Supply Chain - April 2022 by Supply Chain Digital

April 2022 | supplychaindigital.com

SAP: Harnessing Industry 4.0 tech for smarter supply chains

Supply Chain Consultancies

Snam: Transformation journey of Italian energy giant WeWork: Using intelligent sourcing & procurement to scale operations

EXCLUSIVE INTERVIEW:

Andy Hancock, on leading SAP’s trailblazing Centre of Excellence

The Digital

Supply Chain

SWAT team

The ‘Risk & Resilience’ Conference

2022 27th - 28th April

STREAMED & IN PERSON TOBACCO DOCK LONDON

70+ speakers. 1,000+ attendees. One global conference.

Get your tickets

Watch our 2021 Showreel

Previous Speakers Include:

Aurelien Faucheux

Senior Director, Procurement Performance, Systems & Excellence

Charlotte de Brabandt Technology and Negotiation Keynote Speaker & Host

Aston Martin

Lufthansa

AMAZON

Ninian Wilson

James Westgarth

Group Procurement Director Vodafone Procurement

CPO

Never miss an issue!

+ Discover the latest news and insights about Global SupplyChain...

JOIN THE COMMUNITY

The SupplyChain Team EDITOR-IN-CHIEF

SEAN ASHCROFT EDITORIAL DIRECTOR

SCOTT BIRCH

PRODUCTION DIRECTORS

GEORGIA ALLEN DANIELA KIANICKOVÁ PRODUCTION MANAGERS

PHILLINE VICENTE JANE ARNETA ELLA CHADNEY

CREATIVE TEAM

OSCAR HATHAWAY SOPHIE-ANN PINNELL HECTOR PENROSE SAM HUBBARD MIMI GUNN JUSTIN SMITH REBEKAH BIRLESON JORDAN WOOD CALLUM HOOD VIDEO PRODUCTION MANAGER

KIERAN WAITE SAM KEMP

MOTION DESIGNER

TYLER LIVINGSTONE

DIGITAL VIDEO PRODUCERS

EVELYN HUANG JACK NICHOLLS MARTA EUGENIO ERNEST DE NEVE THOMAS EASTERFORD DREW HARDMAN MARKETING DIRECTOR

ROSS GARRIGAN

MARKETING MANAGER

KAYLEIGH SHOOTER PROJECT DIRECTORS

TOM LIVERMORE MIKE SADR CRAIG KILLINGBACK

MEDIA SALES DIRECTOR

JAMES WHITE

SALES AND MARKETING DIRECTOR

JASON WESTGATE MANAGING DIRECTOR

LEWIS VAUGHAN

CHIEF OPERATIONS OFFICER

STACY NORMAN CEO

GLEN WHITE

FOREWORD

A long road lies ahead for uptake of e-vehicles in supply chain A lack of infrastructure around electric vehicles, as well as high cost of purchase and maintenance, means supply has an awful long way to go on sustainable transport

“So much needs to be done between now and 2050 if meaningful progress is to be made on decarbonising our roads”

In this issue we look at how the logistics industry is progressing with making the switch from using vehicles powered by fossil fuels to those that run on renewable energy. The answer is, very slowly. This glacial uptake rate can be no surprise. The cost of a new electric truck is around US$100,000 more than its diesel counterpart. Maintenance costs are higher too, because replacement batteries can also run into tens of thousands of dollars. Plus, there remains a chronic lack of renewable-fuel infrastructure, around both battery-powered vehicles and those designed to run on green hydrogen. But with a ban on the sale of certain diesel vehicles just a decade away - and a blanket ban on all diesel engines also looming - so much needs to be done between now and 2050 if meaningful progress is to be made on decarbonising our roads. Like so much of today’s seismic changes to the way business is conducted, a lot will depend on cooperation and collaboration - between companies, and also between companies and governments. Progress here really can’t begin soon enough.

SEAN ASHCROFT SUPPLYCHAIN DIGITAL MAGAZINE IS PUBLISHED BY

sean.ashcroft@bizclikmedia.com

supplychaindigital.com

CONTENTS

Our Regular Upfront Section: 12 Big Picture 14 The Brief 16 Timeline: A potted history of packaged goods 18 Trailblazer: Dennis Mullahy 22 Five Minutes With: Dr Elouise Epstein

Supply Chain

How to get the most from supply chain consultancy

28 SAP

Centre of Excellence is SAP SWAT team

SAP Design & Manufacture report:

Sustainable supply chains are in SAP’s DNA

Sustainability

Electric dreams a long way from reality in trucking

Logistics

Pop-up or micro? Fulfilment strategies are becoming evermore important

Snam

Snam is powering its way to a sustainable future

SAP Planning & Sourcing report:

SAP makes sustainability a question of planning

110

Tech & AI

With enterprise resource planning, less is more

EDUCATE • MOTIVATE • EL EVATE

PR ES ENTS :

23rd-24th June 2022 TOBACCO DOCK - LONDON E1W 2SF

GET TICKETS

PART OF:

SPONSOR OPPORTUNITIES

INCORPORATING:

156 118

Tealbook

Solving Supplier Data For Procurement Leaders

Ikano Bank

Procurement - the heart of every organisation

168

Guy's and St Thomas' NHS Foundation Trust

Procurement shared services are essential to support healthcare

132 Top 10

Consultancy Firms

186 EY

How to build autonomous and sustainable supply chains

144

202

Powering Purposeful Sustainable Sourcing

The time for flexible work environments is now

Rolls-Royce

WeWork

M A RCH8.COM

IS HERE Telling the stories of driven, ambitious women in business and society...

V I SIT NOW

E D U C AT E • M OT IVAT E • E L E VAT E

VI SI T N OW

BIG PICTURE

April 2022

The daffodil growers who put a spring in our step Cornwall, England

Varfell Farm in Cornwall - England’s western-most county - is the world's largest grower and packer of daffodils. Over 3,500 acres of fields produce 500 million hand-picked daffodils every year. The UK produces 90% of the world's cut daffodils, and exports to Europe and North America.

The highly perishable early-spring flowers are shipped using a ‘cold chain’ a temperature-controlled supply chain comprising chilled containers, transport modes and storage facilities. Data loggers monitor and control temperatures to keep the flowers between 1-3 degrees Celsius while in transit.

supplychaindigital.com

THE BRIEF "We are creating processes and systems that are really allowing us to scale and be profitable” Gary Levitan

Global Head of Procurement, Sourcing and Supply Chain, WeWork 

BY THE NUMBERS Running Hot: McKinsey report on inflation

Economies around the world grew quickly in 2021

8.1% 5.7% 5.2%

But as economies have heated up, so too has inflation: “5G is a great enabler as it has low latency and you can put a lot of data through a single access point” Andy Hancock

Global Vice VP of Digital Supply Chain Centre of Excellence  READ MORE

“The ongoing transformation process comprises 55 staffed projects and planned investment of €500m”

EDITOR'S CHOICE

PROCUREMENT AND SOURCING BODY SIG HAILS 'SUPERHERO' MEMBERS

The Sourcing Industry Group's CEO Dawn Tiura tells Supply Chain Digital Show why procurement's stock has never been higher - thanks to the pandemic. READ MORE

MEDICAL DEVICES SUPPLY CHAINS 'FACING CYBERSECURITY STORM'

Claudio Farina

Supply chain cybersecurity vulnerabilities are hitting medicaldevice manufacturers, as they add ever-more suppliers in order to mitigate disruption.

Executive VP of Digital Transformation & Technology, Snam 

7.1%

April 2022

Retail 'dragging heels' on Scope 3 supply chain emissions Retail is falling behind other sectors when it comes to tackling Scope 3 emissions in the supply chain, a leading supply figure has said. Simon Geale, Executive VP at procurement specialist Proxima, says that in retail there is no clear path towards sustainability and that this is causing problems. He points to vastly different approaches to Scope 3 emissions from one retailer, Costco, to another - Walmart. In response to shareholders’ votes for tougher net-zero goals, Costco has said they cannot directly control supplier actions, whereas Walmart is working to reduce Scope 3 emissions by incentivising suppliers with early payments if they score highly on sustainability. “Simply put, Walmart can make a brand act and Costco can’t,” he says. “Costco is feeling the noise of sustainability but has not yet felt the pain, because its customers value price and quantity above all else.” This will all change, he says, when customers start voting with their wallets when it comes to retailers’ sustainability performances.

 PROCUREMENT PROFESSIONALS

The pandemic has seen a sharp rise in the stock of the procurement profession in the eyes of C-suiters, because procurement has done more than any business function to overcome supply disruption and they’re also ideally placed to help their firms on sustainability issues.

 AI & DRONE TECHNOLOGY

New research from supply chain management specialist Blue Yonder found that in 2021 AI & drones were the techs being most rapidly adopted by companies looking to digitally transform.

 MEDICAL DEVICE MANUFACTURERS

Stockpiling life-or-death components to bypass supply disruption means medical companies’ may be opening themselves up to supply chain cyber attacks if they don’t properly vet new suppliers.

 LOGISTICS PROVIDERS

After Russia invaded Ukraine, Oil prices soared to US$3.0134 a gallon, a gain of 16.39 cents. This will increase the cost of freight, by sea, rail and road - at a time when logistics has never been more expensive

W I N N E R S APR 22

L O S E R S

supplychaindigital.com

TIMELINE

10,000 BC

2500 BC

Nomadic man’s natural food packaging

The ancients discover glass and paper

Packaging started with humankind’s need to store and transport food while on the hoof. Historians believe that during our nomadic hunter-gatherer days, materials such as leaves, animal skins and gourds were used to store and transport foodstuffs.

The ancient Egyptians were the first people to discover glass-blowing technology, and to mould glass into food and water containers. In ancient China, meanwhile, paper making was discovered, and was used as a flexible packaging for medicines and loose tea.

April 2022

1300 Medievals roll out the barrel The Middle Ages saw a rise in popularity of wooden packaging, in the shape of barrels and boxes, both for storage and transportation. Barrels were typically used for sea travel, and contained rum, dried food, and fresh water. Barrel-makers called coopers - were highly valued tradesmen.

It may seem that today’s packaging is all about sustainability but protecting goods and keeping things fresh has been packing’s most important function - right back into prehistory.

1760-1840

1900s

1957present

Tin cans and cardboard boxes

Paper bags and cellophane

Bubble-wrap, pop-tabs and plastics

The Industrial Revolution saw major technological advancements, fueled by a surge in new mass-produced products. For the first time food could be preserved by boiling and sealing in airtight glass containers. It’s the same method we use today, with canned foods. Tin-plated steel cans replaced glass, and cardboard boxes were also first used to transport goods such as cloth and eggs.

Mass-produced paper bags were becoming commonplace for ad hoc packaging, while in the US the Kellogg brothers began using cardboard to distribute and market their cereal, from 1906. Meanwhile, in Switzerland, chemist Jacques Brandenberger was busy discovering cellophane, as he searched for a material that wouldn’t absorb liquids.

Bubble-wrap was invented in 1957 by the Sealed Air company; the pop tab was invented by Ermal Fraze of DRT Manufacturing, as a way to consume canned drinks without a tin-opener; and the bete noire of today’s packaging - plastic - was introduced as polyethylene terephthalate (PET) bottles, patented in 1973 by American chemist, Nathaniel Wyeth.

supplychaindigital.com

TRAILBLAZER

Dennis Mullahy

JOB TITLE: VP, GLOBAL SUPPLY MANAGEMENT AND LOGISTICS COMPANY: JOHN DEERE

The man who ploughed through the pandemic, learning as he went

allas Wiggins is VP Global Supply Management and Logistics at John Deere, the well-known manufacturer of machines and equipment for agriculture, construction, forestry, and other industries. John Deere is an iconic US business. It was back in 1837 that farmer John Deere invented the first steel plough, which was designed

to cut through sticky prairie soil. Before the dawn of the combustion engine, Deere did more than any single person to increase agricultural productivity in the US. Today, John Deere employs 68,000 people worldwide and has annual net sales and revenue of around US$44bn. Wiggins is the man who ensures that the company’s products reach thousands of customers across the globe every day. Wiggins cut his supply teeth at GM Wiggins began his career in supply management at General Motors, where he spent over a decade, working across supply management, engineering, operations, and other areas. After this he went to work for a small B2B startup in Detroit called Covisint, which focused on connectivity between suppliers and the automotive Original Equipment Manufacturers (OEMs). It was after this, in 2007, that he joined John Deere, as a quality manager at a facility in North Carolina. His next role was in the corporate strategy team at company HQ in

April 2022

“Having an open mind and preparing for risk has become essential at Deere”

1837

US$44bn

The company was founded in 1837, by farmer John Deere, who made a steel plough.

John Deere has annual net sales and revenue of around US$44bn supplychaindigital.com

TRAILBLAZER

Moline, Illinois, and it was this that eventually led him into his current role. Wiggins says that while at John Deere he has come to appreciate the immense value of the supplier relationship. Supplier relationships ‘vital’ during the pandemic “During the pandemic the strength of those relationships helped us through a challenging time,” he says. “Those same relationships are also key to unlocking innovation. Often suppliers approach us to share what they’re working on, and that can be a very powerful tool to generate innovation, growth, and get first-mover advantage.” It is the pandemic, says Wiggins, that has taught him most while at the company. Talking to Accenture, Wiggins said: “One key learning point was the effect the pandemic had on our people and what, as leaders, we must do to ensure they make it through. It’s been an extremely stressful time for all employees, but specifically those in supply management. “It’s important to give encouragement and support, and have people take a timeout when they need it, to refresh their minds before getting back to the battle for products and parts.” Engaging your people ‘is priority number one’ Wiggins says he sees “tremendous value” in driving high levels of engagement, “so that people wake up in the morning and don’t fear coming to work”. He adds: “Taking care of people is number one.” As for operational matters around suppliers, he says Covid-19 has taught him the importance of resilience. “I don’t think you can have too much resilience. Microsoft’s CEO Satya Nadella said in a recent interview that good leaders look 20

April 2022

“It’s been an extremely stressful time, but especially for those in supply management”

into the future and try to make sure that what you’re doing today is preparing you for that. I strongly believe this. “Having an open mind and preparing for that future through diversification and risk mitigation has become essential at Deere, but also for me as a supply management leader.” Business flexibility is needed for the right results Wiggins says he has also learned the value of being flexible. “We’re doing all kinds of things we never had to do before,” he says. “Being

flexible is important, because although we’ve got lots of standard processes, we're learning that sometimes we have to be able to adapt.” To this end, he says,John Deere’s ‘Smart Industrial Operating Model’ has “enabled thinking outside the box and reminded us that understanding the required result is extremely important”. He adds: “With a clear result in mind we might find a way to get there faster or more efficiently. Some things can't take weeks; they must be done in days. Speed to execution is becoming essential.” supplychaindigital.com

FIVE MINUTES WITH...

DR ELOUISE EPSTEIN DR ELOUISE EPSTEIN IS A LONGSTANDING PARTNER AT KEARNEY, A PUBLIC SPEAKER AND AN AUTHOR OF NOTE ON PROCUREMENT AND SUPPLY CHAIN

Dr Elouise Eptein is a Partner at Kearney, a futurist, and a supply chain and procurement author. Her latest book, about digital procurement, is called ‘Trade wars, Pandemics, and Chaos’.

Q. TELL US ABOUT YOUR CURRENT ROLE AT KEARNEY

» I am a Kearney partner based out

of San Francisco. I’ve worked for the firm for almost 22 years. I am a trusted advisor for clients, helping them set their digital procurement and supply chain strategies. I work across all industries and geographies, and am continually generating new content based on my work with clients. I will not show up with half-baked content from five years ago, platitudes, or buzzwords. I am also a frequent public speaker. Because I am a historian by training my presentations often are equal-part history lesson and supply chain insights, all imbued with my dry wit!

Q. WHAT DOES IT MEAN TO BE A 'FUTURIST' IN PROCUREMENT?

» As a futurist, typically I work either

with extreme leaders or extreme laggards. Extreme leaders like to embrace a challenge, while extreme laggards look at the extreme leaders and decide they want to scrap everything and leapfrog to the future. 22

April 2022

full of macro disruptions that turn conventional wisdom on its head, such as the pandemic. The way businesses operate, and specifically global supply chains, compels us to come up with imaginative new ways of operating that make use of the sophisticated digital technologies available to us.

Q. WHAT'S THE BIGGEST MISTAKE PROCUREMENT LEADERS MAKE?

» Not using the power of their

These tend to be my clients. The middle-of-the-road clients usually make incremental changes and that's fine, but that's not the role for a futurist. In practical terms, I help clients prepare for tomorrow’s problems, today. I am continually looking at what threats are coming next and what we need to do to prepare for a disruptive future, because there will be a neverending set of disruptions facing tomorrow’s supply chains. This literally keeps me up at night. .

Q. WHAT'S THE TAKE-HOME MESSAGE OF YOUR BOOK?

» That we must shed legacy processes, technology, and thinking. Businessas-usual has been good for the past 25 years but today’s world is vastly more complicated, and

platform. Chief procurement officers have the unique ability to bring about change because they control - or at least influence - where an enterprise spends its money. This is a significant role because they can bring ESG progress through the suppliers a company engages. The other mistake CPOs make is to needlessly hold on to the legacy idea of cost control, instead of value creation. Far too often the focus is on how to control and limit where money is spent, and using legacy technology and processes.

Q. WHY IS PROCUREMENT MORE IMPORTANT THAN PEOPLE THINK?

» At its core, procurement is

about managing third parties. Today’s globalised supply chains predominantly consist of third parties. It is not uncommon for large enterprises to have 50k-100k third parties. That means building a secure, efficient, green, socially conscious, and fault-tolerant supply chain will require being excellent at third-party management. And who better than procurement to deliver on this promise than procurement? supplychaindigital.com

FIVE MINUTES WITH...

April 2022

“ THE BIGGEST MISTAKE PROCUREMENT LEADERS MAKE IS NOT USING THE POWER OF THEIR PLATFORM” Q. WHAT'S THE BEST PIECE OF ADVICE YOU'VE EVER BEEN GIVEN?

»Take care of your people. Your job as a leader is to enable them to do their job. This includes giving them the tools and support they need and protecting them as necessary. .

Q. WHERE DO YOU SEE PROCUREMENT BEING IN 5 YEARS' TIME?

»Without a doubt procurement

will continue its trajectory to the big leadership table. The profession will be responsible for facilitating value creation with third parties. It will go from serving the business to being the business. Enterprise ESG goals will be owned by procurement, with CPOs adopting the mantle of chief sustainability officers. And, procurement will provide the first line of defence against enterprise risk. To make all of this happen, procurement will continue to be at the forefront of digital adoption and innovation. supplychaindigital.com

DISCOVER WHO MADE THE CUT. Top 100 Companies in Supply Chain Read Now

A BizClik Media Group Brand

Creating Digital Communities

Centre of Excellence is SAP SWAT team WRITTEN BY: SEAN ASHCROFT

April 2022

PRODUCED BY: MIKE SADR

SAP

supplychaindigital.com

SAP

As VP of SAP’s Digital Supply Chain Centre of Excellence, Andy Hancock and his team have deeper, and earlier, knowledge of SAP products than anyone else.

he reason many of the world’s biggest companies use SAP’s products for their supply chain solutions is that its software helps companies accelerate growth, develop game-changing innovations and drive more value to their bottom lines. But of course, before the process of transformation can begin, SAP must first connect with customers, and then communicate the benefits of their solutions. For this, SAP has its very own international SWAT team of industry experts, who travel the globe, supporting knowledge transfer and being hands-on with customer-facing activities. That team - the SAP Digital Supply Chain Centre of Excellence (CoE) - are experts in any given product, and are adept at applying their industrial experience in helping customers overcome their current business problem and to its own internal stakeholders around the globe. Andy Hancock is Global Vice President of the Digital Supply Chain Centre CoE. Hancock explains exactly how CoE experts provide the necessary support: “We support field sales teams, helping them with product-features knowledge in the early part of a product’s life cycle. We also do internal knowledge enablement. We look after a lot of global projects.” He adds: “Our people have been out in the field - they've had oil underneath their fingernails. They understand how to run a 30

April 2022

business. It's not theoretical. They take that knowledge and help our customers achieve their goals.” The SAP CoE has been around for 12 years and is central to what SAP does, because its teams in the field need to leverage CoE know-how, to enable them to speak the language of their customers. “You have to understand the terminology,” says Hancock. “You have to be able to speak the language of your customers, and that's what we do. We support sales opportunities in the field.” CoE has teams all over the world, including in North America, Mexico, central Europe and Singapore. With team members located globally, CoE never sleeps, and it offers expertise across all aspects of the digital supply chain, including on the assets side, as well as in manufacturing and logistics.

“ Our people have been out in the field - they’ve had oil underneath their fingernails” ANDY HANCOCK

GLOBAL VICE PRESIDENT OF DIGITAL SUPPLY CHAIN CENTRE OF EXCELLENCE, SAP

Example of an image caption supplychaindigital.com

€27.84bn Total Revenue (Non-IFRS) in FY2021

1972

Year founded

2022

50th Anniversary

Software company in Dow Jones Sustainability Index for 14 years

200m+

Subscribers in SAP’s cloud-based user base

“ 5G is a great enabler as it has low latency and you can put a lot of data through a single access point” ANDY HANCOCK

GLOBAL VICE PRESIDENT OF DIGITAL SUPPLY CHAIN CENTRE OF EXCELLENCE, SAP

“We kind of have a cross-matrix approach, so that we can support any opportunity at any time across our portfolio,” says Hancock. CoE’s main kind of work is around “the reinvention of business processes”, says Hancock. 32

April 2022

“We will go in and get to understand a customer’s steady state. Our guidance will be based both on the capability of the product in question and also on what we know other customers are doing around the world. That's one of the advantages of having a global team - we know what’s happening in Singapore or Australia. The lessons we learn in one place can be brought to bear in another.” CoE also works closely with its thriving ecosystem of partner firms, says Hancock. These include: • Movilitas. “A long-standing partner, their extensive experience has helped us scale our manufacturing solutions, and their expertise shines through at every customer engagement.” • Havensight. “They just know what the customer needs, and they steer them in

SAP

ANDY HANCOCK TITLE: GLOBAL VICE PRESIDENT, CENTRE OF EXCELLENCE INDUSTRY: SUPPLY CHAIN LOCATION: SAN FRANCISCO

“There are so many great boutique tech firms who have the vision of how a product should be used in real life,” says Hancock. They're invaluable in supporting SAP to make sure projects are implemented correctly.” SAP doesn’t only work with businesses, it also helps organisations in the public sector. So does its approach differ, from one to the other? “There's a lot of regulations in the public sector, so you have to understand these,” says Hancock. “In the private sector, it all

EXECUTIVE BIO

the right direction. Nothing seems to faze them - whether that is a small change request or a complex large multinational project; They just get it done.” • Mirata. “They’ve enhanced the capability of our mobility portfolio, and also brought the power of digital forms to our enterprise customers.”

Andy Hancock is a Global Vice President of the Centre of Excellence, SAP Digital Supply Chain. Andy merges a strong technical foundation, a passion for solving problems and real world situations he has encountered during his 15 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.

Digital Forms for the SAP Enterprise Empower your Business Units to actively contribute to your digital transformation: Our no-code platform enables a Citizen Community to develop forms

Configurable System interfaces to SAP

Run your forms on mobile, browsers or embedded in other apps

Learn more

Route forms anywhere inside or outside your company

SAP

“ We have a crossmatrix approach, so we can support any opportunity at any time across our portfolio” ANDY HANCOCK

GLOBAL VICE PRESIDENT OF DIGITAL SUPPLY CHAIN CENTRE OF EXCELLENCE, SAP

comes down to an individual company's desire to do something.” He adds: “If a company in the private sector wants to migrate to the Cloud, for example, they have absolute authority to achieve that. But in the public sector there are constraints - policy constraints and security constraints for instance. Security is a huge thing in the public sector.” Because public sector rules and regulations differ from country to country,

SAP has a completely separate company, called SAP NS2, that deals with national requirements. NS2 employees also usually have to live in the country for whom they are providing solutions. “For example, if you’re dealing with Ministry of Defence data in the UK then you have to be based in the UK to get the security clearance you need,” Hancock explains. No one understands SAP’s products better - or earlier - than CoE members, so few are better placed than Hancock to discuss SAP’s strategic priorities in the near- mid- and long-term. In terms of the now, Hancock says the pandemic was “a shockwave that shook-up the supply chain, and the old model of creating growth through cost reduction got obliterated”. “Getting stuff manufactured somewhere far away because it’s cheap doesn't work as a model anymore, because if you can't get supplychaindigital.com

April 2022

SAP

Centre of Excellence is SAP SWAT team

supplychaindigital.com

Connected Production Is Smart Business

Transform how your business works Leverage Industry 4.0 technology by weaving a digital thread that combines factory automation with enterprise level execution. Discover how your business can run at speed with agility.

EXPLORE THE BENEFITS April 2022

SAP

“Sustainability and the circular economy will be the defining factors of the supply chain of the future” ANDY HANCOCK

GLOBAL VICE PRESIDENT OF DIGITAL SUPPLY CHAIN CENTRE OF EXCELLENCE, SAP

it on the shelf, then you can't sell anything,” he says. “So in the short term it's all about creating a resilient supply chain, which you achieve through visibility and agility. It's also all about connectivity now. Businesses can’t operate in isolation.” To achieve resilience, businesses are of course turning to Industry 4.0 technology. Hancock says such tech - in conjunction with 5G - is being deployed most widely in so-called brownfield sites. These are existing factories, warehouses or facilities in which new tech is incorporated into the existing infrastructure. supplychaindigital.com

SAP

“Our solutions are helping businesses implement new technologies that allow them gauge the quality of products as they come off the production line, in real time. They can use machine learning to determine, say, if there's a defect on a printed circuit board in a product.” Hancock says 5G is a “great enabler because it has low latency and you can put a lot of data through a single access point”. But he warns that 5G’s huge capacity for data might also cause problems, unless today’s computer scientists heed the lessons of yesteryear.

April 2022

“ You have to be able to speak the language of your customers” ANDY HANCOCK

GLOBAL VICE PRESIDENT OF DIGITAL SUPPLY CHAIN CENTRE OF EXCELLENCE, SAP

He says: “Although computing has changed a lot since the 1980s the core thing is still data flow. Where was the data created? Where is it stored? Who needs to use it? What's it for? Being a programmer means you want to be very effective in the way you move data from one place to another. “Think back to the days of dial-up modems, where everyone minimised the amount of data transmitted - because if you didn’t then the whole thing just hung. “With the huge data capabilities of 5G I think people can get lazy, and end up throwing tons of information around just

because they can. The trouble is, when you scale this approach up to enterprise level you soon end up with 50 million data points that flood the network, making it inefficient. Then you end up chucking more technology at the problem, where what you really need to do is come back to the fundamentals.” Turning to the challenges of the mid-term future, Hancock says the big problems for supply chain will be around staffing. He says: “We’ve all read about the mass exodus from certain sectors, such as haulage, for instance. People don't want to work where they did before. Shop floors,

supplychaindigital.com

SAP Implementations done right the First Time EAM l Mobility l Forms Leverage our experience and tailored SAP product offerings to minimize project risk. You’ll save time, money and ensure a successful project outcome by partnering with Havensight. LEARN MORE

April 2022

SAP

“ We're seeing a convergence of operational tech and information tech around workplace changes” ANDY HANCOCK

GLOBAL VICE PRESIDENT OF DIGITAL SUPPLY CHAIN CENTRE OF EXCELLENCE, SAP

manufacturing sites, warehouses - they're all struggling to get and retain talent. So we're seeing a convergence of operational tech and information tech around such workplace changes.” Such changes in workplace practices are driving “hybrid data streams”, says Hancock. “You've got on-premise capability and also cloud capability,” he adds.

The on-premise capability Hancock refers to is so-called edge computing - a distributed computing model that brings computation closer to the sources of data. “If you have local processing power it can be invaluable,” he says. “For instance, if a machine is going out of tolerance at a paper mill and there was a delay in sending this data up to the cloud and back then you could have lost a hundred metres of product by the time the machine is switched off. So the idea is that local machine-learning tech understands the machine is out of tolerance, and without any human action needed.” The other benefit of edge computing is that, being a local solution, connected machines never stop communicating. “They’re chatting 24/7, creating data,” Hancock says. “The idea is that you discard most of this and look for the exception - the piece of data that shows a machine is overheating, or out of calibration, or whatever it is.” supplychaindigital.com

“ Sustainability will be a datadriven process” ANDY HANCOCK

GLOBAL VICE PRESIDENT OF DIGITAL SUPPLY CHAIN CENTRE OF EXCELLENCE, SAP

Switching his focus to the supply chain landscape five years hence, Hancock says sustainability - and the circular economy will be the defining factors. He says: “I think consumers are going to push the agenda on this. Just telling people a product is made out of recyclable material won’t cut it. People will want to understand about companies’ supply chains - about how sustainable their manufacturers are in the Far East, for example. “They’ll expect an almost complete genealogy of a product, and also whether products that go to landfill are biodegradable, or if they are reusable. I think these things are going to keep everybody busy for the next ten years.” He says that achieving such supply chain transparency will mean that data silos will have to become a thing of the past: “Sustainability will be a data-driven process, which means if products are to have sustainability KPIs, then there can no longer be data silos in the supply chain, because that’s like looking at a product through a series of letterboxes, whereas what you need is complete visibility.”

April 2022

SAP

supplychaindigital.com

HOW TO GET THE MOST FROM SUPPLY CHAIN CONSULTANCY With supply chain now a competitive advantage rather than a cost centre, transformation is a must. But how do businesses wring maximum value from consultancy services? WRITTEN BY: SEAN ASHCROFT

April 2022

SUPPLY CHAIN

ot so long ago, supply chain was seen by many businesses as a costeffective business enabler. But no longer. Thanks to the pandemic, and the ceaseless drive towards sustainability, supply chains must be transparent and agile, efficient, secure and ethical. Accordingly, workplace roles across the value chain are also evolving, and technology is introducing ever-more innovative tools and solutions that are revolutionising planning cycles and day-to-day decision making. With such profound across-the-board change, supply transformation cannot be one

size fits all. The insight and guidance required has to be tailored to the business in question. This is why professional services companies offer fact-based, actionable supply chain insights that meet the very particular needs of any given company. There are professional services companies, such as McKinsey and Boston Consulting Group, who offer consultancy services across all aspects of business management. Then there are tech companies, such as Microsoft and IBM, who offer consultancy solutions drawn from marrying deep technical expertise with business change programmes.

supplychaindigital.com

“The supplier base is

THE BIGGEST UNTAPPED ASSET. If optimized properly, it can deliver hundreds of millions of dollars in value, provided that supplier data is agile and available across systems and people.” Stephany Lapierre Founder + CEO, TealBook

LEARN MORE

SUPPLY CHAIN

“ Smart leaders know that a humancentric strategy is key to success” JONATHAN WRIGHT

SUPPLY CHAIN CONSULTING GLOBAL MANAGING PARTNER, IBM

But how can organisations get the most from a consultancy service? Is there an optimal way that they can work with consultancies to arrive at the solutions they need, or a best-practice approach to implementation? For insight into this, we turn to Jonathan Wright, who is Global Managing Partner for Supply Chain Consulting at IBM. Wright was also formerly with EY and Accenture.

Do all firms need consultancy services to help them transform? We live in a world of non-stop transformation. It’s now just part of the fabric of every high-performing business. Gone are the days of business transformation ‘programmes’ with a defined beginning and end. Most of the easy transformation work is long since done. What’s left are the really difficult problems, and almost all organisations need help to meet those challenges. This means the profession of consulting is fundamentally changing too. In fact, I think we’re in the golden age of consulting. Solutions to the hardest problems require new ideas, new operational DNA, and new muscle memory. That increasingly means supplychaindigital.com

SUPPLY CHAIN

clients are looking for our help to co-create, co-execute and co-operate business transformation solutions. What are the biggest challenges of early-stage transformation? The biggest challenges are clarity of focus, executive alignment and how business-led the change is. With regard to focus, many companies want to set an ambitious and broad transformation agenda, but success requires a do-less-but-better discipline. It’s better to focus on fewer initiatives in the early stages of the journey and drive change and impact along the way. Executive misalignment at the beginning of a transformation can also be a big risk and a drag on pace of change. It’s critical to understand the diverse needs and priorities of executive stakeholders, and to make sure those are reflected in a transformation ‘North Star’ that is broadly communicated and understood. Lastly, while technology is foundational to supply chain transformation success, an essential operating principle is that all work must be business-led and IT-enabled. Leaders all instinctively know this but it can be unbelievably tempting to jump to technology solutions before the business transformation work is complete. Do the challenges vary from client to client? Business transformation work is so challenging because every company is different. There’s no silver-bullet playbook. An approach that’s a smashing success at one company can fail spectacularly at the next. We often see client execs who have achieved great success at one organisation, only to be bewildered when that same approach doesn’t work at all at their next company. 50

April 2022

“ Gone are the days of business transformation ‘programmes’ with a defined beginning and end” JONATHAN WRIGHT

SUPPLY CHAIN CONSULTING GLOBAL MANAGING PARTNER, IBM

The challenges vary, and business transformation must be a customised journey tailored to the unique needs, priorities and business outcomes of the client. We find that companies who have been highly successful in the past tend to struggle more with change. There’s a temptation to avoid change and go back to how things worked in the good old days. This doesn’t work. Our role as trusted consulting partners is to help clients get comfortable with having one foot in today, and one foot in tomorrow.

Typical services offered by supply chain consultancies

That’s where a North Star vision and a clear set of operating principles for transformation can make a huge difference. Are there common barriers to successful transformation? It’s important for all aspiring business transformation leaders to know that the majority of transformation initiatives fail to meet their original success criteria. While programs fail for myriad reasons, the most common one is people.

• Supply chain insight. Enabling effective decision making and identifying additional supply chain value • Cloud supply chain technology. Harnessing the latest technologies and business practices to transform Supply Chain planning and execution capabilities • Supply chain resilience. Understanding and managing risk, improving resilience and reducing ethical impacts in the extended supply chain • Operational excellence. Delivering a step change in performance through the digitisation of operational processes, decisions and performance management • Procurement insights and the ability to drive more value from spend through advanced analytics, and strategy collaboration tools • Cloud procurement technology that provides the backbone of a more customer centric, automated and efficient procurement function • Value delivery, to help businesses achieve bottom-line value on complex programmes of change. supplychaindigital.com

SUPPLY CHAIN

Too often programmes get bogged down in the nuts and bolts of process change, turning on new tools, changing business rules – but fail to engage and inspire the human talent to fundamentally embrace new business models. If you transform a process with technology but you haven’t designed it to empower the end user, helping them make better decisions with efficiency and speed, you’re much more likely to fail. Nothing changes when nothing changes, and people don’t change until it makes sense in their terms to do so. Too often the soft side of transformation and change

April 2022

management gets cut or de-scoped. Smart leaders know that a human-centric strategy is key to success. Does the consultancy-client relationship ever break down? There’s always the possibility of issues, especially given the broad and complex change journeys that so many clients are on. Transformations are hard, noisy and will always have their rough spots. In fact, if you’re not hearing some gnashing of teeth in the organisation, there’s not enough change happening.

Often, the fear of change rears its head just when change is about to hit a tipping point towards results. That’s why building relationships based on openness, commitment and trust are so important. So is having a strong governance process for change in place. Does mindset have a bearing on transformation success? The most important factor in a transformation’s success is instilling the right culture around change, where your people have a growth mindset and open attitude towards new ideas and methods.

Such a culture doesn’t appear overnight. In our experience, methodologies like the IBM Garage that are built around collaboration, iteration and learning can help clients cultivate the talent and change culture they need to succeed in the long term. Internal change-agents that are involved in transformational initiatives and who work closely with consultants are more likely to build a broad understanding of the business, as well as the confidence to challenge the orthodoxies of the past. That will pay dividends for the business as well as help them advance their own careers.

“ Often, the fear of change rears its head just when change is about to hit a tipping point towards results” JONATHAN WRIGHT

SUPPLY CHAIN CONSULTING GLOBAL MANAGING PARTNER, IBM

DESIGN & MANUFACTURE REPORT:

Sustainable supply chains are in SAP’s DNA AD FEATURE WRITTEN BY: SEAN ASHCROFT 54

April 2022

supplychaindigital.com

SAP REPORT

EXECUTIVE INTERVIEW

Sustainable supply chains are in SAP’s DNA Sustainability - from a product’s conception to its recycling is baked into SAP’s enterprise software application solutions

or some time, sustainability has been gaining traction as a corporate aspiration. But following COP26 in 2021 the drive towards net zero carbon emissions by 2050 was enshrined in law by most nations in the developed world, making sustainability a mission critical business goal. At the sharp end, helping make today’s businesses more sustainable, is SAP. SAP has made sustainability integral to its solutions, so that businesses can think green and behave green, from one end of the supply chain to the other. “The supply chain encompasses every part of the process, all the way from design and manufacture to planning, logistics and asset and service management,” says Martin Barkman Senior Vice President, Global Head of Solution Management, Digital Supply Chain at SAP. “Not only does each of these directly impact sustainability, but they're also interrelated.” 56

April 2022

This is why SAP solutions are designed to work at every stage of a product’s life cycle - from how it is conceived to how it is recycled. SUSTAINABLE SUPPLY CHAINS, FROM DESIGN TO OPERATION Barkman says that on sustainability, SAP solutions can be categorised broadly as enablers of:

MARTIN BARKMAN

• The drive toward lower or zero emissions • The drive towards zero waste • The drive towards a circular economy • The drive towards zero inequality Barkman and his global team help businesses across all sectors worldwide keep sustainability top of mind every step of the way, from product concept to product consumption; and to re-use as part of the circular economy. SAP does this by making sustainability a focus in how products are designed, manufactured, moved, and used.

DESIGN & MANUFACTURE

“If you think about how a product is going to be manufactured when you design it, then that's a much better and more holistic approach,” says Barkman. A properly designed product will impact how sustainably that product can be manufactured.” Not just how it is manufactured, either, Barkman reminds us, but also how a product is distributed, used, and recycled. “Design can impact the cost of logistics, and ultimately also how the customer experiences the product, and how that product is recycled, reused, or returned to the earth,” he adds. How SAP is able to bring together the stages of design, planning, production, distribution and operation - and digitalise those processes and allow them to operate continuously with each other - “is particularly interesting to me,” Barkman says.

A properly designed product will impact how sustainably that product can be manufactured He adds: “For example, when you design a product, how do you design with sustainability and the circular economy in mind? You have to think about whether the raw materials can be reused, or at least if they are biodegradable? “Then, when it comes to manufacturing, you want to know you’re making it in the right place - that you're not generating too many emissions by transporting the raw material. Are you generating too much waste in the manufacturing process, and ensuring the health and safety of the workforce?” OVERCOMING THE CHALLENGES OF SUSTAINABILITY IN MANUFACTURING The manufacturing process also poses sustainability challenges, says Barkman: “You have to be smart about keeping equipment properly maintained and serviced, so that you’re not constantly replacing and disposing of components. The aim is to extend the life of all of your supply chain assets.” He adds: “It can get complex, which is why SAP solutions are absolutely geared towards helping companies navigate through all of this, to make sure they’re always headed in the right direction.” supplychaindigital.com

SAP REPORT

On the ground, SAP solutions help businesses make sustainable decisions in practical and profitable ways. SAP has software that allows companies to design and produce products in an environmentally responsible way, by helping them manage exactly what needs to be in any given product’s bill of material.

“A business may need to make a change to a product’s bill of material,” says Barkman. “We can help them WATCH: make that change at the design stage, DIGITAL and then translate this into a bill of SUPPLY CHAIN material for the various manufacturing SOLUTIONS steps. If a business can do this digitally, more or less on an ongoing basis, then that’s going to drive both productivity, profitability, and sustainability to a whole new level.” Other SAP solutions are allowing companies to take carbon-emissions tracking to the next level, says Barkman. “We have software applications that allow companies to manage the environment, health and sustainability of their operation in the best possible way,” he explains. “We're bringing sustainability KPIs into our applications.”

We have software that allows companies to manage the environment, health and sustainability of their operation 58

April 2022

DESIGN & MANUFACTURE

GRAND AMBITIONS AROUND SUSTAINABILITY CAN BE A CHALLENGE When it comes to embedding sustainability into company-wide processes surely there are challenges? Changing regulations from country to country, for example. “Of course, we want to ensure our customers have the right tools, processes, and systems to be in compliance with regulations,” says Barkman. “But in some ways, it’s gone way beyond regulations. The journey into sustainability kind of began with that base level of regulations, and these don’t really change.” Now, he says, the real challenge is more about keeping up with customers’ ever-more ambitious sustainability goals, while maintaining profitability. “The United Nations has set some pretty top-level sustainability goals, and many of the businesses we meet have rigorous aspirations and goals for how they want to operate, and how they want to help lead us towards a more sustainable world. I’d say that the real challenge is how we lead these companies towards those noble, but high-level, goals.” Sustainability is complex, rewarding work for SAP, but Barkman says the tech that underpins its solutions has a paradoxical tinge. He cites the pandemic e-commerce boom, which has seen a global shift away from in-store purchases to omnichannel-driven e-commerce. “The technologies that are helping drive us towards sustainability are the same ones that are enabling consumers

MARTIN BARKMAN TITLE: SENIOR VP, SAP DIGITAL SUPPLY CHAIN SOLUTION MANAGEMENT GLOBAL HEAD Martin Barkman is senior vice president and global head of marketing & solutions for digital supply chain at SAP. Martin’s global organisation leads marketing, strategy, and growth initiatives for SAP’s Digital Supply Chain solution portfolio, which encompasses software for R&D, engineering, supply chain planning, manufacturing, logistics, and asset management. These solutions enable resilient and customer centric supply chains that are more agile, productive, connected, and sustainable Martin joined SAP in 2013 following SAP’s acquisition of SmartOps Corporation, where Martin served as the Chief Executive Officer. In his career, Martin developed a broad supply chain technology and management experience through roles ranging from corporate strategy consulting at McKinsey & Company to product supply and manufacturing management at Procter & Gamble.

SAP REPORT

to behave in ways that aren’t so sustainable,” he says. “People sitting at home ordering one thing after another to be shipped to their doorstep in a way that involves multiple journeys is not the most sustainable way to do things.” He adds: “The pandemic changed many things for consumer packaged goods companies and of course retailers, and the key question now is whether we are going to continue buying the products online at the same rate, or if that will change, like it was showing signs of doing prior to the pandemic.” Outside of e-commerce, Barkman says there are other factors posing sustainability challenges. “Different industries are facing many different challenges these days, of which sustainability is but one thrown into the mix. The ultimate aspiration is creating resilient customer-centric and sustainable supply chains. I think different industries and sectors will take different routes and paths towards this.” NET ZERO IS CHANGING THE WAY BUSINESSES SEE THEMSELVES Beyond the paradox of technology, there are other philosophical elements

Different industries are facing many different challenges these days, of which sustainability is but one thrown into the mix 60

April 2022

to the global drive towards net zero, says Barkman - namely, the way sustainability is changing how companies view themselves. “There was a time when the only school of business thought was that companies exist for the sole and exclusive purpose of driving value for shareholders,” he says. Economics and sustainability have usually been at odds, admits Barkman, but adds that he is now seeing a “coming together” on this front. He says that this most often manifests in corporate goals and mission statements coupled with real innovation that is profitable because it facilitates sustainability. Consumers and customers will expect it, and so that is how sustainability in the end leads to shareholder value. “Increasingly, these are not limiting what corporations are setting out to do,” he says. “Businesses are still taking care of stakeholders but by driving strategy that in part has a vector specifically aimed at and around sustainability. In fact,

DESIGN & MANUFACTURE

investors are putting their money into companies that can show that they are both sustainable and profitable.” While businesses are undoubtedly moving towards their net zero goals, are they being pushed by the court of public opinion into doing so at a rate that will prove unsustainable for many? “Sustainability is an area of innovation,” he says. “As such it’s going to draw new investment and new areas of focus. There will be some amazing successes, and there’ll be those who struggle and perhaps those who fail. That is expected.” He adds: “That's actually a sign of something positive happening. That means risk is being taken. Things are being tried. It shows that businesses are stretching the limits of their imagination and capabilities, and in many cases, the failures will provide the largest source of continuous learning.”

Businesses want to feel good about what they do and how they do it. We can help them with this As for the biggest barrier to sustainability, Barkman feels this is “information, collaboration and visibility”. “These are the priorities,” he says. “Companies want to go on this journey but what they find difficult is how to get started in a meaningful way? How do you do something with all this information?” He adds: “In many cases, people will know what should be done, but putting this into action can make them feel like they’re stuck in the starting blocks. Once they start working around visibility across the end-to-end supply chain, though it soon becomes clear that it’s data where you begin.” But the need for businesses to embark on sustainability transformation programmes will only ever grow more pressing, says Barkman. “Consumers want the companies, products or services they purchase and interact with to be sustainable,” he says. “Increasingly the products people purchase are being looked at through the lens of sustainability. I see a lot of companies making this central to what their value proposition is, as they are driving innovation. At the end of the day, businesses want to feel good about what they do and how they do it. We can help them with this.” supplychaindigital.com

POP-UP OR MICRO?

FULFILMENT STRATEGIES ARE BECOMING EVER-MORE IMPORTANT

April 2022

LOGISTICS

With the pandemic causing supply bedlam and a shift towards e-commerce, fulfilment is more important to the bottom line than ever before WRITTEN BY: SEAN ASHCROFT

raditional customer purchasing patterns were already changing back in 2019, with a strong trend away from bricks-andmortar shopping and towards e-commerce. The pandemic accelerated this to an incredible degree. The industry has also seen a move away from a multichannel retail strategy approach to omnichannel - the seamless integration of the buying experience across all channels. Of course, the pandemic also threw in plenty of supply disruption, however one happened to buy products. With such rapid change, on top of so many challenges, one area that retailers have had to look hard at is their strategy around fulfilment. Recent research from US software consultancy, Blue Yonder, analysed responses from 300 senior logistics and fulfilment executives in the retail and e-commerce industries. The Future of Fulfilment Report In the resulting report, called The Future of Fulfilment, BlueYonder revealed that, in 2021, more than half the usual number of retailers were planning to fully automate their fulfilment operations, in order to enhance the customer experience. supplychaindigital.com

Interos maps supply chain in 3D and real time. You can know every single thing about how all your partners do business. Or you can read it in papers.

LOGISTICS

“ In retail supply chain, getting the processes right should come before any large-scale investment in microfulfilment” PETER JONES

MD AND FOUNDER, PROLOGICAL CONSULTING

It reported that retailers in the pharmacy, health and beauty spaces were the likeliest to have all their fulfilment locations automated. Reflecting on how organisations can meet the needs of customer-driven commerce, and increase fulfilment, Blue Yonder stressed the need for agile fulfilment solutions, such as micro-fulfilment centres (MFCs) and pop-up distribution centres. MFCs take the speed of localised, in-store pick-up and combines it with the efficiency of large, automated warehouses. The model

is popular in the food retail industry, as an alternative to manual fulfilment, or large automated warehouses. Being small, MFCs offer competitive advantages in terms of last mile and delivery costs. “There’s a lot of buzz around microfulfilment at the moment,” says Peter Jones, MD and founder of Australia-based supply chain specialists, Prological Consulting. “Organisations are exploring it as a way to increase speed to market and raise the bar on last-mile delivery.” Pre-pandemic, micro-fulfilment was gaining traction Jones says that even before the pandemic, automated micro-fulfilment centres (MFC) were gaining traction around the world. supplychaindigital.com

LOGISTICS

“The pandemic accelerated this trend, as consumers were forced to find a way to provide food for their families while social distancing,” says Jones. “Online adoption has grown exponentially, leaving many retailers underprepared and in a reactive state. MFCs are being driven by automation technology, with Austria-based automation giant Knapp being in the vanguard. “Micro-fulfilment has been driving efficiencies in the grocery supply chain for some time, and has continued to gain traction in the US and UK,” says Jones. He adds that micro-fulfilment is well suited to grocery retail because it involves “large orders of perishable goods, coupled with strong demand from consumers for quicker, more convenient options for delivery and online orders”. Outside of food retail, Jones says many retailers are unlikely to move the same volume, meaning micro-fulfilment isn’t always the right approach. He says: “While we’re seeing many retailers add e-fulfilment capability, a lot of work has to be done before something as large-scale and cost prohibitive as microfulfilment can be considered.” Inventory control crucial to micro-fulfilment Jones continues: “A fundamental thing you need to get right is inventory control. Inventory needs to be 100% accurate if you’re to communicate with customers what is available, when it is available and where it is available. “You also need to ensure that your goods online are well-merchandised, with accurate information about colour and size, alongside an easy-to-use transaction process.” Once all of this has been worked out, says Jones, “you need to develop the internal 66

April 2022

eBay fufilment boost Down Under Australia’s most-visited shopping site, eBay, is launching a fulfilment program, offering eBay sellers faster delivery options, competitive shipping rates, enhanced seller protection and full eBay integration. The move follows eBay’s partnership with global logistics firm, Orange Connex, to offer fulfilment programs in eBay markets across the world. The first two fulfilment centres in Australia are in Sydney, and there are plans to roll out more locations across major capital cities. eBay Australia’s Director of Shipping, Hayat Horma, says, “At eBay we understand that housing, managing stock and delivery in tight timeframes can be challenging for growing a business - especially as e-commerce continues to accelerate and consumers expect faster and more seamless experiences.

“Our research reveals 73% of Australian businesses believe important marketplaces offer fulfilment services. eBay’s priority is to provide the tools that enable our 40,000 Australian retailers to compete and grow. “Fulfilment by Orange Connex will streamline the delivery experience and gives sellers more opportunity to showcase their products.” Matthew Ling, MD of Australian retailer and eBay seller, AZAU, said the fulfilment service was “a game changer for our business”. He added: “We do most of our sales through eBay, so seller protection and competitive shipping rates are two of the most important benefits for us. We’ve worked with other logistics companies and this is the first time we’ve been able to significantly improve our operations and efficiency.” supplychaindigital.com

“ During one Thanksgiving we set up two pop‑up fulfilment centres for a single client” REBECCA STEELE

MARKETING MANAGER, PFS

April 2022

processes to ensure that the goods can be packaged up, sent out and then delivered through the appropriate delivery processes.” “With retail supply chain, getting the processes right should come before any large-scale investment in micro-fulfilment,” he urges. “As we often find with our clients, there are some great benefits to be realised by developing, enhancing, and improving the assets and people you already have before having to invest in a completely new strategy.”

LOGISTICS

Pop-up fulfilment: Ideal for peak holiday demand While micro-fulfilment is beyond the scope of some retailers, pop-up fulfilment is a more accessible approach. Many retailers are beginning to use temporary pop‑up fulfilment centres to increase throughput during high-volume holiday periods, such as Thanksgiving and Christmas. It’s a way to get products closer to customers faster, in specific areas and at a fraction of the cost

and time required to set up permanent distribution centres. “Long delivery times are one of the top reasons for shopping cart abandonment,” says Rebecca Steele, marketing manager with PFS, a US-based e-commerce fulfilment service for direct-to-consumer and B2B channels. In her white paper, ‘The Future is Popup’, Steele adds: “With an affordable, flexible, fully integrated distributed ordersupplychaindigital.com

April 2022

LOGISTICS

management solution, companies can extend operations with temporary fulfilment locations during peak periods. “During one Thanksgiving, we set up two pop‑up distribution centres for a single client, and they accounted for 10% of the overall order fulfilment volume for the week.” Retailers testing demand with pop-up shops Steele also says that brands are using pop‑up stores as a means to test how consumers interact with their products, and better understand what drives sales. She also reveals that e-commerce brands - such as Wayfair, the US-based homes and living e-retailer - are now using the pop-up model to better understand their customers. “Wayfair has no physical presence, and they realised this is a gap in their understanding of consumers,” says Steele. “So in response, they opened pop‑up stores during the holiday season, to test how consumers interact with their brand and products offline.” She adds that Wayfair and e-tailers like them use such location-specific data to fine-tune their merchandising strategy. Steele also says pop-up fulfilment is being used by retailers with a bricks and mortar presence to test various locations, before making more permanent commitments. “Today’s non-traditional lease terms offer location flexibility that was unheard just a few years ago,” she says. “Short-term leases, with an option to extend, are becoming standard practice.”

supplychaindigital.com

PLANNING & SOURCING REPORT:

SAP makes sustainability a question of planning AD FEATURE WRITTEN BY: SEAN ASHCROFT 72

April 2022

supplychaindigital.com

SAP REPORT

EXECUTIVE INTERVIEW

SAP makes sustainability a question of planning

SAP’s Integrated Business Planning software solution is helping businesses make sustainability part of the fabric of their enterprise-wide operations

he age-old adage, ‘Fail to plan, plan to fail’ has never been more true for those in charge of today’s disruption-hit and unpredictable supply chains. In truth, an agile approach to supply chain planning has always been a prerequisite for any efficient and cost-effective supply chain. It’s just that in today’s pandemicshaped world the density of disruptions to both demand and supply - and the structural integrity of global supply chains - rapidly evolved and accelerated the adoption of digital technologies. One man who knows better than most just how far the planning needs of businesses have evolved is David Vallejo, SAP’s Global Head of Digital Business Planning Vice President. Vallejo runs solution management for digital business planning at SAP, whose Integrated Business Planning software solution is a market leader in this area. 74

April 2022

DAVID VALLEJO

“I've been in supply chain planning all of my career,” says Vallejo. “The reason I moved to SAP was I saw the exciting work it was doing in moving supply chain planning into the cloud.” Sustainability is a key area that Vallejo and his team are helping businesses plan around - particularly in terms of how to balance sources of supply. With 80% of a company’s carbon footprint being Scope 3 emissions from its supply chain, this is a vital area. “Sustainability starts with product design, and this then feeds into the manufacturing and logistics processes. Planning is the intelligent brain that holds these areas together to attain the desired business outcomes,” says Vallejo. “Have you designed a product that contains elements or components that are bad for the environment, or have you set it up to be recyclable,

PLANNING & SOURCING

Sustainability starts with product design, and this then feeds into the manufacturing and logistics processes

to support the circular economy? This is a key question when planning new product launches for example.” PLANNING COMES INTO ITS OWN WHEN FACED WITH TOUGH CHOICES “It’s a question that feeds into others,” says Vallejo - such as whether a company is transporting lots of raw materials from around the globe. “The strength of sustainability planning comes into its own when there are marked alternatives.” supplychaindigital.com

SAP REPORT

“Do you use suppliers in China for raw materials, or local suppliers, for example?” he asks. “There will be a price difference for sure, but also a huge sustainability difference, because one will probably involve air transport. Planning can help with making sustainability decisions like this.” Sustainability measures are sometimes cast as being bad for the

We encourage customers to think of sustainability data as being like a currency 76

April 2022

bottom line, but Vallejo says that being green and making money “often times actually go hand in hand”. DIGITAL He adds: “For example, I've worked with BUSINESS PLANNING a customer whose supply chain was set up with what’s called international direct ship. They were manufacturing electronic devices in China and packaging them ready for air shipment to the US market. “The business benefit of this is a two-day lead time from production to arriving in the US. The disadvantage is the huge environmental footprint of air versus sea transport.” Vallejo says that in situations like this, business planning helps balance transportation volumes with customer service and availability. “We helped this company balance profitability, sustainability, and customer

PLANNING & SOURCING

service simultaneously. We helped them find a sweet spot whereby a certain volume goes by sea and a certain volume by air. It was a happy medium that allowed it to meet all of its goals.” The end result was that a lot more volumes could be shipped by sea which saves thousands of tons in CO2 emissions. HOW DOES SAP HELP BUSINESSES WITH EMISSIONS? Vallejo says that SAP business planning solutions help with emissions by encouraging companies to begin tracking data. “You can't control anything you don't track,” he says. “Everything in the supply chain is measurable and can be added into the planning environment. We encourage companies to think of tracking as being like a currency. You take all aspects of supply - transport, manufacturing, supplier footprint and you track it all. When you onboard a supplier it shouldn’t be just about product quality and price. There should also be sustainability questions included in supplier questionnaires.” He reminds us that this is not just for tier 1 suppliers, either - but also tier 2 and 3: “Who supplies your suppliers? This is where the technology is evolving, so that it can propagate information downstream in the supply chain, and create standard ways and best practices to onboard suppliers with a view to delivering more-sustainable output.” Having a sustainability dimension to data is something SAP takes very seriously. “This is exactly why we believe such data should be treated just like a

DAVID VALLEJO TITLE: SAP’S GLOBAL HEAD OF DIGITAL BUSINESS PLANNING VICE PRESIDENT David Vallejo is globally responsible for solution management and go-to-market for SAP’s Digital Business Planning portfolio which includes SAP’s cloud flagship SAP Integrated Business Planning (SAP IBP). David helped many global companies define and implement their strategy around Supply Chain Planning and Execution and has been honored with the “Prosto-Know” award in 2014 by the Supply & Demand Chain Executive Board. David held various leadership roles within SAP, before assuming his current role also driving the successful launch of Ariba’s supply chain business network focusing on Direct Materials collaboration across the extended supply chain and driving the customer co-innovation program as product owner for SAP IBP. Prior to joining SAP 8 years ago, David had several global leadership roles managing Customer Delivery, Solution Management and Product Management at E2open and icon-scm.

SAP REPORT

financial currency,” explains Vallejo. He adds that businesses are also coming to realise that sustainability is now mission critical, and that it can help them achieve their economic goals. “If it hits the news that your supply chain is not operating in a sustainable way this can have a tremendous impact on your brand, and a disastrous impact on the consumption of your products,” says Vallejo. “Businesses are beginning to realise there is a relationship between success and operating sustainably.” He adds: “Increasingly customers are looking for sustainable products and services. Over time it will be the norm for products to be labelled for sustainability in the same way they’re labelled for ingredients. Companies that take the view that being profitable is all that matters will eventually cease to exist.” 78

April 2022

OPTIMISING INVENTORY IS KEY TO BEING SUSTAINABLE Optimising inventory is another area in which SAP can help companies operate more sustainably. In today’s world, when it comes to inventory, the past can no longer be used to predict the future. “Inventory should be a function of how well you can predict both demand and supply,” points out Vallejo. “If it's 100% predictable, in theory you can have no inventory at all. Everything can be just-in-time.” What SAP’s Integrated Business Planning solution does is help customers measure volatility, and it’s this that helps control spoilage and waste. Vallejo says: “We use a scientific method to right-size inventory across the supply chain, which we call multiechelon inventory optimisation. Companies have seen fantastic results using this technique. They’ve been able to reduce inventory, which not only lessens the drain on working capital but also reduces waste. This is especially important for products that can have a high carrying cost or deteriorate in value.

If it hits the news your supply chain is not sustainable it can have a big impact on your brand and on the consumption of your products

PLANNING & SOURCING

We use multi-echelon inventory optimisation to help businesses reduce inventory and cut waste “And let’s say a customer wants to change the formulation of a product. Here, they would want to know exactly how much inventory of the old product they have left before introducing the new product. Inventory optimisation can help tremendously in this way with reducing spoilage and waste in the supply chain.” Even in complex consumer-goods markets - where sales of one product might impact demand for the same company’s other products - SAP can help keep inventory on track in terms of carbon footprint - to manage those phase-in/phase-out processes. And thanks to better support of artificial intelligence (AI) these processes now happen in more real-time and low-touch. “Managing inventory for interrelated products can be a massive problem,” admits Vallejo. “This is where demand planning built on AI and ML comes in. We can use this tech to look at patterns and interrelationships between not only the products themselves but between the products and other factors, such as the economy, the environment and the market. One simple example

is how the price of steel and oil impacts the portfolio mix and prices in automotive prices.” AWARENESS THE BIGGEST BARRIER TO PROGRESS ON SUSTAINABILITY But of course, integrating sustainability into enterprise-wide systems and processes can be hugely challenging for companies. Often the biggest problem is one of awareness. “There is a lack of awareness of how important sustainability is as a planning discipline,” reveals Vallejo. “We often see companies create offline afterthe-fact sustainability reports - maybe on how they did on this front in the previous quarter. “The biggest challenge is making them realise that their sustainability

supplychaindigital.com

SAP REPORT

SAP’s Integrated Business Planning software solution provides end-to-end supply chain visibility Today’s supply chains have become difficult to manage, due to unprecedented levels of demand and supply volatility, the rise of omnichannel, an increase in geopolitical uncertainty and the inability of siloed data to offer a holistic view of the supply network. SAP Integrated Business Planning (IBP) is a cloud-based planning solution that helps businesses analyse, manage and optimise their supply chain. It provides a single platform to analyse, predict and simulate the entire value chain to anticipate changes and respond with a resilient and sustainable action plan. With SAP IBP, the customer is able to manage multiple end-to-end processes in real time, by combining planning functions such as sales and operations planning, demand planning, inventory management, and supply planning fully integrated into financial planning, manufacturing, logistics and the SAP Business Network for trading partners. This cloud-based solution also allows companies to simulate the effects of customer demand on processes, in terms of capacity, cost and profitability. It can execute planning processes through real-time supply chain management, while allowing businesses to analyse data and generate real-time predictive and prescriptive analytics.

April 2022

goals must inform their decisions around supply chain planning. In logistics, an example this would mean deciding how much volume you send by boat, air, truck, rail.” “Sustainability is an awareness hurdle, but it's not actually that difficult to incorporate into your planning. We’ve just released a carbon-footprint dimension across SAP Integrated Business Planning. Really now it’s all about awareness and training.” Of course, planning isn’t solely about sustainability; avoiding disruption is also vital. “To overcome disruption you need to be able to anticipate what could happen, what the impact would be and how you can be prepared to mitigate better,” says Vallejo. So for example, if you have a single-source supplier that's performing well today, what if that supplier has a problem in the future? It’s the same if you use a single transportation route that's critical for you.”

PLANNING & SOURCING

To this end, he says what-if scenarios are key, because it means that before any disruption happens, there will be a response plan in place. “This is where planning can help tremendously, in terms of being prepared and, therefore, resilient,” says Vallejo. He adds that another important resilience-boosting aspect of planning is how it helps with supply chain response management, which is about responding better when disruption actually hits. “Remember, disruption isn’t always upstream, with suppliers,” Vallejo stresses. “It can also be downstream, with changes in demand or problems with transportation. Using real-time planning, you can see what the impact of such disruption will be, and figure out alternatives. You might reroute volumes, for example, or rebalance

I think we will see dramatic changes in the way products are designed inventory. All of these decisions need to happen instantly, and this is where a digital planning environment can help to synchronise decisions across finance, manufacturing, logistics and the business network in near real time. These are today’s problems, but in a forward-looking business such as SAP, experts like Vallejo always have one eye on the future. He sees big changes afoot in what it will mean for supply chains to be sustainable “I think we will see dramatic changes in the way products are designed,” he says. “Today, when you order things online sometimes the product is way smaller than the packaging it comes in. We’ll see reusable packaging that you can return for the next product to be shipped to you, for example.” And he believes some products themselves will change drastically. “Take detergent, such as shampoo. Up to 99% of shampoo is water, which is heavy and bulky to transport. Yet when you’re in the shower, you're standing in water anyway. I believe shampoo will come in capsule form eventually. Previous generations might not have been open to such a change, but I think today’s younger generations will be.”

supplychaindigital.com

ELECTRIC DREAMS A LONG WAY FROM REALITY IN TRUCKING Public expectation and pressure around sustainability is mounting, but there are no easy wins for logistics firms looking to e-trucks for a solution WRITTEN BY: SEAN ASHCROFT

April 2022

SUSTAINABILITY

supplychaindigital.com

SUSTAINABILITY

he move to net zero carbon emissions is now a global concern, meaning that sustainability is now high on the list of priorities in every boardroom. Any business with a large fleet of vehicles faces a raft of challenges in the bid to cut its carbon output. For logistics companies with a huge fleet of trucks that often need to travel vast distances, the switch from diesel to electric lorries is even more exacting. For this piece, we spoke to two companies on different sides of the e-trucks divide: a truck manufacturer and a truck user The truck user: DFDS shipping & logistics Denmark-based DFDS is Northern Europe's largest shipping and logistics company, with 8,000 employees across 20 countries. When it comes to deploying electric trucks in its fleet, DFDS is in the vanguard of logistics companies. In December 2021, it placed an order with Volvo Trucks for 25 heavy electric trucks, on top of the 100 Volvo FM electric trucks it made in October. Asked what its road map is for switching completely from diesel to e-trucks, Niklas Andersson, DFDS Executive VP & Head of Logistics Division revealed the company is “determined” to be carbon neutral by 2050 but that electrifying its entire fleet will take time, “due to the lack of sufficient and reliable charging infrastructure.” He adds: “This is why we will need to continue working with our customers and partners to explore ways to overcome such obstacles, in order to help us make the switch.” In the meantime, as well as adding e-trucks to its fleet the company is working to improve the fuel efficiency of its regular fleet, supported by driver training, and also use biofuels “in almost all locations”, says Andersson. 84

April 2022

“A big problem is the lack of a sufficient and reliable charging infrastructure” NIKLAS ANDERSSON,

EXECUTIVE VP & HEAD OF LOGISTICS DIVISION, DFDS

Volvo electric truck

supplychaindigital.com

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

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

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

SUSTAINABILITY

“ Driverless trucks could be a solution to the ongoing drivers shortage” NIKLAS ANDERSSON, EXECUTIVE VP & HEAD OF LOGISTICS DIVISION, DFDS

Market choice will increase with maturity As the e-truck market continues to mature, there will also be more choice around driven e-trucks and driverless ones. DFDS is hoping to use a mix of the two, and says it has a number of projects involving autonomous vehicles “on the horizon”, and will deploy them “if they can work for our business”. Driverless trucks could ultimately be a solution to the ongoing drivers shortage, which is affecting DFDS, as it is for all logistics companies.

“We remain impacted by the ongoing shortage of qualified HGV drivers, and ongoing government intervention is required to address this,” says Andersson. “Self-driving trucks could be part of the solution but it is still early days, so we need to take some time to accurately assess if they can work for our business.” Asked why he thought the sale of e-trucks has been so slow, Andersson says as well as being a problem of availability and cost, battery size is also an issue. “The size of batteries required to give sufficient power and range is an obstacle when it comes to electrifying one’s fleet,” he says. supplychaindigital.com

SUSTAINABILITY

Lack of charging infrastructure is a problem But the biggest single problem is the lack of a sufficient and reliable charging infrastructure. “To overcome this, we’ll continue to work with customers, partners, governments, and other stakeholders, to help pave the way for the switch to electric trucks,” says Andersson. “Businesses and governments can and must all play our part to overcome this.” In Sweden, the government has recently announced public funding on this front. 88

April 2022

Andersson says: “We applaud this, as it is designed to help both public and private organisations help solve the problem. Andersson says that across Europe we are seeing “a good proportion of businesses that are prepared to invest in electromobility.” He adds: “As one of Europe’s largest integrated shipping and logistics companies, we play our part in making sure the solutions out there are available and operationally stable.”

“We need to work with our customers and partners to overcome obstacles and help us make the switch” NIKLAS ANDERSSON, EXECUTIVE VP & HEAD OF LOGISTICS DIVISION, DFDSE

The truck manufacturer: Daimler Truck North America Daimler Truck is one of the world's largest makers of commercial vehicles. Its ambition is to only offer new vehicles that are carbonneutral by 2039. The company has a dual-track strategy on electric trucks, split between batterypowered and fuel-cell powered vehicles. A fuel cell electric vehicle (FCEV) drives an electric motor using hydrogen, rather than drawing electricity from a battery. Daimler

Truck is currently developing next-gen refuelling tech for hydrogen fuel-cell trucks, but already has two battery-powered trucks models in production: the Mercedes-Benz eCitaro and the Mercedes-Benz eActros. Daimler Truck recognises that the adoption of e-trucks is slow, and the company's Head of eMobility, Rakesh Aneja, says that changing this “is a matter of transforming an entire industry and associated businesses in a very profound way”. supplychaindigital.com

He adds: “For this transformation to be successful we need the right products, the right Infrastructure and the right cost. It is like a multiplication equation among these three factors, so that if one of these factors is zero the net result of the transformation will be zero.” Aneja says Daimler Truck recognises the switch to what he calls “CO2-neutral propulsion” will be more expensive, at least initially. 90

April 2022

‘We’re working feverishly to reduce cost’ “Our engineers are working feverishly to continuously reduce costs and make the overall total cost of ownership equation more attractive,” he says. “In the meantime, there is a significant opportunity and need to seed the market with zero-emissions vehicles.” Returning to the fact that the recharging and refilling infrastructure around electric vehicles is vital, Aneja says that the current lack of a publicly available, nationwide

SUSTAINABILITY

Plans for hydrogenpowered Euro freight corridor

Daimler Truck's hydrogen-based fuel-cell truck

electric charging infrastructure for commercial vehicles is a massive problem. “It’s one of the biggest barriers for widespread deployment of electric trucks,” he says. “Especially for long-haul freight operations.” But Aneja does point out that there are signs of progress — not least in the US, where Daimler Truck has co-signed a memorandum of understanding (MoU), along with the renewable energy company,

Daimler Truck and Shell are looking to jointly drive the adoption of hydrogen-based fuel-cell trucks in Europe. Shell intends to roll-out a hydrogenrefuelling network, joining three green hydrogen production hubs at the Port of Rotterdam, in the Netherlands, as well as Cologne and Hamburg in Germany. From 2024, Shell aims to launch heavy-duty refuelling stations between the three locations. Daimler Truck, meanwhile, plans to hand over the first heavy-duty hydrogen trucks to customers in 2025. The ultimate goal of the plan is to create a hydrogen-powered freight corridor by 2030. This will cover 1,200 km by 2025, and will involve 150 hydrogen refuelling stations and 5,000 Mercedes-Benz heavy-duty fuelcell trucks. Daimler Truck and Volvo Group have also signed an agreement to install and operate a high-performance public charging network for battery electric heavy-duty long-haul trucks and coaches across Europe. supplychaindigital.com

SUSTAINABILITY

“ There’s a need to seed the market with zeroemissions vehicles” RAKESH ANEJA

HEAD OF EMOBILITY, DAIMLER TRUCK NORTH AMERICA

NextEra Energy Resources, and multinational investment management brand, BlackRock. “This will lay the foundation for a joint venture to design, develop, install and operate a nationwide US electric charging and hydrogen-fueling network to accelerate the rollout of carbon-neutral freight transportation,” explains Aneja. Driverless e-truck plans still in early stages Regarding Daimler's plans around driverless e-trucks, Aneja says two factors are involved: increasing the range of electric drivetrains, and the introduction of fuel-cell technology for long-haul. Until these things are in place, Aneja says the company “will for now, have to prove the technology with diesel powertrain technologies”. As for the kind of conversations Daimler Truck is having with its supplier, Aneja says: “Supply chain people are constantly making magic happen for our dealers and, most importantly, our customers, by securing the parts we need to build trucks. “In contrast to past experience where we simply ordered and received parts, we’re now reaching far down into our supply chain to assist suppliers in planning for shortages, navigating constraints, and working to help them keep the upstream flow of parts moving.” 92

April 2022

Daimler’s Freightliner's eCascadia and eM2 106 battery-electric trucks

supplychaindigital.com

WRITTEN BY: SEAN ASHCROFT PRODUCED BY: TOM LIVERMORE

April 2022

SNAM S.P.A

SNAM IS POWERING ITS WAY TO A

SUSTAINABLE FUTURE

supplychaindigital.com

SNAM S.P.A

Snam is one of Europe’s leading energy infrastructure providers and is undergoing a profound transformation that will see it able to deliver sustainable sources of energy.

he move to net zero carbon emissions is a focus for all businesses right now, but for giant energy companies such as Snam, sustainability is about far more than greening-up internal working practices and encouraging staff to reduce their carbon footprint. Snam is a world-leading energy infrastructure operator, and one of Italy's largest companies. Sustainability for Snam is about transitioning its entire operation from fossil-based gas to sustainable sources of energy. This is why Snam is in the midst of a business transformation programme that is seeing it deploy data-driven Industry 4.0 technologies across its supply chain. Along the way, it has not only transformed its processes but also its mindset, from one of ‘cost’ to one of ‘value’, especially when it comes to efficiency and sustainability.

April 2022

Example of an image caption supplychaindigital.com

SNAM S.P.A

Snam is powering its way to a sustainable future

Leading the Company’s digital transformation is Claudio Farina, Executive VP of Digital Transformation & Technology (DT&T). Farina was once with Boston Consulting Group, where energy was one of the sectors on which he focused, as well as spending 9 years with Vodafone. He says innovation and digitalisation has been a “leitmotif” throughout his career. Snam’s digital transformation is being built on artificial intelligence (AI) and an Industrial Internet of Things (IIoT) infrastructure, comprising networked sensors, instruments, and devices – all of which feed data into 98

April 2022

“ The speed of growth of Industry 4.0 tech is exponential” CLAUDIO FARINA

EXECUTIVE VP OF DIGITAL TRANSFORMATION & TECHNOLOGY, SNAM S.P.A

hybrid cloud-based solutions, to give Snam end-to-end visibility of its supply chain. “Our role in DT&T is as an enabler for transformation and digitalisation,” explains Farina. “It’s our job to make core processes more effective, efficient, flexible and fluid.”

SNAM S.P.A

In terms of technology-driven changes at Snam, he says the key has been de-bottlenecking the value chain of data, from harvesting it in the field, to gaining insights from it and then storing it. “The speed of growth of Industry 4.0 technologies like AI and digital twins is exponential,” he says. “Our ability to process and store data is incomparable when compared with early 2000.” Data is increasingly supporting the way Snam manages its assets,” Farina continues. “It is also making our assets intelligent, so that they are increasingly capable of self-diagnostics and self-regulation.”

Thanks to digitlisation, assets in the Snam energy supply chain can even suggest courses of action, based on available data. “Although people have the final decision,” Farina says, “data is helping us to preserve operational integrity and to optimise emissions and consumption”. It is also supporting Snam in its transition away from fossil-based gas to sustainable energy sources, such as biomethane and hydrogen. Farina adds: “It’s an ambitious multiyear programme, and it needs deep and broad footings to succeed. The ongoing transformation processes comprise 55 staffed projects and planned investment of €500mn.” He says that although data-harvesting technology is what defines the transformation, the most important factor will always be Snam’s people. “Paradoxically, thanks to digitalisation and automation, our people are even more at the centre of everything we do. I think that ultimately this is what will truly make the difference.” He continues: “Supported by technologies and data, our supply chain colleagues will be able to strengthen the entire value chain, because they’ll be better placed to manage tenders, offers and negotiations with our partners.” Specific ways in which technology is helping Snam streamline and automate its ways of working include a solution built on robotic process automation (RPA) - also known as ‘software robotics’. This helps it generate shorter vendor lists on tenders, but without the endless hours of clerical spadework. The RPA solution applies different criteria, such as geo-referencing, analysis of relevant certifications and also of turnover. This cuts down workload in this area from days to minutes. supplychaindigital.com

REPLY HELPS SNAM TRANSFORM THE ENERGY AND UTILITY SECTOR ELENA PREVITERA, SENIOR PARTNER AT REPLY, DETAILS THE COMPANY’S SNAM PARTNERSHIP AND HOW IT IS HELPING TO TRANSFORM THE ENERGY AND UTILITY SECTOR Globally, the energy sector is undergoing a profound transformation. The way that energy is being produced, distributed and sold is transitioning to complete decarbonisation to achieve climate neutrality by 2050. Elena Previtera, Senior Partner at Reply, explains that in order to meet these targets, “an unprecedented acceleration in public and private investments, aimed at supporting research and industrial-scale implementation of new technologies for the generation, distribution and efficient use of energy” is needed.

assets that best represent Snam’s attention to sustainability” says Previtera. TRADITIONAL BUSINESS: “From the introduction of drones and artificial intelligence to the design of cloud and edge computing solutions and the development of process automation solutions, Reply is assisting Snam’s traditional business lines and operational departments,” adds Previtera. CYBERSECURITY: “Reply supports Snam at all stages, from technological initiatives to organisational projects. Specifically, the design and implementation of a CyberSOC for continuous incident prevention, detection and response, as well as other solutions to prevent threats,” explains Previtera.

REPLY’S ROLE IN THE INDUSTRY TRANSFORMATION Reply combines its in-depth knowledge of the energy and utility market with its unique processes and distinctive ability to design, implement and manage application and technology solutions, in order to support the industry in its transformation. REPLY AND SNAM’S COLLABORATION Over the years, Reply has initiated and consolidated important collaborations with Snam, both in support of traditional business lines and in order to meet the needs of new businesses supporting the energy transition. ENERGY EFFICIENCY: “The platform dedicated to monitoring energy consumption and performance developed with Renovit, the group’s company operating in the energy transition business, is definitely one of the

Reflecting on Reply’s partnership with Snam, Previtera says: “It is fundamental for a company like Snam to be able to count on partners to guide the adoption of new digital solutions on a large scale and from an international perspective. “Reply’s value is the result of its strong process and technological specialisation and its capacity to create solutions oriented to meet the needs not only of the specific business but also to consider sustainability aspects.”

SNAM S.P.A

“ Despite Covid we succeeded in improving – organisationally and in terms of technological development” LORIS SPALTINI

EVP CORPORATE SERVICES, SNAM S.P.A

LORIS SPALTINI TITLE: EVP CORPORATE SERVICES LOCATION: ITALY Loris Spaltini has been Executive Vice President Corporate Services of Snam since November 2019. Prior to this, in May 2018, he joined Snam as Senior Vice President Supply Chain. With a degree in electrical engineering at Politecnico di Torino and a master’s degree in business management, Loris began his career in consulting, and then continued with positions in the automotive sector: CEO of Fiat Group Purchasing (JV between General Motors and Fiat), Chief of Purchasing worldwide for IVECO and CNH, General Manager of MV Augusta. Loris worked also in the steel sector as Purchasing and Supply Chain Director of ILVA S.p.A. Main experiences are related to business management, purchasing and industrial management, in international and highly complex contexts, in Italy, in Europe and abroad in North America, Brazil, China, India, Russia and North Africa.

EXECUTIVE BIO

SNAM S.P.A

CLAUDIO FARINA

GUIDO AMENDOLA

TITLE: EVP DIGITAL TRANSFORMATION & TECHNOLOGY

TITLE: SVP CORPORATE & GROUP SUPPLY CHAIN

LOCATION: ITALY

Claudio Farina has been with Snam since 2017, and is Executive Vice President Digital Transformation & Technology leading technological roadmap, ICT and digital transformation. Previously, he was Head of CEO Office. Before Snam, he spent 9 years at Vodafone, as Head of Financial Planning & Analysis and Business Intelligence and Head of Strategy, leading spectrum auctions, reduction of digital divide, fibre strategy. From 2000 to 2008, he was Principal in BCG, leading 25 projects. In 1999 he was Researcher on technological innovation, at the German Institute of Economic Research. Passionate about innovation and start-ups, he is also an alumnus of Aspen Institute.

Guido Amendola has been with Snam since December 2018 and is Senior Vice President Corporate & Group Supply Chain, leading Procurement and Material Management. Previously, he held the role of Head Corporate & Group Procurement, managing Indirect and Operational Services spending of Snam Group. Before Snam, he spent 6 years in BNP Paribas, as Group CPO Italy, responsible for leading a Procurement Shared Services Hub. Prior to this, he was Supply Chain Director at PosteMobile and Head of Project Procurement at Siemens IT Solutions & Services. In 2010 he earned a Master's in Procurement at Supply Chain Management Institute in Munich adding this expertise to a post-graduate MBA and a degree in Economics.

‘71

3 VALUES FOR THE FUTURE: u GROUP IDENTITY u INNOVATION u SUSTAINABILITY

Since 1971, Impresa Tre Colli S.p.A. has operated in various sectors:

OIL & GAS For important clients such as SNAM S.p.A in Italy

REINFORCED CONCRETE STRUCTURES

GREEN PROJECTS

Such as Serravalle Designer Outlet

Including hydroelectric power plants

Discover more on our website

SNAM S.P.A

“ The ongoing transformation process comprises 55 staffed projects and planned investment of €500m” CLAUDIO FARINA

EXECUTIVE VP OF DIGITAL TRANSFORMATION & TECHNOLOGY, SNAM S.P.A

Snam has also rolled out an AI admin solution that automates the checking of vendor documents, including Supplier contracts. This saves huge amounts of time for staff in Snam’s Sourcing, Legal and Risk Management Teams. Another important figure in Snam’s transformation is Guido Amendola, Senior VP Corporate & Group Supply Chain. Amendola has broad-based procurement experience, having been Group CPO

at BNP Paribas bank in Italy and Supply Chain Director at telecoms company, PosteMobile. On sustainability, Amendola says that, in procurement in general, there needs to be a change from the old ways of working to “a new, more entrepreneurial approach where innovation becomes the norm”. This is a journey that starts on a consistent people’s consciousness about the new role of supply chain departments. To do this, he says, Snam launched the Supply Chain Academy, a programme that provides buyers, senior managers and directors with business-led strategic coaching around most important trends and topics in supply chain. And when it comes to sustainability, Amendola is passionate. He says that supplychaindigital.com

105

EVOLVING GAS TRANSPORTATION THROUGH AI & ADVANCED ANALYTICS

SNAM AND ENGINEERING CO - DESIGN THE FUTURE OF THE GAS SECTOR BY TRANSFORMING METER - READING PROCESSES

106

April 2022

DISCOVER MORE

SNAM S.P.A

Snam’s energy transformation model

“ It’s important that Stakeholders continue to be engaged and involved in every step of the way” GUIDO AMENDOLA

SENIOR VP OF CORPORATE & GROUP SUPPLY CHAIN, SNAM S.P.A

“helping drive the company’s net zero carbon programme has been exciting” – as has supporting Snam’s ongoing transition from fossil-based gas to sustainable energy sources. He believes that an important part of Snam’s sustainability drive is that stakeholders “continue to be engaged and involved every step of the way”. This is why Snam has launched a Change Management Initiative in its supply chain with an incubator team called ProcuLab which, says Amendola, “is an ideas booster composed of people from across our supply chain, who

The Snam Group is one of the world's leading energy infrastructure operators and is one of Italy's largest companies. It guarantees the security of the Country’s gas supply and is one of Europe’s key enablers in the energy transition movement. Snam operates in Austria, France, Greece, Italy and the UK, and has a presence also in Asia, the Middle East and the US. The Group has the largest natural gas transportation network in Europe, with over 41,000 km, as well as 3.5% of the world’s gas storage capacity. In recent years, Snam has begun to play a major role as an enabler of the energy transition, in line with EU net zero targets. Its 8.1bn euro strategic plan is expected to be complete by 2025, and it says it is on course to achieve carbon neutrality by 2040. The backbone of the energy transformation is to make its supply infrastructure ‘hydrogen ready’. It is also planning to support energy transition businesses such as biomethane from organic urban waste and agriculture and energy efficiency for buildings. The Group's business model is based on sustainable growth, transparency and the promotion of talent and diversity.

supplychaindigital.com

107

SNAM S.P.A

100% HYDROGEN READY VALVES FOR A SUSTAINABLE WORLD Valvitalia is the first Italian Group in the production of valves for the Oil & Gas sector and has developed solutions for sustainable energy transition.

DISCOVER MORE

Snam on course for net zero by 2040 Snam has set itself the goal of achieving carbon neutrality by 2040, with an intermediate target of reducing direct and indirect CO2 equivalent emissions (Scope 1 and Scope 2) of 50% by 2030. The Group is committed to making its network ready to transport fully decarbonised gas (biomethane and hydrogen) by 2050. In its 2021-2025 strategic plan, Snam foresees investments of 8.1bn euros for developing assets that meet hydrogen-ready standards, as well as net zero investments and speeding up of energy transition initiatives.

108

April 2022

have a balanced mix of gender, skills and experience”. He adds: “In ProcuLab there is no hierarchy, no rules. All that matters is valuable ideas. As well as generating ideas that continue to help us, I think it has also helped with morale, because it brought our people closer together when remote working during the pandemic”. Amendola also feels strongly that having the right mindset will continue to be the bedrock upon which the process of change is built. “Our culture is to challenge ourselves daily, so we can improve profitability and operating efficiency,” he says. A third Snam executive who has been important to its ongoing reinvention is Loris Spaltini, Executive VP of Corporate Services, who reports to Snam’s CEO. Spaltini joined the

company in 2018 and has prior experience in the steel and automotive sectors. Although the transition process has gone well, Spaltini admits it has been hugely challenging at times – not least during the height of the pandemic, when Spaltini and his team “had to guarantee supply continuity by supporting critical suppliers, as well as reinforcing procedures and supplierverification compliance.” They also had to ensure the security of Snam assets, including not only gas pipelines and plants but also the software applications that allow it to control the Italian gas network. “Our cyber team did an amazing job,” Spaltini says. As well as keeping operational matters on course at the height of Covid, Spaltini’s team were also tasked with ensuring its own people were taken care of. He said: “This meant not only developing internal health protocols to safeguard our workers’ safety but also ensuring they were getting the psychological support they needed.”

As well as providing personal support and medical care for its own people, Snam also took on responsibility for helping the wider Italian public, by donating much-needed medical equipment and supplies to healthcare providers across Italy. Now, as the pandemic is beginning to ease its grip, Snam’s supply chain is in a good place, says Spaltini. “Despite Covid, we’ve succeeded in continually improving, in terms of organisational and technological development, as well as in terms of the growth of our people and our attention to sustainability issues. In Europe, we are a fundamental player in the energy transition movement.” “Sustainability is no longer seen as an added benefit,” Spaltini adds. “It is a core operational and corporate goal. We have moved away from a ‘cost’ mindset, to a ‘value’ mindset – not just on sustainability, but in everything we do.”

supplychaindigital.com

109

WITH

ENTERPRISE

RESOURCE PLANNING, LESS IS MORE

Enterprise resource planning solutions are most effective in businesses that never lose sight of their strategic goals

WRITTEN BY: SEAN ASHCROFT

or decades, businesses have been using automation software for increased operational efficiency, productivity and profitability. But thanks to step-change advances in Industry 4.0 technologies, such as the Internet of Things (IoT) and artificial intelligence (AI), the pace of transformation has quickened. And nowhere more than in supply chain, where the pandemic, as well as pressing sustainability issues such as Scope 3 emissions, has there been a need for transparency and agility, both of which are prerequisites for resilience. But a company’s supply chain does not operate in a vacuum, separate from other areas of the business, such as sales, accounting, HR, inventory, customer relationships and manufacturing. These functions also need to be agile and transparent.

110

April 2022

TECH & AI

“ADAPT YOUR THINKING TO THE ART-OF-THE-POSSIBLE – THINK ABOUT DISRUPTION” HEIN PRETORIOUS CEO, ONPRO

supplychaindigital.com

111

In Association with:

Meet who runs the world.

TOP 100

Women

SUPPLYCHAIN

NEW ISSUE OUT NOW Read now

A BizClik Media Group Brand

Creating Digital Communities

TECH & AI

“SUPPLY NEEDS INTERPRETED DATA AS QUICKLY AS POSSIBLE, AND ERPS ARE NOT GREAT AT THIS” HEIN PRETORIOUS CEO, ONPRO

Enter integrated business planning (IBP) - enterprise-wide strategy to align business goals and financial targets with decisions and actions. A well-implemented IBP can reduce costs, lead to more responsive customer service and demand fulfilment, as well as shorten the time to market for new products. But what of the day-to-day implementation of an IBP strategy? This is where enterprise resource planning (ERP) comes in. ERP solutions are an integrated

suite of business applications. They share common processes and data models, and cover operational end-to-end processes, like those found in finance, HR, distribution, manufacturing, service and the supply chain. ERP helps automate and streamline operations ERP helps businesses evolve and adapt, so they become more agile and resilient, for example. ERP solutions help in this front by automating and streamlining operations across departments by using software that manages data and integrates disparate systems. So for supply chain, an ERP solution will take care of the physical aspects of supply, including storage and transportation, as well as the market aspects, such as managing demand and meeting customer needs. An efficient solution coordinates and integrates supplychaindigital.com

113

TECH & AI

material flow, information flow and financial flow. But as with any large-scale transformation project, ERP brings challenges, the severity of which might be determined by which ERP approach a business takes: traditional or modern. Traditional ERP solutions involve a single large platform that covers every aspect of a company. A modern ERP, meanwhile, handles the most important business functions, with other parts of the business - such as supply - being covered by specialised software applications.

How to know if your business is ready for ERP software Hein Pretorious, CEO of South Africa-based digital transformation solutions provider, OnPro, says every business should ask a number of questions before choosing expensive ERP software: 1. What is limiting your growth and competitiveness? “Is it a lack of actionable information across the value chain, and not just within the organisation?” 2. What gave rise to your business limitations? “Was it bureaucracy, silo-led behaviours, or thinking in terms of efficiency, not effectiveness? Or maybe all of them?”

demand, and develop a strategic view of how a technology platform can serve your business purpose.” 5. Will the software support new rules and behaviours, or will it be based on how the old system works? “The design criteria of the new system must be rooted in the business purpose of the project, and provide fast accurate, actionable information, and enable business agility throughout the organisation.”

3. How will ERP solve business limitations? “You need to understand what the solution needs to do before deciding what software to purchase.”

6. Who are the most important stakeholders? “Value chain partners, both upstream and downstream are critical stakeholders, and Internal stakeholders include audit, risk, legal and Is the business ready for the project?

4. What are the behaviours needed to take the business forward? “Think of your place and role in the entire value chain, and how you respond to customer

“Non-negotiables must be sorted out up front to avoid unpleasant surprises later in the project lifecycle, and scenario planning must come before project planning.”

114

April 2022

TECH & AI

“SUPPLY AGILITY CAN BE ACHIEVED ONLY BY REMOVING HUMAN ROLES FROM SUPPLY THINKING” HEIN PRETORIOUS CEO, ONPRO

Traditional approach to ERP ‘will hold you back’ Hein Pretorious is CEO of South Africa-based digital transformation solutions provider, OnPro. He says that the traditional approach to ERP “will hold you back.” Pretorious warns: “It will consume your attention, your budget, your energy and your team. Large, drawn-out ERP projects can actually destroy competitiveness, as well as some very talented people in your business. ERP is no longer the platform you build your business on. All-consuming enterprise-wide projects like this should be a thing of the past.”

Instead, he urges businesses to invest their time, energy, budget and - most importantly - their strategic thinking into how to best embrace digital transformation. “Adapt your thinking to the art-of-thepossible. Think about disruption, and how you can reinvent your business by embracing Industry 4.0 technology. Take your people with you. Get them excited.” When it comes to supply chain, automation - not ERP solutions - should be the name of the game, says Pretorious - and robotic process automation (RPA) should be leading the charge. supplychaindigital.com

115

He says: “Supply is all about interpreting data as quickly as possible in order to understand customer needs, and then making decisions, and acting on them in the shortest possible time. ERP is not great at this. It tends to be centred around human roles, and this does not serve the needs of an agile supply chain. The segregation of workplace duties is just one example why it’s not suited.” Pretorius feels supply agility can only be achieved by removing human roles from supply thinking, and focusing on “patterns that need to be executed.” 116

April 2022

TECH & AI

He says: “For example, paying a supplier invoice when it is due is a pattern. Once you have identified all your business patterns, you then add human roles where it makes sense, and you let automation take care of the rest.” ERP ‘has earned a bad rap as an expensive and drawn-out exercise’ Pretorius believes ERP has earned a bad rap as an expensive and drawn-out exercise that often does not live up to expectations “because software selection gets more attention than business strategy formulation.” In agreement is Maureen O’Shea, partner and Head of Supply Chain at KPMG. She says that when it comes to technology, businesses must keep sight of the bigger strategic picture that has been framed by its IBP, and not get lost “in bells and whistles In a KMPG paper on the future of integrated business planning, she says that with technology, businesses should keep it simple. “There’s been a tendency in the past for too many bolt-ons and bells and whistles,” she says. “Organisations need to understand what the essence of planning is, and use technology as an enabler.” She adds: “IBP can bring the business strands together. It’s about alignment, about arriving at a single version of the truth that is accepted and agreed on across the functions of a business. “By harnessing the power of today’s technology, and building on the ‘can-do’ mindset developed through the pandemic and taking a committed and determined one team approach - there is little doubt that IBP holds huge potential for organisations to better manage their businesses. The signs are that many are making significant progress on the journey.” supplychaindigital.com

117

PROCUREMENT - THE HEART OF EVERY ORGANISATION 118

April 2022

IKANO BANK

WRITTEN BY: GEORGIA WILSON PRODUCED BY: CRAIG KILLINGBACK

supplychaindigital.com

119

120

April 2022

IKANO BANK

Åsa Stoije, Head of Sourcing and Procurement, Ikano Bank, discusses the value effective procurement can provide, and the need for strategic partners

wned by the Kamprad family, Ikano Bank can be traced back to the home furnishing company, IKEA (founded in 1943). Ikano Bank founded in 1995 creates possibilities for better living by offering simple, fair and affordable services, enabling a healthy economy for the many people. Ikano Bank’s offer includes savings and loan products for consumers, sales support services for retailers, and leasing and factoring solutions for businesses. Åsa Stoije, Head of Sourcing and Procurement at Ikano Bank spoke of the company’s business idea: “We create possibilities for better living by offering simple, fair and affordable services, enabling a healthy economy for the many people..” Ikano Bank’s offerings consist of credit cards, loans, mortgages, sales financing, factoring, and leasing. “We have roughly 1,100 employees in eight European markets, including the Nordics, Germany, UK, Poland and Austria,” says Stoije. She adds: “But what is interesting right now and for the coming years is that we are in the middle of a transformation - building a completely new digital bank alongside our existing operations.” Sourcing and procurement at Ikano Bank Having 20 years’ experience in international and progressive functions, Stoije’s focus has been on sourcing and procurement at all levels. supplychaindigital.com

121

IKANO BANK

Procurement - the heart of every organisation

She says: “I joined Ikano Bank in 2019, as Head of Sourcing and Procurement. It’s very exciting to be a part of the sourcing function. We are a central support function that helps the wider organisation to make the right strategic decisions and investments.” Stoije and her team is responsible for indirect purchasing of materials and services

122

April 2022

- essentially everything the bank needs to ensure a smooth running of the business. Such as external resources, consultants, R&D projects, outsourcing, hardware, software licenses. “Or it can be hosted services and software-as-a-service (SaaS),” she says. “It’s quite a broad area. We are also in charge of negotiating the best deals for the company, while continuing to meet company standards and industry regulations as well as client and public expectations.” Sourcing is a wellintegrated function in Ikano Bank’s operations, and as such, Stoije e says it’s vital that sourcing processes are both followed and understood. “Sourcing is a multifaceted and multidimensional function with various tasks

IKANO BANK

ÅSA STOIJE

6bn SEK

TITLE: H EAD OF SOURCING AND PROCUREMENT

Business volume

INDUSTRY: BANKING LOCATION: SWEDEN

1995

Year founded

Åsa Stoije leads the company's purchasing organization, its change and transformation.

1,000+ Number of employees

Before joining Ikano Bank in Nov 2019, Stoije served as Director Global Indirect Procurement at Arjo (Getinge Group) and she has also had several global positions at Tetra Pak and Ericsson for many years.

EXECUTIVE BIO

and responsibilities. We are in the middle of everything, a support function and a service function, where we are more and more becoming an internal business partner providing advice on investments and purchasing decisions.” Stoije says that while the focus on optimisations and cost in sourcing is understandable the job is also about stakeholder management - building relationships, supplier development, risk mitigation, and responsible sourcing. “And there are a lot of new regulations to take into account,” says Stoije. “It is important for sourcing and procurement to help the wider company to be compliant to rules and audits.” She continues: “As a sourcing function we should know what we spend, where we spend, how we spend, and why we spend. It is also important to be able to show how we secure the best value for money, as well as balancing spend risk dependency and value.” The sourcing process is fundamental, she says, and runs through the entire company. “Nothing can be bought, purchased, sourced without the procurement and sourcing function being involved,” she explains.

Åsa Stoije holds an Executive MBA, International Management and Leadership programme. She has also studied economics, marketing and law, graduating at School of Economics and management at Lund University.

DO YOU WANT A FUTURE WHERE TECHNOLOGY CONSTRAINS YOUR BUSINESS? OR EMPOWERS IT?

GET THE FUTURE YOU WANT

Working at the heart of business transformations Capgemini, a key partner of Ikano Bank, is enabling business transformation for its global clients - working together with passion and energy Capgemini, a key partner of IKANO Bank, has enabled business transformation for more than 50 years for its global clients. “We are fortunate to work at the heart of all these major transformations, and contribute to the development of Ikano Bank,” said Sujit Karkera, Account Executive and Delivery Partner at Capgemini. Karkera is responsible for the company’s partnership with Ikano Bank and leads a global team of 250+ people from his office in Sweden. “I believe in building winning teams, being bold, and thinking out of the box.” Capgemini is a global leader in consulting, technology services and digital transformation with the focus on building technology for an inclusive and sustainable future. “Our industry has been evolving at a very fast speed especially given

the pandemic. Digital products and services are now even more relevant than ever before. We have our focus on being the top partners for cloud and data,” said Karkera. “We also focus on cybersecurity and Artificial Intelligence (AI). Our ability is to provide scale and speed with our large pool of global talent which makes us a trusted partner.”

Trusted partner of Ikano Bank Capgemini has been a key partner of Ikano Bank since 2017. “We provide technology services that drive the core banking platforms, we also partner in their New Bank transformation journey. “It has been a privilege to contribute to Ikano Bank’s vision and their journey of a New Age Digital Bank. At Capgemini we are a global team of experts with niche skills and deep domain knowledge.” “The secret to our sustained, strong partnership is the common values we share. I see many similarities, such as being bold with daring to be different, and team spirit with working together. “We are fortunate to work at the heart of all these major transformations. We will do this, as we have always done at Capgemini, with passion and energy, and all together.”

Discover more

IKANO BANK

Where can sourcing’s value be seen? Stoije says that sourcing is about multidimensional value creation: “Value can be seen from a cost perspective, from a supplier insights perspective, but also from a business growth and increased profitability perspective. Sourcing has strong knowledge in so many different areas. It is vital for an organisation to harness the function’s capabilities in these areas.” Beyond the value of cost reduction, Stoije says sourcing also looks to create value by bringing in new technologies. “It’s about how to improve the function,” she says. “How can we further use external input in our own product development so that we can continue on our journey to becoming a fully digital bank offering simple, fair, and affordable financing for the many.” supplychaindigital.com

127

Helping financial institutions build a resilient and adaptable business At TCS, we believe in creating sustainable growth for our stakeholders. Our innovative framework, digital capabilities, agile business model and ecosystem, are helping forward-looking financial institutes in their transformation journey and enabling them to stay ahead in the market.

Rabi Panigrahi, TCS’ Head of Banking, Financial Services and Insurance, Nordics values co-creative relationship with Sweden’s innovative Ikano Bank Tata Consultancy Services (TCS)’s Banking, Financial services and Insurance (BFSI) practice has been partnering with many of the world’s largest financial institutions in their business growth and transformation journeys for over 50 years. In the Nordic countries, Rabi Panigrahi leads this key segment of the business, engaging with key clients like Ikano Bank (founded by Ingvar Kamprad the founder of IKEA). TCS focuses on supporting their customers in taking a clear-sighted perspective towards digital transformation and reimagining their businesses. For this, TCS leverages comprehensive investments in products & platforms, as well as disruptive technologies like AI, cloud, cognitive computing and the like. “We bring these technologies on board, so the customer does not have to enter the innovation journey from zero,” says Panigrahi. “Ikano was a digital bank from its outset, without high-street branches, so it had little legacy burden. We have empowered it, with technology solutions to reimagine

Discover more

the digital banking experience coupled with a robust IT4IT platform to enhance Ikano Bank’s development life-cycle and speed to market. The new platform is enabling Ikano to further enhance their growth and transformation journey, with focus on broadening their customer base & customer experience by creating an ecosystem through retailers and distribution partnerships rather than depending solely on the financial segment of the business.” The vision TCS offers is very much in tune with that of its client. Åsa Stoije, Head of Sourcing and Procurement at Ikano Bank says: “TCS is an important supplier for Ikano Bank. We work in close collaboration with them as part of our strong partnership. They are a part of many development projects and integrations, and provide us with key capabilities. They fit our needs and requirements as a business, providing us with expert knowledge and helping us achieve our goals.” A statement that neatly sums up the advantage of working with the world’s leading banking consultancy.

Get in touch

IKANO BANK

INSIGHT...

Ikano Bank and its partnerships Ikano Bank believes it is important to have partners that are willing to invest in the business. “Now more than ever, because we’re on our transformation journey, it is important for us to have partners with whom we can have a strong relationship,” says Åsa Stoije, Head of Sourcing and Procurement at Ikano Bank. She adds: “You can compare it to a marriage. It is important for us and our partners to have transparency and work together towards the same goals.

RISK MANAGEMENT AT IKANO BANK Risk management in any organisation should be treated with care. From a sourcing perspective, Ikano Bank has a detailed checklist of different requirements. It conducts annual reviews, follow-ups and risk assessments, and it has multilevel of approval chains and security assessments.

It’s about give and take throughout the journey, because this allows us to grow our business and to build at scale.” Given the nature of the sourcing and procurement market, it is also vital for Ikano Bank’s partners to navigate a disruptive market. “They need to be global, she says “They need to have agility, flexibility, and to provide us value for money. They must also be able to work in a multi-vendor environment, and be willing to take risks in order to get rewarded in meeting our business goals..” Stoije adds: “I think those are key foundations for a good partnership. 130

April 2022

IKANO BANK

But our partners are also experts in their field, so it’s important they challenge us. We need them and their expertise, in order to collaborate and improve our offerings.” Two such partners include Capgemini and TCS “In 2017 after a competitive tender process, we entered into a partnership with Capgemini,” she says. “As part of this partnership a large number of Ikano Bank’s IT functions were transitioned over to Capgemini. This enabled us to strengthen our IT capacity, and to further embark on

our digital transformation journey, as well as secure existing bank operations.” Stoije adds: “TCS Tata Consultancy services is another important partner for Ikano Bank. We work in close collaboration with them as part of our strong partnership. They are a part of many development projects and integrations, and provide us with key competence incl. consultants. They fit our needs and requirements as a business, providing us with expert knowledge and helping us achieve our goals.”

supplychaindigital.com

131

TOP 10

132

April 2022

TOP 10

Consultancy Firms Organisations looking to digitally transform their supply chain often turn to consultancy firms to support them with challenges around new technology. Here are 10 leading consultancies that can help.

WRITTEN BY: SEAN ASHCROFT

onsulting firms are often key to helping organisations grow and streamline. They help by solving business problems and finding new and better ways of doing things, often with Industry 4.0 technologies, such as AI and IoT. Many offer enterprise-wide solutions, spanning HR, marketing, IT and finance - as well as supply

chain. On technology, consultancy firms advise businesses on how best to implement and use this to meet their business objectives. In doing so, they play a key role in business transformation, allowing clients to accelerate growth, reduce cost, manage risk, develop talent or simply just change the way they operate.

supplychaindigital.com

133

TOP 10

Forrester Forrester is a leading global market research company that helps organisations meet customer demands and excel with technology. The firm empowers its clients to adopt a customer-centric approach across leadership, strategy, and operations. For more than 35 years, Forrester’s research has given global consumer business and technology leaders a clear vision to see what’s next. Its customer-centric research and analytics support customers as they implement modern strategies that align and empower teams to deliver on a shared vision for growth.

“ Forrester is a leading global market research company that helps organisations meet customer demands and excel with technology” 134

April 2022

Bain & Company Advising leaders on strategy, marketing operations and IT, Bain is a top management consulting firm. Since its founding in 1973, Bain has worked with 63% of the Global 500 companies and now has 63 offices in 38 countries. The firm's technology consultants serve eight of the ten largest tech conglomerates, three of the five leading software manufacturers, and many of the most influential players in the semiconductor industry. It also guides customers in mastering technical and business model innovation.

TOP 10

“In FY21 PwC firms provided services to 84% of the Global Fortune 500 companies and the company had 90,273 people join its firms”

Gartner

With expert guidance and tools, Gartner enables faster, smarter decisions and stronger performance on an organisation’s most critical priorities. The company, which works with businesses in more than 100 countries, also delivers actionable, objective insights to executives and their teams. Gartner's in-depth guidance is developed through rigorous proprietary research methodologies to ensure all insights are independent and objective. It is also created by a global team of more than 2,150 research and advisory experts who understand both business and industry.

07 PwC

PwC helps organisations and individuals create the value they are looking for, by delivering quality in Assurance, Tax and Advisory services. With offices in 156 countries and more than 295,000 people, PwC supports a number of global clients and are among the leading professional services networks in the world. In FY21 PwC firms provided services to 84% of the Global Fortune 500 companies and the company had 90,273 people join its firms.

supplychaindigital.com

135

Because Insight Beats Hindsight

Sustainable procurement: more than box-ticking Businesses with strong sustainability performance benefit from lower capital costs, higher valuations, higher profitability, and lower exposure to risk. Download our eBook to learn more

TOP 10

Ernst & Young

McKinsey & Company Global management account company, McKinsey & Company, is a trusted advisor and counsellor to many of the world’s influential businesses and institutions. Founded in 1926, McKinsey combines bold strategies and transformative technologies to help organisations innovate more sustainably, achieve lasting gains in performance, and build workforces. To support clients in the technology industry, McKinsey helps customers build internal capabilities, integrate digital and analytics tools into their organisations, and transform the ways in which they work to improve their business in substantial, sustainable ways.

With the purpose of building a better working world, Ernst & Young (EY) provides insights and quality services to build trust and confidence in the capital markets and in economies. The company has a number of technology services including: advanced technology; audit technology; tax technology; connected capital technologies; technology transformation; and alliances and ecosystems. Founded in 1989, EY saw its combined global revenues rise 7.3% year-on-year to US$40bn, offering a radically different approach to connecting strategy, transactions, transformation and technology.

supplychaindigital.com

137

TOP 10

Accenture Accenture is a provider of strategy, consulting, interactive technology, and operations services with digital capabilities. Operating in five segments - communications, media and technology, financial services, health and public service, products and resources - Accenture aims to deliver on the promise of technology and human ingenuity as well as help clients become the next and best versions of themselves. The firm has a number of technologyenabled services such as artificial intelligence, cloud and automation, on top of offering technology consulting and innovation.

“ Accenture is a provider of strategy, consulting, interactive, technology, and operations services with digital capabilities” 138

April 2022

Tata Consultancy Services Part of Tata Group, India’s largest multinational business group, Tata Consultancy Services (TCS) is a global IT service, consulting, and business solutions leader that partners with the world’s leading businesses in their transformation journeys. With a wide range of offerings, TCS has a number of different insights into how companies can utilise technology to improve business operations. From digital twin technology and IoT to automation and AI, TCS look to support clients with many business challenges.

TOP 10

UST

Global digital transformations solutions provider, UST craft disruptive solutions and provide the resources and expertise clients need to bring them to life. Empowered by the belief that the power of technology will engineer a better future, UST uses a nimble and creative approach to help clients realise their business outcomes. Founded in 1999, UST is at the forefront of digital technology and engagement. With a diverse talent and deep domain expertise, UST devises better, more efficient ways of helping streamline business and satisfy customers through digital techniques. The firm works with modern media, technology and communications enterprises that touch billions of lives through their products, services and productions. UST has long standing relationships with its largest technology clients. Five of the largest telecommunications companies utilise its services for agile development.

The ‘Risk & Resilience’ Conference

2022 27th - 28th April

STREAMED & IN PERSON TOBACCO DOCK LONDON

70+ speakers. 1,000+ attendees. One global conference.

Get your tickets

Watch our 2021 Showreel

Previous Speakers Include:

Aurelien Faucheux

Senior Director, Procurement Performance, Systems & Excellence

Charlotte de Brabandt Technology and Negotiation Keynote Speaker & Host

Aston Martin

Lufthansa

AMAZON

Ninian Wilson

James Westgarth

Group Procurement Director Vodafone Procurement

CPO

TOP 10

142

April 2022

TOP 10

“ Deloitte currently has approximately 330,000 people in more than 150 countries and territories”

Deloitte Operating as a global professional services network, Deloitte offers audit and assurance, consulting, financial advisory, risk advisory, tax, and related services. The firm, which was founded in London in 1845, serves a number of industries including energy, life sciences and technology. For the technology industry, Deloitte focuses on helping technology companies across the world deal with the demands of adapting their business strategies to succeed in a changing market. In 2021, the company’s revenue smashed the US$50bn revenue mark for the first time and was a 5% increase on its pre-COVID return of US$47.6bn. Deloitte currently has approximately 330,000 people in more than 150 countries and territories. To find solutions to the most challenging issues facing its clients, Deloitte works collaboratively and dynamically by bringing together multidisciplinary teams of people with diverse perspectives, skills, and expertise.

supplychaindigital.com

143

P O W E RI NG PU R P O SE F UL S U S T A IN A B L E S O UR C ING AD FEATURE WRITTEN BY: SCOTT BIRCH PRODUCED BY: GLEN WHITE

144

April 2022

ROLLS - ROYCE

Pearl 15 – Intelligent Engine supplychaindigital.com

145

ROLLS - ROYCE

Rolls-Royce Singapore employees

146

April 2022

ROLLS - ROYCE

Digital transformation of procurement at Rolls-Royce has ushered in a new era for the function to extract value that benefits people, profit and the planet

enn Godfrey’s day begins with the morning school run. It is one of only two non-negotiable parts of every weekday, the other being the return journey when he picks his children up later that afternoon. For everything else, the rest of his day revolves around negotiation. As Vice President Procurement – Raw Material and Forming, he leads billions of dollars worth of annual contract and sourcing projects – quite often, these days, in the comfort of his living room. He estimates around 95% of the past two years have been spent working from home, a far cry from the pre-pandemic days of factory visits, in-person supplier meetings, and face-to-face contracting and dispute resolution around the globe. It’s a very different work-life balance that has taken some getting used to, he says and one he knows he is fortunate to have. RollsRoyce has swiftly adapted to the demands of the current global situation, embracing digital and the emerging supply chain business imperatives of resilience and sustainability. “There’s a physical mundanity that comes from working from the sofa each day, but actually the work is hugely varied,” he says. “We've just had to be bold, to pivot and think about how to do that in an environment that was thrust upon everybody.” Prior to the COVID-19 outbreak, supply chain planning cycles at Rolls-Royce would culminate in a week-long sourcing event, where suppliers and the firm’s sourcing teams would meet and negotiate the next turn of contracts for quality, cost and delivery. Today that is all managed supplychaindigital.com

147

ROLLS - ROYCE

“ I personally spend as much time on sustainability as I do anything else” BENN GODFREY

VP PROCUREMENT – RAW MATERIAL & FORMING, ROLLS-ROYCE

Powering Purposeful Sustainable Sourcing

through technology, with up to 300 negotiations actors able to be coordinated in one sourcing event, remotely and digitally. “We had to change how we did things and move it to a completely digital method of communication, management, and decision-making,” Godfrey explains. “We had to completely build out new digital 148

April 2022

tools, and we are now able to source billions of dollars as a team, effectively, all while sat on our own sofas.” The shift may have been prompted by the necessity of the pandemic, but it has resulted in “some really good, outsized outcomes in terms of quality, cost, delivery from mature supply chains”, the core pillars

ROLLS - ROYCE Rolls-Royce Small Modular Reacto

BENN GODFREY TITLE: VP PROCUREMENT – RAW MATERIAL AND FORMING LOCATION: GREATER DERBY AREA

Digital Agility A greater focus on digital-first processes has brought added agility to all areas of Rolls-Royce’s sourcing function. Its physical supplier network is vast and geographically dispersed. It is a complex ecosystem with a similarly intricate digital fingerprint. To effectively manage this network, the firm’s

EXECUTIVE BIO

of procurement, Godfrey says. Each contract can now be fully analysed and wired into Rolls-Royce’s processes. “We’ve been able to codify that approach to make it repeatable such that we don’t actually have to do that physical interaction and planning anymore,” Godfrey adds. “We're able to be a lot more agile in the way that we approach those sourcing events.”

An expert in procurement, operations and supply chain, Benn has bought everything on an aeroplane engine with responsibility for elemental hedging, alloy, castings, forgings and revert recycling. His diverse experiences include breakthrough multibillion-dollar digital sourcing events, leading cost out control towers, managing the biggest supplier relationships in aerospace as well as responding to acute crises and improving large operational supply chains through lean production systems. An advocate for value-based procurement with purpose, Benn co-chairs the sustainable procurement group defining the sustainability agenda for Rolls-Royce and is active in the wider aerospace supply chain with the International Aerospace Environmental Group.

supplychaindigital.com

149

ROLLS - ROYCE

“ The very best thing you can do from a cost perspective and from a sustainability perspective is not buy the thing at all” BENN GODFREY

VP PROCUREMENT – RAW MATERIAL & FORMING, ROLLS-ROYCE

procurement professionals leverage SAP and Ivalua as their core digital platforms, both bringing scale and a multitude of functionality to the table. This is now enhanced through the introduction of new digital tools. “What we've reflected on is that those platforms alone are not agile and flexible enough for us to go after some of the areas of value that we identify,” Godfrey says. “Whether that's understanding our risk profile in a more real-time environment, or allowing us to start a conversation with EcoVadis regarding their services.” The new partnership with EcoVadis, a platform that analyses and rates the sustainability credentials of vendors and businesses, has opened up fresh opportunities and value for Godfrey and his team. He admits that Rolls-Royce, a firm globally renowned for engineering excellence, can sometimes fall into the trap of thinking it can build a better solution internally. “This EcoVadis conversation is a realisation that there are lots of really smart partners out there,” he says. “They can give us access and leverage to the scale of their platform, 150

April 2022

Power Gearbox for Ultrafan

ROLLS - ROYCE

as well as supporting us in wiring that throughout the business so that it touches everything from processes to policies and contracts, and allows us to fully embrace things like sustainability, for example." Sustainability has risen to the top of Godfrey’s agenda. “I personally spend as much time on that topic as I do anything else,” he says. And for good reason. Sustainability has become a business imperative intertwined with the other demands placed on supply chains, whether it’s “a big boat stuck in a big canal”, geopolitical uncertainty, or the ongoing ripple effects of new viral variants. Godfrey alludes to Blackrock chief Larry Fink’s famous annual letter, and his recent assertion of the ‘triple bottom line’: profit, people, planet. “The point that I want to reiterate is exactly that's the work that I'm doing, and the work that we're doing at Rolls-Royce, is about those things,” he says. Godfrey is a member of the International Aerospace Environmental Group (IAEG), an industry body founded by Rolls-Royce and some of its closest rivals and customers, such as GE, Safran, Boeing and Airbus. “The reason for joining that and forming what's called Working Group 11 is to say, ‘We have to take sustainability seriously across our supply chain and this again has to be a digitally enabled approach to have the right breadth and impact to be effective,” he says. The core purpose of the IAEG is to harmonise and standardise critical aspects of aerospace as an industry, sustainability being just one example. “What we shouldn't do is all ask our suppliers to do something different. We can all agree that this is the way we're going to approach this topic,” Godfrey says. “We’ve done it before in aerospace – with safety and quality – but it's the first time I've seen what could be viewed as a competitive supplychaindigital.com

151

ROLLS - ROYCE

environment actually being truly collaborative. I think this is because we're recognising the power of those third-parties who are not aerospace experts, but are able to bring something to the party.” The Sustainability Imperative Rolls-Royce’s sustainability programme includes a broad array of initiatives that further epitomise the procurement function’s digitally-enabled thinking. One example is managing recycled material to repurpose in Rolls-Royce engines. “We've been doing that for a long time, but we've never talked about that as anything other than as a financial benefit,” Godfrey says. “We're now able to talk about that as contributing to our net zero aspirations by not digging large amounts of metal out of the ground for a second time. It also de-risks our supply chain, because, for example, every unit of nickel that you can recycle, you don't have to buy one from the market and be exposed to either shortages in material or speculation in price.” In energy, the firm has leveraged internal innovation from Rolls-Royce’s power system business – something the company is open to sharing with other organisations – to decarbonise two of its largest footprints in the UK. “Thinking about our overall energy mix is important and not everybody today can buy green energy nor can they build cleaner, mega power plants at scale,” Godfrey says. “Our approach is to take standard technology that exists and package it up to make it modular and smaller. Relatively speaking, it’s as big as a football stadium, but nonetheless, making it smaller and more accessible is part of the solution." Godfrey also points to Rolls-Royce’s core products, and the advances it is making in the electrification of flight. 152

April 2022

The reality is, for moving large numbers of passengers on long-haul flights we are still going to rely on gas turbine engines for decades to come, but as they become more efficient and more Sustainable Aviation Fuel is introduced into operations, the impact on the environment will be reduced. However, for smaller numbers of people, for shorter distances, the electrification of flight, whilst catching up with the electrification of other modes of transport, is very exciting. For example,

Spirit of Innovation – World's fastest all-electric plane

ROLLS - ROYCE

“ We had to change how we did things and move it to a completely digital method of communication, management, and decision-making” BENN GODFREY

VP PROCUREMENT –RAW MATERIAL & FORMING, ROLLS-ROYCE

our all-electric ‘Spirit of Innovation’ aircraft is now officially the world’s fastest allelectric aircraft, having set two new world records – at 15.45 (GMT) on 16 November 2021, the aircraft reached a top speed of 555.9 km/h (345.4 mph) over 3 kilometres, smashing the existing record by 213.04 km/h (132mph). And this is something my procurement role has allowed me to be involved in, buying and securing the rare earth metals that make electrification a reality.”

supplychaindigital.com

153

ROLLS - ROYCE

Advance and Ultrafan engine

154

April 2022

ROLLS - ROYCE

Prolonging the life of a product is another way that sustainability meets profit, Godfrey says. “The very best thing you can do from a cost perspective and from a sustainability perspective is not buy the thing at all – our motto is reduce, reuse and recycle.” Digital transformation has empowered Godfrey and his team to extract value far beyond the scope of procurement’s traditional transactional responsibilities. Smart use of technology and a willingness to evolve mindset and processes as much as software packages and video platforms will come to define where the function is headed next, Godfrey believes. It is a future of increased digital agility, data and the maturity of AI and other emerging technologies. “From what I’m seeing, it's not fully there yet,” he says. “But if I think about some of the solutions that are out there for some of the topics that are important to us, in terms of cost and supply chain visibility, and the conversations I'm having; whether supporting the development journey of small, half-a-dozen-people start-ups to working closely with our own in-house AI team to conversations with the very biggest household names in digital, it’s close. “Couple that with the vast array of competing green technologies out there, which will drive the net zero agenda, and from a technology perspective, I think we're probably closer than many of us may realise to an era-defining change with some really interesting technologies, tools and systems being available to support the buyer to do their job effectively, drive huge value and really make a world of difference.”

supplychaindigital.com

155

SOL SUP 156

April 2021 2022

LVING PPLIER DATA FOR PROCUREMENT LEADERS AD FEATURE WRITTEN BY: ALEX TUCK

PRODUCED BY: JAMES WHITE

supplychaindigital.com

157

TEALBOOK

CTO Arnold Liwanag describes how he and TealBook tackled the problem of bad supplier data to help procurement leaders make better decisions

ealBook is a specialist in the procurement space as a subset of the supply chain; a deeply complex network of relationships, and multiple data sets, where workforces depend on longstanding relationships and frequently enter information manually. With his deep understanding of the supply chain and the core business challenges around that, Chief Technology Officer Arnold Liwanag saw a great opportunity to apply this sector knowledge with his artificial intelligence (AI) background, when he joined the Toronto-based startup in August of 2021. Previously a student of the works of Geoffrey Hinton, a renowned British-Canadian cognitive psychologist and computer scientist most noted for his work on artificial neural networks, Liwanag was one of a lucky few in the world to be studying such a nascent topic in the early 2000s, which led to an early career of cleaning data, integrating it, and ensuring it was of good enough quality to input into the early AI systems that were in development at the time. He has led AI strategy at PwC and overseen many largescale technology implementations. His mandate at TealBook is to drive the engineering and implementation of the product and ensure the business is constantly innovating, relative to the technologies that are available in the market and inserting that into the TealBook platform.

158

April 2022

Example of an image caption supplychaindigital.com

159

TEALBOOK

Solving Supplier Data for Procurement Leaders

“I own Data Ops and within this, Data Governance, Data Quality and the processing of information to complement where the shortcomings are. A big part of my role is also to decide how we're using artificial intelligence technologies and be able to train those models to perform better over time,” said Liwanag. The problem of bad data Particularly in the procurement space, supplier data is about the collection of the information. Liwanag explains: “It's very difficult to convince the universe of suppliers out there to deliver that information in the same way. With the landscape as it stands today, suppliers work with many buyers, and all these buyers want specific information to be able to transact with you. And then, in that situation, each individual buyer is asking that one supplier the same question 30 or 40 times.” 160

April 2022

This tireless process causes supplier fatigue as they enter this information in multiple portals and maintain this information over time. Liwanag added: “People change, situations change, and information changes. So you can see how that problem gets out of scale very quickly. We’re talking about a dynamic environment where things are constantly changing in terms of your buyer landscape, the technologies they're using, and the supplier itself is changing constantly in different dimensions, so then maintaining data across those different systems consistently, in the manual fashion, essentially becomes unsustainable.”

TEALBOOK

According to Liwanag, it's about the ability to maintain accurate records over time: “That's really the big data problem and we call it portal fatigue from the supplier perspective, in the sense that they're just inundated with forms,” he said. The data foundation and benefits to CPOs Within the walls of TealBook, its data foundation is vital. The company has set up the data foundation to be perfect for the needs of chief procurement officers (CPOs). The data points alone do not have a significant value until combined into one global view, which drives high-value insights that CPOs can use to build better sourcing strategies. “For CPOs, their mandate is often savings. So with the data foundation, they have the ability to extract and integrate information, and data from multiple poll systems, that they may have within their technology environment to execute various processes. By leveraging TealBook and merging that information with our data set, they can drive additional insights that they weren't able to do previously. The data foundation integrates these silos of information within typically large technology environments and drives these cross-system insights through an enterprise view,” said Liwanag.

Year founded

136

Number of employees

TITLE: CTO INDUSTRY: SUPPLY CHAIN LOCATION: TORONTO, CANADA

EXECUTIVE BIO

2014

ARNOLD LIWANAG

Arnold Liwanag joined TealBook as the new Chief Technology Officer, adding an impressive background to TealBook’s C-suite. Arnold brings deep supply chain industry knowledge to enable TealBook’s mission of AI-powered supplier data and intelligence. In prior roles, he led the Artificial Strategy and Transformation practice at PwC/ Strategy&, and has also held technical leadership positions at Scale AI, Hewlett Packard and Sybase. He is a talented and coveted speaker at industry events that include CogX, Elevate Toronto and AI4. Most recently, Arnold served as the CTO at IVADO Labs, where he served as the authority on AI for the company. Arnold has the technical depth, experience, skills and understanding of supply chain issues to position TealBook as the only supplier data foundation that powers the digital enterprise.

supplychaindigital.com

161

TEALBOOK

“ People change, situations change, information changes. So you can see how that problem gets out of scale very quickly” ARNOLD LIWANAG CTO, TEALBOOK

TealBook’s singular centralised ‘source of truth’ provides CPOs with an excellent opportunity to get a global view within their enterprises, and even within different departments and divisions. TealBook also possesses a super set of information on supplier data that it can inject and merge with internal operational system data sets, further enhancing systems that CPOs are already invested in. TealBook in the procurement ecosystem According to Liwanag, procurement, as a function in an organisation, has been transformed from being more cost-centreoriented to now being innovation-driven, guiding or driving transformation within the business in a more proactive sense. The scope of impact that a modern procurement function has on the organisation is massive. “The amount of spend that procurement is responsible for is enormous. And often it can run up in the billions. The expectation is now to drive innovation with the supplier 162

April 2022

base, using data as the foundation for being able to do that. A very important trend and it’s what we're bringing to the table for procurement leaders,” said Liwanag. He added that outside of the portal approach, which is the typical model that a lot of technology players in the procurement space use, TealBook also uses AI methods and engineering techniques to autonomously collect a lot of that information, from public, private, and proprietary sources. “We're very strategic and creative about how we apply these different methods. We aggregate, integrate, and normalise that data set into a strong source of truth. And then,

on the dissemination side or the distribution side through data foundation, we can ingest or push that information into the different technology environments for our client host. That way, they are getting accurate, realtime information on a consistent basis, as the supplier landscape changes and the client changes as well,” he added.

Download our 2021 Global Supply Chain Agility Report

Important considerations for procurement leaders Liwanag insists that the most important quality for an enterprise procurement leader is a data-first mindset. Even outside of procurement, he believes this is the trend supplychaindigital.com

163

“ The expectation is now to drive innovation with the supplier base, using data as the foundation for being able to do that” ARNOLD LIWANAG CTO, TEALBOOK

164

April 2022

to help make intelligent decisions for the company, or for the strategy. “Having reliable, trusted information at their fingertips and feeding that into important decisions and processes that procurement leaders are faced with every day, to make mission-critical decisions or activities, ensures these are executed effectively and with the quality that they want. Without good data, you can't make good decisions and without good decisions, you can't be highly competitive in the space that you're trying to compete in,” he said.

TEALBOOK

Agile may be a buzzword, according to Liwanag, but he says the theme or the principles behind agile are very relevant in a highly dynamic world, especially when there are major disruptions: “One method to become more agile is to not only maintain and maximise good relationships with existing suppliers, but also to tap into insights from a broader supplier network to maintain agility as things change,” said Liwanag. Liwanag insists there will always be extraneous factors contributing to the changing landscape. This forces companies to understand who they need to work with and how they need to work with them. “I call that the extended enterprise, which these days is critical to enabling that agility,” he said.

“ Without good data, you can't make good decisions and without good decisions, you can't be highly competitive in the space that you're trying to compete in” ARNOLD LIWANAG CTO, TEALBOOK

TealBook CTO Arnold Liwanag discusses what’s happening in technology and digital transformation within the procurement space

supplychaindigital.com

165

TEALBOOK

“ The mandate for me is to really strengthen and scale what we have” ARNOLD LIWANAG CTO, TEALBOOK

166

April 2022

A highly innovative future with technology at the fulcrum Continuing the theme of the data foundation at TealBook, Liwanag is effervescent in his praise of the technology he has inherited and how that can transform the procurement space. “The mandate for me is to really strengthen and scale what we have. Then also layer in additional innovations to really drive better outcomes in terms of data at scale. The ability to autonomously ingest

information from more unstructured sources”, he says, “which is a very difficult task, quite frankly, when you're doing it at scale.” As the TealBook client base grows, more people use the tools and more suppliers are integrated into its system, the level of scrutiny also continues to grow. “A lot of the decisions that we make from the technology roadmap are rooted in data quality. I’m always asking myself: ‘How can we ingest and disseminate information at scale, for numerous supply buyers and buyers, while retaining the quality of our information for our supplier base?’,” said Liwanag.

The CTO adds that TealBook is delivering valuable insights now, but these may be known as “targeted process enablement activities” in future. “If we become the trusted source for supplier information, at a global scale, with the types of insights and information we can glean from that data and provide for our various stakeholders, it will be unprecedented,” he said.

supplychaindigital.com

167

GUY'S AND ST THOMAS' NHS FOUNDATION TRUST

PROCUREMENT SHARED SERVICES ARE ESSENTIAL TO SUPPORT HEALTHCARE WRITTEN BY: TOM SWALLOW PRODUCED BY: GLEN WHITE

168

April 2022

supplychaindigital.com

169

GUY'S AND ST THOMAS' NHS FOUNDATION TRUST

David Lawson, CPO of Guy’s and St Thomas’ NHS Foundation Trust, highlights the challenges and opportunities of healthcare procurement shared services

he coronavirus pandemic took a struggling National Health Service (NHS) and imposed even further pressures on the organisation that was already stretched to its limits. One important lesson that COVID-19 taught us is that supply chain resilience is critical to maintaining services. The procurement shared service team played a key role to ensure the Trust maintained supply and supported other hospitals across the region, from setting up a 3D Print Farm and air freighting PPE from China to providing over one million items as mutual aid to over 40 healthcare organisations. The organisation’s procurement team, comprised of around 200 employees, is responsible for sourcing, systems, and supply chain operations across four NHS Trusts with responsibility for over £500mn direct spend. With just over 20 years at the organisation, David Lawson, Chief Procurement Officer at the Trust divulged the developments in the organisation’s procurement strategy throughout the pandemic and his team’s contribution to procurement programmes and initiatives. Leading procurement strategy to streamline healthcare Over the past few years, Guy’s and St Thomas’ has worked to transform procurement and supply chain from

170

April 2022

Example of an image caption supplychaindigital.com

171

Procurement shared services are essential to support healthcare

“ The challenge for the NHS was to try and return back to a business as usual footing” DAVID LAWSON

CHIEF PROCUREMENT OFFICER, GUY’S AND ST THOMAS’ NHS FOUNDATION TRUST

deployment, the largest implementation of automated inventory management systems in Europe to leading major complex commercial initiatives. Procurement and supply chain is critical to the day-to-day running of healthcare services. In 2021 for example, the team led the re-procurement of Pathology Services across South East London, covering a patient population of two million, processing over 35 million tests per year, and 172

April 2022

with an annual spend of £135mn. The new 15-year contract worth £2bn involved a major service transformation with the consolidation of 70% of test activity from four hospital sites into a new pathology hub together with the adoption of new digital systems. Lawson commented that “it would be difficult to imagine a more complex procurement.” He explains: “You had an incumbent joint venture supplier that the two Trusts — Guy’s and St Thomas’ and King’s College Hospital — part-owned under a joint venture structure, you had a major service transformation in terms of service consolidation, and you had a mission-critical service which touched almost every patient that interfaced with the local health system from GP Surgery to Acute Hospitals.”

GUY'S AND ST THOMAS' NHS FOUNDATION TRUST

DAVID LAWSON TITLE: CHIEF PROCUREMENT OFFICER INDUSTRY: HEALTHCARE LOCATION: LONDON, UK

EXECUTIVE BIO

Understanding the criticality of the process and the involvement of procurement, Lawson set about leading his team to streamline proceedings, which, through competitive dialogue between bidders, led to a change in supplier and a novel “buy-out buy-in” approach into the Joint Venture to avoid the need to TUPE transfer over 1,500 staff and ensure a smooth service transition. Lawson highlights the three main challenges of the process, which were stakeholder engagement to achieve agreement on the new operating model, ensuring robust bids despite gaps in key data sets, and despite the complexity and scale of the procurement, keeping the evaluation simple and manageable.

Procurement lead for Guy’s and St Thomas’ since 2001 and procurement shared service including three other NHS Trusts. Double winner of the Supply Chain Excellence Award for Supply Chain Innovation (2008) and Urban Logistics (2021) and led the deployment of the largest implementation of automated inventory systems in Europe (2009) and establishment of an off-site supply chain hub (2019). Led the procurement for the £2bn South East London Pathology Transformation awarded in 2020 and the £10bn NHS England Increasing Capacity Framework awarded last year. Member of the GS1 Health Advisory Board. Accredited at Senior Commercial Specialist level in 2021 by the Government Commercial Function.

Connected thinking. What does it mean and why is it vital for your supply chain? ‘Connected thinking’ is working hand in hand with customers to help them join up their business areas, simplify their buying processes and maximise the impact on their sustainability goals.

Banner has the expertise to innovate, the scale to facilitate and the drive to collaborate. Connected thinking. Consolidated supply. Welcome to Banner.

Connect with Banner Click here

Make the connection between supply chain and sustainability Esther Murdock and Isabel Spence of Banner highlight shared values with the SmartTogether consortium and the Guy’s and St Thomas’ procurement partnership Guy’s and St Thomas’ NHS Foundation Trust has chosen Banner as a key supplier for their SmartTogether procurement initiative. As the UK’s largest provider of business-critical supplies and services, Banner provides cleaning, catering and PPE supplies, furniture, printed goods, technology and Managed Print Services to organisations across the private and public sectors. To gauge why the NHS was so keen to partner with Banner, we spoke to its Merchandising and Marketing Director, Isabel Spence, and Esther Murdock, Public Sector Sales Director. “We started with an official tender process, which was then followed with the award of the contract to Banner for office products and electronic office supplies.” “We’re now assessing a new pilot programme to

find ways to help the SmartTogether team with a managed procurement service that addresses contract leakage and any in scope expenditure within that. This provides a compliant supply route whilst also reducing the carbon footprint of Guy’s and St Thomas’ and other participating Trusts”, Murdock said. Connected thinking is the key to success “Our aim is to build strong and effective relationships by connecting with suppliers, colleagues and customers who have high standards and share our values,” says Murdock. “In the future, we’re going to see a greater expansion into partnerships, consolidation of supply and into a digitally enabled work life,” Spence says. “We are supporting customers and innovating with smart solutions to solve the business challenges that our customers face.” Murdock closes: “Evidenced by the work with Guy’s and St Thomas’, our customers, suppliers, and Banner are on a journey of reimagining how we do business. In this post-pandemic era, we are becoming more and more of an embedded solution for our customers and a lead service provider. It is this connected thinking that leads to improved sustainability and consolidated supply.”

Connect with Banner

GUY'S AND ST THOMAS' NHS FOUNDATION TRUST

GUY’S AND ST THOMAS’ Guy’s and St Thomas’ is one of the UK’s largest NHS Trusts. The procurement shared service, SmartTogether hosted by the Trust also supports neighbouring NHS Trusts, Lewisham and Greenwich, Great Ormond Street, South London and Maudsley, and later this year Oxleas.

176

April 2022

“ Our aim is very much to look for opportunities to innovate and scale it up across the shared service” DAVID LAWSON

CHIEF PROCUREMENT OFFICER, GUY’S AND ST THOMAS’ NHS FOUNDATION TRUST

The procurement team also recently led the £10bn Increasing Capacity Framework Agreement on behalf of NHS England to support reducing the current backlog of elective activity by making available independent sector capacity to the NHS. The new framework agreement replaced a capacity model in which block contracts were agreed upon with the main independent sector providers irrespective of whether the capacity was used or not. The framework was set up in under 12 weeks with over 100 providers listed. “While the rest of the NHS was tied up with treating COVID patients, the challenge for the NHS was to try and get to a point

of business as usual, in order to avoid or mitigate a growing backlog of elective cases. To secure funding from the treasury, there was a need to move away from direct awards and the previous capacity model to demonstrate value for money,” Lawson says. “So, I was asked to support NHS England setup. A new national framework where independent sector providers bid against all procedures that are available on the national tariff,” Lawson says. “My role was to set up the procurement strategy and work out a timetable to deliver the framework within quite a short period of time — within about 12 weeks — and make that ready for the new calendar year in January when the existing block contracts were due to expire.” SmartTogether transforms the NHS with access to procurement and supply chain expertise When it comes to procurement in the NHS, the siloed nature of its operations has presented weaknesses over the years due to the lack of scale and investment. Five years ago, the SmartTogether shared service was established to scale up both procurement and supply chain capacity and capability. “It was very much formed on the back of the hospitals, around us asking for help supplychaindigital.com

177

Apogee Managed Services and Solutions for Healthcare What Apogee can provide your healthcare organisation: Optimise infrastructure

With the right mix of devices, you can balance cost and productivity.

Manage environment

With Apogee’s expertise, you can easily support and maintain your hardware fleet at optimum efficiency for your ‘always on’ infrastructure.

Enhance workflow

Automate many paper-intensive workflows with Apogee’s workflow solutions.

L EAR N MORE

Apogee: enabling NHS healthcare supply chain efficiency Discussing the contractual benefits for Guy’s and St Thomas’ NHS Foundation Trust, Matthew Hale provides details of Apogee’s partnership in healthcare Apogee Corporation, an HP company, provides managed workplace and print services to the public sector and wider corporate healthcare environments. Its partnership with the Trust allows Apogee to supply, monitor, and maintain NHS printers and related machines to minimise component stock levels and ensure print machines work at their optimum. Creating a regular and cost-effective print supply “We were able to achieve the savings that we’ve delivered to Guy’s and St Thomas’ through a due diligence project management programme where we have looked at their current infrastructure,” says Matthew Hale, Regional Sales Manager for Healthcare at Apogee. In analysing the Trust’s technology ecosystem, Apogee is “able to design an optimal solution based on their current requirements. This led us to be able to reduce the number of devices and the amount of volume going through the account that, in turn, drives out the contractual savings.” “We take that headache away from IT departments because every device

that will sit within the Trust, ranging from a single function desktop printer to a print room device, will be managed and supported by Apogee from top to bottom.” The process of procuring managed services As a subsidiary of HP, the corporation leverages its digital capabilities to respond quickly to the needs of its clients and, in the case of Guy’s and St Thomas’, alleviate any unnecessary strain on the workforce. “We’re able to predict what that carbon efficiency gain will be, by the nature of the auditing that we’ve done,” Hale says. “With the redesign process that we went through, where we’ve rationalised that amount of machines down, we can figure out — based on data and kilowatts of energy — how much that fleet will cost to run over a three to five year period,” Hale explains. “Because we’re underpinning the fleet with environmentally friendly devices from the HP range, it allows us to achieve even more beneficial carbon savings for the trust as well.”

L E A RN M O RE

“ In response to the request for help, we decided to expand the team and create SmartTogether” DAVID LAWSON

CHIEF PROCUREMENT OFFICER, GUY’S AND ST THOMAS’ NHS FOUNDATION TRUST

and support to transform the procurement service,” Lawson says. “In response to the request for help, we expanded the team and created SmartTogether.” SmartTogether was able to apply common performance standards for order management, inventory management, and CIP delivery. In the first year of Lewisham and Great Ormond Street joining the shared service, CIP delivery increased five-fold. Lawson explains how this helps improve procurement: “We have a scorecard with key metrics and we compare each of the member trusts against national benchmarks, as well as benchmarks within the shared service to drive that performance.” He also spoke about some of the resulting effects of SmartTogether: “We're seeing process improvement, expansion of inventory management systems, and cost improvement delivery as well. So we've been able to influence more spend.” Channelling NHS contracts through select strategic partners Without its partner organisations, the SmartTogether service would not have been as well-received as the team has experienced. The organisation works closely with selected strategic partnerships 180

April 2022

to encourage efficiency and more sustainable operations across its network of healthcare services. SmartTogether partners with Apogee, an HP company specialising in print services, to funnel its printing resources and technology solutions through the company, which supports all the member Trusts of the shared service. Partnering with Apogee resulted in an organisation-wide revamp of its printers, creating an ecosystem of manageable and more sustainable machines, and also allowed SmartTogether to leverage Apogee’s managed print services at scale. Lawson explains how the Trust has negotiated better solutions across all operations. “It means that we've been able to negotiate better technology and better processes as well,” he says.

GUY'S AND ST THOMAS' NHS FOUNDATION TRUST

“So, from a sustainability perspective, benefits around energy efficiency, and from a cost perspective, double-digit percentage savings in terms of having a larger single contract, a multi-year contract and developing a partnership with Apogee going forward.” Following this, Lawson delves into another strategic partnership as he talks about some of the challenges that the Trust faces in terms of risk management, particularly in its supply chain, which is a critical phase in ensuring fast and reliable patient care. CEVA Logistics works with Guy’s and St Thomas’ to manage its offsite Supply Chain Hub: a necessary response to the coronavirus pandemic that supported deliveries to the hospital and supported the wider London Region. To help gauge the scale of the task, Lawson says: “We

previously had over 40,000 trucks arriving into the two Trust campus sites, which equated to a truck delivery hitting one of our loading bays every three minutes.” While the offsite Supply Chain Hub, based in Dartford, was primarily a response to COVID-19, the organisation has now set up an in-house wholesaler within the facility, a process that was implemented based on new insights from the pandemic. “For just over 1,000 high-risk product lines, we hold about a month’s worth of inventory to enable a same-day delivery service to over 50 Main Theatres,” says Lawson. The logistics firm is also working to support the Trusts sustainability strategy with the adoption of bio-fuel and electric vehicles for bulk consolidated deliveries, together with a pilot of a river cargo service supplychaindigital.com

181

Safe, Effective, Durable NEW OPCS CODE / TARIFF Rezum ™ Launch

NICE MTG

2017

2018

Rezum ™ MIB

bostonscientific.com

2020

MTFM

2019 2022

VBP PROJECT

2022 2023

Rezūm Water Vapour Therapy Powered by convective water vapour energy, the Rezūm System delivers targeted, controlled doses of the stored thermal energy in water vapour directly to the region of the prostate gland with the obstructive tissue causing the lower urinary tract symptoms secondary (LUTS) to benign prostatic hyperplasia (BPH).

“Following lots of great work between Boston scientific and NHS Supply Chain Tower 6, I’m pleased to report that we have had our first ever Value Based procurement methodology signed off, which shows how the Rezum Prostate treatment delivers nearly £1000 in value to the NHS every time it is used through reduced theatre time & length of stay for patients. This is a fundamental step for industry and NHS procurement as we seek to recognise and capture the benefit innovative technologies are bringing to the NHS.” -Lee Taylor, Clinical and Analytics programme lead, NHS Supply Chain

“Value based procurement in healthcare is regularly discussed as a way in which the healthcare system and industry can collaborate

to show the benefits of technology from both a patient and system perspective, quantifying measurable and tangible financial savings beyond price reduction. However, there are relatively few practical examples. With the Rezum value based case study, undertaken at Guys and St Thomas’, Boston Scientific were delighted to collaborate on a pilot to treat Benign Prostatic Hyperplasia patients with Rezum, to prove that our claims are not just aspirational but demonstrate tangible benefit to the system and patients. We showed improved efficiency and outcomes, which released much needed capacity in both theatre and realisable bed stay” – Stephen Sutcliffe, Head of Commercial Partnerships, Boston Scientific

NHS England MedTech Funding Mandate 2022/23 “The MedTech Funding Mandate is an NHS Long Term Plan commitment to give patients access to selected NICE-approved cost-saving devices diagnostics and digital products more quickly.” Rezūm included on the 2022/23 MedTech Funding Mandate policy as a NICE recommended cost saving alternative compared to standard treatments such as TURP.

Learn more

NHS VBP Case study

GUY'S AND ST THOMAS' NHS FOUNDATION TRUST

“ We compare each of the member trusts against national benchmarks, as well as benchmarks within the shared service to drive performance” DAVID LAWSON

CHIEF PROCUREMENT OFFICER, GUY’S AND ST THOMAS’ NHS FOUNDATION TRUST

for rapid parcel deliveries from the Supply Chain Hub at Dartford into Guy’s Hospital via Butler’s Wharf. The Supply Chain Hub is also being used to support current work to provide urgent medical supplies into Ukraine. Working in partnership with the Ukrainian Medical Association the hub has acted as a staging point to ship deliveries into Lviv and Kyiv hospitals. 184

April 2022

Sustainable sourcing of products and procuring high-end medical devices One of the themes that could be picked out from the SmartTogether service is the commitment to core values and how this plays a critical role in sourcing goods and, ultimately, finding suppliers with similar core values. For such large-scale operations, the Trust has begun to select products more carefully. A prime example of this can be

seen through its partnership with Banner, an expert provider of workplace supplies, as the organisation focuses a lot of its attention on its environmental, social, and governance (ESG) impacts. Lawson further explains the importance of social value when it comes to engaging with suppliers: “When we carried out the tender process, we weighted social value at 20%. So we weighted it quite high and

set up some specific requirements from a sustainability perspective.” He continues: “We pulled together the different sustainability managers from each trust to set out the standards from an environmental perspective in terms of product, but also in terms of delivery model.” Ultimately, this process is governed by its partner organisation’s ability to provide transparency, which is something the Trust is also aiming for with Boston Scientific, a leading global provider of medical devices. “We buy a wide range of their devices across a number of clinical settings,” says Lawson. “Boston is an example of a medical device company that we're trying to establish a strategic partnership with and that's looking at different elements or different initiatives. This really sums up the core activities of Guy’s and St Thomas’ that we can expect to see over the next few years. As a provider of local healthcare services with specialist capabilities required by the nation, the Trust will continue to develop the way it operates to improve patient care. The coronavirus pandemic has highlighted some of the key areas in which the organisation must innovate to meet the demands of an evergrowing population, strengthening its strategic partnerships and streamlining procurement and supply chain activities to ensure that patients receive what they need when they need it. “PostCOVID, we’re now trying to learn from the experience of COVID-19 and understand the benefits in the sense of being able to make changes for the good and to use that as the catalyst for more change.”

supplychaindigital.com

185

How to build autonomous and sustainable supply chains WRITTEN BY: SEAN ASHCROFT PRODUCED BY: GLEN WHITE 186

April 2022

supplychaindigital.com

187

Glenn Steinberg shares insight into how EY teams are building the next generation of resilient, sustainable and autonomous supply chains

he COVID-19 pandemic outbreak has forever rewritten the rulebook for the global supply-and-demand economy, a delicate ecosystem that, until early 2020, was predicated on efficiency and productivity above all else. Every industry has had to come to terms with titanic shifts during the pandemic: finance now faces a touch-and-go cashless future, while retail has become omnichannel and next-day-delivery by default. Underpinning each of these pivots is the supply chain, where the only constant is adaptation. Ask any chief supply chain officer (CSCO) how the pandemic has impacted their day-to-day life and, unprecedented demand aside, they’ll tell you it’s been largely business as usual, but with a significant twist. “What’s interesting is that the pandemic hasn’t necessarily created any new challenges for supply chains; it’s just magnified the problems that already existed,” says Glenn A. Steinberg, EY Global Supply Chain Leader. “In the US, for example, some estimates say we are short by about 80,000 truck drivers at this time. But three years ago, we were also short, just by about 61,000.” Adaptation has been a career-defining concept for Steinberg, a former executive at GE, IBM and another Big Four who for more than 30 years has helped organizations evolve and thrive throughout periods of boom and bust.

188

April 2022

Example of an image caption supplychaindigital.com

189

“If you want to be successful in this industry, you have to have a thirst for learning – and that doesn’t end. Just continually stay out of your comfort zone,” he says. “If I look back on my career, all the critical turning points came when I got out of my comfort zone and took on something new. From the early days of process and strategy, to the rise of digital and ERP [enterprise resource planning] implementation, I still leverage those learnings, 20 years later.” It is a mindset and lifestyle that Steinberg fully embraces, and shares with thousands of professionals and students each year. He is a frequent and in-demand guest lecturer to MBA students at Columbia University. In conjunction with Columbia Business School, he helps lead a quarterly roundtable for CSCOs to share insights and experiences of the biggest issues they face, from global tax and tariffs to 190

April 2022

sustainability, digital supply chain and the future of work. He also sits on the advisory board of Columbia Business School’s W. Edwards Deming Center for Quality, Productivity, and Competitiveness, whose mission is to train the next generation of managers, upskill the senior executives of today and support vital research. Steinberg’s commitment to learning and sharing knowledge have also earned him a reputation as a trusted and valued advisor to the world’s biggest economies. When the pandemic broadsided governments around the world, Steinberg and his team were contacted by governments in Germany, the UK, the US and Australia. The assistance provided by Steinberg and EY teams were vital in one of the most acute periods of disruption in living memory.

“ WE HAVE SELFDRIVING CARS, WHERE PEOPLE’S LIVES ARE AT STAKE. THERE’S NO REASON WE CAN’T HAVE AN AUTONOMOUS AND SELF-ORGANIZING SUPPLY CHAIN” GLENN STEINBERG

GLOBAL SUPPLY CHAIN LEADER, EY

Today, Steinberg leads more than 5,000 supply chain consultants across the globe, guiding clients by offering supply chain strategy, procurement, manufacturing, logistics and fulfillment, as well as planning and technology solutions. It is a broad remit that demands collaboration, and he’s proud of the “collegial” culture he’s helped shape to foster an environment where it flourishes. “We are focused on taking care of each other, collaborating and doing what’s right for our clients,” he says. “I want this to be a place where everyone can say, ‘I feel valued. I feel understood. I belong. I feel cared for and I can grow.’ This is the culture we have developed.” “EY teams at a global level are very focused on doing cutting-edge work with emerging technologies,” Steinberg adds. "We’re doing innovative engagements with AI and blockchain, digital twins and smart factories.” He adds that his team is “also doing some of the most purposeful work on the planet,” carrying out shop floor digital manufacturing work at a global pharmaceutical company delivering lifesaving medicines and providing a trusted data exchange platform and suite of applications that links all the key players in the cell and gene therapy ecosystem. “We are also working with one of the largest consumer products companies in the world, helping to decarbonize their value chain,” he adds. “This is really purposeful work that our people can be proud of.” As much of the world begins to rediscover some form of regular cadence, Steinberg and his global team are turning their focus to defining the future of supply chain. It is the start of an “investment supercycle,” Steinberg says, with enormous potential for positive change. supplychaindigital.com

191

ey.com/supplychain

What if operational disruptions became growth inspirations?

“Supply chain reinvention is in vogue. It’s an exciting time for C-suites and CSCOs. The multiplicity of demands that are facing CSCOs is incredible. It used to be enough just to balance cost, service, quality and speed. Now you need to add resilience and sustainability into your supply chain.” As global powers continue to vie for cultural and economic influence, tariffs, incentives and saber-rattling will continue to impact supply chains. Sustainability, visibility and resilience will come to define the new standard for supply chain excellence in a world where, Steinberg says, “something broader is at play.” “The world order is changing from a unipolar economic order to a multipolar one,” Steinberg continues. “This has a tremendous impact on the strategic architectures of the world’s supply chains. As a result, virtually every company in the world is re-evaluating their supply chain 194

April 2022

“ THE PANDEMIC HASN’T NECESSARILY CREATED ANY NEW CHALLENGES FOR SUPPLY CHAINS; IT’S JUST MAGNIFIED THE PROBLEMS THAT ALREADY EXISTED” GLENN STEINBERG

GLOBAL SUPPLY CHAIN LEADER, EY

GLENN STEINBERG TITLE: GLOBAL SUPPLY CHAIN LEADER INDUSTRY: CONSULTING

EXECUTIVE BIO

LOCATION: UNITED STATES Glenn serves as EY Global Supply Chain and Operations Leader. In his role, he helps drive high-impact strategies and business execution across the Fortune 500. He is a seasoned professional with extensive supply chain and operations experience. Prior to joining EY, he led many supply chain transformations in several leadership roles. He received an MBA in Finance and Operations Management from Columbia University and an Electrical Engineering degree from Union College. How Glenn is building a better working world “I am focused on helping clients and internal teams navigate complexity with confidence. I am purposefully creating a safe place where our people can ask questions and collaborate – where our people become business consultants moving beyond functional professionals. I am supporting a new generation of leader equipped with digital competencies and focused on innovation.”

footprint, determining where best to place their physical assets such as manufacturing facilities, warehouses and more.” Five key themes for resilient supply chains “Resilience is a concept that is multifaceted, with most people not understanding how broad and deep it really is,” he says. “Endto-end visibility is foundational to a resilient supply chain, with agility built into the extended chain to enable action.” Steinberg says five key themes of resilience have emerged in the course of stress testing clients’ supply chains to uncover both vulnerability and opportunity. • Embedding end-to-end visibility, by leveraging technologies such as internet of things, digital twins, simulation software, analytics, AI (including machine learning) and alerts for risk monitoring. • Creating agile networks, by re-evaluating the geographical and strategic architecture of the supply chain. “It is a simple question to ask what should be local, regional or global, but in a complex partner ecosystem, reconciling a network of warehouses, manufacturing plants, logistics, procurement and the other pillars of supply chain is never easy.” • Securing alternative sources of supply. “This means not only spreading your bets among additional suppliers, but also including diversity, equity and inclusiveness (DEI) commitments in your sourcing efforts.” • Developing a resilient workforce “by preparing employees to have the skills required in the next five years and embedding a problem-solving mindset into the ways of working right down to the shop floor machine operators.” 196

April 2022

• Building a trusted, secure supply network. “In an era where everything is interconnected by technology, cybersecurity is paramount if a supply chain is going to be resilient.” Steinberg’s other focus is supply chain sustainability, and he says innovation around this important topic goes hand in hand with the fundamentals of resilient supply chains. He says: “A resilient supply chain requires that you embed end-to-end visibility, simulation and risk monitoring into your business, while a sustainable supply chain requires traceability, visibility and disclosure. These are two different, but related, topics that are being worked on in earnest by companies across the globe. Similarly, resilience requires that a company secure alternative sources of supply to be ready for

the next disruption, while sustainable supply chain management requires sustainable and diverse sourcing strategies.” Supply chain in the C-suite The final major post-pandemic shift in supply chain is the rise of the CSCO and the elevation of supply chain as a constant boardroom agenda item. Some draw parallels to the rise of the chief information officer in the mid-2000s: once a nice-to-have advantage that is now an imperative skill set for every growing business. “The best CEOs are fully versed in the importance of technology,” Steinberg says. “They have to stay abreast of it as it’s moving very fast, and, otherwise, they can miss a pivot and easily be disrupted. Now CEOs, frankly, need to understand supply chains as well. It used to be a cost of doing business, but now it’s in the boardroom, and if you do it right,

it can be a competitive advantage and a revenue growth driver. For example, think about the largest online retailer, they can get you the product the next day, maybe even the same day. That’s all about using the supply chain as an engine for growth by quickly meeting customer needs. That is a differential competitive advantage.” Supply chain expertise can also come from sources beyond your company’s four walls, Steinberg points out, through a partner ecosystem where companies can collaborate and gain scale by accessing the talent of thousands of talented supply chain professionals globally. This, he says, is why the EY organization collaborates with best-of-breed innovators: industry solutions providers such as SAP and Blue Yonder, and technology giants like Microsoft. supplychaindigital.com

197

ey.com/supplychain

What if resiliency isn’t about withstanding today but envisioning tomorrow?

“ SUPPLY CHAINS ARE HEADED TOWARDS DIGITALLY NETWORKED ECOSYSTEMS WITH SHARED DATA IN THE CLOUD” GLENN STEINBERG

GLOBAL SUPPLY CHAIN LEADER, EY

Typical of this spirit of collaboration is the EY teams collaboration with Nottingham-Spirk, a Cleveland, Ohio, innovation specialist that acts as its supply chain innovation hub. It has a center to demonstrate how its own technologies and EY assets work together to solve client business problems. “But I have to say, above all in the supply chain space, Proctor & Gamble is a very important collaborator for us,” Steinberg says. “They are annually rated one of the top five supply chains in the industry by leading analysts. We formed a global arrangement with P&G, so while our competitors can tell you what great looks like, we can show you what great looks like. “We bring EY clients to P&G sites; we walk the factory and talk to the machine operators. We can embed P&G leaders on our projects, and we have access to their IP [intellectual property]. It’s been wildly successful in helping EY clients see into the future and what the art of the possible really is.”

Where is this all headed? Which leads Steinberg to the question he’s asked most often by clients: what is possible in the future, and where is this all headed? “There’s all this disruption,” he says. “We’ve got geopolitics shaping supply chains for years to come. We’ve got industry 4.0, and the interconnected society we’re living in. Consumer buying patterns are uneven and shifting, providing the opportunity for some companies to tap into analyzing realtime data to match supply and demand. And there is disruption from events ranging from weather to global semiconductor shortages. It is no wonder why CSCOs and the C-suite want to know how all these things will converge.” EY teams research points to the rise of digital and fully autonomous supply chains. EY teams researchers surveyed 500 seniorlevel executives at organizations of more than US$1b in size. One key finding is that

supplychaindigital.com

199

2025 will be the year mostly autonomous supply chains will begin to emerge to replace the hybrid processes common today. “We’re already on a path to an autonomous future. We have selfdriving cars, where people’s lives are at stake. There’s no reason we can’t have an autonomous and self-organizing supply chain. In the end, it’s just about mastering the power of data.” It’s an exciting future, and a journey that EY clients are keen to embark upon – and for good reason. “We’re already doing projects to help clients get to their future state, to show them what the roadmap for a digitally networked and autonomous supply chain looks like. Consider this: today, a change in customer demand has to work its way linearly back through the supply chain to get to the OEM [original equipment manufacturer], the supplier, to the supplier’s supplier, all through the tiers. That could take months before people change their production plans. “Supply chains are headed towards digitally networked ecosystems with shared data in the cloud,” he adds. “This way, everyone can see what’s happening now, immediately adjust to real-time events and even predict what happens next. Finally, we have all the tools and technologies at our fingertips to make this a reality. There has never been a better time to be a supply chain professional than right now.” The views reflected in this article are the views of the author and do not necessarily reflect the views of the global EY organization or its member firms.

200

April 2022

“ SUPPLY CHAIN REINVENTION IS IN VOGUE. IT’S AN EXCITING TIME FOR C-SUITES AND CSCOs” GLENN STEINBERG

GLOBAL SUPPLY CHAIN LEADER, EY

supplychaindigital.com

201

202

April 2022

WRITTEN BY: GEORGIA WILSON

PRODUCED BY: MIKE SADR

supplychaindigital.com

203

Gary Levitan, Global Head of Procurement, Sourcing and Supply Chain, WeWork on why the time is now for flexible working and the need for procurement talent

n the wake of the pandemic, organisations are looking for more flexibility. The Great Resignation has begun: according to US Bureau Of Labor Statistics, 4.3 million people left their jobs in December 2021 in the US alone. In 2021, many employees began to rethink their relationship with employment, chasing higher wages, better work-life balance, better childcare, better safety and more flexibility. Gary Levitan, Global Head of Procurement, Sourcing and Supply Chain at WeWork, says that the pandemic has increased its appeal as a flexible working space and solutions provider.

204

April 2022

WEWORK

WeWork, 6001 Cass Avenue Detroit supplychaindigital.com

205

WEWORK

“ Our vision is to provide flexible office solutions that better people and the environment” GARY LEVITAN

GLOBAL HEAD OF PROCUREMENT, WEWORK

206

April 2022

“Employees are demanding flexibility and that is our value proposition at WeWork,” he says. ”Our vision is to provide flexible office solutions that are better for people and the environment.” WeWork services are categorised under three pillars: Space-as-a-Service; WeWork Access; and WeWork Workplace Since he joined the business back in 2021, WeWork has become a public company.

WeWork, 312 Arizona Ave Santa Monica

GARY LEVITAN TITLE: GLOBAL HEAD OF PROCUREMENT INDUSTRY: REAL ESTATE

“We are becoming a more mature organisation,” says Levitan. “We are creating processes and systems that are allowing us to scale and grow. But it’s not an easy transition from being a startup to being a company able to expand products and solutions to meet growing demand, in order to secure our long-term viability. This process is a day to day reality at WeWork.”

EXECUTIVE BIO

LOCATION: NEW YORK, US Gary is a veteran Procurement leader with a deep passion for Corporate Social Responsibility and Sustainability. Gary is currently leading all procurement and supply chain efforts for WeWork with comprehensive responsibility for owning and managing spend across all Direct and Indirect categories globally. Gary has 15 + years’ experience efficiently and effectively enabling spend owners, business units, and functional partners to maximise the value they receive from suppliers to meet and exceed their objectives. Gary has been recognised as a respected leader and mentor of crossfunctional teams of senior sourcing and procurement professionals for recognisable global firms such as JPMorgan Chase, The Hudson’s Bay Company, and Saks Fifth Avenue.

WeWork, Friedrichstraße 76 Berlin (Below) WeWork, 419 Park Avenue New York (Right)

208

April 2022

WEWORK

“ We are creating processes and systems that are really allowing us to scale and grow” GARY LEVITAN

GLOBAL HEAD OF PROCUREMENT, WEWORK

Data’s role in organisational efficiency In his role, Levitan is not only responsible for managing the company’s global furniture-and-fixtures supply chain but also for procurement, category management, sourcing and spend control.

Of data, Levitan says: “It’s incredibly important. I know everybody says this, but we want to use data in a different way. Typically within procurement, sourcing and supply chain data is often underused in designing an efficient organisation and the employees needed to effectively run its operations.” He adds: “Typically, building a procurement organisation is based on spend under management. There are industry benchmarks that most chief procurement officers use to guide staffing needs. So for example, a common industry metric is that for every US$50mn that you manage, there are benchmarks to say that you need X amount of full-time employees, then on top of that, the complexity of the category dictates the level of experience but typically that is then the end of the data. The major weakness of this analysis is that supplychaindigital.com

209

WEWORK

it doesn’t take actual transactional volume, organisational nuance or product delivery into account resulting in a mismatch between bandwidth and headcount. “But employees that are not engaged, busy, or working towards a goal - even if you have the best culture, leaders and benefits, become complacent. People want to keep busy, feel valued, learn new things and then move on. So this traditional 210

April 2022

benchmarking method doesn’t really work.” Instead, Levitan is trying to incorporate into WeWork the practice of gaining as much ‘real world’ transactional data as possible. He says: “If you base the staffing plan of an organisation on this practice you are able to create volume levers in the future, balanced workloads, and airtight business cases for decision makers when you need to grow.”

WeWork, Carrera 7 Bogotá

WeWork: The time for flexible work environments is now

supplychaindigital.com

211

WEWORK

“ I realised that industry expertise and subject matter expertise is not as critical when it comes to category management as I used to think and is often a detriment” WeWork, 450 Lexington Ave New York

212

April 2022

GARY LEVITAN

GLOBAL HEAD OF PROCUREMENT, WEWORK

4K+

number of employees

700+ locations globally

150 cites

countries

590K+ physical memberships

45K+

All Access memberships *As of Dec 2021

WeWork, 155 West Street, Johannesburg

Category management: ‘It’s all about processes’ Throughout his career Levitan has been driven by different business strategies, many of which have fallen out of favour. “At the beginning of my career, category management was a function that very few understood. I led some very specific categories - including sustainability and renewable energy - but then I started to oversee more commodity-based

categories, such as OPEX consumables, which are products and services that support day-to-day business. It was then that I realised industry expertise and subject-matter expertise is not as key to category management as I once believed. Now, I actually think it can be detrimental,” says Levitan. He adds: “For example, I had stakeholders with the same subject-matter expertise as me, and that created friction supplychaindigital.com

213

WEWORK

because I was too focused on finding the perfect solution, instead of understanding their goals and delivering on their needs.” “But I learned that if you have a great end-to-end category management process, all you need to look for is talented, like-minded, eager, and passionate people. With the run on talent right now, this is more important than ever.” To this end, WeWork’s has a fivestep category-management toolset that allows Levitan to identify anybody with a desirable profile. “Simply filling out various templates, conducting market research, and putting that information into graphs, is a category strategy in itself,” he says. “This in turn organically develops expertise that wasn’t there before.” But the fact remains that - although the pandemic has raised the stock of procurement in boardrooms procurement and sourcing are not typical go-to college topics. “There is no educational framework for it,” says Levitan.

214

April 2022

“Partnerships are critical [...] by leveraging partnerships organisations stand a chance in mitigating risks” GARY LEVITAN

GLOBAL HEAD OF PROCUREMENT, WEWORK

WeWork, Nações Unidas, São Paulo supplychaindigital.com

215

WEWORK

WeWork, 123 Eagle Street Brisbane

216

April 2022

WEWORK

“It’s not something kids are typically passionate about. This means we are missing out on like-minded people with the right talent attributes. So we can help the industry by creating these opportunities for people who may not necessarily know about procurement, sourcing and category management.” How technology is changing procurement When it comes to technology in the procurement function, Levitan predicts there will be a shift in how technology is used in procurement. “I think we are going to move away from self-contained procurement and supply chain ecosystems to best-in-class technology providers for each portion of the end-to-end process. Complete supply chain ecosystems are notoriously difficult to deploy, because not every function in supply and procurement is necessarily deeply related or integrated, especially in certain matrixed organisations.” supplychaindigital.com

217

THE DIFFERENCE BETWEEN CATEGORY EXPERTISE, SOURCING EXPERTISE AND GENERALISTS Gary Levitan, Global Head of Procurement, Sourcing and Supply Chain at WeWork outlines the difference between the three: •

DID YOU KNOW...

•

218

•

Being a category expert is to be an industry subject matter expert. Whether it’s experience in buying, sourcing, or managing, being a category expert the person really owns the product. Sourcing expertise is less about specific industry expertise and more about having competitive process expertise. It’s about knowing how to find suppliers and how to rate and grade them. It is also about how to run an effective and competitive process, how to get stakeholders engaged, and how to make proper recommendations. A generalist is someone who can flex into different categories and situations. They have broad industry, category and process experience and an eye for value.

April 2022

WeWork, Designer Club, Seoul

WEWORK

But one tool to do all that can leave gaps in the functions. Rest assured, Levitan sees emerging technology such as smart contracts, AI-supported demand forecasting, long tail spend management software, and intake and approval workflow platforms filling the gaps for each of these functions in procurement and supply chain. When it comes to deploying any kind of technology, Levitan is a firm believer in looking before you leap. “You need to assess what is most important, then deploy best-in-class tools that serve your organisation best.” He also stresses that organisations must not forget about change management. “I have seen too many supply chain platforms fail because the change-management project plan was too light.” WeWork, 80 Strand Street Cape Town

WeWork and its partnerships “Partnerships are critical,” says Levitan. “It’s a bit of a cliché, especially in the procurement world. Our global supply chains are posing never-before-seen complexities and only by proactively leveraging true, collaborative partnerships do organisations stand any chance of mitigating these potentially existential risks.” Empire Office “Empire Office is an example of a partner who helps us buy furniture directly from multiple global manufacturers. Although our product is space, that space comes furnished with fixtures and technology, and we need to get those products to our customers and members on time,” says Levitan. “Our partnership with Empire allows us to deliver fully furnished space on time and on budget.” This partnership helps WeWork create clear communication and clear expectations on both sides, at a time when having a reciprocal relationship is more critical than ever. Cushman & Wakefield Cushman & Wakefield - a global commercial real estate services firm - believes in flexible office space as a viable option. They are invested in WeWork and the kind of service and amenities that it offers. They are going to be a valued collaborative partner going forward, especially since they have a lot of experience in large real-estate portfolios. There will be a lot of synergy between WeWork and Cushman & Wakefield.

supplychaindigital.com

219

Join Global Business Leaders at 2022’s must-attend expo.

2022

7th-8th September STREAMED & IN PERSON BUSINESS DESIGN CENTRE - LONDON

Sponsor

Supply Chain - April 2022

Articles inside

Timeline A potted history of packaged goods

Trailblazer Dennis Mullahy

Big Picture