Supply Chain - July 2021

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July 2021 | supplychaindigital.com

Logistics Companies by Market Value bp: Harnessing the power of digital

SHAPING THE FUTURE OF PROCUREMENT Reinhard Plaza-Bartsch discusses user experience, ESG, and building beyond the digital frontier of procurement FEATURING:

MARKS & SPENCER

COUPA

KEOLIS AMEY DLR


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The SupplyChain Team EDITOR-IN-CHIEF

RHYS THOMAS EDITORIAL DIRECTOR

SCOTT BIRCH

PRODUCTION DIRECTORS

GEORGIA ALLEN DANIELA KIANICKOVÁ PRODUCTION MANAGERS

OWEN MARTIN PHILLINE VICENTE JENNIFER SMITH

PRODUCTION EDITOR

VIDEO PRODUCTION MANAGER

MEDIA SALES DIRECTOR

CREATIVE TEAM

DIGITAL VIDEO PRODUCERS

SALES AND MARKETING DIRECTOR

JANET BRICE

OSCAR HATHAWAY SOPHIE-ANN PINNELL HECTOR PENROSE SAM HUBBARD MIMI GUNN JUSTIN SMITH REBEKAH BIRLESON DUKE WEATHERILL JORDON WOOD

KIERAN WAITE

SAM KEMP EVELYN HUANG MOTION DESIGNER

TYLER LIVINGSTONE MARKETING MANAGER

KAYLEIGH SHOOTER

JAMES WHITE

JASON WESTGATE MANAGING DIRECTOR

LEWIS VAUGHAN

CHIEF OPERATIONS OFFICER

STACY NORMAN PRESIDENT & CEO

PROJECT DIRECTORS

TOM LIVERMORE MIKE SADR

GLEN WHITE


FORWORD

The Elephant in the Board Room A dip in female representation at the executive level is the depressing takeaway from a recent Gartner survey of supply chain organisations.

“When women in 2021 account for just 15% of these leadership positions, something needs to change”

The headline statistic from a recent Gartner survey, that women represent a greater percentage of the supply chain workforce that at any other point in the past five years, seems a great step forward on the surface. You need only browse the website of any management consultancy to see why this is only a good thing: diverse businesses are higher performing than those falling behind the curve. But the real - and, sadly to say, depressing - story is that fewer women are now in executive leadership positions. It’s only a two per cent drop on 2020’s figure, but when women in 2021 account for just 15% of these leadership positions, something needs to change. The Supply Chain Digital team were enormously proud to celebrate exceptional women in the industry with our Top 100 Women supplement earlier this year. We’re following that up with our next celebration of the Top 100 Leaders in Supply Chain. These are guided by the votes of our digital community - so step up and be heard, CLICK HERE and nominate your colleague, peer or even yourself (no points for being humble!) today.

RHYS THOMAS SUPPLYCHAIN DIGITAL MAGAZINE IS PUBLISHED BY

Rhys.Thomas@bizclikmedia.com

© 2021 | ALL RIGHTS RESERVED

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CONTENTS

Our Regular Upfront Section: 08 Big Picture 10 The Brief 12 Global News 14 People Moves 16 Timeline: The Airbus-Boeing Dispute 18 Legend: Arnold Peter Møller 20 Five Mins With: Sundar Kamak

42

Procurement

Responsible sourcing: The balance between profit and purpose

24

Vodafone Procurement Company

Defining the Future of Procurement Leadership

50 bp

Optimising bp's workflows with digital transformation


62

AI

Supply Chain

70

Keolis Amey

Partners in passenger safety

Globality democratising procurement with AI

82 Logistics

Big Data & Analytics: The race to future proof-logistics

90

Marks & Spencer

Achieving procurement excellence

102

112

The integrated supply chain: AI, ML, and Human intelligence

Logistics companies by market value

Technology

Top 10


BIG PICTURE

Getty: Morning sunlight in a busy Yantian Port

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July 2021


Container chaos Shenzhen, Guangdong, China

An idyllic view over the Port of Yantian is a far cry from more recent scenes. A regional outbreak of COVID-19 caused operations to all but cease at the bustling Shenzhen trade hub - one of the world’s busiest freight terminals. Capacity hit a low of just 20%, causing container jams and congestion the ripple effects of which are expected to eclipse March’s Suez blockage.

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THE BRIEF BY THE NUMBERS

“If you don’t negotiate a good deal, run a good competitive process, and reduce risk by getting the right contract in place with a good indemnity clause, you’re not really in procurement” Andrew Newnham

Director of Group Procurement, Marks & Spencer  READ MORE

“With my suppliers, we must learn from one another, bounce ideas between one another and grow together; it is almost love” Natalia Pickett

Head of Procurement, KeolisAmey Docklands  READ MORE

“A common theme for the entire industry, but BP in particular, is that the efforts put in towards digital transformation are underpinned by the organisation’s need to reinvent itself” Vipin Radhakrishnan

VP Global Transformation and Digital Solutions, BP  READ MORE

10

July 2021

We asked our LinkedIn community:

17% 9%

Not Assessed

Low priority

29%

High priority

How highly do you prioritise cybersecurity when assessing new suppliers? Based on 230 votes

45%

Very high priority

Gender Pay Gap Closes The ASCM’s latest supply chain salary andcareer survey found:

• Women in supply chain under 40 report a median salary of $81,000 annually, while men earn a median annual salary of $79,000 • Across all age brackets, men report a median salary of $82,000 and women $80,000

Women Represent 41% of Supply Chain Workforce Gartner’s new study found that: • Women represent 2% more of the supply chain workforce than in 2020 • Women now account for 42% of the workforce • Number of women in exec-level positions declined by 2% • Just 15% of executive leadership are women (17% in 2020)


UNITED STATES

What is the US Supply Chain Disruption Task Force? Biden has a new governmental unit to tackle supply chain vulnerabilities called the Supply Chain Disruption Task Force. Sounds fancy, but what are they actually planning to do? It is fancy - and a major investment across dozens of departments and agencies. They’re aiming to tackle production and flow of critical medicines, mining minerals within US borders, and push towards cleaner energy with advanced batteries. Sounds expensive. Billions of dollars will be invested, particularly in establishing the battery supply chain. The President hopes the initiative will also create jobs and provide businesses with the capital to expand. All well and good - but what about the influence outside the states? You’re right, no country is an island unto its self, and the task force will look to strengthen ties with foreign allies - Japan and South Korea, specifically, according to the White House. Why those nations? Simple: semiconductors. The US wants more chips for its tech and auto-manufacturing industries. And who knows, maybe an end to this shortage?

 DHL The logistics giant is supercharging its automation programme with the investment in 2000 picking robots from Locus Robotics. The firm aims to have them all operational in 2022, following a successful pilot.  CLEARMETAL Ocean freight intelligence startup ClearMetal was acquired by Project44. The companies intend to “create the world’s most complete realtime visibility platform.”

 FASTLY A bug in Fastly’s content delivery network caused some of the world’s most visited news, ecommerce, and entertainment websites to go dark in early June. The company said most were back up within an hour.  JBS The world’s biggest meat producer was forced to pay $11m in bitcoin after a ransomware attack. The Brazilian firm was forced to suspend production for at least a full day.

W I N N E R S JUL21

L O S E R S

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GLOBAL NEWS

1

UNITED STATES

Intel warns semiconductor shortage could last years Intel boss Pat Gelsinger has warned that the shortage of semiconductor chips is likely to remain a problem for several more years. While steps have been taken to meet short-term limitations, he said: “it could still take a couple of years for the ecosystem to address shortages of foundry capacity, substrates and components."

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July 2021

2

UNITED STATES

Tesla prices rise due to supply chain pressure Tesla’s Model 3 and Model Y prices increased for the fifth time in the span of three months. When a Twitter account called out the EV manufacturer for raising prices despite removing lumbar features, CEO Elon Musk responded: :Prices increasing due to major supply chain price pressure industrywide. Raw materials especially.”


3

GERMANY

SAP launches Business Network to improve supply chains SAP has launched “SAP Business Network”, a platform aimed at improving supply chain networks and connecting trading partners. CEO Christian Klein said: “Our new vision will build the world’s largest business community, enabling customers to easily connect with companies across supply chains.”

5

DUBAI

World Logistics Passport adds 10 more nations

4

FRANCE

Airbus tells suppliers to gear up for aerospace boom

Nations from across Asia, Africa and South and Central America are lining up to join World Logistics Passport, a new trading programme launched under the directive of Sheikh Mohammed bin Rashid Al Maktoum, Prime Minister of the UAE, and ruler of Dubai. Ten more nations joined in June.

Airbus signalled a return to pre-pandemic levels of aircraft production and called upon suppliers to scale up their operations to handle the incoming demand. Chief executive Guillaume Faury said suppliers should prepare for a period of intensive production “when market conditions call for it.”

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PEOPLE MOVES "I know we have a finance team that is both talented and committed and it is an absolute privilege to have the opportunity to lead them"

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July 2021

BECKY TAYLOR FROM: DHL SUPPLY CHAIN UK&I TO: DHL SUPPLY CHAIN UK&I WAS: VP COMMERCIAL DSC UK&I NOW: CHIEF FINANCIAL OFFICER DHL Supply Chain has appointed Becky Taylor as its new CFO, UK&I making her the first female to hold the post. Becky has 19 years of experience in financial management gained from various roles within the DHL business. In her new role she will focus on building DHL’s data-driven insight capabilities to support growth, while continuing to effectively manage risk, controls and compliance. “While our digitalisation strategy will be critical on this journey, the most important factor will be our people,” Taylor said. “I know we have a finance team that is both talented and committed and it is an absolute privilege to have the opportunity to lead them.”


HEIDI TURK FROM: NBC UNIVERSAL TO: ALGO WAS: SVP SUPPLY CHAIN NOW: CHIEF CUSTOMER SUCCESS OFFICER

JIM VRTIS

Heidi Turk has been named Chief Customer Success Officer at Algo, a leading supply chain intelligence SaaS solutions provider. Prior to joining Algo, Turk spent 23 years with NBC Universal, most recently as SVP Supply Chain. Amjad Hussain, Chairman, founder and CEO, said: “Heidi’s deep knowledge of hardgoods manufacturing, distribution and retail channel operations will take Algo's whiteglove, customer-centric service and support to the next level."

COMPANY: ASUCCINI LLC & ARTEMIS ABA INC. NOW: VICE CHAIRMAN, BOARD OF DIRECTORS Jim Vrtis has been elected to the board of directors at Asuccini LLC, the leading international logistics transportation management software company. Vrtis will join as the Vice Chairman, and continue his role as CEO at Artemis ABA Inc. Vrtis has more than 20 years of industry experience working in transportation and logistics. Ashkan Shamili, Founder & CEO, said: “With the addition of Jim to our Board, we are committed to providing our customers with an innovative customised transportation management system built in the Salesforce cloud and tailored to the way our customers run their business.” supplychaindigital.com

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TIMELINE THE

AIRBUS - BOEING DISPUTE The longest trade dispute in World Trade Organisation history looks like it could be drawing to a close. The fractious 17-year quarrel over unfair government aid for Airbus and Boeing is not over yet, but in June, both the US and EU agreed to suspend punitive tariffs on $11.5bn worth of goods for five years.

2004

2006

2011

The Dispute Begins

WTO Launches Probes

Appeals Heat Up

The US files a case with the World Trade Organisation that Airbus, jointly owned by the EU’s biggest powers, has been illegally subsidised by government funds. The EU responds with a counter case against the US and Boeing.

16

July 2021

After negotiations break down, the WTO launches joint investigations into both claims. A year later, Airbus seeks further public sector funding for its newest jet, the A350.

The EU is ordered to end government aid for most models of Airbus jets, but appeals the decision. The WTO rejects the appeal. Meanwhile a separate panel backs Brussels’ counter case, ruling against aid for Boeing worth at least $5.3bn.


2018

2020

2021

Sanctions Threatened

$11.5bn in Tariffs Imposed

Resolution Draws Near

Following years of new claims and appeals in which the US comes out largely ahead, the US finally threatens levies on European goods worth billions of dollars. WTO arbitrators are called upon to determine the severity of the sanctions.

The US is awarded the right to impose tariffs on £7.5bn worth of European imports, including 10% on Airbus jets and 25% on goods ranging from French cheese to wine and whiskey. In the closing months of 2020, the EU imposes its own tariffs on $4.5bn of US goods.

Both sides agree to suspend the tariffs for at least five years in what EC President Ursula von der Leyen calls a “major step” in ending the now 17-year quarrel A Working Group on Large Civil Aircraft, led by each side’s trade ministers, is established to work towards a conclusion.

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LEGEND

King of the Seas

ARNOLD PETER

Møller Founder & Shipping Magnate Company: A.P. Moller-Maersk Group

T

he son of a captain and the scion of a Danish shipping dynasty, sea salt ran through the veins of Arnold Peter Møller from a young age. Born in 1876 before the mass adoption of steamships, he would revolutionise the world of shipping before his death in 1965 at the age of 88. Møller founded Steamship Company Svendborg, his first venture, with his father in 1904 to capitalise on the rise of the new high-power vessels. Prior to the outbreak of World War One, he established a second company to operate freely as he saw fit. Steamship Company of 1912 capitalised on the opportunities throughout the Great War, growing it to the fourth largest shipping company in Denmark as the final shot of the war was fired.

The Second World War was not such a lucrative period of growth. Though highly active in supporting the US war effort, the shipping magnate was unable to recoup all his costs from the US government, and the family reportedly lost a large chunk of their fortune. Møller subsequently diversified his interests, including oil drilling in the north sea, and investment in the Dansk Supermarked retail chain, which went on to become the biggest company in Denmark. In 2003, almost four decades after his death, the two companies Møller established in the early 20th century were merged under the A.P. MøllerMærsk umbrella. It has been the largest container shipping line and vessel operator in the world ever since - and actually held that title since the mid-80s. Møller’s son and namesake, Arnold Mc-Kinney Møller, would take up the mantle and led the business until his death in 2012 at the age of 98. Today the founding Møller’s granddaughter Ane Mærsk Mc-Kinney Uggla owns a controlling interest in the Maersk Group.


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5 MINUTES WITH...

SUNDAR KAMAK PROCUREMENT AND MANUFACTURING VETERAN SUNDAR KAMAK, HEAD OF MANUFACTURING SOLUTIONS, IVALUA WEIGHS IN ON THE CHALLENGES AND OPPORTUNITIES FACING THE INDUSTRY Q. WHO ARE YOU?

» My name is Sundar Kamak, I’m

Head of Manufacturing Solutions at Ivalua. I’ve been with the company for around two years now, and I’m responsible for our industry solutions and our pre-sales team. Before joining Ivalua I spent almost 20 years in the source-to-pay procurement space, working for a number of providers. But I got my career started in manufacturing and supply chain, specifically in automotive and aerospace.

Q. AND WHAT IS TAKING UP THE MAJORITY OF YOUR TIME?

» The last year I've been focused in

helping organisations put together a digital transformation strategy, especially manufacturing companies, so they can continue to, uh, address some of the challenges they face due to the COVID pandemic.

Q. WHAT ARE THE BIGGEST CHALLENGES FACING YOUR CORNER OF SUPPLY CHAIN?

» We have a lot of clients coming

from different backgrounds aerospace, high-tech, automotive - and they’re feeling the pressure and the crunch. There’s a lack of product, lack of material availability, lack of resources, labour shortages. So, I work with the leadership in these organisations, try to understand what problems they're looking to solve and come back with Ivalua solutions that can help them address some of these challenges.

Q. WHERE DO THE BIGGEST OPPORTUNITIES LIE?

» If we look at manufacturing, it all

comes back to procurement and supply chain being involved sooner in the process. The traditional approach of engineers designing their latest

“ THE TRADITIONAL APPROACH OF ENGINEERS DESIGNING THEIR LATEST PRODUCT THEN PROCUREMENT GOING OFF TO SOURCE NO LONGER WORKS” 20

July 2021


“ WE HAVE A LOT OF CLIENTS AND THEY’RE FEELING THE PRESSURE AND THE CRUNCH. THERE’S A LACK OF PRODUCT, LACK OF MATERIAL AVAILABILITY, LACK OF RESOURCES, LABOUR SHORTAGES”

product then procurement going off to source no longer works. It’s important to treat suppliers like partners, which means you build trust, so they can participate very early on in the product design and product development process. It’s not done consistently in the manufacturing sector, but it will be key.

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Bringing the Community to LIVE Broadcast from London to the World

September

28th - 30th 2021 A BizClik Media Group Brand


Featuring:

Keynote Speakers LIVE Roundtable Q&As Networking Lunch Inspirational Presentations

Over 5 Stages:

Main Stage Procurement Stage Supply Chain Stage Sustainability Stage Tech Expo Stage

EARLY BIRD TICKETS

Creating Digital Communities


VODAFONE PROCUREMENT COMPANY

24

July 2021


VODAFONE PROCUREMENT COMPANY

SHAPING THE FUTURE OF

PROCUREMENT WRITTEN BY: RHYS THOMAS

PRODUCED BY: GLEN WHITE

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VODAFONE PROCUREMENT COMPANY

Reinhard Plaza-Bartsch, Global Head of SCM Development, Operations & Digital

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July 2021


VODAFONE PROCUREMENT COMPANY

Reinhard Plaza-Bartsch, Global Head of SCM Digital & Operations, Vodafone on empowering procurement through digital transformation

D

efining the efficacy of a digital transformation in procurement seems straightforward on the surface. You can consider the facts by measuring efficiency and productivity metrics or tally up the black ink on quarterly financial results. But the full story is written in the detail. In making areas of user experience and ESG commitments tangible, reportable and manageable. As Global Head of SCM Digital & Operations at Vodafone, Reinhard PlazaBartsch is driving the telecoms giant’s supply chain digital transformation journey. His vision is that digital will transform the way we work, fostering a culture of innovation and driving more sustainable value creation. It will empower individuals to do more, through outstanding user experience, boost productivity and reshape how we collaborate across organisations. “Digitalisation will unlock exponential value for our business,” he says. “As a function, we want to push the boundaries of what can be achieved through technology and innovation. Having a vision and lining up a clear roadmap of new capabilities interlocked with the business is an essential part of the journey. “You need to start from the basics - typically opportunities that will free up capacity of commercial teams so that they can devote more time to more value-adding activities. However, you need to shift gears quickly, go beyond simple automation, and equip teams with new digital solutions that go beyond bridging process gaps and providing data supplychaindigital.com

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VODAFONE PROCUREMENT COMPANY

Title of the video

insights to enable business foresight. In other words, enabling fully end-to-end connected solutions that provide transparency about what is happening in their area of spend. Extending the reach to identify external factors that will influence the business and leveraging artificial intelligence to advise and recommend the best course of action to minimise risks and maximise the value for the organisation.” Plaza-Bartsch joined Vodafone 14 years ago in the nascent era of digitalisation, when centralization and standardization were the buzz words of the hour. That initial unification process took some years to accomplish but resulted in “a data foundation for the supply chain organisation” that has been instrumental in accelerating the digital transformation over the past five years. “The degree of insights that we can get from the data that we've created over those years is tremendous,” says Plaza-Bartsch. “We can see how our operations perform in realtime, identify patterns and behaviors in our business and take laser sharp actions to drive performance. We can see how our users are 28

July 2021

“ Digitalisation needs to be very much linked to the actual expected business outcome” REINHARD PLAZA-BARTSCH

GLOBAL HEAD OF SCM DEVELOPMENT, OPERATIONS & DIGITAL, VODAFONE

leveraging certain datasets, what is becoming more relevant to them and how they are unlocking value for the business. Beyond our operations, we are helping our suppliers and partners improve their performance through our insights and the actions we have taken. “We are now also using some predictive models to proactively manage and mitigate risks, although this is an area where there is still a big opportunity to scale further. Getting access to data has been one step in our journey; this has now moved towards


VODAFONE PROCUREMENT COMPANY

turning data into business insights that are meaningful and relevant. This has enabled us to achieve world-class performance and drive consistency across all categories and regions. “What’s great in our function is that no matter where you are in the business, you will have access to the same information, same dashboards and analytics, and enjoy the same and unique user experience across our processes.” While business insights are a great asset to give you a view of what is happening, we are already leading into applications that provide business foresight. We want to take a more proactive and long-term perspective to potential risks and issues that may impact our supply chain. This can range from simple business trends being contextualised for category teams, to more advanced risk modelling solutions that enable our business to take data-driven decisions on more complex scenarios. The next step in the journey is to make data actionable, and where possible autonomous. You can think about this being a “companion or assistant” for a category manager, PlazaBartsch says, which equips them with the information they need to make decisions based on empirical evidence, rather than relying on heuristics or decontextualised data. “Going a step further, we intend to leverage artificial intelligence to autonomously identify

REINHARD PLAZA-BARTSCH TITLE: GLOBAL HEAD OF SCM DEVELOPMENT, OPERATIONS & DIGITAL INDUSTRY: TELECOMMUNICATIONS LOCATION: LUXEMBOURG Reinhard is currently the Head of Digital Supply Chain & Operations at Vodafone. He is spearheading the digital transformation of Vodafone’s supply chain by accelerating innovation and adoption of new technologies, driving operational excellent performance and unlocking new sources of value for the function. His career spans across a number of different industries with roles ranging from managing large scale logistics operations to leading complex transformation programmes along the supply chain. At Vodafone, Reinhard has been pivotal in the establishment and operation of the Vodafone Procurement Company and the transformation of the global supply chain (which now oversees Vodafone’s 25bn€ global spend). He has successfully delivered major transformation programmes that have delivered multimillion Euro in benefits for Vodafone and have also gained external recognition Reinhard is passionate about the role that

1982

Company founded

€44bn+

Revenue in the 12 months to 31 March, 2021

EXECUTIVE BIO

technology can play in shaping the future of procurement, and is actively engaged in customer advisory boards for a number of procurement technology solution providers.



Vodafone in partnership with Block Gemini Has created a commercial contract management (CCM) platform based on blockchain Since 2016 when Chris Fernandez founded Dubai-based Block Gemini, it has been meeting a growing demand for blockchain implementations particularly in the supply chain and fintech space. “The fact that we are now working with a company like Vodafone on a truly innovative blockchain project is testament to what we’ve been able to achieve in such a short span of time,” he says. Any industry that deals with transactional ecosystems that are tracked and monitored digitally can be greatly improved through the use of blockchain technology. “The project we’re currently deploying for Vodafone, using blockchain and smart contracts to manage complex contractual agreements with their suppliers, is an example of the value that blockchain can create. Of course, managing procurement contracts is not specific to the telecoms industry, but there are many other areas specific to the telecoms industry that can benefit from the use of blockchain.”

Over the last two years the collaborative relationship between Block Gemini and Vodafone has grown steadily. “From consulting and advisory services, to design and development, every aspect of the project has been managed and delivered by our dedicated in-house team - I believe this has been the strongest driver for our continuing partnership with Vodafone on this project. I see Block Gemini bringing a great deal of value to the future growth and expansion of this solution across Vodafone’s internal procurement systems.” Blockchain has the power to transform the global telecoms ecosystem, Chris Fernandez concludes: “Take the example of fixed-line leasing services - huge amounts of bandwidth are bought and sold across millions of customers worldwide. “These transactions need to be negotiated and settled discretely between many telecoms service providers, and that’s a very resource-intensive process. With blockchain, the entire manual settlement could be replaced by a smart contract settled instantaneously!”

Learn More


VODAFONE PROCUREMENT COMPANY

“ Supply chain is a key contributor to Vodafone’s purpose agenda” REINHARD PLAZA-BARTSCH

GLOBAL HEAD OF SCM DEVELOPMENT, OPERATIONS & DIGITAL, VODAFONE

32

July 2021


VODAFONE PROCUREMENT COMPANY

patterns and prompt action, and eventually… enable our systems to autonomously take decisions,” he adds. While all the new tech is great, securing a consistent and outstanding user experience is a cornerstone to any successful digital transformation. “You need to keep a close focus on user experience to drive adoption,” says Plaza-Bartsch. Enhancing user experience has been a long objective of Vodafone’s supply chain digital transformation. As far back as 2017 the company began measuring user experience across all its procurement processes and systems. Using a net promoter score - a simple but effective questionnaire, that is automatically triggered when people interact with the digital solutions, asking users to gauge how likely they would be to recommend the SCM solutions - the results were underwhelming. On a scale from -100 (everyone hates the system) to +100 (everyone loves the system) the score came back at -37. “Naturally what this told us was we needed to do something, and so we did,” Plaza-Bartsch says. “While we couldn’t find any company trending on the positive side of user experience with procurement systems, we are strong believers that improving user experience helps our organisation to become leaner and more agile. It also helps us drive operational excellence and attract talent. People want to work with companies that have great tech, where they can unlock their potential and supplychaindigital.com

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Start Today


SIRIONLABS, EMPOWERING TRUE COLLABORATION AND PARTNERSHIP Ajay Agrawal, CEO & Co-Founder of SirionLabs, discusses their fruitful partnership with Vodafone and how CLM enables smarter contracting enterprise-wide. Ajay Agrawal, CEO & Co-Founder of SirionLabs, shares how the alignment of values and the power of CLM have made for an effective partnership with Vodafone. “We believe in the power of cost savings and superior customer experience, and therein lies the synergy between our organisations. What started out as a post-signature value realisation exercise back in 2016 has since grown into a full suite CLM solution encompassing customised pre-signature features to cater to local markets spread over more than 40 countries. Nothing gives me greater happiness than a customer who has been able to gain increased visibility and get a tighter grip over their contracts.” “Vodafone has today around 2000 strategic supplier contracts managed through SirionLabs, which oversee a spend of close to 6 billion euros annually. Through our initial discussions, we saw great potential in addressing Vodafone’s commercial engagements, tracking and realising value at scale through a myriad of systems that were retrofitted to suit existing infrastructure.” “Our four-way automated invoice matching solution has contributed to Vodafone’s bottom line, enabling them to save hundreds of millions of dollars. It has also reduced the friction in their supplier landscape,

ranging from missed commitments or complaints to disputes or disagreements. Automation also reaps many benefits and has enabled Vodafone to cut costs in contract management and supplier governance by more than 60%, reducing manual effort by almost 50% and generating further savings through reduced headcount cost. Post signature activities have also become smoother and a lot more efficient, with one enterprise contract repository across all suppliers and managing them according to their footprint.” By leveraging AI and extracting valuable data, SirionLabs’ CLM solution empowers collaboration and continued cooperation and partnership long after contracts have been signed. Agrawal explains, “Collaboration is essential to any partnership. That is really the heart and soul of any SirionLabs project. Unlike many conventional contract management systems that create, store, and maybe extract information from contracts, SirionLabs is unique because it allows both contracting parties to have continued access to the system, even after the contract is signed, while giving a single, consolidated view of data, further enhanced by rich dashboards and insights which help make quick business decisions. The purpose of that continued access is true collaboration across multiple business functions.”

Digitize Your Contracts Now


VODAFONE PROCUREMENT COMPANY

actually maximise their contribution to the organisation, rather than being consumed by administrative activities.” Today that score sits 117 points higher at positive 84. “User experience is and will always be something to chase, PlazaBartsch admits. “This is basically because our expectations as individuals continuously evolve. We are all exposed to great user experience in everyday applications we have in our private lives, so naturally our expectations will not be different at work.” The improvement achieved in user experience represents a complete turnaround in the course of just three years. That development will continue as Vodafone continuously influences the innovation roadmap of its partners, but also through a new approach to partnerships which is taking shape through the development of new 36

July 2021

“ Customer experience will continue to be an uncompromised priority, combined with an obsession for speed and simplicity across all our user journeys” REINHARD PLAZA-BARTSCH

GLOBAL HEAD OF SCM DEVELOPMENT, OPERATIONS & DIGITAL, VODAFONE

SCM systems. Instead of buying ready-made solutions, Vodafone is driving innovation by teaming up with a number of partners to develop new capabilities, including software firms outside the traditional sphere of procurement software solutions. One good example of this drive for innovation is Vodafone’s vision of autonomous journeys across the whole supply chain.


“This is a very ambitious project we are doing with Pegasystems. Today we call it Autonomous Procurement, however, we expect it to quickly expand beyond procurement to a truly integrated and automated supply chain ecosystem” PlazaBartsch says. “We’ve worked hand-in-hand with our category teams to shape the user journeys in the procurement space as a start,

and on this basis we are beginning to add on the capabilities that make buying simpler and faster for the business, while also creating competitive tensions. Our ambition is that this becomes a fully autonomous, end-toend solution, where everything from supplier selection, to contracting and risk management happens automatically, all on the platform. We are moving here clearly from a digital-first to a digital-only mindset. “We are very proud to have launched our MVP (minimum variable product). This is truly agile development where we are getting to see how the product shapes every other week” Plaza -Bartsch adds. “The platform is still in its early stages and needs greater human oversight to function properly than when it is complete, but having an MVP up and running has been an important step in solidifying Vodafone’s leadership position. supplychaindigital.com

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Pega & Vodafone: Procurement’s Digital Transformation Pega and Vodafone are partnering up to build futureready procurement processes. With 6,000 global employees across North America, Europe, Latin America, and AsiaPacific, Pega has joined forces with Vodafone, a leading British technology communications company. We recently spoke to Joaquin Reixa, Pega’s Vice President & Managing Director, EMEA, to see what this partnership will hold. ‘This is a joint digital journey’, he told us. ‘To accelerate Vodafone’s digital transformation, Pega is focused on leveraging our unique and complementary technology and skill sets’.

Why Collaborate? Both Vodafone and Pega bring unique strengths to this new partnership: Pega will provide the digital foundation; Vodafone will provide the procurement expertise. With

Pega’s simple yet sophisticated architecture, Vodafone Procurement Company (VPC) can rapidly build, deploy, and automate global operations to scale. In addition, Pega’s solutions are perfect for complex supply chains. With Vodafone experts manning the controls, Pega will help create a streamlined, intelligence-driven supply chain engine. As Reixa explained: ‘You want to have a global common process, but couple it with the flavour of the local country and culture’. Overall, Pega and Vodafone’s partnership will drive agility, optimise supply chains, offer customers a personalised experience, and accelerate Vodafone’s operations. Reixa summed it up: ‘In these moments of chaos, companies must speed up their digital transformation. If you’re not prepared, you stand the risk of irrelevance. This is the time to pursue change’.

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KEY PARTNER: BLOCKGEMINI

“We have big ambitions around our autonomous procurement journey, and we are keen to push the envelope further” REINHARD PLAZA-BARTSCH

GLOBAL HEAD OF SCM DEVELOPMENT, OPERATIONS & DIGITAL, VODAFONE

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“We exchange a lot of pricing information with partners and suppliers, and we wanted a solution to manage that activity in a much more seamless manner,” says Reinhard Plaza-Bartsch. “So we decided to work with BlockGemini, a late-stage startup partner and Tomorrow Street portfolio company, which is not part of the traditional procurement tech space, because we had a vision of what we wanted, and it was clear that it wasn't available in the market. “The partnership is about commonly investing from both ends to develop this solution and eventually productise it. It is already live within our ecosystem across 11 markets, with around 30 different partners operating on the platform, and we are now aiming to scale this rapidly towards the end of our financial year across all our supplier base. It has been successful so far, enabling us to track price fluctuation and identify areas of opportunity for reviewing price on an on-going basis.”


VODAFONE PROCUREMENT COMPANY

“When we set our vision, we initially went to market to find an off-the-shelf solution that will meet our objectives. We invited 30-plus different partners and came to realize that the landscape wasn't ready. That gave us an indication that this is an area where we should invest more time and develop something to maintain our leadership position for the future. We believe such a solution will be relevant not just for Vodafone, but also for our partners.” Alongside evolving the core functions of its procurement division, Vodafone is also leveraging its digital transformation to encompass environmental, social and corporate governance (ESG) objectives. PlazaBartsch says: “Supply chain is a key contributor to Vodafone’s purpose agenda. This is by embedding planet and society objectives across everything we do, from how we make decisions (policies) and how we run our business (processes and systems), enabling us to influence and align our more than 10,000 global suppliers around common objectives.” Sustainability, diversity and inclusion have become core concerns for the private sector, but many businesses continue to grapple with exactly how to quantify them, and how to link them to business objectives. At Vodafone, Plaza-Bartsch’s approach is to make them tangible and transparent so that they can be managed. “For example, we have embedded purpose commitments in our sourcing process,” he says. “When evaluating suppliers for new work, 20% of our scoring criteria will account for their commitments to diversity, inclusion and the environment. Enabling this through our systems has been key to secure a consistent implementation across our spend.” Likewise, to support a reduction of carbon emissions objectives, Vodafone is leveraging big data to access and create full transparency of its CO2 footprint. "For us the use of

technology is essential to understand and predict CO2 emissions growth through our supply chain” Plaza-Bartsch says. “By creating this visibility, we can be more targeted when selecting areas of opportunity to actively drive a reduction in emissions on a year-by-year basis by working with our partners on greener technologies and solutions. “It’s the same for ESG. We expect that the demand for information and transparency across our supply chain will continue to rise. We will see larger and more connected ecosystems that will contribute richer information to enable business foresight at scale. “Innovation has become the new normal across our digital transformation journey and our culture. Customer experience will continue to be an uncompromised priority, combined with an obsession for speed and simplicity across all our user journeys. This will enable us to scale commercial and operational value to Vodafone, and beyond that, enable lasting and impactful improvement to society and our planet.”

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RESPONSIBLE SOURCING:

THE BALANCE BETWEEN

PROFIT and PURPOSE

Technology and AI will help procurement professionals lead from the front in ESG as the world begins to build back better, says Coupa’s Donna Wilczek WRITTEN BY: RHYS THOMAS

M

aking decisions for purpose and making decisions for profit is a tricky balancing act even for individuals in their personal lives. Scale that up by many orders of magnitude to a multi-national business, where profit often trumps purpose, and the tightrope grows narrower still. But the wind is changing. PwC, one of the world’s biggest accounting and consultancy firms, announced in June a recruitment drive to boost its headcount by 100,000 - a move not only to support growth in its current verticals, but to meet the swelling demand for ESG guidance. Environmental, social and corporate governance is set to become the new competitive battleground for all areas of business, but it is in procurement where ESG is already being readily embraced. Coupa, one of the world’s leading Business Spend Management providers, has launched a new platform capabilities that aim to empower procurement teams to redefine their approach to responsible sourcing and ESG. 42

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“Our goal here is to create a platform that not only helps sourcing professionals to manage their spending on a fiduciary level, but also to answer questions of how they manage their spending to deliver a more sustainable outcome,” says Donna Wilczek, SVP, Product Strategy & Innovation at Coupa. ”How do we help organisations better make decisions that impact the planet, that create more of a social good with every decision that they're making?” Building back better As the global economy scales up for postpandemic recovery, organisations are constantly asking themselves these questions, Wilczek says. It’s not just a case of returning to how things were, but how to build back better. In real terms that means breaking down silos, connecting disparate business functions and working more collaboratively than before. The conventional wisdom is that WFH and our reliance on digital platforms during the COVID19 outbreak has already kickstarted this shift.


RESPONSIBLE SOURCING

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RESPONSIBLE SOURCING

“INSTEAD OF TRYING TO BITE OFF THE ENTIRE THING, TAKE A PROBLEM AREA AND GET STARTED ON THAT PROBLEM AREA” DONNA WILCZEK

SVP, PRODUCT STRATEGY & INNOVATION, COUPA

“Our platform is designed around doing just that: bringing these teams together and then helping the whole organisation align against those strategic goals,” Wilczek says. One of the biggest historic hurdles for ESG has been envisioning and supporting the long-term plan. In a typical sourcing process, procurement will do their job in identifying suppliers for the goods or services they need. Due diligence will ensure both sides are aligned, that the supplier is not on a sanctioned list, and that they have decent ESG compliance. The business begins using that supplier, and the sourcing team moves on to a new project. But responsible sourcing doesn’t end the moment the contract is signed.

“The problem is, no-one is guarding the henhouse anymore,” Wilczek says. “The reality of what's happening is that the suppliers are changing on a day-to-day basis.” No procurement team can reasonably be asked to manually monitor suppliers on a dayby-day - or even week-by-week - basis. It’s a well-known limitation, and Coupa’s new Sustainable Business Spend Management (BSM) platform aims to provide an AI-powered technology solution. Drawing on social sentiment, government sanctioned lists, and external data, it compiles a profile of each supplier. If any ESG compliance breach occurs, it flags them up, pausing spend transactions and redirecting it back to the risk and coursing team.

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RESPONSIBLE SOURCING

“It creates this model that puts the risk team and the sourcing team in the day-today business transactions,” Wilczek says. “And you're alleviating the need for a human to monitor these millions of data points, because the system is doing it for you.” The balancing act between profit and purpose But solving one dilemma can often create another. Now the questions become how do organisations fully embrace ESG commitments as a central part of their business objectives? And how do they reposition ESG as an enabler in delivering on their shareholder commitments, rather than considering it a disruptive external force. “It’s a balancing act,” Wilczek admits. “There are currently around 1800 lawsuits out there against businesses for sustainable reasons - and this is going to increase. So the key is for businesses to start working with the people responsible for ESG 46

July 2021

“ HOW DO WE HELP ORGANISATIONS BETTER MAKE DECISIONS THAT IMPACT THE PLANET, THAT CREATE MORE OF A SOCIAL GOOD WITH EVERY DECISION THAT THEY'RE MAKING?” DONNA WILCZEK

SVP, PRODUCT STRATEGY & INNOVATION, COUPA


RESPONSIBLE SOURCING

programmes, understanding that working together now, building a model that will extend into the future and get ahead of these regulations or potential lawsuits, will pay off in spades. “But it is a balance between fiscal, environmental, economical, purpose and profit. And this is where technology can help. The technology that Coupa brings to the table is an optimisation type model using AI. And when you're applying AI against millions of data points, you're able to model a vast array of scenarios, and the system can help you prioritise and discover the best possible scenario that balances all of those different needs.” The evolving roles of procurement professionals, from cost-cutters to strategydefiners, places them squarely in the centre of this new perspective. But where to start, and how to motivate every stakeholder? Making ESG tangible and measurable will be key, Wilczek says.

Donna Wilczek TITLE: SVP, PRODUCT STRATEGY & INNOVATION COMPANY: COUPA INDUSTRY: TECHNOLOGY LOCATION: UNITED STATES Donna Wilczek is a seasoned technology veteran with over 20 years of industry experience. She currently serves as the Senior Vice President of Product Strategy and Innovation at Coupa Software, a global leader in business spend management. In her time at Coupa, Wilczek has helped the company scale from a young startup to a successful public company. Wilczek is also a board member and a technology innovator who has been awarded 12 software patents.

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Solving diverse supplier visibility There’s one dimension that’s often overlooked in discussion of increasing supplier diversity, and that’s discoverability. Diverse-owned and operated SMEs are often unable to compete, pound for pound, with their larger peers. They simply don’t have the marketing resources, or the historic data to support their claims. “It’s a very upside down equation when you consider the vast majority of the world’s business are SMEs,” Wilczek says. “Coupa’s networked model means that once a supplier creates a profile on the system, they are available and visible to everyone on our platform. And when a customer of Coupa's does a search for suppliers, they can filter for aspects such as diverse or green, or these types of certificates that the supplier has posted. “We also support those suppliers on Coupa’s platform through our matchmaking system. So, if a supplier's performance starts decreasing, and this is a small or medium business, a diverse business, you can route them to a team that can help that supplier be better performing. What is the point of large enterprises sourcing from a small business if they're not doing business with that same supplier two years later? These suppliers are not enterprise level; their technology is not going to be as sophisticated. You have to make it as easy as possible, but you also have to help them be a better supplier.”

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“IT IS A BALANCE BETWEEN FISCAL, ENVIRONMENTAL, ECONOMICAL, PURPOSE AND PROFIT. AND THIS IS WHERE TECHNOLOGY CAN HELP” DONNA WILCZEK

SVP, PRODUCT STRATEGY & INNOVATION, COUPA

“Our platform is continually tracking spend and assessing, for example, how much diverse spend you have processed in that prior year. In our next release, we're using the collective community data across our customers to benchmark them and provide visibility into how they're comparing against the leaders. This is a very powerful tool that customers can use in speaking to their executives, to say, ‘Here is how we are doing compared to leaders in our industry, our peers’.” One organisation using Coupa’s supply chain solutions measured more than 70 million tonnes of CO2 avoidance for its customers - a “really powerful impact”, Wilczek says. “The more organisations can measure the outcomes of their efforts, the more impact they can have on their business and the planet, across the board.” Grappling with the opportunities and hurdles is the next great challenge for procurement. But the important thing is to start. “Every day that you delay is a day that you delay your outcome,” Wilczek says. “Instead of trying to bite off the entire thing, take a problem area and get started on that problem area. Use technology, use AI to look at all of your options and redefine what you should do. I think organisations may believe it's harder than it actually is.” supplychaindigital.com

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BP

Optimising bp's workflows with digital transformation WRITTEN BY: MELISSA KHAN PRODUCED BY: THOMAS LIVERMORE

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bp

The energy company’s transformation leaders shed light on harnessing the power of digital for business performance and meeting their sustainability goal

b

p has set out a new strategy to transform from an International Oil Company to an Integrated Energy Company focused on delivering solutions for customers. This is a major, necessary step in support of the company’s purpose to reimagine energy for people and the planet, and its ambition to become a net zero company by 2050 or sooner and help the world get to net zero. After more than a century defined by oil and gas, bp set out a strategy to become a very different energy company in the next decade. So what does it take for an organisation with a rich heritage to remain ahead of the game today? One of the answers is digital transformation. Nick Wright, bp’s global director of digital and innovation sourcing is a strong advocate of transformation for efficiency. He says the focus for his area of the organisation is sourcing complex or innovative technology deals in support of bp’s strategy. Nick states: “Transformation isn’t just a change in process, for an organisation like bp that has years of legacy systems behind it, it becomes more of a mindset shift. There is a sense of reimagined purpose, given our ntentions to move from traditional oil and gas to clean energy, and to fulfill that purpose, it is important to transform and lead through innovation.”

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bp

Vipin Radhakirshnan , bp’s vice president for digital solutions & transformation, adds: “[This is] a common theme for the entire industry, but bp in particular believes digital transformation efforts are underpinned by the organisation's need and want to reinvent itself.” He further adds that the organisation functions on a ‘transformation as usual’ principle which is essential to keep pace with the everevolving technology landscape and user demands. Vipin is responsible for the full scale of work from transformation strategy to execution. In his role, Vipin oversees the adaptation of digital solutions for finance, customer and procurement processes, which includes key areas like data, insights and analytics, business process management, intelligent automation and enabling solutions. 54

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“ A common theme for the entire industry, but bp in particular is that the efforts put in towards digital transformation are underpinned by the organisation's need and want to reinvent itself” VIPIN RADHAKRISHNAN

VICE PRESIDENT GLOBAL TRANSFORMATION & DIGITAL SOLUTIONS AT bp


bp

VIPIN RADHAKRISHNAN TITLE: VICE PRESIDENT GLOBAL TRANSFORMATION & DIGITAL SOLUTIONS INDUSTRY: OIL & ENERGY LOCATION: UNITED KINGDOM

EXECUTIVE BIO

This holistic approach to transformation helps different areas of the business in understanding the full scope of the problem and building an infrastructure to solve it. Vipin adds “It is really a combination of enablers that are unique because you have everything from data, process automation and technology solutions enabling transformation strategy and delivery.” The other key factor when it comes to transformation at bp is the approach. According to Vipin, it is a good blend of a top-down and bottom-up approach. “A bottom-up approach simply means tapping into the pain points of the business to get an idea of the problems faced and how they can be transformed,” explains Vipin. “On the other hand, a topdown approach would mean setting

Over the last two decades Vipin Radhakrishnan has lead global roles across the Oil & Energy, CPG and Telecom industries with companies like bp, Diageo and Vodafone focusing on Business Strategy, Digital Transformation, Data Analytics & Enterprise Operations. In his current position as Vice President of Global Transformation and Digital Solutions at bp, he is responsible for business transformation covering transformation strategy, global process ownership and agile delivery of the transformation roadmaps. His business and technology background gives him an edge to align the right digital solutions with the business needs, maximising value to his stakeholders and customers.


bp "pushes boundaries" of procurement with Fairmarkit bp wanted to free up procurement resources to concentrate on value-added procurement activity as well as ensure they were managing their spend and budgets efficiently. To do this, the company wanted to both automate as much of their process as possible and monitor procurement data in real time to identify efficiencies.

The Challenge Procurement at bp is an incredibly large operation. The company’s supply chain spans the globe, incorporating functions as varied as drilling for oil, to constructing wind turbines, to operating retail storefronts. In this environment, the procurement team needs to manage spend ranging from billion-dollar specialist equipment to the receipt rolls in cash registers.

Competitively source every purchase. Automation makes it simpler. Data makes it smarter. Fairmarkit is the intelligent sourcing platform that makes it possible.

Learn more


“Sourcing and contract negotiations can be quite a manual process,” says Nicholas Wright, Director, Digital and Innovation at bp who is responsible for the way in which bp approaches the market in the digital and innovation space. “It requires careful attention at every step of the process—from capturing and sending the requirements out to suppliers to have them bid on particular requirements or scope, to the selection of a final vendor and the activities required to on-board them. It's an incredibly time- and resource-intensive process.”

bp not only wanted to free up resources to concentrate on value-added procurement activity, they also wanted to ensure they were making the best use of the digital tools avalaible within the marketplace. To do this, bp wanted to be able to both automate as much of the process as possible, as well as monitor and analyze their procurement data at a granular level.

The solution Wright says Fairmarkit is delivering “a great outcome.” He says the platform automates what used to be a manual process to help bp do things faster, with less people. But for Wright, Fairmarkit’s proposition has served another benefit. “It has pushed the boundaries,” he says. “At bp, it was one of our first significant digital platforms, and it is disrupting the way that we work within procurement; it’s actually made people stand up and realize that we can do things differently. As a team and a company, we’re inspired to go out and look for the next Fairmarkit, whatever that may be, and be more aware and open to disrupting other manual processes.”

The result By working with Fairmarkit to automate processes, bp’s procurement team was able to deliver the same scope automatically that was previously done manually. “We can now do more with less,” says Wright. “Automation and the capture of data makes our platform infinitely smarter than any one person. We are now using real time data to make accurate decisions—more than one single brain can comprehend.” bp procurement team members are also using data collected from previous transactions to make smarter decisions. “For instance, if we’re paying for a certain products and services, we can now see how much other organizations pay for those products and services and evaluate whether we’re getting a competitive price,” says Wright. “To be able to do that in real time—on every single transaction—is a level of transparency that is extremely value-additive. We’re using price history to inform the future.”


bp

NICK WRIGHT TITLE: DIRECTOR, DIGITAL & INNOVATION SOURCING INDUSTRY: OIL & ENERGY LOCATION: UNITED KINGDOM I am an expert in commercialisation, super energised by finding new ways to do things, recognising that tried and tested methods are not always right as our business evolves to its low carbon future. As a leader, I seek to build real depth and breadth of knowledge within my team to support the increasingly complex commercial requirements of our stakeholders. I also strive to create a safe environment which encourages experimentation and innovation within my team and across my relationships. I bring 15 years’ experience and am recognised as an expert both internally and within the marketplace.

EXECUTIVE BIO

broader business transformation goals and outcomes and looking at processes end-toend so that teams don’t just get stuck at the problem-solving level, but instead get a head start on innovating the business of the future.” Speaking of some of the drivers that led to transformation at bp, a need-based purpose is prevalent. The organisation strives to meet customer needs - both B2B and B2C, attune to the needs of the emerging market while serving bp’s internal ambition of reinventing themselves and finally, adapt to the needs of the customer landscape that is progressively changing. As procurement is a large and collaborationoriented business enabler at bp, their strategy has understandably been driven by transformation.


bp

“ We used to be supplyled, meaning we had a commodity and we would release that to the market and that's our bread and butter. But as we reinvented ourselves and created a more digital organisation, we became demand-led” NICK WRIGHT

DIRECTOR, DIGITAL & INNOVATION SOURCING AT bp

Procurement workflows can be quite cumbersome and require a colossal amount of historical and comparative data that is traditionally manually studied to govern processes. This explains why digital transformation has been crucial to decision-making, where both real-time analytics and historical data is available at hand, thereby reducing the need for manual synthesising of information. bp is in the process of evaluating all our existing procurement vendor engagements as part of a wider procurement transformation initiative. A good example of an improved workflow is the contract negotiation process. Traditionally, procurement officers would spend weeks if not months reviewing documents, negotiating contracts and running tenders, however with the collaboration from digitally native vendors, bp has essentially taken work out of the system and negotiated better deals over time. “The value of working with new suppliers is that it takes work out of the system by delivering a scope that was previously resource intensive, using realtime data to make accurate decisions. Essentially, we’re using our history to determine our future,” adds Nick. To support bp’s customer-centric approach, bp’s procurement and sourcing teams are pivoting to reflect the company’s strategy. This can mean partnering with suppliers to co-develop products to meet new business challenges. With sustainability as a long-term goal, within 10 years, bp aims to have increased its annual low carbon investment 10-fold to around $5 billion a year, building out an integrated portfolio of low carbon technologies, whilst over the same period, bp’s oil and gas production is expected to supplychaindigital.com

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bp

“ It is really a combination of enablers that are quite unique because you have everything from data, process automation and technology solutions enabling transformation strategy and delivery” VIPIN RADHAKRISHNAN

VICE PRESIDENT GLOBAL TRANSFORMATION & DIGITAL SOLUTIONS AT bp

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bp

reduce by at least one million barrels of oil equivalent a day, or 40%, from 2019 levels. Its remaining hydrocarbon portfolio is expected to be more cost and carbon resilient. These are ambitious goals, and to be able to achieve them while keeping everybody’s best interests at heart, the organisation needs to adopt an agile mindset. Long-term goals aside, bp employees are working at constantly reinventing processes and focusing on incremental gains. Coupled with this agile mindset is the need to have a digital outlook – listening to the voice of the customer and improving along the way. And lastly, having a growth mindset both internally and externally, allowing the organisation as well as its partners to grow beyond factors such as cost and time. To this, Nick adds “We used to be supplyled, meaning we had a commodity and we would release that to the market and that's our bread and butter. But as we reinvented ourselves and created a more digital organisation, we became demand-led, listening to the needs of our customers, regions, cities and the wider society.” Nick’s leadership style is also a testament of his commitment to growth, and he nurtures a culture of incremental learning within his department. Nick’s teams are encouraged to learn from experimentation and celebrate their failures, rather than slowly applying tried and tested measures. He believes in providing continuous cycles of feedback and that a minimal viable product that's imperfect is the way to achieve growth and foster innovation.

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SUPPLY CHAIN

AI 62

July 2021


SUPPLY CHAIN

DEMOCRATISING PROCUREMENT

WITH AI

Globality CRO Keith Hausmann on building a disruptive, digital, inclusive future with AI-powered procurement at its core WRITTEN BY: RHYS THOMAS

A

s companies around the world seek new ways to drive growth and value coming out of the pandemic, Globality has a solution: an AI-powered B2B services platform and marketplace that enables companies to yield an average of 20% cost savings, 50% efficiency gains and 100% collaboration from anywhere. Globality provides a fully reimagined sourcing experience transforming the procurement of complex, high-value services and enabling procurement teams to focus on more strategic, relational and rewarding tasks. "We free up procurement professionals – humans with high emotional intelligence and underutilised skill sets – to play to human strengths’, said Keith Hausmann, Globality’s Chief Revenue Officer. “Humans, unlike AI, are equipped to build partnerships, develop brilliant projects and develop programme frameworks." supplychaindigital.com

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BEGIN YOUR JOURNEY TO EFFECTIVE SUPPLIER COLLABORATION TODAY Download this research report, produced by Gartner and presented by Nulogy, which outlines key activities that chief procurement officers should follow to design and execute an effective supplier collaboration strategy. This research report will equip you to: • Define clear objectives for a successful supplier collaboration strategy • Identify key stakeholders to achieve internal buy-in • Create a preliminary list of strategic suppliers using fundamental best practices

Download Report

nulogy.com | uk@nulogy.com | +44 (0)1173 134432 GARTNER is a registered trademark and service mark of Gartner, Inc. and/or its affiliates in the U.S. and internationally and is used herein with permission. All rights reserved.


SUPPLY CHAIN

“ Ultimately, our platform helps people make more accurate, precise, quality-based supplier decisions” KEITH HAUSMANN CRO, GLOBALITY

By relying on natural language processing to understand the user’s complex intent, the platform’s AI advisor, Glo, allows procurement teams to streamline the demand creation, supplier identification, proposal evaluation and statement of work creation process. “Ultimately, our platform helps people make more accurate, precise, quality-based supplier decisions,” Hausmann explained. What also makes Globality’s platform unique is its autonomy – in other words,

business stakeholders can source complex services without burdening procurement team members who have bigger opportunities to solve. “In a nutshell, I’d call it democratising,” said Hausmann. "It’s an AI-guided, self-service way to source. We’re making procurement available to anyone while ensuring transparent, competitive, fair guardrails are in place to optimise outcomes.” Artificial Intelligence The use of AI truly differentiates Globality’s platform. The AI-powered, consumerlike user experience enables business stakeholders to source complex services without needing explicit training and qualifications. "Critical moments in our platform are driven entirely by AI,” said Hausmann. The Globality experience is unique in four specific ways: First, Glo acts as a strategic sourcing advisor, helping companies unpack their needs. Just as a human might interview a business partner, the platform asks questions that move the conversation from abstract goals to a concise and comprehensive specification. Second, Globality’s platform provides customers with highly qualified matches – going far beyond what a search engine can do. Unlike a search engine, Glo’s matches fully eliminate bias from the results without any advertisements or sponsorships. “Requirements such as geography, industry, biography, awards and other subcategory qualifications help pair companies with the right suppliers,” explained Hausmann. Third, Glo quickly distills the critical elements from supplier proposals, saving hours of labour and effort. “AI outputs recommendations and decisions in a simple framework,” said Hausmann. “Then, supplychaindigital.com

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SUPPLY CHAIN

Using Artificial Intelligence to Identify Complex Intent

companies can get to more complex choices and move forward more quickly.” Finally, with built-in feedback opportunities throughout the process, Glo learns from every sourcing event and captures that knowledge for use in future projects. According to Hausmann, this helps ensure future selections will surpass customers’ expectations and standards for excellence: “You don’t want to match with two or three-star suppliers; you want to match with five-star suppliers.” Setting the ESG Agenda With the capabilities of Globality’s platform, procurement leaders are better positioned to focus on more strategic opportunities, including the acceleration of their company’s ESG commitments – a top priority for all leading businesses. As Hausmann explained, 66

July 2021

“ We’re making procurement available to anyone while ensuring transparent, competitive, fair guardrails are in place to optimise outcomes” KEITH HAUSMANN CRO, GLOBALITY


SUPPLY CHAIN

Keith Hausmann COVID-19 has exposed the risks of relying on single suppliers and has brought sustainable and inclusive procurement to the forefront as executives have needed to expand their global capabilities. Globality’s multinational marketplace has more than 25,000 suppliers – including customers’ preferred suppliers and other diverse providers from around the world. For each provider, the platform incorporates insights on social and environmental commitments as well as other critical ESG data points. As a result, Hausmann said that “procurement professionals can evaluate leading companies and award spend based not on what they say, but on what they do”. To support small, medium-sized and underrepresented suppliers, the company works with each provider to build its presence on the platform and

TITLE: CRO COMPANY: GLOBALITY INDUSTRY: INFORMATION TECHNOLOGY & SERVICES LOCATION: UNITED STATES Keith Hausmann is Chief Revenue Officer at Globality, the world’s first AI-powered platform and marketplace that is revolutionising how companies buy and sell services. Prior to joining Globality, he was Accenture’s Global Head of Procurement & Supply Chain Operations where his team of more than 15,000 people managed over $300 billion in spend. A well-known leader in the Sourcing & Procurement domain, Hausmann was also a co-founder of Procurian.

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SUPPLY CHAIN

create a comprehensive profile. “Sourcing isn’t usually a competitive, inclusive or transparent process,” said Hausmann. “Globality showcases suppliers with proven merit and qualifications, whether small, diverse, medium or large. We help level the playing field and create a fai play environment.” Looking Ahead Throughout the pandemic, Globality’s customers relied on the platform to maintain 68

July 2021

their service continuity while simultaneously preparing for the inevitable upturn and longterm growth opportunities. As Hausmann noted, companies could match with new suppliers immediately if existing ones faced disruption due to lockdowns or other pandemic-related issues: "It’s all there for you in an instant." He explained that it’s critical to bring procurement to businesses in a way that makes sense. “Many budget holders like to stay autonomous,” he said. “They


SUPPLY CHAIN

“All companies around the globe are coming out of a tough time these days, which puts pressure on procurement” KEITH HAUSMANN CRO, GLOBALITY

think, ‘I have my own budget. I have my own decision rights. I’m running my own business'. We don’t want to interfere with that. Instead, we want to empower them to face the new normal.” According to Globality, the new normal is digital, responsible procurement. Analogue enterprises cannot succeed in a new era; global companies cannot continue to turn a blind eye to ESG compliance issues within their value chains. “Companies will start to look at diverse suppliers or small businesses in their communities,” said Hausmann. “In the future, companies will try to achieve transparency and visibility in all their spend. Globality is a marketplace at the heart of this. It’s fundamentally a platform that connects buyers, procurement organisations and their business stakeholders with suppliers in a very different way than we have in the past. We’re driving transparency, fair play and a diverse digital market.” Digital Leadership As a digital leader in its field, Globality wants to make AI-based procurement intuitive. “If the technology requires attending a training class for 30 to 40 hours, then people won’t use it,” Hausmann said. "Therefore,

our platform is easy enough to navigate such that even employees who source services only once or twice a year can use it. My experience in 30 years is that most companies don’t really touch the entirety of their spend across marketing, technology, legal, HR, facilities and everything else. But now, they have a chance.” Greater efficiency will allow procurement to take on a more strategic role within companies. As Hausmann observed, most CPOs want their procurement teams to manage supplier relationships, develop digital strategies and help sub-tier suppliers meet corporate ESG standards. Finding the time is difficult right now, but if teams can use Globality’s platform to replace their spreadsheet templates and lengthy vetting processes, then they can focus on more complex and rewarding tasks. “All companies around the globe are coming out of a tough time these days, which puts pressure on procurement. Leaders are investing, doing different things and trying to grow their business,” said Hausmann. “We’re a great partner to have if they want to get on top of their ESG agenda, make operating models scalable and free up their headspace to think and innovate.” supplychaindigital.com

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Partners in

Passenger Safety

WRITTEN BY: RHYS THOMAS PRODUCED BY: GLEN WHITE

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Natalia Pickett, Head of Procurement, KeolisAmey Docklands, sheds light on the vital role procurement plays in more than 117 million annual rail passenger journeys

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117 million Passengers use the DLR each year

ondon’s Docklands Light Railway, known as the DLR in local shorthand, is the UK’s busiest light railway network and one of the vital transport arteries for business and leisure in the sprawling British capital. It is operated by French transport specialist Keolis and British infrastructure engineering firm Amey, under the joint venture KeolisAmey Docklands. The service is responsible for the comfort and safety of more than 117 million passengers each year, giving the transport network an enormous impact on the economy, and the day-to-day lives of Londoners and tourists alike. Cutting through the city’s financial hub in Canary Wharf, the line also feeds into convention centres and cultural hotspots, as well as residential areas and retail destinations. Though the pandemic has significantly reduced the number of passengers over the past 18 months, it is a responsibility that Natalia Pickett, Head of Procurement at KeolisAmey Docklands, takes incredibly seriously. “Safety is a word I say a million times a day, because whichever solutions we implement, services we buy or technology we deploy, the safety of our passengers, staff and transport crew is the most important factor always,” she says. Pickett’s procurement division is responsible for sourcing and implementing everything from vital services and back office supplies, to to spare parts for maintaining rolling stock. When someone once asked Pickett’s husband what his wife does for a supplychaindigital.com

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Title of the video

“ Safety is a word I say a million times a day, because whichever solutions we implement, services we buy or technology we deploy, the safety of our passengers, staff and transport crew is the most important factor” NATALIA PICKETT

HEAD OF PROCUREMENT, KEOLISAMEY DOCKLANDS

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living, he joked that she is a “professional shopper, at an industrial scale”. To some extent, she says this is true: “If you imagine your thought process at the DIY shop when you’re redecorating the bathroom, there are parallels to the considerations in my professional life: whether the product is good quality, safe, value for money. But there is much more to it than that." Pickett describes herself as part matchmaker, part problem solver - the key to both being partnerships. “Those are really the core of my work, and I’m pleased to say that the team and I are very good at it. Procurement is not only about saving money. That is fundamentally not true; savings will be the natural outcome of procurement processes,” she says. “Partnership is another of those words I repeat a lot, because it is very important to me. With my suppliers, we must learn from one another, bounce ideas between one another and grow together; it is almost love,”


KEOLISAMEY DOCKLANDS

NATALIA PICKETT TITLE: HEAD OF PROCUREMENT LOCATION: LONDON DOCKLANDS, UK

EXECUTIVE BIO

she jokes. “We need to reach the stage of the relationship where we can talk about the good things, the bad things - it doesn’t matter to me. As long as we’re talking then we can find a solution, which is what procurement is really all about.” Pickett and her team operate in a unique procurement environment. Unlike malleable sectors such as IT, procurement in the rail and wider transport industry runs at a more cautious, measured pace. Safety concerns mean Pickett is unable to “simply change a nut here and a bolt there because it is cheaper”, but these stringent regulations do crystallise a fundamental level of quality adherence not often present in more agile sectors. All suppliers in the rail industry can be found on the Rail Industry Supply Qualification System, a sector-specific database which holds all their insurances, certifications, licenses and financial information. “It makes my job quicker,”

Natalia Pickett is an experienced procurement and sourcing professional with more than 25 years’ experience. In her current role she is responsible for developing and implementing commercial strategy and contracting models to support a variety of rail network contracts, including DLR, Wales and Borders Rail, and Metrolink. Pickett has worked in senior procurement roles at Network Rail, Regus and Shell, and earned a masters in Math, Physics and Computer Science from Moscow Railway University, and latterly an MBA in management from the Open University.

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“ With my suppliers, we must learn from one another, bounce ideas between one another and grow together; it is almost love” NATALIA PICKETT

HEAD OF PROCUREMENT, KEOLISAMEY DOCKLANDS

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Pickett says. “And it also makes suppliers’ Services play an equally important role lives easier because they don't need to in keeping passengers and staff safe and answer all those same questions again comfortable. That comes with its own The DLR for me.” set of challenges, particularly as the size has a Pickett’s teams also leverage a of KeolisAmey Docklands belies its suite of other digital procurement impact. “We operate a large service, departures tools, though she admits she may be but our actual company is only around record considered “a little old fashioned” in 860 employees, which is nothing her approach to digital transformation. “I compared to the biggest networks. We can don’t like to use lots of different computer be limited in finding suppliers that want to systems and pieces of software,” she says. work at that scale,” she says. “I find that the more systems you use, the After around a year of negotiations more noise you have to deal with. But we do to secure a quality occupational health use Microsoft Dynamics and IBM Maximo, provider, Pickett encountered Medigold which is a very robust asset management Health. “They were different. They were ERP system and very important to our keen to work with us, but beyond the usual procurement analysis. Using this system services, it was apparent that they care about I can instantly know what a good is, how our staff as much as we do. They offered we bought it, what we spent and use the insight into how to reduce blood pressure, information to review our categories. From how best to approach dietary requirements. a digital perspective, they are enough for us.” When we inevitably have staff off sick, they Not all Pickett’s procurement efforts help us bring people back to work as swiftly are dedicated to steel, tracks and carriages. as possible, because while we are paying

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GOAL SYSTEMS One of the key reasons for the success of KeolisAmey Docklands in achieving operational excellence has been its choice of its technology partners! Among those suppliers, Goal Systems stands out by providing the latest technology for optimising the planning of material, technical and human resources. The partnership has grown steadily over the last few years as KeolisAmey Docklands have entrusted more key operations and tasks to Goal Systems. Goal has adapted their approach to suit the UK market and introduced robust, standardised and automated solutions which are driving a more efficient and more profitable operation with high levels of internal and external customer satisfaction.

“ I think in 2022, we will be back to business as usual. It will be a time to achieve efficiencies” NATALIA PICKETT

HEAD OF PROCUREMENT, KEOLISAMEY DOCKLANDS

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them on leave, we need to cover their job, meaning we are paying twice. But this is not about simply pushing people back to the track, it’s about caring for our staff while minimising spend, and Medigold are a great partner for that.” Another example of this close collaboration is Xrail, a rail services supplier which provides trackside cabling to KeolisAmey Docklands. Xrail was discovered through the Rail Industry Supply Qualification System, though none


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of Pickett’s team had heard of their work previously. “But we followed procedure - as is our mantra - and invited them for a presentation,” she says. “And then the magic happened. This sounds like such a matter of fact, one-dimensional job on the surface but they are so passionate, so innovative, and we all thought: ‘wow’. We awarded them the contract, and they have been fantastic.” Pickett’s decision to offer Xrail the contract was further vindicated some months later.

While sleeping rough at an organised event to raise money for The Railway Children Charity, she encountered Monica Barbosa, Xrail Group’s Director of Business Development and Communications. “It was an accidental meeting, but we got to talking and realised we are cut from the same cloth,” Pickett says. “It was an interesting experience and great to know we’re passionate about the same values. This is what I mean when I talk about the importance of partnerships that go beyond saving money.” supplychaindigital.com

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“ When the new franchise started on 1 April this year, nobody noticed. The suppliers delivered on time, the network didn’t stop, and that was our real achievement” NATALIA PICKETT

HEAD OF PROCUREMENT, KEOLISAMEY DOCKLANDS

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KEOLISAMEY DOCKLANDS

2014

Year Founded

Transport Industry

Pickett’s partnerships extend beyond London. The joint venture between Keolis and Amey expanded in 2017, landing the contract for the Manchester Metrolink, a light rail network that is the largest of its kind in the UK. Procurement played a central role in the project, but it was largely invisible and that was by design. “We began by providing numbers and what we can achieve with suppliers, but procurement’s real role in the launch of this service was in the realisation. Our job was to ensure that day one looked no different to the previous day. So when the new franchise started on 1 April this year, nobody noticed. The suppliers delivered on time, the network didn’t stop, and that was our real achievement. The purpose of my role is to make sure that everything works and I’m not noticeable. It’s similar to HR: why should anyone notice if everything runs nice and smooth? So well done to us.” When KeolisAmey Docklands was awarded the ISO 55001 asset management certificate, “we were very proud of it”, Pickett says. “And I'm particularly proud of the fact that to get this certificate, we as a procurement function didn't need to do anything extra.” Pickett hopes to remain quietly exceeding expectations and out of the limelight in the coming year, when commuters begin returning to work and cities reopen to tourists. “I think in 2022, we will be back to business as usual. And I will do all my standard efficiencies projects, and we have taken over maintenance of the Lewisham extension - seven stations in south London. It will be a time to achieve efficiencies. Nothing is certain, but this is the plan.”

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Felipe Bezamat, Head of Advanced Manufacturing Industry, World Economic Forum

Memia Fendri, Project Specialist, Advanced Manufacturing, World Economic Forum

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BIG DATA & ANALYTICS:

THE RACE TO FUTURE-

PROOF LOGISTICS

Speaking to the World Economic Forum, Supply Chain Digital looks at how organisations can gain a competitive edge and future proof their operations WRITTEN BY: GEORGIA WILSON

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ith COVID-19 exposing a number of vulnerabilities in today’s supply chains, companies affected by unexpected disruptions and shortages caused by the pandemic are racing to digitise their supply chain and logistics, future-proofing their organisations. To achieve this, one key investment area is data and analytics, which is currently expected to have a market growth of US$5.5bn to US$8.9bn by 2025. “COVID-19 has given the world a sharp reminder that manufacturing and their enabling supply chain ecosystems remain the most real and significant force in the global economy,” explains Felipe Bezamat, Head of Advanced Manufacturing Industry and Memia Fendri, Project Specialist, Advanced Manufacturing at the World Economic Forum. “Emerging from the crisis, companies will need more resilient supply systems to prepare for future shocks as well as higher productivity in their operations to free up liquidity for future investments.” supplychaindigital.com

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LOGISTICS

Different Application Types of Big Data and Analytics The World Economic Forum categorises the different application types of Big Data and analytics into three main areas: 1. Productivity increase in manufacturing and supply systems 2. Enhanced customer experience through improved products and services 3. Positive impact on society and the environment “Depending on the type of application and enterprise, companies can unlock value from many applications themselves using only internal data. Such applications include tracking and tracing within a factory or navigation of automated guided vehicles used in logistics,” says Bezamat and Fendri.

“ COVID-19 HAS GIVEN THE WORLD A SHARP REMINDER THAT MANUFACTURING AND THEIR ENABLING SUPPLY CHAIN ECOSYSTEMS REMAIN THE MOST REAL AND SIGNIFICANT FORCE IN THE GLOBAL ECONOMY” FELIPE BEZAMAT, MEMIA FENDRI WORLD ECONOMIC FORUM

“However, to unlock the full potential, the exchange of data is often required beyond company boundaries to effectively train artificial intelligence (AI) algorithms and to support collaboration in complex networks that require full transparency. Yet, several challenges prevent companies from sharing data with one another and building effective data ecosystems. At the World supplychaindigital.com

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Economic Forum’s Platform for Shaping the Future of Advanced Manufacturing and Production, we look after identifying these value opportunities and overcome roadblocks to maximise value from data and analytics,” adds Bezamat and Fendri. How Organisations can Gain a Competitive Edge and Future-Proof Logistics and the Overall Supply Chain with Big Data and Analytics In the supply chain and logistics environment, there are many applications of Big Data and Analytics that provide organisations with a competitive advantage. Bezamat and Fendri explain that “end‑to‑end data flows enable the tracking and tracing of material throughout the supply chain and inventory reduction, as well as facilitating enhanced sales and operations planning. Moreover, it could allow data‑driven supply chain risk management and the simulation of quick re‑configuration scenarios.” “Beyond productivity improvements, data and analytics applications allow companies to enhance the customer experience such as just‑in‑time delivery of critical goods. More accurate sales and operations planning as well as real‑time tracking and tracing of critical materials (for example, medical goods or perishable food) prevent stock‑outs and improve availability for customers,” continue Bezamat and Fendri. While many Big Data and Analytics applications can be implemented on their own, those looking to future-proof their supply chain and logistics operations should consider collaboration with external partners in order to reach their full potential. “Data collaborations along supply chains have, for instance, allowed manufacturers 86

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“ THE KEY IS FINDING THE RIGHT APPLICATIONS WHERE COLLABORATIONS AROUND DATA AND ANALYTICS OFFER CLEAR BENEFITS, AND ALIGNING ON A DATATO-VALUE STRATEGY AND ROADMAP” FELIPE BEZAMAT, MEMIA FENDRI WORLD ECONOMIC FORUM


LOGISTICS

to gain visibility on their supply chains and integrate their suppliers, exchanging information on inventory, capacity or shipment status. Using advanced analytics, they have then managed to better integrate supply and demand,” explains Bezamat and Fendri. “For this, organisations need to assess their maturity in implementing applications and technological and organisational enablers. A community of companies hosted by the World Economic Forum’s Platform for Shaping the Future of Advanced Manufacturing and Production have developed the Manufacturing Data Excellence Framework to compare their individual maturity versus the benchmark and define their individual target state. Companies are currently using the framework

to forge new partnerships to develop applications or advance the maturity of critical enablers,” adds Bezamat and Fendri. Challenges Experienced by Supply Chains When Adopting Big Data and Analytics Capabilities When it comes to the adoption of Big Data and analytics, organisations usually require a complete, end-to-end data set that covers the entire supply chain or that provides visibility of an entire process. It is also important that this data set is large enough to drive valid insights in order to establish statistically significant correlations to train artificial intelligence. “As a consequence, data from external partners plays a critical role. This makes it essential for manufacturers to build an ecosystem in which companies can supplychaindigital.com

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collaborate to exchange data within a common data ecosystem that provides a single source of truth for promoting mutual understanding and collaboration. Supply chains can overcome these challenges by focusing on the data excellence organisational and technological priorities outlined below,” says Bezamat and Fendri. Organisational priorities 1. Define a data‑to‑value strategy and roadmap 2. Incentivise internal and external ecosystem partners 3. Build capabilities to capture and use data

Finding Solutions: How to Accelerate Sustainable Technology

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8 YEARS

Big Data Analytics has developed and today is increasingly becoming part of the de-facto operating model for the logistics industry

Technological priorities 4. Implement an open platform to unlock data silos 5. Enable connectivity for low‑latency, high‑bandwidth data flows 6. Ensure data security and privacy Specifically, when it comes to using technology to overcome adoption challenges, Bezamat and Fendri explain that “the key is finding the right applications where collaborations around data and analytics offer clear benefits, and aligning on a data-to-value strategy and roadmap.” “Pioneering technologies are then essential to generate insights and value from data. They first allow supply chains to boost data extraction through physical acquisition and access to different databases and systems. Cloud, for instance, allows supply chains to unlock data silos, combining data from different sources and systems to increase and enhance the overall data pool. Automation, as well as artificial intelligence algorithms, are then needed to make sense of the enhanced data pools. Finally, technology allows supply chains to ensure privacy and security when dealing with personal or competitive data,” concludes Bezamat and Fendri. supplychaindigital.com

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MARKS & SPENCER:

ACHIEVING PROCUREMENT EXCELLENCE WRITTEN BY: ELISE LEISE 90

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Andrew Newnham

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POST-PANDEMIC, BRITISH RETAILER MARKS & SPENCER PURSUES NEW PROCUREMENT STRATEGIES AND SUPPLIER PARTNERSHIPS TO EMERGE STRONGER THAN EVER

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ne year after the UK first locked as an exciting time: “We made a real down, COVID-19 has accelerated difference to the business.” procurement transformation. A year later, M&S emerged from the Non-essential retail has pandemic stronger than ever. Certain re-opened—but according to British procurement practices, however, have multinational Marks & Spencer (M&S), the shifted—especially those revolving around most important shift has been in mindset. risk management. “It doesn’t mean you can’t “[Before the pandemic], we had tried to have risks,'' Newnham said. “You should have change the hearts and minds of the team”, risks. But companies also need knowledge, said Andrew Newnham, Director of Group transparency, and understanding.” Procurement at Marks & Spencer. “[But it was When Newnham joined M&S, risk difficult] to make our people think differently mitigation was one of the pillars he about the role of procurement.” implemented in his new procurement If nothing else, the pandemic forced even strategy. When the pandemic hit, risk successful retailers to think outside the box. suddenly took centre stage. “Marks & At one point in 2020, M&S’s clothing and Spencer talked about decision-making”, he home sales dropped to 15% of what they said. “Suddenly, we were at the forefront of had been prior to the pandemic. “At one asking: ‘What’s the risk in our supply chain?’” point just before the first lockdown point, Immediately, the company took steps to our CEO, Steve Rowe, came through the understand its supplier base, work with office and said, ‘Go home now’,” Newnham individual suppliers, and keep its operations said. “The pandemic was moving. “How do we a kickstart to an entirely start making risk-based “ONE OF THE MAJOR new way of working.” decisions on a data-led ACHIEVEMENTS Throughout 2020, basis rather than what Marks & Spencer we think we know?” OF 2020 WAS WITH gathered information — Newnham asked. HEARTS AND MINDS about the strength of its “Do we understand GETTING PEOPLE TO data and processes, its which suppliers have agility, and its supplier no cash problems, BELIEVE WE NEEDED knowledge. “We were which suppliers are TO CHANGE” empowered to make too reliant on M&S, decisions”, Newnham and which suppliers ANDREW NEWNHAM said. He recalled telling have untenable DIRECTOR OF GROUP his team that they’d look financial and legal PROCUREMENT AT MARKS & SPENCER back on the moment risks going forward?” supplychaindigital.com

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When Marks & To mitigate future “WE’RE A BRAND WITH Spencer initially shut operational risks, M&S A LOT OF HERITAGE down, the company had Procurement spent tried to review contracts significant time putting AND A LOT OF and, in line with many a new risk framework in LEGACY. CULTURE— retailers, mitigate place. Yet, the company AND HOW WE LOOK supplier costs. But decided not to spend Newnham and his team AFTER OUR PEOPLE— large sums of money to members discovered buy pre-made solutions. IS IMPORTANT” that they didn’t have “If you do that, the clear immediate data to team doesn’t own the ANDREW NEWNHAM know which contracts problem”, Newnham DIRECTOR OF GROUP could end easily and told us. “We made a PROCUREMENT AT which couldn’t. This led conscious decision to MARKS & SPENCER to more revelations. use tools that [our team “Before COVID, we’d talked about supply members] could use… that had accessible chain risks, but not necessarily operational information and data. They needed to risk”, Newnham said. “Certain suppliers have a stake in the solution.” could shut down a store. So what plan One of the biggest motivators for did we have in place to ensure that didn’t Procurement at Marks & Spencer, after happen?” all, is the direct link between what they 94

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MARKS & SPENCER

ANDREW NEWNHAM TITLE: DIRECTOR OF GROUP PROCUREMENT COMPANY: MARKS & SPENCER INDUSTRY: RETAIL PROCUREMENT

1884

The year Marks & Spencer was founded in Leeds by Michael Marks and Thomas Spencer

£9.0bn Group revenue in 2021

EXECUTIVE BIO

accomplish and the success of the company. “M&S is a great place to work if you want to work somewhere where you can deliver, make changes, and be empowered”, Newnham said. “This team understood what we were trying to do. One of the major achievements [of 2020] was with hearts and minds—getting the team to believe we needed to change.”

Andrew Newnham is Head of Group Procurement at British retailer Marks & Spencer, where he has delivered £500mn worth of business savings in three years, implemented a new thirdparty supplier risk framework, and led company-wide efficiency programmes. Prior to his role with M&S, Newnham negotiated and implemented several large-scale outsourcing contracts at Vodafone, UBS, and ITV. After he graduated from the University of Sussex with a First Class Honors economics degree, he worked at BT and British Airways before taking a role as Vodafone’s Senior Commercial Manager.


MARKS & SPENCER

Marks and Spencer’s Procurement Transformation

“ALL PROCUREMENT TEAMS, I BELIEVE, NEED TO GET CLOSER AND CLOSER TO THE BUSINESS. EVERYTHING YOU DO, AS A PROCUREMENT TEAM, SHOULD BE ABOUT INFLUENCING AND MAKING YOUR PART OF THE BUSINESS MORE SUCCESSFUL” ANDREW NEWNHAM DIRECTOR OF GROUP PROCUREMENT AT MARKS & SPENCER

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HQ

The corporate headquaters are located in London, UK

CEO

Steve Rowe was appointed CEO in April 2016

78,000+ Number of employees

1,519

Number of retail stores globally

62

International markets

50.5%

Percentage of UK Clothing & Home sales online

13.5m

Online traffic (visits per week)

45

M&S have factories in 45 territories globally

1,379 Number of factories globally

953,129 Number of factory workers globally


MARKS & SPENCER

“ ONCE WE’VE GOT THE DATA, HOW DO WE MAKE DIFFERENT DECISIONS? HOW DO WE LOOK AT OUR SUPPLIER RESILIENCE AND EITHER HELP THEM TO CHANGE THE WAY THEY OPERATE OR SWITCH TO ALTERNATIVE SUPPLY SOURCES?” ANDREW NEWNHAM DIRECTOR OF GROUP PROCUREMENT AT MARKS & SPENCER

Throughout its decades of supply chain and procurement operations, Marks & Spencer has focused on building an inclusive, tightly-knit culture. As a result, when the UK lockdown started, many thirdparty suppliers stepped up to help M&S through its most difficult months. Said Newnham: “They were part of the solution.” From here on out, the company intends to find not just tier-one partners but the right partners. “Sometimes the tier-two vendors are more flexible”, Newnham said. “It’s important that our suppliers share our values and are prepared to buy into our values.” How important is this cultural fit at Marks & Spencer? “Almost a defining thing”, Newnham said. “We’re a brand with a lot of heritage and a lot of legacy. Culture—and how we look after our people—is important.” But successful partnerships take two to tango—and Marks & Spencer is determined to hold up its end of the bargain. Moving forward, the company aims to strengthen its supplier relationships by lending its expertise. “This isn’t just the right thing to do”, Newnham said. “We’re going to try to change things.” He pointed out that now, ESG supply chain measures affect how consumers buy and shop. “Our customers are diverse”, he said. “Our customers want 98

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“ NOW WE’RE ABOUT AGILITY. WE’RE ABOUT MAKING DECISIONS. WE’RE ABOUT BEING EMPOWERED. WE’RE ABOUT EFFECTING CHANGE” ANDREW NEWNHAM DIRECTOR OF GROUP PROCUREMENT AT MARKS & SPENCER

sustainability. As a procurement team, it’s up to us to understand those concerns and help our third-party providers understand and deliver our values.” While Marks & Spencer has historically focused on RFPs (requests for proposals) to close good deals, Newnham argued that the company should also be commercial advisors. “We’ll start with what we’re trying to achieve”, Newnham said. “Then we’ll work back from that. [We can decide] whether an RFP is the right route to 100

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take, or whether we take a more direct approach with a key partner.” First, the company covers the basics. “You’ve got to understand the business objectives; you’ve got to handle the sourcing process”, Newnham said. “If you don’t negotiate a good deal, run a good competitive process, and reduce risk by getting the right contract in place with a good indemnity clause, you’re not really in procurement.” Certainly, Marks & Spencer is excellent at focusing on key business outcomes. While the company has a distinguished history, it doesn’t shy away from keeping up with the times. “If you’re not involved


MARKS & SPENCER

in the commercial discussions all the way through the lifetime of the contract”, Newnham said, “how can you be expected to understand the service and do a great deal going forward?” Still, to Newnham, procurement excellence is all about strategy. “Once we’ve got the data, how do we make different decisions?” he asked. “How do we look at our supplier resilience and either help them to change the way they operate or switch to alternative supply sources?” Compared to other retailers, this mindset sets Marks & Spencer apart. “You need to build a strong foundation and become

business partners”, Newnham said. “You need to be known as a good negotiator. You need to be known as understanding the market.” All in all, Newnham believes the pandemic has made Marks & Spencer stronger. “Our procurement organisation is an unstoppable force”, he said. “You can’t let perfect be the enemy of the good. During COVID, the team had to drive operations forward. “Better to achieve our targets on time rather than reach an absolutely perfect bar”, he said. “We reach 80% perfect, and then we can ask: ‘How can we do things better?’” As for the evolving role of procurement, Newnham is thrilled that his team’s recent work is helping Marks & Spencer adapt: “Nothing’s too small. You’d be surprised— deliver a lot of 1% changes and you make a real difference, it’s the British Cycling Marginal Gains rule.” Going forward, the foundations of the company’s procurement strategy will be much more solid. After a transformative year, the company has stress-tested its systems, evaluated which ones work, and targeted those that it needs to improve. Newnham explained: “We learned what we were good at.” In some sense of the word, COVID19 helped Marks & Spencer change its perspective on what it meant to be in procurement. Currently, the company is re-envisioning its role in the global supply chain as well as its core strategies. “Now we’re about agility”, Newnham concluded. “We’re about making decisions. We’re about being empowered. We’re about effecting change.”

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THE INTEGRATED SUPPLY CHAIN: AI, ML, AND HUMAN INTELLIGENCE AI will never be a silver bullet, but with proper data and augmented with human intelligence, it will revolutionise supply chain agility and resilience WRITTEN BY: ELISE LEISE

A

ccording to IBM’s Cognitive Computing Study, 92% of outperforming manufacturing executives said AI and cognitive computing would enhance their future performance. Advances in artificial intelligence will tie everything together: SCM and ERP systems, smart factories, and autonomous warehouses; humans will make complex decisions, changing course as needed. At least, this is one potential future. Right now, supply chains are in the midst of deciding how to best upgrade their visibility and agility. Pre-pandemic, we globalised, unleashing threads of data, teams, goods, and transport networks across the globe. On the flip side, we also sped up procurement times, multiplied errors, and obscured the truth of modern slavery in sub-tier supplier networks. And during COVID-19, everyone saw the result: massive supplier shortages, backed-up transport networks, and miscalculated ESG metrics. 102

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Now, as companies recover from the pandemic, artificial intelligence (AI) and machine learning (ML) may equip supply chain teams to cope with similar events. According to Gartner, this isn’t far into the future: by 2024, 75% of companies will transfer AI from pilot programmes to their main operations. But we’re obviously not at that point yet. So what’s the holdup? Artificial Intelligence and Machine Learning First, let’s break down two commonly —and understandably—confused terms. Artificial Intelligence Question: How do we build intelligent machines that simulate human intelligence? Artificial intelligence is the big “umbrella concept”. According to BMC, AI exists on several levels:


TECHNOLOGY


We are Procurement. Sustainability in supply chains is our responsibilty. We will build a sustainable future for people and our planet.

Join our grassroots initiative and community of more than 4,000 change agents who want to ensure that all supply chains across the world have embedded sustainable procurement practices by 2030.

Pledge now at spp.earth Sustainable Procurement Pledge Let‘s drive change together


TECHNOLOGY

“ [Humans have] natural hesitations to believe machines that don’t have years of experience in manufacturing and supply chains” RICHARD LEBOVITZ

PRESIDENT AND CEO, LEANDNA

• Reactive Machines, where AI makes basic inferences • Limited Memory, where AI can store and learn from data • Theory of Mind, where AI starts to interact with human emotions • Self-Aware, where AI recognises its own existence

Machine Learning Question: How can we build machines that learn from data without explicit programming? Machine learning is a small subset of artificial intelligence. It’s an application of AI in which unsupervised machines can learn from data without human supervisors watching their every move. ML programmes centre on four primary tasks: • Gathering data • Training models • Deploying models • Maintaining/upgrading systems supplychaindigital.com

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AI Supply Chain Applications Now that we’ve established the basics of AI and ML, how do they relate to the supply chain? The answer’s quick and easy. By allowing humans to view and alter operations how and as they wish, AI touches every field of supply chain management: procurement, manufacturing, fulfilment, logistics, inventory, and ESG compliance. Ten years ago, IBM predicted that the supply chains of the future would be instrumented, interconnected, and intelligent: Sensors and RFID tags would track goods worldwide; connectivity would enable global supplier networks; and advanced analytics would help decisionmakers evaluate their risks and constraints. 106

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“ [AI] must demonstrate that its automated recommendations are reliable and backed by best practices. Without that trust and context, teams simply won’t adopt new technology” PERVINDER JOHAR CEO, BLUME GLOBAL


TECHNOLOGY

Now that companies recognise how quickly global financial, economic, and social collapse can decimate local supply chains, many will invest in risk mitigation before the next global disaster. According to IBM’s Cognitive Computing report, CPOs report that their top three tech investment initiatives will be cognitive computing, cloud, and predictive data analytics. 56% of companies said that cognitive computing would transform their forecasting capabilities, 55% said that it would do the same for risk and security management, and 55% said that it could redefine the customer experience. If a global disruption occurs again in the next decade—which, no doubt, it will—AI can provide visibility into international supply chains, target risk factors, suggest resilient suppliers when old ones fall through, remap transport routes, and help companies maintain their sustainability standards.

Several of the firm’s predictions have proved prescient, as AI and ML start to influence three major supply chain divisions. Manufacturing: Companies invest in cloud applications, 3D printing, and IoT applications to speed up and make their operations more sustainable,Procurement. Companies use risk management platforms to tackle regulations and sustainability, connect with collaborators, and follow through on ESG goals. Product Development: Companies test out automated robotics in factories, labelling facilities, and shipment loads— increasing efficiency and accuracy.

A Renewed Commitment to ESG AI- and ML-based automation tools, through searching and tracking patterns, can help companies keep their environmental, social, and corporate governance commitments. In 2021, most major multinational corporations have declared strong support for the United Nations’ Sustainable Development Goals and global ESG standards. Yet, not all claims are backed with concrete data. Company KPIs, in some cases, represent little more than an exercise in greenwashing. As often as not, this isn’t the company’s fault. Opaque procurement processes and multi-tier supplier networks make it intensely difficult for any human to sort through, analyse, and make sense of ESG performance data. But regardless of cause, the result is just as detrimental. Companies, without meaning to, mislead consumers and investors—and perpetuate injustice in the parts of the world that need it most. supplychaindigital.com

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TECHNOLOGY

Even international watchdog agencies lack perfect visibility. According to Terence Tse, a professor at the ESCP Business School and Executive Director of Nexus FrontierTech, ratings can be deceptive. He cited UK-based Boohoo, a fast-fashion retail startup that MSCI rewarded with its second-highest ESG rating. By sourcing from a Leicester factory, the company relied on a supplier that paid its workers as little as £3.50 per hour and refused to provide PPE during the pandemic. Such a case begs the question: how can companies ensure that they truly meet their supply-chain labour standards? AI technology startups like Tse’s Nexus FrontierTech claim that the answer is AI and ML: the future of visibility and agility. Yet others aren’t quite convinced. Part of it is the all-too-human fear of growing obsolete. The Human Element “[Humans have] natural hesitations to believe machines that don’t have years of experience in manufacturing and supply chains”, explained Richard Lebovitz, President and CEO of LeanDNA. Yet few AI and ML leaders suggest that we get rid of all humans and let machines rule the world. Artificial intelligence, though it continues to make strides towards greater intelligence, is still a tool in the hands of professionals. Its goal is not to replace humans but to increase speed and accuracy in a multitude of mindless job specialisations, such as crunching numbers, handling data, and vetting suppliers. As AI takes on these functions, humans will regain the ability to turn their attention— and their unique cognitive skills—to tasks that add value. Yet Pervinder Johar, CEO of Blume Global, cautioned against moving too fast, noting that incremental steps are 108

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TECHNOLOGY

critical to an organisation’s success. “[AI] must demonstrate that its automated recommendations are reliable and backed by best practices. Without that trust and context, teams simply won’t adopt new technology”. Overall, the best path forward is to combine humans and AI. Machines might be able to rationalise their way through complex supplier data, but in collaborating, negotiating, and navigating complex supplier relations, humans still have the advantage. “Bottom line: AI is not a replacement for human judgement”, said Pervinder Johar, CEO of Blume Global. “People are vital to the successful implementation of any automated system—and in supply chains especially, AI should never work in isolation.” Future Adoption: What’s Holding Us Back? Right now, the main issue facing AI and ML in the supply chain is that no machine can fix bad, corrupted, or biased data. And most corporations don’t have great data. It’s not unusual for naming conventions to differ across countries, regions, and companies, and the lists of categorical acronyms—CDP, GRI, SASB, ISO—blur together.

75%

of companies will transfer AI from pilot programmes to their main operations by 2024. Gartner

56%

of companies said that cognitive computing would transform their forecasting capabilities. IBM, Cognitive Computing report supplychaindigital.com

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65%

of early adopters view cognitive technology as very important to their organization's strategy and success. IBM, Cognitive Computing report

58%

of early adopters say cognitive computing is essential to digital transformation. IBM, Cognitive Computing report

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TECHNOLOGY

“ AI is not a replacement for human judgement” PERVINDER JOHAR CEO, BLUME GLOBAL

Part of the issue is a shortage of multi-tier supply chain visibility. “The number one challenge...is the absence of data governance policies that are enforced and adhered o across an OEM’s (original equipment manufacturer’s) extended supply chain”, said Trevor Stansbury, founder and CEO of Supply Dynamics. “As crazy as it sounds, General Electric doesn’t make engines. Caterpillar doesn’t make heavy earth-moving equipment. Boeing doesn’t make aeroplanes. And Ford doesn’t make cars. Their tier-one through tier-n suppliers do”. Supply chain management, at the end of the day, is intrinsically linked to relationship management. And it will be humans who develop, inquire, and build the supplier connections that drive our supply chains forward. On this playing field, only companies who take advantage of supplier intelligence platforms and strengthen ties with sub-tier suppliers will score points. To be properly used, AI and ML need accurate, granular intelligence. This is a major part of the reason why AI adoption has been slightly slower than any of us thought. AI relies on us, humans, to provide large, well-standardised datasets, to eliminate data silos, and to supplement its analyses with excellent supplier communication. To apply AI and ML, then, companies must train their employees in ethics, decision-analysis, and context-based strategy; evaluate cloudbased, cognitive AI solutions; and invest in supplier relations. Only then can they fuel their machines—and supply chains—with the proper data. supplychaindigital.com

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TOP 10

LOGISTICS COMPANIES

BY MARKET VALUE

Logistics companies have played a critical role in the midst of the global pandemic, and have continued to grow while other sectors flounder

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TOP TOPTEN 10

WRITTEN BY: ELISE LEISE & RHYS THOMAS

A

year and a half since the start of the pandemic, logistics companies have experienced rising stock performance. When governments first imposed lockdowns, logistics and delivery companies kept running. Yet to make a full recovery, the world’s oldest and most influential firms still need to implement post-COVID procedures and processes to remain resilient and profitable. The following 10 companies, all among the world’s largest logistics firms by market capitalisation, command significant shares of the global market.

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TOP 10

10

Apex Logistics HQ: Hong Kong

Market Value: $1.5bn Founded in China in 2001, Apex Logistics rapidly expanded across Asia and internationally across six continents to become one of the leading freight forwarders. It has a presence in 70 countries and a specialist team of more than 2500 team members. In 2020, the firm handled total air freight volume of approximately 750,000 tons and sea freight volume of 190,000 TEU. Earlier this year Apex Logistics was acquired by Kuehne+Nagel, strengthening the Swiss-based logistics leader’s market position and expanding its presence in Asia.

09 Bolloré

HQ: France

Market Value: $15.85bn The Bolloré Group retains a presence on five continents, overseeing 600 agencies across 109 countries. The organisation remains among the world’s 500 largest companies, and while the organisation is publicly traded, the Bolloré family still controls the majority of its shares. Currently bringing in €24,109m in revenue, the France-based company has an operating income of €1,650m and a shareholders’ equity of €25,984m.


08

Expeditors International of Washington Inc. HQ: USA

Market Value: $20.97bn Founded in 1979, Expeditors International manages logistics from 6 continents, 60+ countries, and 357 locations worldwide. In 2019, its revenue share by sector was 36% air, 27% ocean, and 37% customs, distribution, and transcontinental shipping. With regional headquarters located in London, Dubai, Shanghai, and Singapore, Expeditors International works with more than 18,000 employees to ship freight around the globe. ‘We encourage our people’, the company says, ‘to inquire, investigate, be curious, and grow with the knowledge and inspiration that come with a great discovery’.

07

ZTO Express Inc. HQ: China

Market Value: $26.23bn ZTO Express, based in China, is the first express company to achieve simultaneous listings in the United States and Hong Kong. As of December 2020, its network included almost 30,000 service outlets, 5,350 direct network partners, and more than 10,450 trunk transportation vehicles. The company reaches over 99% of Chinese districts and counties. Last year, its annual business volume increased more than 40% to surpass 17 billion pieces. The main principles behind the company’s success: ‘persistence, focus, and persistence’. supplychaindigital.com

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TOP 10

06

Hapag-Lloyd HQ: Germany

Market Value: $36.58bn Formed out of a merger between Hamburg-American Line (HAPAG) and North German Lloyd, this German firm counts itself in the list of top ocean carriers for Transatlantic, Middle East, Latin America, and Intra-America trade. With six regional headquarters located in Hamburg, Genoa, Piscataway, Valparaiso, Singapore, and Dubai, the company operates 241 ships, transports 11,8 twentyfoot equivalent units (TEUs), and employs 13,300 team members.

05

Kuehne+Nagel HQ: Switzerland

Market Value: $42.42bn Headquartered in Switzerland, Kuehne+Nagel International Ag handles freight transport, transportation, and logistics. Over the past 130 years, the company has grown from a small shipping company to a global specialised solution logistics partner. Four hundred thousand customers trust Kuehne+Nagel to handle their logistics, and the group operates in 1,395 global offices to stay close to clients. In 2020, Gartner recognised the firm as a visionary amongst third-party logistics providers. supplychaindigital.com

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TOP 10

04 DSV A/S

HQ: Denmark

Market Value: $53.78bn Operating in 80+ countries worldwide, DSV manages 1,300 offices and logistics facilities staffed with more than 56,000 employees. According to DSV leadership, the company wants to ‘[target] extensive growth to be among the most profitable in the industry’. The company handles warehousing, fulfilment, third-party logistics, and contracts logistics. Recently, DSV agreed to acquire Kuwait’s Agility Public Warehousing Co logistics division in a $US4.1bn deal, making the organisation the world’s third-largest freight forwarding company.

03 FedEx

HQ: USA

Market Value: $79.81bn FedEx Logistics provides a complete suite of specialty transportation, cross-border e-commerce, trade management databases, and integrated supply chain solutions. The company connects more than 99% of the world’s GDP, relying on 490,000+ international employees to fulfil its deliveries. Recently, thousands of team members voted to reinvest US$600,000 in green solutions across six operating regions around the globe. Their mantra: ‘Make every FedEx experience outstanding.’


02

TOP 10

Deutsche Post Ag HQ: Germany

Market Value: $86.10bn

Deutsche Post employs approximately 570,000 team members in 220+ countries worldwide. The company aims to be the logistics company for the world, committing itself to ‘making customers, employees, and shareholders more successful – without compromising on results’. The company owns five sub-operating divisions: Post and Parcel Germany, Express, Global Forwarding, Freight, Supply Chain, and eCommerce Solutions. Looking forward, Deutsche Post executives want to invest €30m into customs and trade digitisation, e-commerce promotion, and low-emission city logistics, committing to zero emissions by mid-century.


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TOP 10

United Parcel Service Inc. HQ: USA

Market Value: $185.35bn Over a century ago, UPS was started with a US$100 loan. Today, with 11.5 million pick-up and delivery customers, 5.5 billion packages delivered per year, and more than 10,300 alternative fuel and advanced tech vehicles, the company connects 220+ countries by air, water, and sea. One of the world’s largest shipping agencies, UPS operates more than 500 supply chain facilities across the world across 125 countries. In 2020, it generated full year revenue of $84.6bn. Most importantly, its 495,000 employees help keep the company’s shipping running smoothly.

“ At UPS we are customer first, people-led, and innovation driven” Carol Tomé, CEO, UPS

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