Supply-Chain-June-2021

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June 2021 | supplychaindigital.com

Inventory Management Optimisation:

A must for 2021 & Beyond

Sustainable Supply Chain Initiatives

UPGRADING RFID AND AUTOMATED

TRACK AND TRACE SOLUTIONS

Why do decades-old tech like RFID remain relevant despite digital disruption - and which recent innovations can accelerate traceability and SCM? FEATURING:

SAP Whitepaper

Macmillian

Anaplan


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Over 5 Stages:

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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 SOPHIA FORTE SOPHIE-ANN PINNELL HECTOR PENROSE SAM HUBBARD MIMI GUNN JUSTIN SMITH REBEKAH BIRLESON

KIERAN WAITE

SAM KEMP EVELYN HUANG TYLER LIVINGSTONE MARKETING MANAGER

KAYLEIGH SHOOTER PROJECT DIRECTORS

TOM LIVERMORE JAMES RICHARDSON KARL GREEN

JAMES WHITE

JASON WESTGATE MANAGING DIRECTOR

LEWIS VAUGHAN

CHIEF OPERATIONS OFFICER

STACY NORMAN PRESIDENT & CEO

GLEN WHITE


EDITOR'S LETTER

Live and learn The launch of our fortnightly LinkedIn Live show is the latest way to stay ahead of the curve on the latest trends, headlines and challenges in supply chain and procurement.

“Join us for the next episode of The Supply Chain Show and stay up-to-date with the biggest headlines in supply chain and procurement”

If you’ve tuned in to one of our brand-new regular LinkedIn livestreams, The Supply Chain Show, you’ll know the big talking points of the past month. If you’ve yet to catch the show, I’d like to ask why not? But in reality, I know the answer: there’s only so much time in the day, content to watch, read and share, and insights to ingest. Thousands of you have already joined us for our twice-monthly shows, adding to the discussions we’re exploring in greater detail this issue. Thankfully, the idea of post-pandemic recovery is finally a realistic goal to work towards. Governments have wised up to the important role supply chains have played over the past 18 months, and in the US and UK at least, are looking to better support the sector. Things are moving more swiftly than ever, which is to say, to be informed is to be prepared to act in real time. So join us for the next episode of The Supply Chain Show and stay up-to-date with the biggest headlines in supply chain and procurement, exclusive interviews, and the latest thoughts from your peers around the world.

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: 8

Big Picture

10 The Brief 12 Global News 14 People Moves 16 Timeline: JD Logistics 18 Legend: Keith Olver 20 Five Mins With: Mark Perera

30

SAP Whitepaper

Intelligent Assets Report

24

40

Blueprint for Efficiency

Empowered People Report

SAP Whitepaper

SAP Whitepaper


50

60

NTT DATA Services, Remodelling Supply Chains for Resilience

Reimagining the Publishing Supply ChainLandscape

Procurement

Macmillan

78

88

Inventory Management Optimisation: A Must for 2021 & Beyond

Maximising Value by Embracing Change

Supply Chain

Accenture & Anaplan

100

108

Upgrading RFID and Automated Track and Trace Solutions

APTIM Revamps its Way to Better Procurement

Technology

122 Top 10

Sustainable Supply Chain Initiatives

APTIM

134

SA Health

Transforming Supply Chain and Procurement


BIG PICTURE

8

June 2021


Driving prices up California, USA

The price of a Tesla EV has been in flux this year, and CEO Elon Musk confirmed some of the incremental rise is in response to supply chain issues. “Prices increasing due to major supply chain price pressure industry wide,” Musk tweeted in response to a disgruntled user. supplychaindigital.com

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THE BRIEF “If you can’t do it manually in small steps, you can’t do it digitally in large steps”

BY THE NUMBERS

We asked our LinkedIn community: Do you welcome greater government involvement in supply chain? based on 603 votes

Yasunori Tomita

Accenture Technology, Accenture Japan  READ MORE

42% NO

“We learned that the public sector could be fast, effective and efficient. We realised we had the skills and tools that we needed. We just had to believe that it could be done” Andrea Andrews

Executive Director Procurement and SCM, SA Health  READ MORE

“We’re not here just to bill you and leave. We are here to partner with you. We’re invested in your business” Punit Shah

VP Procurement and Supply Chain Officer, Aptim  READ MORE

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June 2021

36% YES

22% MIXED Did you know

Just 12% of organisations review cyber threats from immediate suppliers. Only 5% address vulnerabilities in the wider supply chain . Find out more 

Ocean freight dominated by largest players

72% of TEU is operated but the 10 biggest organisations. 45% of which is operated by the three biggest: Maersk, Mediterranean Shipping Co., and CMA CGM Group. Find out more 


Where have all the shipping containers gone? You’ve probably noticed it’s been difficult to find shipping capacity. I have, where are they all, exactly? Well, production has actually increased. A handful of Chinese companies manufacture the majority of shipping containers, around four in five, and have increased their output significantly. It’s expected to rise by 6-8% this year. So where are they? Despite this increase, demand is still far outstripping supply. And it’s pushed the prices up significantly. We’ve also noticed that… Yes, it’s not a small increase: the currently rate is around $3,500 per CEU, close to double the $1,800 you’d pay for a new container in early 2020 I can’t even find used containers. The shortage has had a knock-on effect there, too. The price of those has also nearly doubled. In fact, you’d pay more for a used container today than you would’ve a brand new one at any point last year. So when will this end? It’s impossible to say. The Suez blockage delayed thousands, and some are still stuck aboard the Ever Given. Analysts expect things to be plain sailing by the end of the year when the pandemic trade spike settles down.

 AIRBUS The world’s largest planemaker signalled a return to pre-COVID levels of manufacturing in the aerospace sector, telling suppliers to invest in machines and staff to meet continued demand until 2025.  JD LOGSTICS JD.com took its supply chain and delivery arm JD Logistics public on the Hong Kong Stock Exchange on 28 May. Shares ended the day 3.3% up, giving the company a market cap close to $33bn.  TESLA The EV leader has been fined by a court in Norway after a software update was found to be throttling battery charging speeds and miles-per-charge of some Model S vehicles. 30 customer brought the case, which may be appealed.  ROYAL DUTCH SHELL A court in the Hague ordered the oil and gas giant to cut its carbon emissions by 45% by 2030. The court found Shell’s measures were insufficient, ordering it to accelerate sustainability goals.

W I N N E R S JUN21

L O S E R S

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GLOBAL NEWS

1

UNITED STATES

Crypto Chia leads to hard drive drought Touted as a greener alternative to bitcoin, Chia uses hard drive storage capacity, instea of proof of work, to underpin its network. Its popularity has caused a scarcity in digital storage SSDs, with manufacturers such as Seagate and WD unable to meet demand.

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June 2021

2

CANADA

Uber Freight introduces new Shipper Platform The popular ride-sharing platform Uber, which also operates a service for hauliers, has announced the rollout of its new Shipper Platform. The company has developed applications that link pedestrians to nearby drivers, trucking companies with loads to haul, and now a self-service for shipping in Canada.


3

EGYPT

Suez Canal Authority wants $200m to free Ever Given The operator of the Suez Canal has agreed to free the impounded Ever Given upon receipt of a $200m deposit from the vessel’s owner, Shoei Kisen. The full compensation claim has fallen from £900m to $600m. It will pay for repairs, and “loss of reputation.”

5

INDIA

Tesco admits labour abuse in Indian supply chain Tesco has admitted to finding labour abuse in its India garment supply chain after evidence of forced labour of migrant women in cotton spinning mills located across Tamil Nadu. The UK supermarket said: “We recognise our responsibility to everyone in our supply chain and are working to ensure improvements are made."

4

FRANCE

Airbus tells suppliers to gear up for aerospace boom Airbus told suppliers to begin accelerating investment in production capacity and hire more staff. It anticipates a full recovery in aerospace manufacturing within the next two years. CEO Guillaume Faury said: “The aviation sector is beginning to recover from the COVID-19 crisis.”

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PEOPLE MOVES ELAINE KERR FROM: DPD UK TO: DPD UK WAS: EXECUTIVE DIRECTOR, SALES, CRM & CUSTOMER SERVICES NOW: CHIEF EXECUTIVE OFFICER DPD UK has named Elaine Kerr, a 28-year veteran of the parcel delivery company, as its new CEO, effective 1 June. She joined DPD as a Sales Executive in the early 90s and was promoted to senior management in 2008. ”Elaine has had a tremendous career with DPD and has been instrumental in growing our customer portfolio to include some of the most prestigious brands and securing our continued growth, both domestically and internationally,” said Yves Delmas, COO, DPDgroup Europe. “Elaine will now continue this success story in the role of CEO, building on the strengths of the senior management team to lead the business to a new chapter.”

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June 2021


VERONICA MERCER FROM: GSK TO: VODAFONE PROCUREMENT COMPANY WAS: VP PROCUREMENT - CORPORATE SERVICES NOW: HEAD OF SCM CORPORATE SERVICES AND PROPERTY

MITA GUPTA FROM: GEP TO: GLOBALITY

Vodafone Procurement Company has welcomed Veronica Mercer, who joins as Head of SCM Corporate Services and Property. She joined from GSK, where she spent more than four years leading a procurement team of more than 60 people. At Vodafone, Mercer will work with a team of category managers to design category and sourcing strategies aimed at leveraging the company’s scale to deliver increased efficiency and transformation. She will be based in Luxembourg.

WAS: GLOBAL VICE PRESIDENT NOW: SENIOR VICE PRESIDENT OF BUSINESS DEVELOPMENT Globality has appointed Mita Gupta as Senior Vice President of Business Development. She joins from GEP, where she oversaw growth strategy, and is founder of Procurian, a procurement business process services company. Of her new role, Gupta said: ““I’m excited to join Globality, No other solution combines AI, machine learning and natural language processing to provide customers with a buying channel that covers a vast set of categories while reducing costs, increasing efficiencies, enhancing business agility and enabling supplier diversity.” supplychaindigital.com

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TIMELINE THE RISE OF JD LOGISTICS JD Logistics went public in May, raising more than $3bn. Quite the achievement given it began life less than 15 years ago as a delivery unit for JD.com's ecommerce business

16

2007

2015

2017

Humble Beginnings

Period of Innovation

JD Logistics is Born

Unable to find a thirdparty delivery firm to serve its growing e-commerce business, JD.com establishes a new logistics unit. A rudimentary network is setup, with locations in Beijing, Shanghai and Guangzhou.

In a bid to reach a larger share of the Chinese population, the company establishes a research and logistics innovation lab. The goal is to develop smart logistics capabilities and pioneer unmanned and automated technologies.

JD Logistics is spun out from JD.com's ecommerce business and is established as a separate company. New services, including a white-glove delivery service called JD Luxury Express, are launched.

June 2021


2019

2021

Opening Up

JD Logistics Goes Public

A new open platform for digital supply chain is launched to expand JD Logistic’s reach beyond JD.com's e-commerce business, and into a wider range of industries. The company now also serves consumers directly through parcel delivery.

JD Logstics floats on the Hong Kong Stock Exchange raising $3.1bn. Shares surge 18% as trading opens, closing the day 3.3% up to give the company a market cap of $33bn. The business now operates 1000 warehouses and is expanding into Europe.

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LEGEND

KEITH OLIVER Consultant at Booz & Company

Y

ou very likely owe the title, if not the substance, of your profession to a British consultant called Keith Oliver. At the dawn of the 1980s, Oliver coined the term Supply Chain Management (SCM), an all-encompassing phrase around which the lives of supply chain professionals has orbited ever since. Like all good origin stories, however, it very nearly wasn’t this way. In the late 70s, Oliver was busy thinking about a new methodology for linking business departments, breaking down silos and defining a better way for manufacturing, sales and marketing, logistics and finance teams to work together to improve the movement and supply of finished goods. He envisioned a more connected company with more inter-departmental collaboration. It was narrow in its focus, but this was the cradle of modern SCM. And so the term Integrated Inventory Management, or I2M, was born. Snappy, fresh (in the context of 80s business jargon) and concise, Oliver was sure he’d hit the nail on the head with a simple, saleable philosophy.

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That was until he actually pitched the idea. In a meeting with executives at Dutch consumer tech firm Phillips, he was met by a room of bewildered faces, the eyes of upper management glazed over. In an article for Strategy+Business, written in 2003, Oliver recalls the subsequent conversation he had with one of Philips’ bemused managers, Mr Van t‘Hoff, who quite rightly wanted to know exactly what I2M was. The conversation went something like this: • Oliver: “We’re talking about the management of a chain of supply as though it were a single entity, not a group of disparate functions.” • Van t’Hoff: “Then why don’t you call it that?” • Oliver: “Call it what?” • Van t’Hoff: “Total supply chain management.” Whether Van t’Hoff coined the term is splitting hairs; Oliver dropped the Total, and Supply Chain Management - and the principals that continue to govern modern supply chains - were here to stay. Oliver admits that SCM today looks very different to his original vision, but we are 40 years further down the track. “Thanks to the collective efforts of executives, practitioners, academics, software vendors, and consultants, we anticipate a long — though sometimes chaotic — life for supply chain management,” he says.


“Oliver coined the term Supply Chain Management (SCM), an all-encompassing phrase around which the lives of supply chain professionals has orbited ever since”

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FIVE MINUTES WITH...

MARK PERERA Mark Perera is the CEO and cofounder of Vizibl. He is busy defining the future of supplier collaboration and supply chain resilience, spending time with his family, and celebrating the wins in life

Q. WHO ARE YOU AND WHAT CURRENTLY OCCUPIES YOUR PROFESSIONAL TIME?

» I am Mark Perera, CEO and

co-founder of Vizibl. The thing that currently occupies most of my time is looking at the strategy underlying the Supplier Collaboration technology that we have built, and how, as a team, we take that forward. My time is really product-centric, working with the wider team to understand what the future of supplier collaboration looks like.

Q. IN YOUR OPINION, WHAT CURRENTLY IS THE BIGGEST TREND DRIVING CHANGE IN YOUR AREA OF SUPPLY CHAIN?

» We work with companies across

multiple industries, but regardless of sector, we really see agility and resilience as overarching topic areas in the supply chain. From a resilience perspective, that’s both in terms of operational resilience, but also strategic resilience; we see organisations looking at implementing the desired levels of flexibility and the ability to change with demand, as they look towards the future of their company.

Q. WHAT ARE THE BIGGEST CHALLENGES FACING SUPPLY CHAIN LEADERS IN 2021?

» Becoming a real business partner

who has the ability to capture growth, sustainability, and productivity gains.

“ REGARDLESS OF SECTOR, WE REALLY SEE AGILITY AND RESILIENCE AS OVERARCHING TOPIC AREAS IN THE SUPPLY CHAIN” 20

June 2021


“ I ALWAYS APPROACH IT LIKE THIS: IN THE WEEK I’VE GOT SEVEN DAYS. SOME DAYS YOU WIN, SOME DAYS YOU LOSE, BUT AT THE END OF THE WEEK I ALWAYS TALK ABOUT MY WINS” Gartner lists supplier collaboration as supply chain leaders’ number one focus to solve for agility and resilience. The mindset and process change to switch to a supplier collaboration model will be a challenge for organisations that are falling behind.

Q. WHAT’S YOUR PERSONAL MANTRA?

» I guess one thing that’s kept me

going through my entrepreneurial life is ‘what doesn’t kill you makes you stronger’. I always approach it like this: in the week I’ve got seven days. Some days you win, some days you lose, but at the end of the week I always talk about my wins, and I always do that

on Sunday. That means I’ve had the weekend with my family, so I always get at least two wins in there.

Q. THREE THINGS YOU CAN’T LIVE WITHOUT ?

» Exercise. I really got back into

fitness recently, so my Whoop band and the Peloton bike are the big things that have helped me get through the day and keep me balanced. I also just love getting out with the dog in the morning and then going again in the evenings. Getting fresh air really keeps me going. Time with my family and colleagues is key. Obviously, I haven’t been able to see the Vizibl team face to face much due to the COVID-19 pandemic, but now starting to see them more and more. I’m really looking forward to more opportunities to do that. supplychaindigital.com

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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


FEATURE HEADER

INDUSTRY 4.0

Blueprint for Efficiency

24

June 2021


FEATURE HEADER

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FEATURE HEADER SAP INDUSTRY 4.0

INDUSTRY 4.0:

Excellence in Industrial Productivity Industry 4.0 enables enterprises to face supply chain disruptions directly and the new normal for manufacturing and production, says Dominik Metzger, the lead on SAP’s Industry 4.0 programme

I

n a period of unrivalled disruption, an organisation's supply chain has become either its strongest or weakest facet. Those businesses with agile and resilient supply chains have succeeded throughout the events of the past 18 months, while those that have been slow to adapt to digital transformation struggled and, in some cases, face falling further behind in the years to come. It is uncertain what the future holds, but it is clear that transparency and resiliency will be key to navigating localised threats to productivity, such as the Suez Canal blockage, and the unforeseen global disasters highlighted by the unprecedented and pernicious impact of the COVID-19 pandemic. At the same time, enterprises are faced with increasing customer expectations in product cost, quality, excellence and experience. Industry 4.0 offers a holistic approach to both these long-term and short-term obstacles to growth and productivity, says Dominik Metzger, Head of Product Management, Manufacturing and Industrial 26

June 2021

IOT at SAP, and the lead on SAP’s Industry 4.0 programme. “The main philosophy we at SAP follow with Industry 4.0 is to bring productivity increases into supply chains so that organisations of all sizes and industrial sectors are more resilient to disruptions.” This process of connecting all core business operations revolves around the transformation of four often disparate but integral pillars across manufacturing, design operations, and employees: Intelligent Factories, Intelligent Products, Intelligent Assets and Empowered People. “Often you find that too many companies focus on what happens within the four walls of a factory, but with our strategy for Industry 4.0, the real value creation goes far beyond that by connecting these four strategic pillars into end-to-end business processes,” Metzger says. “You can truly achieve a tremendous productivity increase if you connect your entire industrial processes not only the factory - but where products are being engineered and designed, where


FEATURE HEADER FORESIGHT

The main philosophy we at SAP follow with Industry 4.0 is to bring productivity increases into supply chains so that organisations […] are more resilient to disruptions DOMINIK METZGER

recipes are formulated, materials are supplied to production, machines and assets are maintained and serviced, all the way through to the shop-floor, from end-to-end. Supply chains are constantly encountering disruption, and Industry 4.0 is all about equipping users at the right point in time with valuable insights to make the right decision and resolve such a disruption.” Connecting business applications end to end through Industry 4.0 repositions businesses to be more resilient and increase productivity. But there are a multitude of other benefits, including increasing manufacturing quality and, as customers continue to raise the

bar in terms of service expectations, significantly increase customer experience and satisfaction. “Industry 4.0 can really be a differentiator to your customer service levels,” Metzger says. "An example that we find fascinating is allowing companies to move towards service offerings and away from classic product offerings. If you consider discrete manufacturers, rather than selling machines, automation equipment or other assets as their primary business model, Industry 4.0 allows them to offer output-based service models. In this way you guarantee the outcome of an industrial asset, and sell this as the primary service to your customers, rather than the supplychaindigital.com

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FEATURE HEADER SAP INDUSTRY 4.0

Dominik Metzger from SAP talks about Industrial Productivity

physical asset itself. This allows businesses to diversify their product offering against international competition.” SAP has been at the forefront of Industry 4.0 strategy since its inception more than a decade ago. As the global leader in enterprise business applications, SAP has guided many companies to successfully adopt Industry 4.0 and make it work for them. “This is one of our biggest strengths,” says Metzger. “Our ability to deeply embed the wealth of machine, sensor and device data, in other words Industrial Internet of Things (IOT) data into business applications, from engineering to logistics and manufacturing to maintenance and service, thereby significantly improving end-to-end business processes.” SAP even offers a hyperscaler agnostic approach to leverage industrial IOT data. Cloud computing allows 28

June 2021

a tremendous scalability for Industry 4.0 strategies, while Edge computing ensures robustness of even the most mission critical manufacturing operations. The second strength is SAP’s leadership on defining and developing initiatives for pan-industry adoption. The company is highly engaged in standardisation bodies and industry consortiums, and continues to drive the conversation forward. “SAP was one of the founding members of consortias, such as the Platform Industrie 4.0 and the Open Industry 4.0 Alliance which are among the leading institutions driving standardisation and execution for Industry 4.0. The main obstacle for many customers has been TCO, the total cost of operations, the cost of ownership, and of manually integrating the worlds of hardware and software, IT and OT while making it scalable,” says


FEATURE HEADER FORESIGHT

Metzger. "I think this is where we have seen a huge leap forward in the past 10 years. That’s why standardising is key, and we are involved in this process at every level.” The third strength of SAP is its unparalleled ecosystem of partners. Moving from ‘egosystems’ to ecosystems is the new normal in successfully bringing productivity increase with Industry 4.0 from concept to reality. SAP has partnerships with leaders, such as Microsoft for Cloud and Edge computing technologies as well as Siemens for Engineering and Design

SAP was one of the founding members of Platform Industry 4.0, which is still one of the leading institutions driving standardisation for Industry 4.0 applications, to name a few. The strong partnerships expand into many other areas such as System Integrators and Machine and Equipment Makers. The following series of white papers explores the four pillars of SAP’s Industry 4.0 strategy in depth. Discover expert insight into how to begin or supercharge your Intelligent Factory transformation journey, how to reduce downtime and overheads with Intelligent Assets, and realign your business to take advantage of the challenges and opportunities of today and tomorrow.

DOMINIK METZGER TITLE: GLOBAL VP – HEAD OF PRODUCT MANAGEMENT | MANUFACTURING AND INDUSTRIAL IOT Dominik Metzger is part of the SAP product engineering organization for Digital Supply Chain and works as Head of Product Management for Manufacturing & Industrial IOT. A key cornerstone of SAPs Digital Supply Chain strategy is to bring significant productivity increase and cost reduction to customers with the capabilities of Industry 4.0. SAPs Industry 4.0 strategy is called Industry 4.Now with a high focus on Intelligent Products, Intelligent Factories/Plants, Intelligent Assets and Empowered People based on technology enablers with the Industrial IOT. With around 14 years of experience in the SAP Digital Supply Chain space Dominik has a deep background in consulting and go-to-market responsibilities. Dominik was based out of New York City for the past 4 years where he was a Managing Director for the implementation partner Westernacher Consulting. Prior to his time in the US, Dominik worked as a Solution Architect for Digital Supply Chain solutions in Singapore (for 4 years) and Germany. He delivered numerous successful implementation projects across Europe and Asia within different industries including Automotive, Chemicals, Consumer Products, Logistics Service Providers, IM&C and Retail.


SAP INDUSTRY 4.0

INDUSTRY 4.0

Intelligent Assets Report

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June 2021


INTELLIGENT ASSETS REPORT

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SAP INDUSTRY 4.0


INTELLIGENT ASSETS REPORT

INTRODUCTION

Intelligent Assets Intelligent Assets reduce downtime, increase efficiency and empower employees to secure greater resiliency throughout the supply chain

A

cting as the backbone of any Industry 4.0 organisation is the Intelligent Asset. Gathering and analysing data from connected equipment and machinery gives employees greater control over how to increase efficiency, remove unplanned downtime, and reduce overheads by eliminating the need for unnecessary maintenance. Intelligent Assets is one of the four pillars of SAP’s Industry 4.0 initiative, alongside Intelligent Factories, Intelligent Products and Empowered People. Rachel Romanoski, Solutions Manager, Digital Assets, SAP, says: “Intelligent Assets allow businesses to ensure that they have a resilient supply chain, by making sure that the products are where they need to be when they need to be there, regardless of who the end consumer, user, operator, or service provider might be.” Here she explains what an Intelligent Asset is and how it can influence all facets of an organisation’s operation, from design and manufacturing, to delivery.

Intelligent Assets allow businesses to ensure that they have a resilient supply chain

More than half of maintenance leaders report that their companies have strategies to implement Industry 4.0 into plants and processes

Source: The Power of Industry 4.0 in Asset Management report / MPI Group


SAP INDUSTRY 4.0

EXECUTIVE INTERVIEW

The building blocks of intelligent business Rachel Romanoski, Solutions Manager, Digital Assets, SAP, shares insight on the fundamentals of Intelligent Assets, and how to mitigate risk, downtime and supply chain volatility

A

business’ most “You can do a lot with just a little valuable assets intelligence,” Rachel Romanoski, are those that Solutions Manager, Digital go relatively Assets, SAP says. “Oftentimes unnoticed day to people think Intelligent day. When a machine on a Assets need to be the latest shop floor is fully lubricated, and greatest cutting-edge running at optimum technology. They can be super temperature and pumping advanced, such as leveraging out its required units per hour, it physics-based engineering requires no intervention or conscious simulations to forecast potential thought. The same can be said for the failures, and help mitigate them. But it employee that has all the necessary could be as simple as a temperature information at their fingertips to reading. You can pull a lot of simple RACHEL complete their tasks and dedicate their ROMANOSKI information from most equipment, and time to improvements. by enhancing that data through ancillary The harsh reality is often more solutions and digital capabilities, you complicated. Machines break down, they can create that Intelligent Asset.” must undergo routine maintenance and they can quickly become a disruption CUTTING THE COST OF POOR to productivity and a costly hit to an ASSET MANAGEMENT organisation’s bottom line. Through the Intelligent Assets provide two power of Industry 4.0, Intelligent Assets fundamental benefits for business, promises to change that. Romanoski explains. "First and foremost, 34

June 2021


INTELLIGENT ASSETS REPORT

Intelligent Assets can help mitigate and eliminate unplanned downtime - those catastrophic events that can have major impacts on your supply chain and cost in general.” Allowing companies to take a more proactive approach to routine maintenance and critical repair instantly improves risk mitigation. Traditional asset management is an inexact science, at best, often informed by OEM recommendations, time-based best practices or, in some instances, the heuristic gut instinct of individual engineers and operators. Take the equipment used in an oil field. In this high pressure, technical environment, traditional asset management would usually dictate that maintenance on a centrifugal pump is informed by time-based metrics. Blanket assumptions such as these,

Intelligent Assets allow you to be more lean in using materials for repairs or maintenance however, do not account for a wide variety of variables such as uptime or operating conditions. “With a simple vibration sensor integrated into that pump, operators are able to change the way they look at maintenance, pull information and data, plot trends and analyse that accordingly,” Romanoski says. “The result is a more dynamic and prescriptive understanding of exactly when a pump needs lubricating, for example. The true power of the Intelligent Asset is in changing the basic, reactive emergency work or timebased, planned maintenance and being more prescriptive and tailored to that specific asset and use case. Ultimately, you can reduce the unplanned events that often carry a big price tag.” Intelligent Assets can also alleviate cost leakage. Unnecessary maintenance not only means machines are unproductive and idle when they could be serving customers, it carries hidden costs in the form of labour and the use of expensive spare parts. “Intelligent Assets allow you to be more lean in using materials for repairs or maintenance,” Romanoski says. “Because you have a full understanding supplychaindigital.com

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SAP INDUSTRY 4.0

Rachel Romanoski talks about predictive maintenance

of what will be needed and when, you’re able to significantly reduce overhead costs. If we further look at the costs from an overhead perspective, Intelligent Assets also allow businesses to better sweat their assets. Maybe you can consider the lifecycle of the asset and understand whether you can push it a little bit further.”

Intelligent Assets are the building blocks of the Intelligent Factory and Industry 4.0 36

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EMPOWERING PEOPLE FOR RESILIENT SUPPLY CHAINS The second major opportunity Intelligent Assets provide is in empowering employees to build more resilient and more efficient supply chains. A more informed worker is, after all, a more productive worker. “Not every asset is going to be applying this more prescriptive maintenance strategy,” Romanoski says. "It might be that the best course of action for a low cost item is to run it to failure. Having this information that we collect over time empowers those people to make those better decisions, but also has a trickle down effect to building resiliency and efficiency into the entire supply chain.” At SAP, Intelligent Assets represents the “through line” that connects the four


INTELLIGENT ASSETS REPORT

pillars of its Industry 4.0 approach. The company has a rich heritage in plant maintenance and operation solutions, with decades of data, best practice and market stewardship to draw from. “If we consider Intelligent Products, being able to leverage the information that we get from the assets themselves can actually have an impact on things like quality in that particular product that's being manufactured or produced,” Romanoski says. “This

People think Intelligent Assets need to be the latest and greatest cutting-edge technology […] But it could be as simple as a temperature reading allows organisations to start to correlate trends based on how a machine might be performing to what's the actual appropriate yield you might be getting out of that product, for example. “Intelligent Assets are the building blocks of the Intelligent Factory and Industry 4.0, and then ultimately, with Empowered People, it’s about bringing the people, the assets, the processes all together to really drive a resilient supply chain, no matter which of the pillars you’re looking to implement from Industry 4.0”.

RACHEL ROMANOSKI TITLE: SOLUTIONS MANAGER, DIGITAL ASSETS Rachel is part of Digital Asset Solution Management, globally responsible for strategy, direction, go-to-market and customer adoption across SAP’s Maintenance & Service solution portfolio. Rachel specializes in business processes across the entire asset lifecycle with a focus on mobile, geospatial, predictive and maintenance management solutions. Rachel has been with SAP for 8 years and while her background and education are in Biomedical Engineering from Texas A&M University, she has spent her career primarily focused on operational excellence within Oil & Gas, Chemical and other asset intensive industries.


SAP INDUSTRY 4.0

INTELLIGENT ASSETS BY THE NUMBERS

Up to

30%

of OEM-recommended maintenance activities happen too frequently Source: IBM

40%

Research suggests up to of all preventive maintenance costs provide only minor improvement in uptime Source: IBM

58%

of maintenance leaders believe Industry 4.0 is a competitive differentiator…

…A further

39% Two thirds

say it will continue to be in the near future

Inability to share equipment information with professionals and applications is seen as the biggest challenge, with

62% of maintenance leaders reporting machine-to-enterprise IT systems communications need improving (4% need an entire network overhaul)

38

June 2021

of maintenance leaders report their companies invested more than 5% of sales into Industry 4.0 strategy implementation in plants and processes in 2019…

95%

… say that figure will increase in the next two years, with 10% expecting a more than 20% rise Source: The Power of Industry 4.0 in Asset Management report / MPI Group


INTELLIGENT ASSETS REPORT

Process in which smart devices/ embedded intelligence have been applied Shipping/Logitistics/ Transportation

1%

27%

42%

30%

Maintenance

0%

28%

43%

29%

26%

41%

28%

5%

Assemby

Packaging

1%

27%

43%

28%

Document Management

1%

25%

46%

28%

by percentage of manufacturers N/A

No application

Some application

Significant application

Impact of Industry 4.0 to plants and processes on productivity and profitability over next 5 years 33%

Increase more than 10 percent

34% 49%

Increase 6-10 percent

41% 14%

Increase 1-5 percent

No change

Decrease

No Industry 4.0 currently or planned

19% 0% 3% 0% 0% 4% 3% by percentage of manufacturers Productivity

Profitability

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SAP INDUSTRY 4.0

INDUSTRY 4.0

Empowered People Report

40

June 2021


EMPOWERED PEOPLE REPORT

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SAP INDUSTRY 4.0


EMPOWERED PEOPLE REPORT

INTRODUCTION

Empowered People Empowering a business’ most valuable asset, people, is critical to success in Industry 4.0

N

o amount of automation, AI or ML will supplant the ingenuity of the human mind. From the C-suite to the shop floor, people will always be central to any organisation. Better informed people make better business decisions, and by breaking down barriers, companies can achieve more. Empowered People is one of the four pillars of SAP’s Industry 4.0 initiative, alongside Intelligent Factories, Intelligent Products and Intelligent Assets. Andy Hancock, Global Vice President, Centre of Excellence at SAP Digital Supply Chain, says: “We're never going to replace the people, or take the human out of the process. But the key thing is, if we can automate predictable tasks and mitigate risk through technology, those highly skilled workers can move to high value, complex decision-making tasks that are further up that chain.” Here he explores how empowering people comes to life in an organisation, how each individual can achieve more and, ultimately, how businesses can remain competitive and innovative in the era of Industry 4.0.

We're never going to replace the people, or take the human out of the process

Accessing Industry 4.0 data remains a major challenge for employees. Company executives believe only

50%

of manufacturers currently provide access to all who need it Source: MPI Group


SAP INDUSTRY 4.0

EXECUTIVE INTERVIEW

Empowering people, improving business Andy Hancock, Global Vice President, Centre of Excellence at SAP Digital Supply Chain on empowering people for better business

B

ehind the platforms, IoT sensors and connected assets in digital transformation sits the humble human, without which the entire system comes to a crashing halt. Employees can be a business’ most valuable asset, but they can also be the most costly if left behind in the revolution of Industry 4.0. Ultimately the goal should be to elevate an individual’s role within an organisation, remove dead weight from their desk and aid them in reaching their full potential. “The people will always be the centre,” says Andy Hancock, Global Vice President, Centre of Excellence at SAP Digital Supply Chain. “It doesn't matter how much automation that you adopt or how much you increase AI integration, there will always be tasks 44

June 2021

ANDY HANCOCK

that only a human can actually execute on. In fact, as we do more automation, there’s an even higher complexity of decision-making required that only a human can do.” SAP envisions a reality of Empowered People as a critical pillar in its approach to Industry 4.0. “What we mean by Empowered People is empowering individuals to be agile in the moment,” Hancock says. “The whole concept and ethos surrounds organising data, whether that comes internally or externally, to make it insightful and, most importantly, actionable.” BREAKING DOWN BARRIERS A real world example that made headlines earlier this year is the Suez Canal crisis. In the operation to rescue the Ever Given container ship wedged across the narrow channel, hundreds


EMPOWERED SAP: PEOPLE WHITEREPORT PAPER

of experts worked in collaboration. Excavators worked around the clock to dig the bulbous bow of the container ship out of the sand. Dredgers were called upon, who understood the crosssectional area of the Suez canal, and exactly where to dig to help refloat the vessel. And there were the pilots on board who understood that an approaching high tide would give an extra two metres of lift. In essence, this was a microcosm of modern business, where siloed departments use their expertise to help a business reach its objectives. “What happened in the Suez is that these dredgers, excavators, tug boats and pilots all pooled their information together and realised that they can actually refloat this ship in five days and let it sail,” Hancock says. "Go back 20 or even 10 years and this information would have been in people’s heads, in different places, and instead the situation would’ve taken weeks and required the costly job of removing containers. That’s a good illustration of where Industry 4.0

What we mean by Empowered People is empowering individuals to be agile in the moment

brings all of these technology enablers to empower people to make those informed decisions.” EMPOWERING THE WORKPLACE In less extraordinary circumstances, Empowered People is realised through a layering of information that filters throughout an organisation. “Start with the operator who has maybe one or two pieces of equipment to run. To empower that operator to do his job efficiently, he needs to know if it’s running correctly, if it’s going out of bounds, does he need an indicator to do something in order to avoid a failure? That’s the basic level,” Hancock says. “We then lift it up to the next layer, moving from operational execution to areas of financial core values. The plant manager can collate the information from each of the production lines, assess the KPI, form a plan, and measure that against their actuals.” supplychaindigital.com

45


SAP INDUSTRY 4.0

Andy Hancock from SAP talks about Industry 4.0

Beyond the four walls of the siloed plant, SAP enables businesses to stack further data from external suppliers, their wider network and begin to derive true value. In the boardroom, executive

Where this empowerment truly comes into effect is in the time it takes to make decisions and implement them 46

June 2021

leadership, now fully informed by this aggregated data, are able to deliver to their shareholders. “The CEO or CFO have their core values that they need to meet, whether that’s sustainability goals, P&L, or something else,” Hancock says. "Where this empowerment truly comes into effect is in the time it takes to make decisions and implement them. We can now actually bring the data all the way down the individual steps to the operator, because it's all connected. Decisions made at the top can be actioned incredibly fast throughout the business. That's a very simple example, but it shows how this layered approach works in a lot of our businesses that we see.”


EMPOWERED PEOPLE REPORT

Empowered People are the culmination of SAP’s Industry 4.0 strategy, and a company value that it wears on its sleeve. "The key thing when we talk about industry 4.0, is that SAP cannot do it on its own,” Hancock says. "We need our partner ecosystem, hardware vendors and integrators, and consultancies to understand these big shifts like digital transformation. And we also contribute to those discussions.

It doesn't matter how much automation that you adopt […] there will always be tasks that only a human can actually execute on “The first step is always the hardest in any project. It requires an amount of energy that some organisations may start but never finish and continually transform. And so what SAP has done is to make the entry point very low, so businesses can come and see the best course of action in our industry hubs. We have SAP services to support the maturity assessment, the evaluation of where they are on that journey. And then we have our partner ecosystem to help them move in the right direction.”

ANDY HANCOCK TITLE: GLOBAL VICE PRESIDENT, CENTRE OF EXCELLENCE Andy Hancock is a Global Vice President of the Center of Excellence, SAP Digital Supply Chain. Using his background in Human Computer Interaction, Enterprise Mobility and Industry Expertise, Andy merges a strong technical foundation, a passion for solving problems and real world situations he has encountered during his 14 years tenure at SAP to fulfill his role as trusted advisor for leading global brands. He understands how to quickly undercover the root of the problem and articulate a clear path to the right business outcome. Having worked in more than 40 countries and experienced a vast array of cultures he knows the importance of operating efficiently at the point of performance and put simply, getting the Right Information at the Right Time to make that informed decision.


SAP INDUSTRY 4.0

EMPOWERED PEOPLE BY THE NUMBERS

74%

of EMEA industrial product leaders believe training and developing their workforce with new skills is a priority for Industry 4.0 realisation Source: Deloitte

People are at the core of Industry 4.0 initiatives, with three quarters of organisations saying training and development of their workforce is a priority, and 28% focusing on attracting and retain talent Source: Deloitte

Demand for physical and manual skills in repeatable, predictable tasks is expected to shrink by nearly 30% over the next decade…

Industry 4.0 is expected to increase employment prospects for workers with IT skills, 50% of automakers report…

…25%

Source: BCG

expect to need more employees with logistics and planning expertise to derive true value from the insights provided by Industry 4.0 strategies

…Demand for technological skills, and acumen in interacting with technology is predicted to grow by more than

50%

Greater automation and digitalisation also worries workforces. Cultural adaptation and acceptance of Industry 4.0 is a challenge for

27%

of manufacturers…

…Meanwhile around

June 2021

a fifth

of manufacturers struggle with redefining the roles of their employees Source: MPI Group

48

Source: McKinsey


EMPOWERED PEOPLE REPORT

Impact of Industry 4.0 in next five years 1% 1%

29%

On Industry

69%

2% 3% On their business

30%

65%

by percentage of manufacturers

No impact

Limited impact

Some impact

Significant impact

10 biggest challenges with Industry 4.0 adoption

47%

Identifying opportunities/benefits of Industry 4.0

45%

Adapting existing technologies

38%

Security of corporate devices, network, and data

37%

Network capabilities to handle Industry 4.0 Incorporating smart devices/ embedded intelligence

35%

Necessary skills/talent to leverage data/intelligence

35% 32%

Network capacity to handle Industry 4.0 Leadership support for Industry 4.0

27%

Cultural adaptation/acceptance of Industry 4.0

27%

Changing business processes and workflows to accommodate Industry 4.0

26% by percentage of manufacturers

Source: MPI Group

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PROCUREMENT

NTT DATA SERVICES, REMODELLING

SUPPLY CHAINS FOR RESILIENCE


PROCUREMENT

Joey Dean, Managing Director of healthcare consulting at NTT DATA Services, shares remodelling strategies for more resilient supply chains WRITTEN BY: LAURA V. GARCIA

Joey Dean, NTT DATA Services

J

oey Dean, the man with the coolest name ever and Managing Director in the healthcare consulting practice for NTT DATA, is focused on delivering workplace transformation and enabling the future workforce for healthcare providers. Dean also leads client innovation programs to enhance service delivery and business outcomes for clients. The pandemic has shifted priorities and created opportunities to do things differently, and companies are now looking to build more resilient supply chains, none needed more urgently than those within the healthcare system. Dean shares with us how he feels they can get there. A Multi-Vendor Sourcing Approach “Healthcare systems cannot afford delays in the supply chain when there are lives at stake. Healthcare procurement teams are looking at multi-vendor sourcing strategies, stockpiling more inventory, and ways to use data and AI to have a predictive view into the future and drive greater efficiency. “The priority should be to shore up procurement channels and re-evaluate inventory management norms, i.e. stockpiling for assurance. Health systems should take the opportunity to renegotiate with their current vendors and broaden the supplier channel. Through those efforts, work with suppliers that have greater supplychaindigital.com

51


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PROCUREMENT

“ HEALTHCARE SUPPLY CHAIN LEADERS ARE RE-EVALUATING THE JUST IN TIME (JIT) MODEL WITH SUPPLIES DELIVERED ON A REGULAR BASIS” JOEY DEAN

MANAGING DIRECTOR OF HEALTHCARE CONSULTING, NTT DATA SERVICES

geographic diversity and transparency around manufacturing data, process, and continuity plans,” says Dean. But here ensues the never-ending battle of domestic vs global supply chains. As I see it, domestic sourcing limits the high-risk exposure related to offshore sourcing— Canada’s issue with importing the vaccine is a good example of that. So, of course, I had to ask, for lifesaving products, is building domestic capabilities an option that is being considered?

“Domestic supply chains are sparse or have a high dependence on overseas centres for parts and raw materials. There are measures being discussed from a legislative perspective to drive more domestic sourcing, and there will need to be a concerted effort by Western countries through a mix of investments and financial incentives,” Dean explains. Wielding Big Tech for Better Outcomes So, that’s a long way off. In the meantime, leveraging technology is another way to mitigate the risks that lie within global supply chains while decreasing costs and improving quality. Dean expands on the potential of blockchain and AI in the industry. supplychaindigital.com

53


PROCUREMENT

“Blockchain is particularly interesting in creating more transparency and visibility across all supply chain activities. Organisations can create a decentralised record of all transactions to track assets from production to delivery or use by end-user. This increased supply chain transparency provides more visibility to both buyers and suppliers to resolve disputes and build more trusting relationships. Another benefit is that the validation of data is more efficient to prioritise time on the delivery of goods and services to reduce cost and improve quality. “Artificial Intelligence and Machine Learning (AI/ML) is another area where there’s incredible value in processing massive amounts of data to aggregate and normalise the data to produce proactive recommendations on actions to improve the speed and cost-efficiency of the supply chain.” 54

June 2021

“ HEALTHCARE SYSTEMS ARE LOOKING AT PARTNERS THAT CAN ESTABLISH DOMESTIC CENTRES FOR SUPPLIES TO MITIGATE THE RISKS FROM HAVING ‘ALL OF THEIR EGGS’ IN OVERSEAS LOCATIONS” JOEY DEAN

MANAGING DIRECTOR OF HEALTHCARE CONSULTING, NTT DATA SERVICES


PROCUREMENT

Joey Dean TITLE: MANAGING DIRECTOR OF HEALTHCARE CONSULTING COMPANY: NTT DATA INDUSTRY: INFORMATION TECHNOLOGY & SERVICES LOCATION: UNITED STATES

Evolving Procurement Models From asking more of suppliers to beefing up stocks, Dean believes procurement models should be remodelled to favour resilience, mitigate risk and ensure the needs of the customer are kept in view. “The bottom line is that healthcare systems are expecting more from their suppliers. While transactional approaches focused solely on price and transactions have been the norm, collaborative relationships, where the buyer and supplier establish mutual objectives and outcomes, drives a trusting and transparent relationship. Healthcare systems are also looking to multi-vendor strategies to mitigate risk, so it is imperative for suppliers to stand out and embrace evolving procurement models. “Healthcare systems are looking at partners that can establish domestic centres for supplies to mitigate the risks of having ‘all

I'm a healthcare consulting leader at NTT DATA focused on delivering workplace transformation and enabling the future workforce. Whether it is driving transformation, providing business analysis, or brainstorming, ideating, and designing a new solution, I plug in like your favorite utility player to best meet the need. My value system is centered around servant leadership, mindfulness, and empathy. Expressed another way, I value getting my hands dirty to help someone, paying attention to the present, and understanding how others feel and being compassionate toward them. I've always been fascinated by technology and what it can do to advance society. Technology, particularly in healthcare, has been the foundation of my experience, whether it has been in previous business development, marketing, or client delivery roles.

supplychaindigital.com

55


PROCUREMENT

of their eggs’ in overseas locations. Suppliers should look to perform a strategic evaluation review that includes a distribution network analysis and distribution footprint review to understand cost, service, flexibility, and risks. Included in that strategy should be a “voice of the customer” assessment to understand current pain points and needs of customers.” “Healthcare supply chain leaders are re-evaluating the Just In Time (JIT) model with supplies delivered on a regular basis. The approach does not require an investment in infrastructure but leaves organisations open to risk of disruption. Having domestic centres and warehousing from suppliers gives healthcare systems the ability to have inventory on hand without having to invest in their own infrastructure. Also, in the spirit of transparency, having 56

June 2021

predictive views into inventory levels can help enable better decision making from both sides.” But, again, I had to ask, what about the risks and associated costs that come with higher inventory levels, such as expired product if there isn’t fast enough turnover, tying up cash flow, warehousing and inventory management costs? “In the current supply chain environment, it is advisable for buyers to carry an in-house inventory on a just-intime basis, while suppliers take a just-in-case approach, preserving capacity for surges, retaining safety stock, and building rapid replenishment channels for restock. But the risk of expired product is very real. This could be curbed with better data intelligence and improved technology that could forecast


PROCUREMENT

“ HEALTHCARE PROCUREMENT TEAMS ARE LOOKING AT MULTI-VENDOR SOURCING STRATEGIES, STOCKPILING MORE INVENTORY, AND WAYS TO USE DATA AND AI” JOEY DEAN

MANAGING DIRECTOR OF HEALTHCARE CONSULTING, NTT DATA SERVICES

surges and predictively automate future supply needs. In this way, ordering would be more data-driven and rationalised to align with anticipated surges. Further adoption of data and intelligence and will be crucial for modernised buying in the new normal. The Challenges These are tough tasks, so I asked Dean to speak to some of the challenges. Luckily, he’s a patient guy with a lot to say. On managing stakeholders and ensuring alignment on priorities and objectives, Dean says, “In order for managing stakeholders to stay aligned on priorities, they’ll need more transparency and collaborative win-win business relationships in which both healthcare systems and medical device manufacturers are equally committed to supplychaindigital.com

57


PROCUREMENT

“THE BOTTOM LINE IS THAT HEALTHCARE SYSTEMS ARE EXPECTING MORE FROM THEIR SUPPLIERS” JOEY DEAN

MANAGING DIRECTOR OF HEALTHCARE CONSULTING, NTT DATA SERVICES

58

June 2021


PROCUREMENT

each other’s success. On the healthcare side, they need to understand where parts and products are manufactured to perform more predictive data and analytics for forecasting and planning efforts. And the manufacturers should offer more data transparency which will result in better planning and forecasting to navigate the ebbs and flows and enable better decision-making by healthcare systems.

Due to the sensitive nature of the information being requested, the effort to increase visibility is typically met with a lot of reluctance and push back. Dean essentially puts the onus back on suppliers to get with the times. “Traditionally, the relationships between buyers and suppliers are transactional, based only on the transaction between the two parties: what is the supplier providing, at what cost, and for what length of time. The relationship begins and ends there. The tide is shifting, and buyers expect more from their suppliers, especially given what the pandemic exposed around the fragility of the supply chain. The suppliers that get ahead of this will not only reap the benefits of improved relationships, but they will be able to take action on insights derived from greater visibility to manage risks more effectively.” He offers a final tip. “A first step in enabling a supply chain data exchange is to make sure partners and buyers are aware of the conditions throughout the supply chain based on real-time data to enable predictive views into delays and disruptions. With well understand data sets, both parties can respond more effectively and work together when disruptions occur.” As for where supply chain is heading, Dean says, “Moving forward, we’ll continue to see a shift toward Robotic Process Automation (RPA), Artificial Intelligence (AI), and advanced analytics to optimise the supply chain. The pandemic, as it has done in many other industries, will accelerate the move to digital, with the benefits of improving efficiency, visibility, and error rate. AI can consume enormous amounts of data to drive real-time pattern detection and mitigate risk from global disruptive events.” supplychaindigital.com

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MACMILLAN EDUCATION

REIMAGINING THE PUBLISHING SUPPLY CHAIN L ANDSCAPE

WRITTEN BY: MELISSA KHAN PRODUCED BY: THOMAS LIVERMORE

60

June 2021


MACMILLAN EDUCATION


MACMILLAN EDUCATION

Shaun Plunkett, VP of Global Supply Chain, provides an exclusive insight into Macmillan Education’s global supply chain transformation

1843

Year Macmillan was founded

2000+ Number of Employees

62

June 2021

I

t isn’t every day that you come across an organisation that was founded in the 1800s and is still running to this day. With a 175-year history, Macmillan Education is one of the world’s oldest and most renowned publishing houses, providing books, digital tools and educational content to pupils and teachers all over the world. With a local presence in over 120 countries, Macmillan Education works with a global community of teachers and educators whose aim is to leave the world better than they found it by sharing knowledge and advancing learning. It is a company with responsibility at its heart and – along with its parent company Springer Nature – measures and manages its environmental and social impact. In 2019, Macmillan Education reduced the use of plastic in teaching materials and donated over 97,000 textbooks to schools and universities in lower income countries. So how does an organisation with such a long history function in the hyper-advanced world of today? The simple answer – a transformed supply chain. Providing a bit more depth into Macmillan Education’s operations is Shaun Plunkett, Vice President Global Supply Chain. Plunkett, who joined Macmillan Education in 2016 immediately identified the weaknesses the legacy operating practices presented. He spent the next year or so defining a supply chain


MACMILLAN EDUCATION

supplychainglobal.com

63



Grupo Espinosa: 70 years of constant evolution A proudly Mexican company servicing the publishing industry with best-in-class printing, storage and distribution facilities in the heart of Latin America Founded in 1952, Grupo Espinosa has been relentlessly supporting the publishing industry with producing more than 100 million copies every year. No project is big or small for Grupo Espinosa, as the facility can scale up on demand and their turnaround times are highly competitive. Grupo Espinosa works with on-demand digital press or offset press, in paperback with glued softcover binding, PUR softcover binding, stitched paperback binding, binder’s board, hardcover, saddle stitched, Spiral or Wire-O. Equipped with the experience needed for a product to leave the plant ready for distribution, Grupo Espinosa delivers anywhere inside or outside Mexico. With nearly 70 years behind them, and located in Mexico City, Grupo Espinosa has two major locations that they operate out of. Both locations are controlled by a single ERP (Enterprise Resource Planning) system ensuring speed, consistency and quality of work. Tirado says this isn’t their only competitive advantage. He adds “Our

competitive advantage is the relationship we have with customers and the trust they put in us with their intellectual property”. Speaking of trust, global publishing giant Macmillan Education exclusively partners with Grupo Espinosa for their Latin America operations, as part of Macmillan’s decentralized hub strategy. Having a facility that offered the full spectrum of service – from storing digital content to printing and distributing – was one of the major requirements for Macmillan, and Grupo Espinosa was recognized as the leading printing hub for providing this 360 infrastructure. Another factor that has led to success for Grupo Espinosa is the absolute focus on quality and time. Sustainability is a huge factor playing into Grupo Espinosa’s operations, and they’ve created a healthy environment with the sustainable use of paper and energy resources as well as keeping their employees – most of them associated with the organisation for over 10 years – happy.

Learn more


Macmillan Education & Edelvives

Partnership makes us stronger

Find out more about our Printing and Logistics services Vertical integration Warehousing and Distribution solutions Personalised attention Trustworthy

supplychain@edelvives.es

www.edelvives.com


MACMILLAN EDUCATION

“ The operation I inherited was Far East focused, where a team of about 30 would report into me, source and bring books to our single warehouse in the UK, and then ship a lot of books out again back to Asia. So you can imagine there were some inefficiencies there.”

SHAUN PLUNKETT TITLE: VP GLOBAL SUPPLY CHAIN COMPANY: COMPANY NAME INDUSTRY: PUBLISHING LOCATION: LONDON, UNITED KINGDOM Shaun Plunkett VP Global Supply Chain for Macmillan Education has over 30 years of supply chain leadership experience in FMCG, entertainment and media sectors supporting multi-billion euro businesses including Universal Music, EMI, Sony Music, Harper Collins and Associated British Foods. He has a track record of successfully delivering transformational change coupled with, award winning operating models and developing and coaching global teams. Challenging the status quo is at the heart of what drives Shaun on a daily basis and encouraging others to continuously push the boundaries.

SHAUN PLUNKETT

transformation strategy to deliver an operating model that would deliver improved cost, service and support growth opportunities. Shaun is an experienced supply chain leader, with experience of over thirty years. A naturally charismatic and motivated leader, Shaun has a leadership style that is one of engagement and open conversation. In a preCOVID world, Shaun spent most of his time traveling and meeting people in local offices across the globe in order to better understand their market dynamics, customer needs and to understand what they were expecting of a future supply chain. He also made it a point to meet other internal stakeholders and key supplier partners so he could get the full picture of end-to-end operational practices and measure existing service levels. As an extension to his leadership strategy, Shaun prides himself on being a change agent, someone who is invested in improving

EXECUTIVE BIO

VP GLOBAL SUPPLY CHAIN, MACMILLAN EDUCATION

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MACMILLAN EDUCATION

In bound Freight costs reduced by

90%

Service level consistently rose to

99%

68

June 2021


MACMILLAN EDUCATION

processes by challenging the status quo, and raising the bar for service in whatever capacity he can. Shaun has been responsible for delivering a resilient and agile model based on

“I could sense the pain, and that level of service was just not going to be acceptable and sustainable, to avoid losing business to our competitors ultimately” SHAUN PLUNKETT

VP GLOBAL SUPPLY CHAIN, MACMILLAN EDUCATION

regional supply/ printing hubs with strategic partners in each continent. The strategy has delivered multi-million euro savings across freight, packaging, inventory and production. Speaking further about his strategy for Macmillan Education, Shaun says that the need for reform was imperative, adding “The operation I inherited was Far East-focused, where a team of about 30 would report into me, source and brings books to our single warehouse in the UK, and then ship books in some cases out again back to Asia. So you can imagine there were some inefficiencies there.” Soon after he presented his findings to Springer Nature, Shaun was tasked with the job of creating a supply chain system that cut time, costs and dependencies on this single-region sourcing model. Since the manufacturing was Asia-focused, lead times were significant and this created a non-traversable obstacle for Macmillan Education’s operations. Shaun remembers one of the early conversations with executives at the company about the frustrations that some of the legacy system was bringing on. He says “I could sense the supplychainglobal.com

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MACMILLAN EDUCATION

At CLOC we specialise in working with large organisations in helping to improve print efficiency, and reducing print spend in the following ways: •

Flat pricing model – Supports auto-stock replenishment of small batch quantities and encourages production teams to only order what is needed. This keeps the long tail of products commercially viable even down to 1 book whilst avoiding any waste.

On demand low volume printing – As little as one copy. Zero stock; what you order is what you need – no waste or storage costs – great for the environment.

Stock management – Triggered stock replacement and fulfillment services.

Simplified bespoke ordering platforms and reporting; provides managed print spend through budget code automation, as well as many other budgeting methods.

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Our combined print technologies – Mixing digital printing with large press printing, delivers cost savings and increased production speeds for larger production volumes.

Targeted print – Variable data printing from template driven files via a bespoke ordering platform. 70 June 2021

High volume copying services through our large digital printers, deliver lower costs against onsite copiers.

Our security printing – We are a trusted and accredited security printer, delivering court bundles for many organisations as well as exam printing for 10 key Universities.

Our combined processes can deliver the fastest production speeds, same day is commonly available.

CLOC play a key role with Macmillan Education, by delivering on demand printed books within a flat pricing model.

For further information please email: info@clocltd.co.uk or call 020 8801 6983

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MACMILLAN EDUCATION

Macmillan Education Insights Index

pain, and that level of service was just not going to be acceptable or sustainable, if we were to avoid losing business to our competitors.” So what do you do when you have an operation that functions out of the UK, sources content from the Far East and distributes around the rest of the world? You organise. And that’s exactly what Shaun did. He established that the forecasting, on which demand was estimated, was not sufficiently accurate - resulting in unnecessary additional costs. He undertook detailed planning and scenario modelling to establish a radical alternative. The new decentralisation strategy he devised helped to cut inbound freight costs almost entirely. He adds “The existing model also didn’t meet our sustainability goals as the carbon footprint was way too high.” So he recommended building an integrated supply chain based around local printing and supply. This hub solution – as Shaun calls it –

would mean that all the printing, storage and supply could be done from a hub located in each operating country or region around the world, immediately eliminating the long lead

“One of the main challenges was sustainability, and this model was clearly not meeting our sustainability goals as the carbon footprint was way too high” SHAUN PLUNKETT

VP GLOBAL SUPPLY CHAIN, MACMILLAN EDUCATION supplychainglobal.com

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MACMILLAN EDUCATION

“ What I recommended was building an integrated supply chain based around local print and supply” SHAUN PLUNKETT

VP GLOBAL SUPPLY CHAIN, MACMILLAN EDUCATION

times and poor service levels that some clients were facing. After implementation, Macmillan Education’s service levels rose from under 90% to consistently above 99%. Another factor that contributed to the transformation of the supply chain was the issue of legacy content storage. Files were previously stored traditionally, often sitting with printers or local offices, which led to a significant waste of time and higher risk of version errors. To counter this, Shaun implemented a new digital archive system, meaning all content files were now held up to date and easily distributed to printing partners. He adds, “We’re seeing improvements in quality and a lack of mistakes because we've cleaned up all that supplychainglobal.com

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legacy content. We now know when we want to print something it's the right book, it has all the right content. And we also know we can print it anywhere anytime on demand, so we have a lot of confidence in that digital supply chain now.” Over the course of the past year during the COVID-19 pandemic, teachers around the world have had to rapidly adapt to online teaching and learning, and many classrooms have operated remotely for periods at a time. Macmillan Education was adapting to new digital offers already and the pandemic has led to a further focus on a robust digital-only offering, although printed components remain a key ingredient of their blended offer. The pandemic has also brought about barriers on transport, country-wide shutdowns and reduced-

capacity workplaces, making the need for decentralised hubs essential for operations to keep running. Elaborating further on how these hubs work, Shaun mentions that partnerships played a key role in bringing his strategy to life. Notable partners include Grupo Espinosa based in Mexico, Edelvives in Spain, Arab

“We’re seeing improvements in quality and a lack of mistakes because we've cleaned up all that legacy content” SHAUN PLUNKETT

VP GLOBAL SUPPLY CHAIN, MACMILLAN EDUCATION supplychainglobal.com

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“We now know when we want to print something, it's the right book, it has all the right content. And we also know we can print it anywhere, anytime on-demand, so we have a lot of confidence in that digital supply chain now.” SHAUN PLUNKETT

VP GLOBAL SUPPLY CHAIN, MACMILLAN EDUCATION

Printing Press in Lebanon and Cloc in the UK. One of Shaun’s first experiences with the hub system took place in Singapore, where he observed an entire production, warehousing and fulfilment operation under one roof. This was the catalyst for Shaun’s decentralised model, and he soon met with other partners in order to convince them to make investments and transform their infrastructure. To his surprise, he wasn’t met with resistance, as the partner companies soon realized that transforming their own operations could mean a higher volume of production and the potential to sell on the model to other clients. These partners recognized the mutual benefit, with Grupo Espinosa – for example - currently printing and delivering nearly 1.5 million books per year for the company. In the summer of 2020, when Lebanon experienced a catastrophic explosion at their port, one warehouse partner lost their entire facility. Incredibly Arab Printing Press was able to remanufacture all local requirements in two weeks the our third party logistics vendor found an alternate warehouse within days. Edelvives, a long term partner based in Spain, has been transforming its operations in line with the hub model by acquiring a new warehouse and installing print on demand equipment. Cloc, based in London, is the local

partner in the UK and has introduced a fast track digital printing service in order to support print on demand services and eliminate unnecessary waste. When it comes to sustainability, Macmillan Education has made notable strides in ensuring they use sustainably sourced paper for all publications. They have also reduced the use of plastic globally, eliminating shrinkwrapping and packaging wherever possible – amounting to millions fewer items of plastic in use each year. As a business, Springer Nature has committed to supporting delivery of the UN’s sustainable development goals, and so as a part of the larger organisation, Macmillan Education follows suit. As a closing statement, Shaun is once again reminded of the challenges that lie ahead, but is confident that with the right kind of transformation in place, the future looks bright. He concludes “Macmillan Education is an old organisation, I would say, and needed to consider emerging potential risks as the world is moving on. Actually you can't just stay still. People will overtake you and you need to change, and so this has been a roller coaster and fun journey, but there is more to come.”

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INVENTORY MANAGEMENT

OPTIMISATION: A MUST FOR 2021 & BEYOND

Now more than ever, supply chains need effective inventory management optimisation strategies to weather fluctuating demands and potential disruptions WRITTEN BY: GEORGIA WILSON

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t is fair to say that inventory optimisation is needed now more than ever in the supply chain world. Following the initial outbreak of COVID19, it was estimated that US$8trn worth of goods were held for sale as operations came to a halt, with stock management issues estimated to cost manufacturers in the UK alone £66bn because of disruption caused by the pandemic. A year on from the initial outbreak, organisations are starting to make the journey back to ‘business as usual’. As they transition into the new “normal”, and in reaction to the supply struggles exposed by the pandemic, many business leaders are wondering whether an investmen in inventory optimisation should be a priority or not. While it’s natural to assume that making a precautionary investment to mitigate future risks just in case the supply chain falters again, the pre-COVID-19 statistics reveal that issues relating to inventory

management aren’t new. In fact, the figures suggest that global retailers had known about the problem for a long time and had been making good progress in combatting inventory distortion, reducing it by US$158bn since 2017. So inventory distortion certainly wasn’t born out of the pandemic, as many suggest. Rather, it is a continuous and now growing challenge, exacerbated by COVID-19, with a worldwide figure totalling US$1.8trn in 2020. “More than anything else, the COVID19 pandemic has provided a teaching moment in what can happen when inventory planning, tracking, and management capabilities are not where they need to be. Over the last year, we have learned that ‘rules of thumb’ unit-based policies for safety stock are far too static to respond to sudden and significant demand and supply disruption,” says Ned Glattly, Managing Director and Leader in Deloitte Consulting’s Supply Chain and Network Operations Practice. “We learned that suboptimal deployment ‘stranded’ inventory where it was not needed and left huge gaps where demand spiked. We learned that visibility – just knowing what we have and where it is – is perhaps more critical than ‘optimised’ inventory levels, and working remotely made us more reliant on data and systems to provide this visibility. We learned the importance of including inventory planning as part of an supplychaindigital

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SUPPLY CHAIN

integrated business planning capability. a successful and profitable supply chain, In short, inventory tends to shine a light leading organisations are leveraging on all things both good inventory optimisation and bad in a supply for a long term and Did you know…? chain, and COVID-19 sustainable competitive provided a case study in edge and strategic how important it is to get Research from the Asset advantage. it right.” Based Retail Association Significant stock reported that British management issues Understanding the manufacturers alone were reported by the Advanced core elements of sitting on at least £5bn of Supply Chain Group inventory management unsold stock prior to COVID(ASCG) include “poor and its importance 19, with stock management stock availability leading in the supply chain issues costing retailers £1.6bn to lost sales and margin With inventory between 2018 and 2020, wiping dilution, as well as high management ranking 22% of company market values levels of stock surpluses among the most (Advanced Supply Chain Group). resulting in heavy important elements of discounting of products supplychaindigital

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Improve Inventory Management for Ecommerce

and losses incurred through aged and out-dated stock,” supply chain inventory optimisation can help organisations to balance capital investment constraints and goals across a large number of SKUs, while also considering supply and demand fluctuations. “Inventory policies and processes, working together across the global supply chain, define the overall supply chain posture — and also determine how the business will respond to changes in market and supply conditions,” states Blue Yonder. Therefore it's crucial to understand the core elements that drive success in inventory management. “At Deloitte, we have proposed six core ‘ingredients’ of inventory excellence – governance, tools, visibility, strategy, analytics, and process”, adds Glattly. “Collectively, these ingredients contribute to a capability. You can make improvements with just process fixes or tools. You can put in place governance and measurements. You 82

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can provide better visibility, and you can use this visibility to enable actionable analytics and insight. However, the reason they are all collectively important is that together they make inventory management both impactful and sustainable.” Navigating inventory challenges with optimisation practices “Managing inventory was a big ask when customer demand and supplier lead times were fairly predictable, but with marketplaces and supply chains more dynamic than ever, the job just got much harder. With customer demand and inventory supply continually fluctuating up and down, ‘old-school’ inventory management practices are simply too basic,” comments Eazystock. By introducing inventory optimisation practices for demand forecasting, stock levels, and supply continuity, supply chains can “take a feed of inventory data, do the


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forecasting and replenishment calculations, and provide the intel that can be used to make smarter purchasing decisions.” Demand forecasting While traditional forecasting methods are effective when demand is stable, volatile disruptions such as COVID-19 require more sophisticated methods. Adopting an inventory optimisation tool that uses statistical forecasting formulas can help supply chains account for variations in demand. “This method recognises that every inventory item has a different demand pattern because it is affected, to some degree, by its position in its product lifecycle, or by seasonality, trends or promotions. All of these are taken into account when forecasts are automatically generated and updated to inform purchasing parameters and stocking rules,” says Eazystock. Carrying the right stock When trying to navigate the challenging task of carrying the right inventory item to meet demand while ensuring that a sensible investment is made in stock, supply chain management (SCM) teams need to track item stock levels that are businesscritical and react accordingly to potential influencing factors to alleviate risks.

“ At Deloitte, we have proposed six core ‘ingredients’ of inventory excellence”

Ned Glattly TITLE: MANAGING DIRECTOR COMPANY: DELOITTE CONSULTING’S SUPPLY CHAIN AND NETWORK OPERATIONS PRACTICE INDUSTRY: MANAGEMENT CONSULTING LOCATION: UNITED STATES My Name is Ned Glattly. I am a Managing Director, and a leader in Deloitte Consulting’s Supply Chain and Network Operations practice focused on synchronised planning and fulfilment. I am also a thought leader within Deloitte Consulting in the area of inventory planning, management, and optimisation, and led the development of our inventory analytics platforms InveritasTM and Reimagine Inventory that we have used extensively across multiple industries to identify and drive down the excess, validate planning parameters, optimise stocking targets, and diagnose root-cause drivers of inventory problems.

NED GLATTLY

MANAGING DIRECTOR, DELOITTE CONSULTING’S SUPPLY CHAIN AND NETWORK OPERATIONS PRACTICE supplychaindigital

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“ Securing supply has been extremely difficult for many SCM teams in 2020, and supply issues could re-emerge at any time”

Formulas used to calculate replenishment, e.g. reorder points or safety stock levels etc., need the ability to be adjusted when supplier lead times change to avoid stockout situations. This can be done manually on a regular basis or using inventory optimisation software that will track lead times and update purchasing requirements automatically,” says Eazystock.

“Inventory optimisation helps by classifying items and focusing on the availability of those most important to the business. A simple form of inventory classification can be done manually using ABC analysis, but with inventory optimisation software, the categorisation can be much more sophisticated [...] The big advantage of inventory optimisation software is that stocking rules and reordering parameters are automatically adjusted to ensure service levels are met. This means that reorder points, reorder quantities and safety stock levels are all dynamically calculated, based on market dynamics”, adds Eazystock.

How digitalisation is transforming inventory management and optimising operations Being one of the ‘foundational use cases for the digital supply chain’, “real-time sensor data and tracking capabilities are being leveraged to optimise placement, avoid obsolescence, and help enable proactive planning and responsive replenishment [in inventory management],” says Glattly. “The digitisation of inventory has also enabled game-changing analytics. By harnessing the data that captures how inventory moves through a supply chain, we are able to build a “digital twin”– a model that illuminates what is actually happening versus what we planned to happen. From this, we gain insight into what is needed, what is excess, and more importantly, how inventory requirements are being impacted by the underlying drivers such as lead time, production and shipping frequency, demand volatility, quality, and supply variability,” continues Glattly.

Supply continuity Finally, when it comes to mitigating variation in supplier lead time, the replacement of traditional inventory management with probabilistic inventory is something that supply chains should consider. “Securing supply has been extremely difficult for many SCM teams in 2020, and supply issues could re-emerge at any time.

The benefits of an increasingly digital inventory management strategy for the supply chain “The value of digital in inventory management is significant and impacts all aspects of the enterprise value equation,” says Glattly, who lists some of the core benefits for organisations that are looking to digitise their inventory management:

EAZYSTOCK

LOGISTICS & SUPPLY CHAIN,

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• Top-line revenue benefits from mitigating stockouts and lost sales and redeploying products to respond to demand changes with agility • Cost benefits are enabled by avoiding expediting and firefighting, as well as reducing obsolescence and write-offs • The impact on working capital is perhaps the most significant. The digital capability isolates excess and provides actionable insight into how to draw it down “Technology is foundational to Inventory optimisation. Most advanced planning solutions provide for multi-echelon inventory optimisation (MEIO) that provide

inventory levels across a network and not just at individual locations. Keep in mind that having good inventory visibility as well as core planning fundamentals in place is critical before targeting optimisation, as you really can’t optimise inventory without knowing what is currently in the network and having a planning process to execute against the recommendations”, adds Glattly. The next decade of inventory management optimisation “Inventory management has come a long way in the last five years,” says Glattly. “We are seeing a greater recognition that inventory is the critical ‘link’ in optimising the end-to-end supply chain, as manifesting in several key areas.” supplychaindigital

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“Companies will better align individual performance objectives with inventory goals – and these objectives will be shared to foster collaboration” NED GLATTLY

MANAGING DIRECTOR, DELOITTE CONSULTING’S SUPPLY CHAIN AND NETWORK OPERATIONS PRACTICE

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capabilities like pooling, postponement, and multi-echelon optimisation. There is also a greater focus on becoming more demand-driven, targeting smarter replenishment of inventory buffers based on ‘sensing’ demand signals.”

Such key areas include: • A big focus is on improving inventory visibility: “you can’t manage what you can’t see. Tools that provide real-time tracking and visibility to inventory are a big focus, and visibility is a very popular ‘control tower’ use case.” • Significant focus on inventory strategy: “We are seeing more companies exploring opportunities to operationalise proven

• Greater emphasis on making inventory management a key part of the supply chain operating model and Enterprise Business Planning (EBP) process: “Inventory centres of excellence are becoming more commonplace, bringing strategy, planning, and analytics together to operationalise leading inventory management capabilities across the enterprise.” “The days of inventory being viewed as ‘free’ are long gone,” says Glattly. “Scrutiny over inventory and its role in improving cash flow is a priority in most industries, even where margins have been historically high and stockout-driven losses significant. This trend will continue. Priorities for inventory management will be to enhance the capabilities discussed today. Data and analytics will become core competencies of inventory managers.” “Companies will better align individual performance objectives with inventory goals – and these objectives will be shared to foster collaboration. Inventory stocking policies will become more dynamic and will ‘scale-up and down’ based on daysof-coverage, not static unit targets. Optimisation capabilities will evolve to become simulation and machine-learningbased. Finally, planning and fulfilment will become more synchronised and will fully embrace intelligently positioned inventory as a key objective to becoming a more demand-driven and responsive supply chain,” concluded Glattly. supplychaindigital

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Maximising Value by Embracing Change

WRITTEN BY: LAURA V. GARCIA PRODUCED BY: THOMAS LIVERMORE

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By embracing change, Accenture and Anaplan continue a long term partnership in maximising customer value. We take a look at what they’re doing right

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cross 200 cities and 19 industries, Accenture works as a unified team. Collaborating with an ecosystem of over 180 partnerships, they aim towards a common goal— to harness the full potential of platforms and accelerate the path to 360° value for every one of its customers by embracing change. Bringing together leaders in strategy, industry experts, enterprise function practitioners, business intelligence professionals, cloud migration and management specialists, designers, data scientists, and many other service providers, Accenture co-creates a unique path to customer success. By bridging finance to operations, Anaplan helps to build a dynamic, resilient future where connected leaders and teams are able to adapt, transform and redesign their business models to react to ever-changing market dynamics. Anaplan makes it possible to make agile decisions with confidence to drive growth, increase margin, improve cash efficiency, and manage risk via real-time, complex scenarios and intelligent forecasting.

“Culture follows mindset” EVAN QUASNEY

GLOBAL VP OF SUPPLY CHAIN SOLUTIONS, ANAPLAN

With more than 175 partners worldwide, Anaplan is proud to be partnering with many of the world’s leading experts. By strategically aligning with a wide range of organisations from large, global system integrators to smaller regional integrators and specialty consulting firms that provide transformation services around the world, Anaplan delivers successful digital transformation to their customers. Together, Accenture and Anaplan remain a long-standing, powerful duo whose shared success speaks for itself and is exemplified in their successful joint deliveries. Accenture + Anaplan, Sharing in Customer Success Accenture and Anaplan’s long-standing partnership is rooted in collective goals, equalled drive, and shared values. Accenture began working with Anaplan in 2011, becoming an official partner in 2014. Although, as Evan Quasney, Global VP of Supply Chain Solutions at Anaplan, says, “It started under the moniker of connected planning, as the companies grew, so did the partnership.” Today, Accenture is a "Global Strategic Partner,” the highest partner level defined by Anaplan, and was recognised as both APAC Partner of the Year and Japan Partner of the Year in 2021. “When I looked at the power of transformation that Accenture has delivered supplychainglobal.com

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Anaplan UX

for thousands of clients around the world and the outcomes that they like to achieve for their customers, Anaplan really seemed to be a natural fit,” Quasney says. “Oftentimes, Accenture is charged with transformations across processes, people, and technology for all types of organisations. Given Accenture's strong focus on being able to drive outcomes and deliver the results, what their clients were seeking was a natural fit for Anaplan to plug in and provide that next-generation platform that enables digital transformation.” Yasunori Tomita from Accenture Technology at Accenture Japan continues the train of thought, sharing how Anaplan’s cloud-based business planning software helps maximise value. “Using Anaplan as a platform for sales, production, procurement, and inventory planning, users can maximise their corporate value by unifying supply chain planning. We believe that Anaplan's platform features are very suitable for global PSI reforms that Accenture promotes with 92

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our clients, where sharing and collaboration of plans across departments are essential.” Promoting Innovation and Fuelling Growth Anaplan understands the importance of growing alongside customers and continually adapts to meet their changing needs, helping to power their clients’ growth and maintain successful long-term partnerships.

“ If you can't do it manually in small steps, you can't do it digitally in large steps” YASUNORI TOMITA

ACCENTURE TECHNOLOGY, ACCENTURE JAPAN


ACCENTURE & ANAPLAN

After working as a technology consultant for years, he moved to the strategy group in 2011. He has executed many domestic and international supply chain planning and design projects for manufacturing and high-tech industries. Currently, he is leading Supply Chain & Operations within Accenture Japan.

EVAN QUASNEY TITLE: GLOBAL VP OF SUPPLY CHAIN SOLUTIONS COMPANY: ANAPLAN INDUSTRY: IT & SERVICES LOCATION:

EXECUTIVE BIOS

UNITED STATES

Technology consulting group, Anaplan center of excellence team lead at Accenture Japan. For more than 15 years, supported global Japanese companies in transforming their business operations, especially by leveraging cloud solutions. A lot of experience in planning-related areas such as supply chain planning, demand/sales planning, and management accounting transformation using Anaplan and other solutions

YOSUKE OHTA TITLE: SUPPLY CHAIN & OPERATIONS LEAD, MANAGING DIRECTOR COMPANY: ACCENTURE JAPAN INDUSTRY: IT & SERVICES LOCATION: JAPAN

Evan Quasney is Anaplan’s Global Vice President of Supply Chain Solutions, bringing a decade and a half of experience spanning supply chain consulting, software, and hands-on industry experience across a range of industries. He is responsible for Anaplan's supply chain offerings, working with customers and prospective customers to define solutions to address their supply chain challenges, and helping those customers achieve their expected topand bottom-line outcomes.

YASUNORI TOMITA TITLE: TECHNOLOGY CONSULTING GROUP, ASSOCIATE DIRECTOR COMPANY: ACCENTURE JAPAN INDUSTRY: IT & SERVICES LOCATION: JAPAN

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Quasney explains, “One of the things about Anaplan that I believe is most compelling is that as an organisation, we are all about bridging the gap between finance and operations. Particularly as it relates to the supply chain landscape, I believe our capabilities to tailor our product to meet a customer where they are today and then grow with them over time is one of the single biggest differentiators we have to offer.” Tomita concurs, “Accenture believes it is essential to work with ecosystem partners to ensure that we have the weapons we need to meet our clients' current and future business needs. We also believe that Accenture can maximise the value we can provide for our clients. People well-versed

in our clients' business promote innovation with a correct understanding of our partner's product characteristics and usage.” Yosuke Ohta from Supply Chain & Operations Lead at Accenture Japan says, “The ultimate goal of digital transformation is to increase corporate value from a 360° perspective that includes the perspectives of Sustainable Development Goals (SDGs) and compliance. Even in the age of ‘digital is everywhere,’ the purpose of transforming operations remains the same: to increase corporate value. It is essential to continue updating and implementing the means to achieve this goal with the latest technology, and in the process, to always capture the extent of the contribution quantitatively to


ACCENTURE & ANAPLAN

“ When I look at the power of transformation that Accenture has delivered for tens and hundreds of thousands of clients around the world and the outcomes that they like to achieve for their customers, Anaplan really seemed to be a natural fit” EVAN QUASNEY

GLOBAL VP OF SUPPLY CHAIN SOLUTIONS, ANAPLAN

increasing corporate value. It is our mission to ensure customer success and provide our clients with support throughout their transformation journey.” Building Resilience in a VUCA World The COVID world remains very much a VUCA world, where businesses currently operate under nebulous circumstances and constant change brought on by market volatility, uncertainty, complexity and ambiguity. “We have experienced decades of the VUCA era,” says Tomita. “But we believe that only a few companies have capabilities of detecting changes that may occur in the future and act accordingly. As most companies are faced with many barriers, including existing

organisations, business processes, and legacy systems, they are looking for what and how to start building resilience.” “By leveraging our global expertise, Accenture provides end-to-end support for such companies, from defining the vision of what they want to achieve, to developing a roadmap for realising the vision to working with clients to form project teams to deliver results.” “Our clients in the manufacturing industry are particularly lagging far behind in digital transformation in the planning area. A majority of companies have already implemented EPR systems and are able to automatically obtain the minimum required data for financial accounting purposes, such as inventory receipt and delivery information and production results. However, many companies still have only partial or limited digitalisation capabilities in the supply chain planning area, from demand prediction to sales and production planning based on supply capacity restrictions, transportation and delivery planning, and inventory optimisation. The reality is that business supplychainglobal.com

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operations are run with a huge amount of manpower, using EXCEL that depends on individual skills. As a result, the speed and accuracy with which companies respond to change are not keeping pace with the needs of the market, which we believe is the biggest challenge.” Yet, things aren’t likely to slow down. “The trend of VUCA will increasingly accelerate. From the perspective of supply chain management in the manufacturing industry, it will become more and more difficult to correctly grasp the market demand and supply products and services appropriately. Under these circumstances, companies that manage to stay in business through a vast amount of manual operations will soon find themselves unable to keep up with the changes. To make or break a company's success depends on how quickly it can move away from manual operations. “We recommend companies start on a small scale. Large companies with global operations tend to have disparate business rules and processes, as well as IT systems and master data/code systems for each business, so efforts to standardise and unify them are necessary to increase the resilience of organisations. Toward realising this initiative, companies need to carefully select members well versed in the business processes and IT situation of each country and business to form a large-scale project team. Only a few companies can launch such a large-scale initiative right away, and even they will take years to realise it. In recent years, we have seen an increase in the number of companies that have started with a small reform by focusing on a specific business or product, using readily available SaaS solutions. They can obtain steady results by gradually expanding the reform across the company while quickly checking the effects.” 96

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However, when it comes to planning and decision making, Ohta believes companies need to pick up the pace. “I suggest speeding up the decision-making cycle. In the age of VUCA, however excellent a leader you are, the probability of making the right decision is decreasing. We should acquire an opportunity to make decisions more frequently rather than pursue 100% correct decisions. As an example, many global companies from Japan still conduct monthly S&OP, which is behind the global standard where weekly S&OP is the norm. It goes without saying that the inefficient bucketrelay of operations need to be eliminated to make decisions more frequently. Change Management, Culture Follows Mindset Anaplan has proven themselves to be successful implementers of change, consistently helping their customers in driving implementations, ensuring adoption rates and optimising value. Quasney shares the importance of culture and how Anaplan is getting it right.


ACCENTURE & ANAPLAN

“ Anaplan is a cloudbased business planning software. Using Anaplan as a platform for sales, production, procurement, and inventory planning, users can maximise their corporate value by unifying supply chain planning” YASUNORI TOMITA

ACCENTURE TECHNOLOGY, ACCENTURE JAPAN

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“When I look at the power of transformation that Accenture has delivered for tens and hundreds of thousands of clients around the world and the outcomes that they like to achieve for their customers, Anaplan really seemed to be a natural fi” EVAN QUASNEY

GLOBAL VP OF SUPPLY CHAIN SOLUTIONS, ANAPLAN

“There are a couple of ways that we believe we excel. The first is we take an agile approach to our implementations. On the software side, we work with our partners and teach what we call the Anaplan Way. The Anaplan Way is very different from a traditional software implementation methodology like waterfall. It's more like agile. What that allows our partners to do when they're driving transformations is to move very quickly and iteratively to build a mock-up of the concept they wish to test with the customer, focus on that outcome, on the dashboard, or the technology solution and get buy-in immediately.” “Culture and mindset are absolutely critical to achieving any type of digital transformation. At the root of digital transformation is becoming more agile, more flexible, more adaptive, and more 98

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responsive to the end goals of improving your business’s overall performance and agility. In order to do that, you require a fundamentally different mindset to how you look at and how you think about operating an organisation, making that organisational shift to a digital native or digital-first mindset.” “And to that end, culture follows mindset. If I can take the approach that I need to drive this transformation and the business imperative is to become more agile, culture will follow along.” The road isn’t always a straight one, however. Tomita shares some of the pitfalls and explains how small success can lead to big wins. “In many cases where change management is not successful, the purpose and effect of the change are unclear. Even though you have been briefed on new tools and system


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functions, you may be unsure of what kind of data you can get that you couldn't handle before, what kind of decision-making you can do with the data available, and what kind of effects it can produce. It is important to have first-hand experience on such points before implementing a tool. If you can't do it manually in small steps, you can't do it digitally in large steps. Accenture promotes a ‘change management free implementation pattern by simultaneously implementing Business Process Re-engineering (BPR) and digitalisation.” “A major cause of failure in transformation lies in resistance from opponents within the organisation. Change management is a key factor in mitigating this risk. The first step is to build up your confidence by experiencing small successes, and then

transforming the confidence into certainty enables great results. Creating business benefits will help build momentum for transformation and turn opponents into allies. Based on the change management methodologies that we have developed over many years, we believe that we can develop communication plans for all layers of people, from management to front-line workers, and implement the plans together with our clients.” Accenture

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TECHNOLOGY

UPGRADING RFID AND AUTOMATED

TRACK AND TRACE SOLUTIONS

Why do decades-old tech like RFID remain relevant despite digital disruption - and which recent innovations can accelerate traceability and SCM? WRITTEN BY: ELISE LEISE

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FEATURE TECHNOLOGY HEADER

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uring the COVID-19 pandemic, global supply chains faced the challenge of rapidly adjusting their business priorities to new customer preferences. Local supplier backlogs, winter storms, and the Suez Canal backup in March underscored the need for efficiency and visibility across the supply chain. According to Christof Backhaus, Digital Lead Product Supply and Smart Label Project Lead at Bayer, companies must now place critical importance on tracking and tracing their products. “All large enterprises in the world dealing with finished goods,” he said, “seek functional and technical solutions to real-time channel inventory.” Indeed, RFID’s real-time tracking data allows executives to make quick, wellinformed decisions in moments of supply chain crisis - and rather than unfolding across days or weeks, it only takes a matter of minutes.

Why does RFID remain relevant despite digital disruption? Essentially, RFID uses radio frequency waves to transfer data wirelessly between a scanner and a tag. In contrast to barcode technology, which requires a stationary scanner, RFID tags can be pinged from anywhere in the world, allowing companies to track realtime movement through the supply chain. RFID tags can also scan unique SKU numbers and distinguish between varying product sizes, colours, and styles: a critical feature for increasingly personalised end-user products. Though the first patent for RFID tags appeared in 1973, higher accuracy rates, lower costs, and advances in sensor and data technology have made it newly accessible to a wide range of companies. Today, the technology is used in logistics networks, manufacturing and delivery networks in the pharmaceutical industry, and any business where efficiently tracking and monitoring supplychaindigital.com

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product location is critical: raw materials, consumer products, cars, electronics, retail, and agriculture. What are the key benefits? Overall, automated track and trace solutions keep labour costs low, optimise operating costs, mitigate security risks, use capital effectively, and assist companies in adhering to regulatory requirements. Below are three in-depth dives into how RFID benefits major industries: • Pharmaceuticals: RFID tags help manufacturers safeguard sensitive products such as vaccines, tracking where they are and when they will arrive in real-time. Sensors closely monitor temperatures to ensure regulatory compliance. If anyone tampers with a shipment, the sensors alert the company. • Logistics: RFID identifies process gaps and frequent anomalies by monitoring a product’s lifecycle from shipment to delivery. This data helps decision-makers predict the most efficient routes and therefore optimise their distribution schedules. Retail: Sensors help guard shipments against theft and provide critical intelligence when shipments go missing. Before adopting RFID technology in 2203, UK retailer Marks and Spencer relied on barcodes to scan inventory. When they made the switch, their productivity increased from a maximum of 400-600 items scanned per hour to up to 15,000 items scanned per hour. Building on their initial success, the retailer expanded the use of the technology and is still using it today.

“ All large enterprises in the world dealing with finished goods seek functional and technical solutions to real-time channel inventory” CHRISTOF BACKHAUS

DIGITAL LEAD PRODUCT SUPPLY AND SMART LABEL PROJECT LEAD AT BAYER supplychaindigital.com

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TECHNOLOGY

Totally Integrated Automation RFID-enabled supply chain management

Regardless of the industry, RFID promotes accuracy, immediacy, and efficiency. Companies reduce human error by automatically scanning products, keep track of inventory even in geographic locations with poor connectivity, and help streamline warehouse operations by identifying exact product locations. Which recent innovations have changed the game? With recent developments in cloud technology and IoT, a multitude of cloudbased alternatives have emerged to challenge traditional RFID technology. One of these cutting-edge solutions is Sony’s Smart Label - an intelligent shipping label that runs on AT&T’s global cellular network. 104

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“ Automated track and trace solutions keep labour costs low, optimise operating costs, and assist companies in adhering to regulatory requirements”


TECHNOLOGY

network, and sends data to the Smart Label Cloud in real time. In sharp contrast to other smart label solutions that place trust in a patchwork combination of Wi-Fi, radiofrequency identification, and other limited coverage connections, the Sony Smart Label connects solely through a secure and universally-available cellular network. “Working with Sony,” says Robert Boyanovsky, the vice president of Mobility, IoT and 5G at AT&T, “we provide full visibility of every item shipped.” Most importantly for companies on the edge, the Smart Label integrates with existing enterprise systems to achieve full visibility, thus adding value without disrupting supply chain process flow.

As with any good innovation, Sony’s proprietary technology started with a customer need ready to be solved: the Bayer Crop Science Division lacked an international IoT solution that could track seed products from start to finish throughout its distribution channel. Millions of dollars of revenue stood at stake, so Bayer turned to Sony to develop a smart label that would set the organisation up to manage its supply chain with end-toend visibility. Sony’s printable and disposable adhesive label allows companies to track the condition and location of their products worldwide and act upon the vast amounts of data it collects. The process is simple: the label activates when attached to the package, connects to AT&T’s secure LTE-M

Why is this important now? Companies that previously delayed introducing RFID and other automated track-and-trace technologies can capitalise on recent developments that lower costs, improve accuracy, and supercharge traceability. Clearly the technology has value in today’s uncertain global marketplace, and can help decrease the costs of tracking goods. To quote Christof Backhaus, the Project Lead at Bayer, “the Smart Label indicates how much product is in the market, from the packaging line to the end customer.” Companies no longer have to spend a small fortune to take advantage of recent IoT developments. “Due to the technical composition [of the label],” Backhaus explains, “we don’t require additional infrastructure, manual scanning, or other expensive tools.” Over the decades since RFID was first introduced, support for introducing it to supplychaindigital.com

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“ Companies that invest in traceable and visible supply chain solutions stand the best chance of survival”

company supply chains has also improved. AT&T’s IoT Professional Services Organisation, for example, supports companies through the end-to-end design and integration process--from installation to deployment and project management. Companies that invest in traceable and visible supply chain solutions stand the best chance of survival, adjusting in real-time to natural disasters, shipping backups, and slowed-down supplier turnarounds as a result of the global pandemic. “Smart Label promises to help businesses like Bayer realise the full potential of the IoT,” says AT&T’s Boyanovsky. “[We can] deliver improvements in revenue and cost savings and make supply chains more efficient.” Certainly, company executives will be hard-pressed to ignore recent innovations. In an age of uncertainty, RFID and its challengers herald a welcome sense of supply chain security. The next step? “Our sales team,” Boyanovsky adds, “is prepared to engage with prospective customers now.” supplychaindigital.com

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APTIM REVAMPS ITS WAY TO BETTER PROCUREMENT WRITTEN BY: LAURA V. GARCIA

PRODUCED BY: GLEN WHITE

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ADJUSTING TO INDUSTRY AND COMPANY CHANGES, APTIM LEVERAGES TECHNOLOGY AND REVAMPS ITS WAY TO BETTER PROCUREMENT AND SUPPLY CHAIN

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eople. Process. Tools. Sometimes referred to as the golden triangle, it's an old concept that optimises the relationships between people, processes and the tools required to get the job done. APTIM is using this age-old strategy to propel its supply chain and procurement transformation journey. By ensuring the right people, with the right mindsets are given the right tools, APTIM is working to fix what's broken, and leveraging technology to optimise where it makes sense, and getting to better procurement in the process. Punit Shah, VP of supply chain and procurement officer at APTIM, walks us through. Digital Transformation; Setting the Pace and Challenging Mindsets "Private equity ownership has a very unique and a much faster-paced ask and requirement as compared to a traditional oil and gas firm whose structure and identity had a few iterations in recent times, owing to changes in ownership. In terms of establishing a base to grow from, the two backgrounds present quite a stark contrast. "It took a lot for the company to bring those two together, but right now, our approach is to bite off as much as we can chew. We want to take small steps but make sure that they are: a) consistent with the strategy, b) they're relevant to the business in size, scale and scope and c) we can continue to build on that. We don't want to do something we have to backtrack from or restart because we didn't think of something further downstream. And so it's a very cautious and slow but deliberate approach. "We started by ensuring we had the right people with the relevant backgrounds and

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APTIM’s Supply Chain & Procurement Transformation

skillsets to execute in the areas that are our responsibility. In order to do that, we needed to define what that breadth and depth of the supply chain realm and scope would be. Once we got there and got the right people in the right structure, the next step was going through documenting our processes and making sure that we were rigorous about it. This ensured everybody was working off of the same framework. Then we looked at bringing in tools where it would increase efficiencies by making it easier for people to execute on those processes." People First Redesigning better ways of doing things requires a diverse group of people, a wealth of experience, and most importantly, it requires flexible mindsets. "One really unique thing about APTIM is that we are very diverse in the sense that we are both diverse in the industries we serve and in multiple geographies. I've been in larger 112

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companies that don't have as wide a breadth of scope as APTIM does. We are in a lot of different areas, and so management, in general, is very accommodating and are very in tune with diversity and inclusion. They're very encouraging and employee-focused because, at the end of the day, our product is our service, and so the company really does value their people," says Shah. He continues, "That flexibility supports people to be able to perform and stay focused on work and their function more than the traditional thought processes, where it was believed you have to have an office and a set work schedule. Having flexibility around all of those things has made us a lot more successful." "This industry has been traditionally very resistant to change. It's in our DNA. They're known to be entrenched in the way that they've done work. One of the things I found is working well is that we're trying to foster the thought process with our teams that


APTIM

“ EXPERIENCE IS FANTASTIC, BUT IT DOESN'T MEAN THAT THAT'S EXACTLY WHAT WE NEED HERE. I WANT YOU TO USE IT TO ASSESS OUR SITUATION AND THEN TELL ME WHAT'S RELEVANT AND HOW WE CAN MAKE THIS BUSINESS BETTER”

PUNIT SHAH TITLE: VICE PRESIDENT SUPPLY CHAIN AND PROCUREMENT OFFICE INDUSTRY: CONSTRUCTION LOCATION: UNITED STATES Operations leader and executive achiever with broad experience in Energy, Construction, and Manufacturing industries, driving supply chain strategy and sustainability in cost-savings, profitability, and productivity. Innovative and strategic decisionmaker with a focus on total cost of ownership, reducing costs, and optimizing efficiencies. Harness engineering background to deliver rigorous solutions to business problems. Relationship builder and motivational manager able to adapt to skillfully maneuver through challenging circumstances and drive collaboration in delivery of organisational goals. Strong problemsolving talent.

PUNIT SHAH

your experiences are great and they make you what you are, and we value what you've learned, but you need to understand that not only are you allowed to, but you're expected to take those learnings and translate them into something that's more relatable to this business. "Experience is fantastic, but its true value lies in being able to scale it and applying it to your circumstances. I want you to use your experience and knowledge to assess our situation and then tell me what's relevant and how we can make this business better. I think that's what really sets our supply chain team apart." "Personally, I think a healthy company needs to be looking at growing and promoting talented employees. These days, people have multiple options, and a company owes it to an employee to support their growth and inversely, as they grow, the company does too. We are also one of the industries that are experiencing a talent gap and are very much exposed to the ageing workforce phenomenon. And so, one of the first things that I established when I came in was an

EXECUTIVE BIO

VICE PRESIDENT SUPPLY CHAIN AND PROCUREMENT OFFICER, APTIM


The right materials. At the right place. At the right time. Industry Measured Results SiteSense® Materials and Inventory Management helps customers keep track of the materials throughout their project lifecycle more efficiently.

40%

REDUCES BULK MATERIAL SUPPLIES

23%

IMPROVES CASH FLOW SAVINGS

16%

IMPROVES CRAFT LABOR PRODUCTIVITY

* CII Best Practices Guide: Improving Project Performance


Intelliwave SiteSense boosts APTIM material tracking and predictive analysis

Barry Peyton, Business Development and Strategic Partnership Manager at Intelliwave Technologies, outlines how it provides data and visibility benefits for APTIM We’ve been engaged with the APTIM team since early 2019 providing SiteSense, our mobile construction SaaS solution, for their maintenance and construction projects, allowing them to track materials and equipment, and manage inventory. We have been working with the APTIM team to standardize material tracking processes and procedures, ultimately with the goal of reducing the amount of time spent looking for materials. Industry studies show that better management of materials can lead to a 16% increase in craft labour productivity. With APTIM, we’re looking at early risk detection, through predictive analysis and forecasting of material constraints, integrating with the ecosystem of software platforms and reporting on real-time data with a ‘field-first’ focus – through initiatives like the Digital Foreman. The APTIM team has seen great wins in the field, utilising bar-code technology, to check in thousands of material items quickly compared to manual methods.

As things start to stabilise, APTIM continues to utilize SiteSense to boost efficiencies and solve productivity issues proactively. Integrating with 3D/4D modelling is just the precipice of what we can do. Access to data can help you firm up bids to win work, to make better cost estimates, and AI and ML are the next phase, providing an eco-system of tools. A key focus for Intelliwave and APTIM is to increase the availability of data, whether it’s creating a data warehouse for visualisations or increasing integrations to provide additional value. We want to move to a more of an enterprise usage phase – up to now it’s been project based – so more people can access data in real time.

There are three key areas when it comes to successful Materials Management in the software sector – culture, technology, and vendor engagement. Solving problems comes down to better visibility, and proactively solving issues with vendors and enabling construction teams to execute their work.

Learn more Learn more here


APTIM

“ WHEN WE ARE EFFICIENT AND PUT IN PROPER CHECKS AND BALANCES IN PLACE AND SET CONTROL MECHANISMS AND STANDARDISATION OF PROCESSES, THIS ALLOWS US TO REDUCE WASTE AND EXECUTE MORE EFFECTIVELY ON OUR WORK FOR OUR CLIENT” PUNIT SHAH

VICE PRESIDENT SUPPLY CHAIN AND PROCUREMENT OFFICER, APTIM

effective mentorship and succession plan, as it relates to a career ladder and a path that ensures room for growth and career advancement. It's a mutually beneficial event and one that is strategically important to us." Process: Revamping Policies and Procedures Shah then looked at reviewing, refining and tweaking procedures and policies, ensuring all functions are designed to best support the varied industries APTIM services. As Shah tells it, "In an ideal world, I would have liked the change management approach to be top-down, bottom-up. You want to approach it from both sides if you really want long term change to take effect. We've gone through significant gyrations at our top level, and there's been a lot of changes in leadership. So we're still waiting for the long term vision to settle down. But in the meantime, the business can't stop or wait. So, for now, our approach is to work from the bottom-up.” "Our strategy is to take a look at what processes we have or need to have in place in order to execute our function and what portions of that present an opportunity for 116

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$500m+ Revenue

1971

Year founded

10,000+ Number of employees

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automation or enhancement to where we can take that piece and make it a little bit better and then build on it.” "When we are efficient and put in proper checks and balances in place and set control mechanisms and standardisation, of processes, this allows us to reduce waste and execute more effectively on our work for our clients." "As a significant portion of what we do is project-based and often works on a costplus structure, our improved efficiencies get passed on to our clients. In the last 12 months, we've seen multiple instances 118

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“ WE'RE NOT HERE JUST TO BILL YOU AND LEAVE. WE ARE HERE TO PARTNER WITH YOU. WE’RE INVESTED IN YOUR BUSINESS” PUNIT SHAH

VICE PRESIDENT SUPPLY CHAIN AND PROCUREMENT OFFICER, APTIM


APTIM

where we improved what we were doing, and we showed it to the client, and in the end, it brought more business because we were able to show that we're not here just to bill you and leave, we are here to partner with you, we're invested in your business." Tools: Leveraging Tech with a Common Sense Approach "We're now using Microsoft's existing ecosystem of tools to manage more of our workflows. Microsoft is one of the bigger, leading-edge companies when it comes to innovation, and they’ve seen over the years the focus on supply chain and ERP systems, and they’ve really made significant strides and putting in investments and growing that out,” says Shah. “We’re really just at the beginning of our relationship. We’ve picked up a few projects that are small in scale but very critical to

our work process, like automating the requisitioning process. If we can do it from a tool that exists with consistency, which has a stable platform, we won’t need to integrate other systems, which is a huge win. So that presents a very attractive option, and we’re very actively exploring that. “It amazes me that a company the size of Microsoft gives us the preference and the treatment that they do. The relationship is mutually beneficial. They’ve been willing to listen to our issues, and they’re willing to invest in where we are as a company. They’re investing time and effort in understanding what our priorities are. And they’re not forcing solutions onto us. They’re allowing us to take the lead and supporting us in our path forward, and I have a lot of respect for that.” Intelliwave Technologies provides new solutions to the construction industry to help increase “Time on Tools” for craft labour

APTIM | Making A Difference

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and improve site safety and have been an integral partner in APTIM’s success in finding better ways of doing things. Shah expands, “As we were previously almost a hundred per cent manual when it comes to material management, Intelliwave Technologies is really bringing in a whole different dimension into the way we execute jobs. They bring a very niche and specific offering and have developed a tool specifically for material management, everything from managing your inventory and warehousing to receiving and allocating material to your job site, which on a construction site, depending on your scope of construction, can be extremely complex. We 120

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can have thousands or even millions of parts, and all of this ultimately is dollars. So if you're not watching it, you could risk losing it.” "Ballooning inventory erodes margins, so we took it another step further and looked at how we could improve the planning on our jobs—for instance, leveraging smart technology for better inventory management. We can now see how much material we have and where. We can plan ahead and see if we have an upcoming shortage, and then we can take actions to prevent that shortage. We can also report and track where there is product damage, which allows us to then go back to a vendor and recover some of those costs.


APTIM

“ INTELLIWAVE TECHNOLOGIES IS REALLY BRINGING IN A WHOLE DIFFERENT DIMENSION INTO THE WAY WE EXECUTE JOBS” PUNIT SHAH

VICE PRESIDENT SUPPLY CHAIN AND PROCUREMENT OFFICER, APTIM

"We've also taken the approach of developing work processes with Intelliwave and bringing them in to understand our business and have them give us suggestions and provide their expert view on what can and cannot be done. Intelliwave Technologies have been with us at multiple job sites, and they've been alongside us through all of our challenges, and they've earned our trust along the way. We share values, and we have a shared vision of where we want to get to. So it's a really healthy relationship based on a mutual understanding." Indirect Procurement Savings Shah tells us how APTIM has managed to take control over indirect spend and capture

cost savings. "Indirect in the traditional sense is indirect spend that's not going into your end product. Well, our end product is our project. And so indirect for us really is more of our corporate and overhead and it includes everything from your travel to your office buys, your benefits providers, insurance companies and so on. In the APTIM world, in broad terms, Supply Chain has the responsibility for managing the outward dollars as they're being spent, but we share a responsibility with multiple functions to define what that is and who you want to spend it with. "We don't want to dictate things, but we want to look at how we can make more strategic decisions. So we work with the functional group to determine the appropriate vendor base, and then we help manage the spend. In general, the approach has been to better define some of these categories and apply some supply chain disciplines to them, such as going through a rigorous RFP and taking a category management approach and applying the seven steps strategic sourcing process. We were typically very focused on and used to operating within that Gulf coast Baton Rouge area, so the value was in getting players to the table that were outside our usual geography. "Prior to the transformation, everything was done in pockets with no aggregate view on spend. We've now established programs and have signed some contracts with key companies. We've also put in structure to protect us from liabilities and risk. And we've locked in pricing. So now we have a very clear reference for capturing savings from where we were to where we are. We've come a long way, and now we can rinse and repeat."

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SUSTAINABLE

SUPPLY CHAIN

INITIATIVES Sustainability begins in the supply chain, informing better practices to reduce our impact on the environment and promote brighter prospects for business

C

WRITTEN BY: HELEN SYDNEY ADAMS

onsumers are calling for greater sustainability in every area of their purchasing, even those non-customer facing elements such as supply chain. In a 2020 survey, 70% of consumers said they thought it was important that the brands they buy from are sustainable. Here we consider the top 10 supply chain initiatives that are taking a stand to put sustainability first and promote eco-friendly as the new normal.

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TOP TEN

10 Suntory

Tokyo, Japan

Revenue: US$21bn It's estimated that there are up to 8 billion plastic straws in the ocean. Drinks company Suntory has left plastic straws in the past, with Ribena cartons now only available with paper straws. The company created a policy on the Sustainable Supply Chain in 2011, with six sustainable ideals, including legal compliance, human rights and labour. “We will promote activities mindful of the global environment,” the statement reads.

09 P&G

Cincinnati, USA

Revenue: US$70bn P&G (of Always and Pampers) is committed to a sustainable future: ending deforestation, supporting local farmers and as previously reported in Supply Chain, creating a solution to the palm oil problem. P&G’s policy on Wood Pulp details: “We have a responsibility through our practices to ensure sustainability of the world’s forest resource.” This includes minimizing unwanted sources of wood and maintaining independent third party verification systems of policies.


TOP TEN

08 IKEA

Delft, Netherlands

Revenue US$41.3bn The Scandinavian furniture giant has had sustainable supply chain policies in place for years: a 2005 partnership with WWF supporting cotton farmers and sustainably sourced cotton from 2015. Furthermore, the IKEA Forest Positive Agenda for 2030 plans to reforest areas which have been damaged. The company will only buy wood from destinations which have been verified by third party certification systems and encourages customers to recycle IKEA products.

07

ShipHawk

California, USA

Revenue: US$5m The shipping software company was founded in 2012. “We are on a mission to create a world where shipping positively impacts society without thrashing workers, the environment, or the bottom line,” says ShipHawk. The company aims to reduce packaging materials to help combat “the 36 million tons of packaging waste filling our landfills”. Using ShipHawk’s multicarrier services, the company is also working towards making transportation “more efficient”. supplychaindigital.com

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TOP TEN

06 Asda

Leeds, UK

Revenue: US$31bn The British supermarket Asda is focusing on raising respect for workers’ rights across their supply chain. “We are a supermarket with an environmentally responsible and sustainable sourcing model,” say the policy. A member of the Ethical Trading Initiative the company, Asda’s clothing line, George, refuses to buy cotton from Uzbekistan due to the use of forced child labour. By 2025, 30% of polyester will be made from recycled content.

05

Philip Morris International New York, USA

Revenue: US$28bn The cigarette company behind Marlboro, Bond Street and Red & White is dedicated to supporting tobacco-farming communities and preventing children from being used in the workforce. “The socio-economic well-being of tobacco-farming communities depends on many factors, including resilience to climate shocks and regulatory framework,” claims the company. When these factors are underdeveloped, child labor persists. PMI has been transparent in the reports of child labour. supplychaindigital.com

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04

Jaguar Land Rover Coventry, UK

Revenue: US$441bn Jaguar’s mobility service is managed by InMotion, which uses blockchain technology. This allows raw materials to be traced from origin to supplier. “This will enable Jaguar Land Rover to source with greater transparency as to the provenance, welfare, and compliance of suppliers throughout its networks. It will also enable Jaguar Land Rover to assess the carbon footprint of its supply chain,” said Jaguar Land Rover.

03 Aldi

Dessen, Germany

Revenue: US$13bn The supermarket with low prices, a bakery and a mysterious middle aisle is taking sustainability seriously, by introducing solar panels to power some stores is the USA. Across the world, tons of food goes to waste – either from shops floors or having expired in customers cupboards. Aldi plans to halve food waste by 2030 and is developing plans for composting waste in its reverse supply chain.


02

TOP TEN

Nike

Oregon, USA

US$37.4bn

In the early 2000s, sportswear company Nike was blighted by accusations of sweatshop labour. In the present day, Nike has firmly moved in a transparent direction, from factory floor to shop floor, in managing a supply chain that works for all, including the environment. “This past year we used Nike’s scale and influence to raise the bar for sustainability,” said CEO John Donahoe. “We saw real progress throughout our supply chain: We are currently using 100% renewable energy in the United States and Canada in our owned or operated facilities.” In addition, Nike’s European Logistics Campus in Laakdal, Belgium, is surrounded by canals, so 99% of containers reach the campus by water, which saves 14,000 truck journeys annually.

“ This past year we used Nike’s scale and influence to raise the bar for sustainability” supplychaindigital.com

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Over 5 Stages:

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TOP TEN

“ As we enter a pivotal decade of change, we have a landmark opportunity to accelerate our efforts to build a healthier and more sustainable future”

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TOP TEN

HSBC

Canary Warf, London

US$50bn

Claiming to be “the world’s local bank” would make little sense if it were not trying to alleviate some of the damage human behaviour has caused to this planet. HSBC has made 2030 their target for “building a thriving low-carbon economy” by ensuring that their operations and supply chains are net zero carbon. In addition, the bank is putting up to $1trn of finance and investment to support customers who want to make the same bold transition. Group Chief Executive Noel Quinn said: “HSBC is committed to opening up opportunities. As we enter a pivotal decade of change, we have a landmark opportunity to accelerate our efforts to build a healthier and more sustainable future.”

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SA HEALTH


SA HEALTH

Andrea Andrews, Executive Director Procurement and SCM at SA Health, on transforming supply chain and procurement and the lessons learned from COVID

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ith Andrea Andrews, Executive Director Procurement and Supply Chain Management, at the helm, SA Health has kicked off its supply chain and procurement transformation journey. “We've spent a lot of time over the last couple of years trying to improve our processes and recognised that we needed technology for that. So we are looking to implement a contract management system this year. We’re also looking to implement a new Catalogue management system for the thousands of products that we distribute across hospitals and SA Ambulance. We're really in the middle of our technological transformation whilst also trying to implement spend analytics as well.” “We use an ERP system here at SA health, and you don't want to throw out the baby with the bathwater, so to say. So we had to assess what we had and identify where the gaps were, and then develop that vision of where we wanted to be. It's taken us time. I would say at least three years to get us to the point where we are now looking to implement these changes. It's a big exercise. We have to implement it all across SA Health, in all our hospitals and across our network as well. When it comes to implementation and change management, it’s important to hit the right note. That’s a massive piece of the work, and so we spent a lot of time in the planning stage to ensure we get it right.”

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SA HEALTH

Andrea Andrews, Executive Director Procurement and SCM at SA Health supplychaindigital.com

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“Prior to COVID, our hope was to have our spend analytics implemented last year. So some of our projects have been paused because we had to divert our resources to other priorities. So we are still on our digital transformation journey. We never got to that finish line. But I don't believe there is a finish line. I think that technology will keep evolving and improving, and we will have to evolve with it.” It seems, however, that the global pandemic caused a cultural shift and brought its own set of lessons to be learned. The Covid Lesson: A Cultural Shift Andrea was on vacation when COVID hit. And as all good supply chain and procurement professionals do, regardless of where in the world they may be, or if they are on or off “the clock, began to immediately think of the repercussions. By the time she got back to work, usage had started to spike. 138

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Andrea shares the story. “On the 2nd of February, we saw all our hospitals draw down about six months of PPE stock in about five days. Fortunately for us, we were watching it and saw it happening. We quickly realised we had to put some controls in place. But then we had to come to longer-term solutions.” “The first half of 2020, we focused on PPE and identifying our supply chain vulnerabilities. People thought it was great to see oil prices for Petro going down, but for us, it signified possible supply chain issues as a raw material, e.g. polypropylene used in PPE and hospital supplies. You have to start connecting the dots fast. The team did a great job of that.” “I put the team into functional streams early on so we could focus on those areas, and we got some support from government agencies. One of the key things we did early on was to centralise PPE for all government agencies, and that really helped us. I


ANDREA ANDREWS TITLE: EXECUTIVE DIRECTOR PROCUREMENT AND SUPPLY CHAIN MANAGEMENT LOCATION: SA HEALTH

ANDREA ANDREWS

EXECUTIVE DIRECTOR PROCUREMENT AND SUPPLY CHAIN MANAGEMENT, SA HEALTH

EXECUTIVE BIO

“ I don't believe there is a finish line. I think that technology will keep evolving and improving, and we will have to evolve with it”

Andrea is the Chief Procurement Officer, South Australian Health. She has more than 20 years experience across private, public and not-for-profit sectors in Australia and the United Kingdom. Her experience has proved invaluable throughout the COVID19 pandemic, navigating the various challenges with procurement and supply chains. Recognising the prompt actions required at the commencement of COVID-19 allowed for a team, led by Andrea, to oversee logistics supporting the State wide response. Andrea is driven to maximize results and deliver value for money through the establishment of crossfunctional relationships. She understands the importance of mutually beneficial partnerships with business leaders, customers, suppliers and service providers all with the patient in mind.


Healthcare

Health knows no bounds Philips connects data, technology and people – seamlessly. Every day, healthcare moves forward. And it appears nothing can stop the progress of human health. Yet even the most advanced healthcare networks can be more integrated. Systems need to be able to talk to each other. Data needs to be available when and where decisions need to be made. At Philips, we help create seamless solutions that connect people, technology and data across the care continuum. From first-time-right diagnosis to hospitals that go where the patient goes, we’re breaking the boundaries standing in the way of progress. There’s no limit to what we can do together. Because today health knows no bounds, and neither should healthcare. See how Philips is removing the bounds of care at: www.philips.com/nobounds There’s always a way to make life better.


SA HEALTH

“ We learned that the public sector could be fast, effective and efficient. We realised we had the skills and tools that we needed. We just had to believe that it could be done” ANDREA ANDREWS

EXECUTIVE DIRECTOR PROCUREMENT AND SUPPLY CHAIN MANAGEMENT, SA HEALTH

remember sitting with all the heads of procurement, all the people in roles similar to mine, across all the government agencies, police, education and the department of infrastructure and transport. And in that meeting, we talked about centralising supply through health. We were competing for scarce resources, and we could prioritise from a health perspective how we supplied.”

“I think controlling the demand as well as the supply helped us tremendously, and I thank my colleagues for working with us and trusting us to assume control of that for them. The fact that the public sector could pull together like that was a real benefit. We learned that the public sector could be fast, effective and efficient. We realised we had the skills and tools that we needed. We just had to believe that it could be done.” “I think the common practice we had across corporates, across the health system, as well as the government agencies, all coming together towards a common goal helped speed things up. We set up PPE manufacturing companies within weeks when normally it would take years. We were lucky to have suppliers who are willing to come to the party and trusted us. I think it's been heartening to see how the community pulled together and how the private sector was able to work with us.” supplychaindigital.com

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Healthy Supplier Relationships for a Healthy Supply Chain Upon stepping into the role, Andrea was keen to improve supplier relationship management, something her team embraced. “It’s important to realise you must talk to suppliers and build up those important relationships. Otherwise, you can’t look at things like innovation. You must have those relationships in place, and it’s important to be clear about what the guidelines are. We should have good working practices that allow us to have those conversations.” “We run an annual supplier conference. When we had our first one, people questioned why we would run a supplier conference in the public sector. But it’s important to pull everyone in, which allows everyone to hear the same information at the same time. We can share with them our vision and our business planning and strategy and where we're heading, which then makes it easier for all of us when we’re looking for support for goods or services, or whatever it may be.” “The supplier conference has been growing year-over-year. Last year, we moved it to a virtual conference, and that still worked well. We incorporated one-onone meetings as well, either with myself, Directors of Procurement, our the Head of SRM or other members of my team. We make sure that suppliers have as much access to us as we can. Everyone is really busy, but we deliberately set that time. And the suppliers know that we do those round tables throughout the year, so that is certainly improving how we work together and the innovation that comes from that.” “It’s important to remember that it’s those relationships with suppliers that we relied on when Covid hit. Maintaining those relationships meant we could pick up the 142

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SA HEALTH

10,000+

Number of Employees supplychaindigital.com

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phone and see if they could help us. We aren’t the biggest state in Australia, and for a lot of international companies, we are on the other side of the world. So if we want to be a key customer, then we need to think differently because it's not necessarily going to be about scope and scale. I think the fact that we really built those relationships up really helped us throughout, and I hope to maintain those moving forward.” Automating for Better Contract and Relationship Management Andrea highlights how tighter contract management allows for better relationship management. “Facts and data enable you to have these relationships because you want to be able to be clear and quantitative. We want to have contract management meetings, agendas and minutes and action logs and all that good stuff because that's the foundation. And if you can get those things right, then it allows you to be able to do some of the more innovative work.” “Is that an area we could improve in? Absolutely, and the technology piece for me is really key. I want us to automate as much as we can because I want contract management to be not just about talking to suppliers and having contract management meetings but going to talk to our customers. Actually getting out into the hospitals and talking to the nurses and doctors, the endusers. To be able to do that, I need to make time, which means I need to automate what I can so I can get out there.” In terms of long term plans, Andrea wants to continue to leverage technology for easier ways of working. “I want to come in in the morning, click a button and see a supplier dashboard with colour coding and early warning signals where we can see any 144

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“ It's been heartening to see how the community pulled together and how the private sector was able to work with us” ANDREA ANDREWS

EXECUTIVE DIRECTOR PROCUREMENT AND SUPPLY CHAIN MANAGEMENT, SA HEALTH


SA HEALTH

challenges, where we may have to go and have a conversation. But also where we can see that suppliers are going above and beyond, and there may be opportunities. I want those early indicators. The benefit is for our contract managers to be actually out with our customers and talking to suppliers and preparing the whole life cycle management of contracts, looking for better ways of working, preplanning for the next tender or whatever is next. “We’re not there yet, but we're stepping towards it, and that certainly is our end objective. Much of the transactional work can be automated, so we can really get into those other analytical pieces and opportunities, hence the technological transformation that we need to go through to get there.” “Oracle is our ERP system, and there are additional Oracle modules we're looking

to implement. Certainly, I think that having everything on one platform will help us. We are bringing in service partners to come in and help complete implementation for us. We’re supply chain management experts. You can ask us how many SKUs we have in distribution, or you can ask us about negotiation strategies, but we’re not ICT experts, so we do need help from our Digital Health department and from service providers to do that.” The Distribution Centre “We are constructing a new distribution centre, and I went out to see it last week, it’s looking brilliant. It’s about 11,000 square meters with office areas on top of that. And we're looking to automate as much as we can. We’ll be putting in a new procurement system and warehouse management system. Our new goods to person picking supplychaindigital.com

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“ I think we were very brave and bold through COVID, and I would like us to maintain that kind of boldness that things can be done differently” ANDREA ANDREWS

EXECUTIVE DIRECTOR PROCUREMENT AND SUPPLY CHAIN MANAGEMENT, SA HEALTH

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system alone will hold about 10,400 high volume fast-moving SKUs,” says Andrea. “We’re working to move the unit picking work to the distribution centre. We’re actually looking at what they need at ward level and then building it back. So at the distribution centre, we pack it in a way that when it arrives at the imprest, ward level, the first thing they need to unpack is at the top. So that's been a massive project for us. We will be working carefully with our customers. I don't think our stakeholders fully understand what the supply chain will look like yet, but certainly, it will be far more effective and efficient while improving quality, speed and volume as well.” “It’s impressive to see it go from drawing to reality. I hope that the team enjoys it and understands that we tried to make it as positive for our team as possible. We did some surveys early on to decide on things like do we want bike racks in, or outdoor eating area, touchpoints like that. I want it to be a good place to work. The ribbon should be cut sometime at the beginning of September, and we should be operating from there from then on.” As Andrea and her team look to get back on track with their digital transformation, Andrea hopes they hold onto the lessons they’ve learned along the way. “I would really like to see us imbed a real culture of continuous improvement throughout our network. I think we were very brave and bold through COVID, and I would like us to maintain that kind of boldness that things can be done differently. We don't need to keep doing things the same way we did them before.”

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