700-strong workforce, comprising nationals of more than 60 countries from around the world – a global team of experts. Now the company is embarking on its most ambitious project to date. Dubai Smart City will connect residents, business and government in ways never seen before, leveraging the power of the Internet of Things to enhance usability and efficiency of vital services spanning utilities, parking
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Accelerating
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predictability
DU
1.7k
The total number of employees working for du (2015)
and health. It will also contribute to achieve the vision of Dubai’s ruler and Vice President of the UAE, His Highness Sheikh Mohamed Bin Rashid Al Maktoum, to transform Dubai into the smartest and happiest city in the world.
Lift off Playing a key strategic part in du’s journey from the beginning has been Anis Tabka, Senior Vice
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President – Sourcing, Contracts & Supply Chain Management. Vital areas that have been developed by Tabka, allowing the company to grow so impressively, are its procurement and strategic sourcing strategy, end-to-end supply chain experience and positive attitude towards supporting the business to meet its needs while enforcing corporate governance. Tabka, who has 21 years of
experience in the telecoms trade, mostly in the USA and Germany with Siemens on the commercial side, emphasises the importance that finding the right expertise to work with both internally and externally has had on business development. “Traditionally the industry in the MENA area was not well-equipped in terms of expertise,” he explains. “When I came in 2005 most of the
professionals I was sourcing in the region came from other functions. One of the biggest challenges I faced was finding technical procurement professionals who are familiar with the telco world and having the business thinking on how it is important to look at the whole value chain whenever negotiating deals rather than just focusing on price negotiation. “I was able to convince my
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DU
management of the value of putting a strategic spend category strategy matching our corporate roadmap and also of the benefits of partnering with some strategic vendors can bring. We needed a proper procurement strategy and a Supplier Relationship Management (SRM) methodology put in place and Executive Management allowed us to run with it and make it happen.” This has paid off and du was the first Telco in the Middle East to get awarded in 2010 the prestigious Chartered Institute of Procurement & Supply award from the UK. Going above and beyond the norm in corporate governance has also allowed du to stand out in what was an extremely saturated and monopolised telecoms market in the UAE. Three core values lay at the heart of du’s corporate governance
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system: friendly, honest and confident, with an emphasis on nurturing responsible practice and accountability which will result in sustainable business. Underpinning this is a strong code of ethics set by the Board of Directors, with business objectives based on community and national development needs.
Dubai: smart city This is no better demonstrated
MIDDLE EAST
than by du’s work to turn Dubai into a smart city. The UAE has one of the highest mobile penetration rates in the world, and Dubai is witnessing a steady population growth, making the need to be ‘smart’ all the more pressing. Du has been selected as strategic partner to the government’s Smart Dubai Office, responsible for implementing and managing the smart city platform. “This will be the first of its kind in the world,”
Tabka says. “All services and applications will be connected and running together so the citizens of Dubai will be able to make better use of their data. “For example, someone about to leave their home will be able to find out exactly where to park and the best route to get there before they get in the car. Many of the smart cities around the world have deployed separate IoT applications such as smart homes, smart metering and smart transport, but none have integrated as many used cases under one centralised digital platform as Dubai. Du will be hosting such a platform and managing it on behalf of the city.” The project aims to establish collaboration in six ‘smart’ focus areas: smart life, smart transportation, smart society, smart economy, smart governance and smart environment, guided
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DU
“All services and applications will be connected and running together so the citizens of Dubai will be able to make better use of their data” – Anis Tabka, Senior Vice President of Sourcing, Contracts & SCM, Corporate Affairs
Building A Better Connected World Huawei is a leading global information and communications technology (ICT) solutions provider. Our aim is to improve efficiency through a better connected world. Driven by customer-centric innovation and open partnerships, Huawei has established endto-end ICT solutions portfolio that gives customers competitive advantages in telecom and enterprise networks, devices and cloud computing. www.huawei.com
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MIDDLE EAST
by principles of communication, core services are flattening; integration and cooperation. that’s why our management has Du will be responsible for creating decided to set up a new Digital one common infrastructure from Business Unit to boost our cloud which all smart services can products and complex Managed grow and interact, bringing the Services offerings in the market. city’s data into one place in a “Our Dubai Smart City project secure environment, is a perfect example introducing best-ofof this. This does not breed smart services, involve a traditional all designed to work sourcing strategy nor together and sharing the traditional large data that brings a proprietary software The amount of new level of insight to players we are used to. revenue in AED Dubai to benefit the The Big Data and IoT generated by du public, entrepreneurs worlds are challenging (2015) and government. our Modis Operandi: Such non-traditional it’s now all about telco work also Open Source software requires Tabka to realign vendors, SaaS (software as a his sourcing strategy. Service) solutions, Cloud services Tabka explains: “Major Telcos are and strong systems integration. having to look into other revenue We worked very closely with our alternatives such as digital business technical colleagues to find the as revenues in their traditional best in class partners to meet
12.35 billion
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DU
Smart Dubai requirements and use our experience to integrate it all together and deliver a complex project such as this. “There are far more joint ventures, partnerships, revenue shares and corporations working together to deliver this strategic project in the long term. We all drive to deliver the best services and evaluate each other much more closely and in much greater detail, as we are both taking risks. These are very close relationships that involve constant communication and flexibility from both sides and HPE [Hewlett-Packard Enterprises], our main partner and system
2006
The year that du was founded
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integrator for the Dubai Smart City project, is a good example.” Du’s smart city credentials are already in evidence, shown by its city-wide public WiFi provision and smart street lights, using motion sensors to increase visibility when vehicles approach. However, integration of app-based services on this scale presents a larger set of challenges to overcome. “We need to be flexible on how we put this huge ecosystem in place, and my job is to help bring all the different component parts together in the best way,” Tabka adds. “How do we set up revenue sharing, who do we choose to partner with, how do we optimise costing for du and the City? “We need to convince partners to invest in this as a long term partnership, and we also need to convince the providers of existing smart technology in the
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MIDDLE EAST
“Major telcos are having to look into other revenue alternatives such as digital business as revenues in their traditional core services are flattening; that’s why our management has decided to set up a new Digital Business Unit to boost our cloud products and complex Managed Services offerings in the market” – Anis Tabka, Senior Vice President of Sourcing, Contracts & SCM, Corporate Affairs
city that an integrated approach is the way forward. There will be changes, there will be challenges. “For example, security is one of the biggest challenges facing us. The hackers out there are only going to get smarter. We are going to be seeing all the traffic and data from all of these different government functions and services provided by private entities – electricity, parking, home consumptions, supermarket shopping. How do you secure this and not endanger the integrity of the customer’s
data we are integrating? It’s a big challenge and we are working with our main partners the Smart Dubai Office, Dubai Data Establishment and our community of selected technology partners to bring the best suited solutions to secure this.”
Track record Based on du’s recent track record in innovation and service delivery, the challenges presented by Dubai Smart City will no doubt be overcome. In March, du won ‘Security Implementation of the Year’ at the
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DU
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2016 Network Middle East Innovation Awards for its Secure Web Hosting in the cloud. The company was also recognised for Best Enterprise Mobility Solutions and the Best Cloud Security Solutions at the inaugural Cloud MENA Awards 2016 in April. In terms of delivering a value for money service, du announced earlier this year that it is reducing its GCC roaming charges, offering more affordable connectivity and communication for customers as they travel for business and leisure. Customers can also benefit from a joint venture with Ticketmaster, receiving a 15 percent discount on some of the region’s biggest events. These end user benefits would not be possible without the work of key partners in day-to-day activities, and Tabka is eager to emphasise the many positive working relations du has with other businesses, and how important these will be in the future.
He adds: “Aramex, for example, are our main logistics provider helping us from traditional warehouse operations to distribution channels, fulfilment and end-to-end customer activation. They are going through their own digital transformation and are embracing the concept of crowd sourcing more and more. We are very happy to be working with innovative companies such as Aramex. Our other key partners include HPE, Huawei, Atos and Cisco. “As for the future, we will be growing more and more and we will need new technology partners embracing the world of Open Source and innovations to add to the business. I would love to get involved with more exciting new projects like the Smart City, opening up new areas and opportunities for growth.”
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Tunisian Heights for Cancer Since 2004, du’s Anis Tabka has been raisingmoney for cancer charities. He started with running the Boston Marathon in support of the children’s cancer department Massachusetts Memorial Hospital and then started taking part in various mountain climbing charity fundraisers. In 2012, Tabka was inspired to set up his own charity and Tunisian Heights for Cancer was created. He says: “I wanted to support my fellow Tunisian youth who are suffering from that disease but are not getting the same financial support as is the case in the West.” The aim of the charity is to support young Tunisian kids from disadvantaged families who can’t afford proper cancer treatments and Tabka focuses on both raising awareness and funding during his mountain climbs. He adds: “The first Tunisian project I was involved in was in association with ATEL (Association Tunisienne des Enfants Atteints de
Leucemie) on the project of extending the paediatric wing of the Hospital Aziza Othmana in Tunis. This allowed more children to be treated in that facility.” Tabka’s achievements include being the first Tunisian to climb to some of the world’s highest peaks. “I’ve climbed Kilimanjaro in Africa, Elbrus in Europe, Denali in North America, Aconcagua in South America - each time I am on an Expedition, I try to raise funding for the charity.” His next expedition is scheduled inNovember to Mt. Vinson in Antartica.
To find out more, visit the charity’s Facebook page
Transport of delight Written by John O’Hanlon
Produced by Erika Kracer
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NSW TRAINS (TRANSPORT FOR NSW)
Transport for New South Wales is the responsible body governing all modes of transport in Australia’s most populous state: in the last three years it has been transformed from a behemoth to a responsive and agile public service provider
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t was in December 2012 that the Minister for Transport of New South Wales, Gladys Berejiklian, announced a complete review of transportation services in the state, paying particular attention to the State rail provider RailCorp. This was at the time the largest asset owner in the whole of Australia, employing upward of 15,000 people, and its size and complexity were causing problems; in particular it had become highly Sydney-centric. All the decisions were made in the capital city, and timetabling was arranged to meet the needs of Sydney citizens and its commuters. However the needs of a traveller on a 40 minute commute and another on a six hour train journey are very different, and the minister wanted a better service for upstate citizens. It was decided to replace RailCorp
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with two new rail agencies: Sydney Trains, which would look after all the suburban services of Sydney, and NSW Trains to manage the network in the rest of New South Wales, including coach services to reach the many communities not reached by rail. In fact today NSW Trains is also the largest coach operator in Australia, running 600 different services a week It was NSW Trains’ good fortune to secure the former CEO of RailCorp Rob Mason as its CEO when the new companies started operating on July 1 2013. His brief was to improve the lot of intercity and regional passengers who had been given a lower priority. Another key appointment at the new organisation was that of Chief Procurement Office (CPO). There was a serious reputational
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problem within the industry. Apart from having fallen into the traps that affect large organisations in the public Supply Chain from silo thinking to a job-for-life culture and union strangleholds, a series of enquiries had revealed that long term suppliers had become entrenched, discouraging new entrants, and that money had changed hands to keep things like that.
to regional customers,” he says. The company runs express passenger train (XPT) services linking Sydney, Melbourne, Brisbane, Dubbo, Grafton and Casino. One of the complexities of running these services is that NSW Trains leases the track from private companies which derive 95 percent of their income from goods not passenger operators, explains Johny. “For an XPT to go over a Embedding certain speed the track ethics has to be maintained Siju Johny took up more regularly and this post in June to a higher standard. 2013, and faced the We are a public Number of employees at job of establishing service organisation NSW Trains (Transport world class supply having to work with for NSW) chain procedures private organisations for the organisation at whose driver is profit.” the same time effecting profound Passengers complain to the cultural change and establishing operator if the service is slow, confidence in a sustainable and but that’s not the only metric and ethical sourcing policy. The eyes the last three years have seen a of the ministry, the employees, the massive improvement in customer supply chain community and above satisfaction. This has been achieved all the travelling public were on the through customer surveys that new team. “The focus has changed identified ways to make their
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experience better. He cites safety as a key concern. More police presence on the trains and the introduction of CCTV on the guards’ uniforms are among the steps that were taken as a result. Another major procurement operation was an A$120 million investment in new buses to give a much better service to remote communities. The new fleet has enhanced facilities including toilets on board. As the first really big procurement exercise for the new company, it signalled that
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the company intended to pursue a more transparent policy than before. It was a proud moment for Siju Johny when in April 2015 NSW Trains became the first public organisation to be awarded the corporate ethical mark by the Chartered Institute of Procurement and Supply (CIPS). “Reputation was important to us.,” he says, recalling the days when suppliers were more incubi than incumbents. “The reason I sought that certification was that we are independently audited organisation and I wanted to be able to show we are now adhering to the best international practices.” An example of the new approach was breaking a 15-year contract and appointment of a new catering provider on the long distance trains. In June last year Gate Gourmet, known as the world’s premier airline catering company, was named as the new supplier. “By doing that we assured the wider supplier community that from now we are putting quality and value for money first.”
KEY PERSONNEL S U P P LY C H A I N
Exciting times Each year NSW Trains holds a supplier conference, and the people Johny has invited as keynote speakers reflect his determination to cement the new culture of openness. In 2013 he brought in the Managing Director of CIPS; in 2014 the group was addressed by the head of the Independent Commission against Corruption (ICAC) and last year the Transport Secretary Tim Reardon used the occasion to announce that TNSW would over the next five years be making the biggest investment ever made in the State – A$107 billion to upgrade road and rail infrastructure. “These are exciting times for us,” says Johny. Exciting indeed. The minister also announced a A$1 billion investment in diesel trains, and at the time of writing a A$3.8 billion contract is on the point of being signed with the successful bidder for 65 new trains to replace the ageing Intercity fleet which date back to the 1980s. Train replacement is a once in a generation activity, he says, and it
Siju Johny Chief Procurement Officer Siju Johny is the Chief Procurement Officer for NSW Trains and got the full responsibility for Strategic Procurement, contract management, supplier relationship management, Probity and governance. He joined NSW Trains in 2013. Under his leadership NSW Trains was awarded as the first Public organisation in Australasia to be certified for Ethical Procurement by CIPS. Prior to joining NSW Trains Siju was with Singtel Optus as Group Strategic sourcing manager. He has also led the successful implementation of various SAP modules in different organisations. Siju has also worked for blue chip companies such as Westpac, Veolia, Portland Group, Caltex etc to establish procurement teams in Greenfield operations as well as transformation project in established functions, developing teams, skills uplift, systems process and policies, implementing strategic sourcing, category management and setting the long term strategic direction for the function. Siju has extensive knowledge of the different procurement and supply chain environments in both direct and indirect areas. He has also been the key note speaker in various international procurement conferences and presented and conducted procurement training across AUS&NZ. Siju holds a master’s degree in Business Administration and is a qualified Charted Accountant. He is also a member of Charted Institute of Procurement and Supply (CIPS). In recent years Siju’s efforts in Procurement was recognised through Best Procurement Initiative in Australia award by CIPS and Most Successful SAP Implementation Project by SAP.
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“ We are a public service organisation having to work with private organisations whose driver is profit” is a boost to his entire team to be involved in such a huge procurement exercise. This is a team which many more responsibilities than simple purchasing. Most organisations would split procurement, contract management and supplier management but at NSW Trains these are integrated. “I want my team to be responsible for an end to end process of sourcing, strategy development, contract management planning, supplier relationships and ongoing KPI management.” The person coming up with the strategy, he says, ought to be responsible for its implementation and operational and financial outcomes. “I strongly believe procurement is a service provider. Sometimes in the public Supply Chain procurement is a tickbox activity, but it is really about how you are adding value to the business. My aspiration is to have
a team of strategic people.” The creation of a procurement board made the rethinking official. Johny sits on this subcommittee of the main board or Executive Management Committee (EMC), together with the CEO, CFO and the director of engineering. “It is a reflection of the confidence of my CEO, who takes all the decisions to the EMC for sign off. This came about because he has seen over the last three years how our business unit helps the wider organisation achieve savings targets and ensure that statutory commitments are met.” Unlike the old days, he adds, numerous independent audits have thrown up precisely no issues for investigation. And now NSW Trains is becoming a benchmark for good procurement practice. The NSW Department of Finance requested all its 33 public procurement departments
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to get independently accredited against 147 different criteria. Siju Johny’s department came out in the top three, and he was then invited by the Ministry of Justice to submit a review report on its procurement processes to the Minister of Corrections and the same service was requested by Australian Tax Office(ATO) – an assurance that NSW Trains is on the right path.
Poised for progress Two big projects that will occupy the team over the coming year. The first is an SAP implementation across TNSW, which will bring transparency to every activity across the transport cluster. It’s an opportunity to redesign the ERP to suit the current organisational structure, he says. There won’t be so much impact on NSW Trains, which already operates the Ariba ERP, recently acquired by SAP, but in other parts of the organisation that haven’t been using Ariba it will be more full on. The benefits will be a one stop shop for all information relating to transport, greater discipline and again, greater transparency. The second is integrating the new trains, which are to be operated on a completely new model, with the operator just providing the crews. The new supplier will manage the service and be responsible for on-time running, cleanliness and all train facilities. “It is a game changer” says Johny, “with the third party provider bound by a
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contract managed by my team.” July 2016 will see the manufacture contract awarded. In January 2018 the first train will be delivered with the remainder being supplied at a rate of one or two a month till all 65 are in service by 2019. Innovative contracting of this sort is the way forward. As NSW never permits a public Supply Chain contract of more than five years’ duration but Johny believes that in key supplier areas the model should be a limited number of strategic partners, incentivised by viable
margins. One of these is Amadeus, the world’s largest airline booking provider, and he stepped out of line by offering this key partner an eight year contract, though he was able to show that it would save up A$8 million over the contract period. Not only did the NSW government sign off the deal – it liked it enough to cite it in its annual summary of best procurement processes. Not prepared to stop there, he is working on the NSW government through the Procurement Leadership Group, which meets monthly, to
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GJK is a privately owned Australian company providing customised solutions in the cleaning and related soft services industry since 1985. The company is internationally recognised for their adaptation of new technology and delivery systems. GJK provides services to clients throughout Australia covering a diverse range of industries across both the public and private sectors and manages a workforce of over 2,000 nationally.
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AUSTRALIA
reform its purchasing practices. “NSW is the biggest purchaser in Australia, spending A$20 billion a year on goods and services alone, but because it is done on an individual agency basis we are not making the best use of our purchasing capacity. We are working toward an approach where the NSW government is the purchaser, not the agency.” From the state level it’s a short step to the federal. “In the public Supply Chain you are accountable
to the whole of society not just the shareholders. I always do succession planning. I will be a guest speaker at the upcoming CIPS Asia Pacific Conference in Melbourne in July, where I will be talking about the changes we have made in our organisation. We are working with the federal government to make procurement a formal provision in Australia: at present it is lumped in under general finance.”
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Perfe logisti changin Written by Wedaeli Chibelushi
ecting ics in a ng China Produced by Charlotte Clarke
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China is rapidly developing - the supply chain sector must keep up. Logistics service provider DB Schenker has accepted the challenge, so we ask them about the opportunities and setbacks present in the Chinese business climate
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B Schenker in China is modifying to fit the “new normal”. According to CEO North/Central China Thomas Lindy Sørensen, China is experiencing negative growth in traditional industries (e.g. coal and steel) “whereas industries that are more consumer-based, like the automotive industries or the luxury goods industries are really growing”. How can DB Schenker, a logistics service provider, adapt to this change? Supply Chain Digital talks to Sørensen to find out. Sørensen knows the Chinese business landscape well. “I joined Danish shipping company Maersk Line 25 years ago and worked in various finance functions for a few years. Then, I was expatriated
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overseas to China. I worked in Beijing and Shenzhen back in the mid-90s. I worked for Maersk Line until 2013, then I joined the DB Schenker organisation in Korea in 2013. About a year and a half later, I joined here in China as the CEO of DB Schenker North/Central region.” Operating in China Sørensen finds the pace of business development much faster in China than in Europe. He explains how DB Schenker operates in this everchanging climate. “The organisation is split in two, I run the centre in North China and my counterpart runs South China. For North and Central China, we have 40 offices and for South China another 20”, he comments. Sorensen’s remit covers Shanghai,
S U P P LY C H A I N
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plus west, north east and east China. In terms of services, DB Schenker in China conducts air freight, ocean freight, contract logistics, warehousing and land transportation. “Land transportation covers domestic distribution, rail transport to Europe, domestic rail and domestic trucking down to Vietnam, Laos, Thailand, Malaysia and Singapore”, he adds. DB Schenker’s operations in China also owes to many partnerships. The company has many strategic Number of employees at DB Schenker globally
95,000
partners, including GLP, Goodman, Ningbo Port Southheat Logistics Group, Shanghai E&T Intl-Trans Co and AirBridge Cargo. Investing in e-commerce To keep up with the departure from traditional business, DB
Schenker focuses on e-commerce. “We see this as a growing way of doing business”, Sorenson says. He explains that with traditional business, goods are imported into China, they are stored in a warehouse, then transported to a distributor or a store. The consumer then buys the product from the store. DB Schenker is involved in importing, warehousing and distributing to the stores. The new e-commerce model differs. “It doesn’t go through the stores. Sometimes, the goods come straight from overseas, in which case we are not involved, but in many cases the goods are distributed within warehouses in China”, Sørensen explains. “If you are a fast fashion retailer and you sell goods online, the consumer will go online on Tmall or the company’s own website and then buy something. The order triggers a message to our system in the warehouse. We will pick the items, package them and prepare them for delivery. When
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there are special online sales events in China it can happen that we need to handle more than 500,000 orders in 24 hours!”, he says What about express delivery? “We don’t do the physical delivery to the end consumer, we outsource this to domestic express companies. But we do the warehousing part”, Sørensen clarifies. Sørensen moves on to demonstrate the advantages of e-commerce. According to Sørensen, it is mainly the Eastern part that is developed in terms of retail set up (besides certain tier 2 and tier 3 cities in the West). DB Schenker’s involvement in e-commerce allows everyone with a working internet connection to order practically anything. “Essentially it gives the seller access to the full market of China, i.e. access to a greater market without the investment in physical stores”. Additionally, e-commerce allows consumers outside of big cities to access a wide range of goods. Inspiring employees Involvement in the growing e-commerce industry requires a team of well-trained employees. DB Schenker has set up a Logistics Academy to ensure this. The academy uses both third party and internal expertise and is offered at various locations in China. Modules include logistics concept, continuous quality improvement, logistics
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controlling, project management and conflict resolution. The company aims to develop employees over the long term. DB Schenker also aims to keep them, which according to Sørensen, can be a challenge. “In China there is generally a relatively high staff turnover. It is quite a hot labour market so there is a relatively high turnover”, he says. However, DB Schenker gives its employees a reason to stay. “A lot of our people, especially our young people have a great chance to advance their careers relatively quickly”, Sørensen comments. Furthermore, DB Schenker gives staff members the opportunity to take on big roles at a young age. Challenging competitors “If we are looking at domestic distribution, we are way ahead”, Sørensen replies when asked about competition. “We have developed a number of what we call ‘e-solutions’ - ways by which we can interact with all of our customers and create visibility so a customer
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knows when the truck will show up at their door. They know in real time when the goods are coming.” DB Schenker covers about 400 cities across China. Sørensen tells us that among their international competitors, they are the biggest domestic network in China today. Caring for customers Within this network, Sørensen identifies individual customers: “We do business with an American fast fashion retailer here in China. Every year there is a big sale on 11th November called Singles Day. It is a big e-commerce sales day. All the different websites (Tmall, Alibaba etc.), they have big sales. The revenue of that day now exceeds the revenue of black Friday in the US. What we do for this specific American fast fashion retailer, we assist them with a fulfilment for their customer”. Sørenson tells us about how last year, the American customer got more than 500,000 orders of 1.5 million items in 24 hours.
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“Our direct customer sells its products to someone and they’re the ones who won’t be happy if the goods don’t arrive on time” DB Schenker has to despatch orders within a very short period of time. To manage this amount of orders, the company hires a thousand extra people. “This is quite exciting and it shows the scale that you now have in China. Our customer this year expects to double that number, so the expectation this year is that we will get three million pieces, or roughly one million orders.” When the customer makes an order, it goes into DB Schenker’s warehousing system. The warehousing system interacts with the company’s transport management system. After the order is despatched, the customers can then track their order. “Ultimately, the customer we
have to serve is our customer’s customer”, Sørenson concludes. “Our direct customer sells its products to someone and they are the ones who won’t be happy if the goods don’t arrive on time”. Moving forward DB Schenker is working hard to adapt to China’s “new normal” – its focus on e-commerce and sustainable recruitment is testament to the company’s efforts. As Sørensen aptly summarises: “It is about adapting to the winning industries. We make sure we understand where the future growth is going to come from so that we can not only meet the growth of the market but also exceed the growth of the market”.
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A SUCCESSFUL STORY IN RIO’S RAILROADS
With solid investments in technology and infrastructure, SuperVia Trens Urbanos offers quality transportation, comfort, safety and accessibility to its passengers through revitalized services Written by: Ellen Mason Produced by: Nayara Ferreira Interviewee: Herbert Quirino
SUPERVIA
I
n its 17 years operating the commuter rail service in the metropolitan region of Rio de Janeiro, SuperVia has been investing in expansion and continuous improvements. In November 2010, Odebrecht TransPort, a company within the
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Odebrecht Organization focused on urban mobility, road concessions, integrated logistics systems and airports, became its largest shareholder. This change took place at a time of great importance for the city of Rio de Janeiro, which had been preparing for large international events: World Youth Day in 2013, World Cup 2014
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“Urban mobility on r there are great expe society towards to t – Herbert Quirino, President of SuperVia
and the upcoming 2016 Olympics. The company, which transports sustainably through clean energy an average of 700,000 passengers per working day, serves a road network of 270 km in eight branches. The route crosses Rio de Janeiro and eleven municipalities in the Metropolitan Region (Duque de Caxias, Nova Iguaçu, Nilópolis, Mesquita, Queimados, São João de Meriti, Belford Roxo, Japeri, Magé, Paracambi e Guapimirim). On 8
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October 2015 a 729,000 passenger record was achieved with around 95 percent paying customers. In just five years the company managed to recover from four decades of abandonment, improving the quality and spirit of service, transparency and commitment to its commuters. According to Herbert Quirino, President of SuperVia: “To meet the increased passenger demand without losing quality in the service
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rails is high and ectations from the sector” offered is the main challenge experienced by the railways today. Urban mobility on rails is high and there are great expectations from society towards to the sector.” Currently there are 1,200 daily trips and seventeen stations have been revitalized for passenger comfort and accessibility. SAFETY AND TECHNOLOGY Quirino also reveals that periodical reviews are carried out
to address quality of service, with survey of passengers and frequent evaluations of operational processes and maintenance. “The safety of our system is non-negotiable. We are investing a lot in the issue of control of conditions of the Permanent Way by using the Control Car, which performs a precise and detailed diagnosis of the road conditions (sleepers, rails and switch machines) and allows us, through geolocation, to map out the exact critical points
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compositions.
where possible failure might occur.” In addition, the company has adopted the ATP— Automatic Train Protection—signaling system, equipment that runs from sensors installed in trains and railways. In trains, it is installed in the driving cab (first car). On rails, it is between them. It allows the reduction of the intervals between the compositions in a more secure way with the automatic speed control of the
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According to the President of the company, technological investments Superhighway have: Operational Control Center (OCC): Operating since January 2012, USD $12,2 million were invested in the new Operational Control Center (OCC) that automates records registry, giving more flexibility to the operation. This is in addition to having an integrated communication system, a contingency plan, a digital panel that brings together information from all over the system in real time and the monitoring of stations via security cameras. Operational Training Centre (OTC): The Operational Training Center has two simulators to improve the training of drivers, and another one for training in the new reinforcement system signaling. Professionals can experience all the real situations of
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a working day without leaving the building. To make the simulation as close to reality as possible, the images reproduced in the training room on the screen were filmed with a camera which was installed on the front of trains, and recorded the route of all branches. Automatic Train Protection (ATP): With an investment of USD $46 million, the new equipment enhances the signaling system and is already installed in the five electrified SuperVia branches - Deodoro, Santa Cruz, Japeri, Belford Roxo and Saracuruna. ATP allows the reduction of the interval between trains by an even safer drive when the speed of the compositions is automatically controlled by means of 3,220 beacons. With this technology the trains can move closer to each other, thus reducing the waiting time on the platforms. Information Delivery System (IDX): After
investing USD $11,6 million in a modern communication system implemented by SuperVia (even used in more than 50 airports around the world and at Grand Central Terminal in New York), the current equipment in installation phase allows take information in audio and video for passengers directly on the platforms, allowing customers to check and monitor the interval between trains regressively. The system already works at terminal stations.
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“The safety of our system is non-negotiable” – Herbert Quirino, President of SuperVia
Control Car: Used in preventive maintenance work monthly, and that during the period of the Olympics will be weekly, performs automatic laser inspection of all parameters and conditions of the railroad (rails, sleepers, ballast, screws) providing qualified maintenance where it is really needed. Roadrail backhoe: There are two backhoes that automate and streamline the sleepers installation process, enabling the exchange of 60,000 sleepers per year. This replacement work offers greater
operational security to the railway system, since it gives more stability to the train, reducing travel time and increasing passenger comfort. MORE INVESTMENTS Quirino ensures that the focus of investment is expansive. According to him, SuperVia has been investing since 2011 when Odebrecht TransPort took over its management, USD $658 million in rail transport. The investments focus on:
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- Infrastructure: To date, 137 kilometers of rails replaced, 161,000 concrete sleepers installed, and 105,000 meters of air network cables replaced, readjusting in power substations. - Construction and renovation of stations: All 102 stations will be revitalized and reformed to conform to international standards of accessibility. The investment is USD $116 million. - Olympic Stations: SuperVia has invested USD $77 million in the renovation and accessibility of six stations considered strategic for the Olympic Games in 2016, and they are São Cristóvão , Engenho de Dentro, Deodoro, Vila Militar, Ricardo de Albuquerque and Magalhães Bastos. - Renovation of the entire fleet: The fleet is being extensively replaced. One hundred new Chinese trains acquired by the State Government are in circulation. 12 Chinese other compositions, also bought by the state, will begin arriving in 2017. SuperVia previously purchased 10 national trains (equivalent to 20 trains of the Chinese model), which are already in service. All new trains are equipped with air conditioning. Since 2011, 84 old trains were retired, and 29 more trains also will leave circulation in the coming months. - Signaling system: The new equipment that enhances the signaling system is already installed in the five electrified sidings SuperVia - Deodoro, Santa Cruz, Japeri, Belford Roxo and Saracuruna – and is being gradually installed on all trains. ATP allows the reduction of the interval between trains by means of even safer driving when the speed of the compositions is automatically controlled through of 3,220 beacons. With this technology the trains can move closer to each other, thus reducing the waiting time on the platforms. Investment: USD $46 million (SuperVia).
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PROFIT The Net Operating Revenue of 2015 (adjusted for construction revenue) reached USD $180 million, representing an increase of 17 percent compared to the year before. Compared to 2011, when the Net Operating Revenue reached USD $110 million, the growth reached 62 percent. This result is a direct reflection of the continuous improvement of service quality and
result of the increased passenger flow presented year after year. In 2015 EBITDA—Earnings Before Interest, Taxes, Depreciation and Amortization— surpassed USD $58 million, which is 56 percent higher than in 2014. These have been positive results achieved over the past few years. When compared to the year of 2011, the growth was over 168 percent. Operational improvements,
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infrastructure investments and constant company’s efforts to reduce its administrative costs have resulted in significant increase in the EBITDA margin, jumping from 24 percent in 2014 to 33 percent in 2015. THE FUTURE It is estimated that SuperVia will transport 1.2 million passengers daily this year. It is projected that within five years Rio de Janeiro will have reached a unique and unprecedented level. “The train fleet will be 100 percent modern and airconditioning equipped, more stations will meet international standards of accessibility and the range of all extensions will have reduced. To achieve these objectives, the main projects are: fleet renewal program in partnership with the State Government and installation of the ATP system, which will enhance the signal and reduce ranges of all extensions, bring more safety and passenger comfort,” reinforces Quirino.
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Company Information NAME
SuperVia INDUSTRY
Transport SERVICES
Urban Trains HEADQUARTERS
Rio de Janeiro FOUNDED
1998 WEBSITE
www.supervia.com.br
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