The art of procurement with Frank Wadsworth, Managing Director and Chief Procurement Officer, Americas Division at Sumitomo Mitsui Banking Corporation DATAPROCUREMENT:DRIVEN THE SMBC STRATEGY Nutrabolt: Supply chain is the engine of business Supply Chain: It’s called the ‘value’ ‘chain’ for a reason MTN: DNAwithprocurementTransformingadigitalapproach Logistics: Logistics outsourcing is now mission critical September 2022 | supplychaindigital.com Sustainability: Being green is a mindset not a tech project, says Sheri Hinish Tech & AI: Industry 4.0 revolution,tech: or evolution?
Get tickets Sponsor opportunities THE FUTURE OF PROCUREMENTDIGITAL A BizClik Media Group Event: 3,000+ Participants 2 Days 2 Zones 60+ Speakers 12 - 13 OCT 2022 STREAMED & IN PERSON QEII CENTRE, LONDON
Join us at PROCUREMENT & SUPPLYCHAIN LIVE LONDON Get tickets Sponsor opportunities Showcase your values, products and services to your partners and customers at PROCUREMENT & SUPPLYCHAIN LIVE LONDON 2022. Brought to you by BizClik Media Group PROCUREMENT & SUPPLYCHAIN LIVE LONDON, the hybrid event held between 12th-13th October is broadcast live to the world and incorporates two zone areas of SupplyChain LIVE plus Procurement LIVE in to one event. With a comprehensive content programme featuring senior industry leaders and expert analysts, this is an opportunity to put yourself and your brand in front of key industry decision makers. From keynote addresses to lively roundtables, fireside discussions to topical presentations, Q&A sessions to 1-2-1 networking, the 2-day hybrid show is an essential deep dive into issues impacting the future of each industry today. Global giants and innovative startups will all find the perfect platform with direct access to an engaged and active audience. You can’t afford to miss this opportunity. See you on: 12 - 13 October 2022 Watch our 2021 Showreel
The SupplyChain Team JOIN THE COMMUNITY DANIELAPRODUCTIONEDITORIALSEANEDITOR-IN-CHIEFASHCROFTDIRECTORSCOTTBIRCHDIRECTORSGEORGIAALLENKIANICKOVÁPRODUCTIONMANAGERSPHILLINEVICENTEJANEARNETAMARIAGONZALEZCHEIFDESIGNOFFICERMATTJOHNSON CREATIVE TEAM OSCAR VIDEOSOPHIE-ANNHATHAWAYPINNELLHECTORPENROSESAMHUBBARDMIMIGUNNJUSTINSMITHREBEKAHBIRLESONJORDANWOODDANILOCARDOOSOCALLUMHOODPRODUCTIONMANAGERKIERANWAITE DIGITAL VIDEO PRODUCERS MARTA EUGEND ERNEST DE NEVE THOMAS EASTERFORD DREW CRAIGKAYLEIGHMARKETINGJOSEPHJIINGXIHARDMANWANGHANNAMANAGERSHOOTERPROJECTDIRECTORSMIKESADRKILLINGBACK MARKETING DIRECTOR JASON ANDIKA-SMITH MEDIA SALES DIRECTOR JAMES WHITE MANAGING DIRECTOR LEWIS VAUGHAN CHIEF OPERATIONS OFFICER STACYGLENCEONORMANWHITE
BRANDON RAEL
It’s called ‘value chain’ for a reason
Brandon Rael – Strategy & Operations Leader at IT services and consulting company, Capgemini, says that it’s vital for businesses to leverage supplier know-how as early as possible in the manufacturing process.
“Suppliers clearly understand their end customers and can provide innovative ideas about strategy, products, services, and business models.” Quite. I suspect we’ll be hearing a great deal more in the coming months about the crucial role collaboration has to play in helping businesses navigate such difficult times.
SUPPLYCHAIN DIGITAL MAGAZINE IS PUBLISHED BY © 2022 | ALL RIGHTS RESERVED supplychaindigital.com 5 FOREWORD
“There are clear advantages for businesses to leverage supplier capabilities, particularly during the design and conceptual phase of the innovation cycle,” he says.
know-howleveragebusinessesfortosupplierasearlyaspossibleinthemanufacturingprocess”
Given ‘supply chain’ is also commonly referred to as the ‘value chain’, this makes perfect sense.
STRATEGY & OPERATIONSCAPGEMINILEAD,
SEAN ASHCROFT sean.ashcroft@bizclikmedia.com
Tapping into supplier expertise and knowledge is becoming ever-more important for organisations who want competitive advantage in a time of uncertainty and disruption.
According to a recent McKinsey survey, the organisations that leverage supplier know-how for innovation purposes enjoy up to 10% more growth in earnings.
In this issue, we look at how organisations can maximise the value to be had from their suppliers. This is especially important in today’s uncertain, disruptionfilled world, with its greater reliance on innovation to keep things on track.
“It’s vital
SMBC: Data-Driven Procurement: The SMBC Strategy 24 Our UpfrontRegularSection: 10 Big Picture 12 The Brief 14 Timeline: A look at throughprocurementtheages 16 Trailblazer:SaulResnick 18 Five Minutes With: Mathew Elenjickal Nutrabolt: Supply chain is the engine at the heart of Nutrabolt 54 Supply Chain: It’s called the ‘value’ ‘chain’ for a reason 46 CONTENTS
MTN Transforming procurement with a digital DNA approach 78 Sustainability: Sustainability is a mindset not a tech project 90 Logistics: Logistics outsourcing is now mission critical 70 Tech & AI: Industry 4.0 tech: revolution, or evolution? 96
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BIG PICTURE
The world’s biggest beer festival Munich, Germany Munich’s Oktoberfest is the world’s biggest beer festival, with an estimated 6 million people descending on the city every year. Somewhat counterintuitively, though, Oktoberfest is staged in earlyDuringSeptember.therecord-breaking 2013 festival, attendees guzzled 7.7 million litres of beer. Each beer served must contain nothing but water, barley, hops, yeast, wheat and malt, and be brewed within the city limits ofTheMunich.event is a huge logistical challenge on another front, too. Each year, attendees eat an estimated 500,000 chickens, 115,000 pork sausages, and generate 1,000 tons of garbage.
10 September 2022
supplychaindigital.com 11
ADOPTING AI AT SCALE KEY TO SUPPLY CHAIN
TRUST WILL BE KEY TO SCM OF FUTURE, SAYS UST'S COLEHOWER
Supply chain management of future will require trust, says Jonathan Colehower of UST, with Blue Yonder's Wayne Snyder agreeing data sharing will be key. Shanghai in delays at LA and Long Beach Port in vessel calls, Buenos Aires project44
Port 78% Fall
SUCCESS - ACCENTURE
3% Drop
Source:
THE BRIEF “Data is everythingimportantexceptionallytowedo”FrankWadsworth Americas Division at Sumitomo Chief Procurement Officer, SMBC “Businesses are now more adept at using outsourced providers as a Milesdifferentiator”Lethbridge Director, Mergers and Acquisitions Consulting, PwC READ MORE “Supplier innovation helps shift optimisationmindsetprocurementthefromcosttoprofitimprovements”BrandonRael Strategy & Operations Leader Capgemini Invent READ MORE READ MORE The latest data from supply chain visibility specialist project44 details port congestion trends BY THE NUMBERS
EDITOR'S CHOICE READ MORE READ MORE 12 September 2022 195% Increase in dwell times in
Accenture report says that adopting AI at scale & making data central to supply chain operations is the route to resilient value chains in times of chaos.
RELATIONSSUPPLIER
Thames Water’s Director of Commercial and Procurement, David Wylie, tells Procurement & Supply Chain LIVE that supply disruption is making strong supplier relations “more vital than ever”.
supplychaindigital.com 13
FEDEX EXPRESS FedEx Express is setting up a new South China Operations Centre as part of its Asia Pacific Hub at Guangzhou Baiyun International Airport in China. FACTORIESSMART Industry 4.0 technology has made smart factories a prominent target for cyberattacks, according to a new report from multinational consulting company Capgemini. The report found that, in 2021, manufacturing overtook financial services as the most attacked sector. GOALSSUSTAINABILITYSME
Sheldon Mydat, CEO of supplier relations firm Suppeco, says that most SMEs lack the resources or motivation to act on sustainability issues such as Scope 3 emissions.
The report outlines further serious problems: As risks arise more frequently and with wider reach and urgency, CPOs lack the capacity to learn from past issues to prevent future disruptions causing similar issues. Amid continual disruptions, CPOs are unable to devise long-term innovative strategies, such as disruption-proof products investments in processes that provide a competitive edge
Shockproof Your Supply Chain for the New Age of Disruption – details how endless disruptions to global supply chains have left CPOs with insufficient time to recover in between and that many “are confusing risk mitigation with resilience”.
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CPOs 'confusing risk with resilience', says Gartner report A new Gartner report says too many chief procurement officers (CPOs) are endlessly firefighting day-to-day problems and challenges, at the cost of forward planning and risk Gartner’smitigation.report–
SEPWINNERSLOSERS
“Their ability to respond effectively is depleted,” Gartner says. “The cost of recovery is constantly increasing and CPOs’ focus is misdirected to solving the most immediate and simplest issues, time and again.”
The scribes of Ancient Egypt In the ancient world, scribes were people who copied documents. In Egypt, they were used to manage the supply of materials for building the great pyramids. Scribes recorded the volume of materials and workers required to complete the task, tracking orders through to fulfilment.
The Industrial Revolution marks the dawn of procurement as a trade in itself, with the creation of the rail network being a driving force. One of the earliest acknowledgements of procurement as a function comes in 1832, in a book called ‘The Economy of Machinery and Manufacturers’, by noted mathematician, philosopher, inventor and mechanical engineer Charles Babbage.
A3,000BClook at procurement through
14 September 2022 TIMELINE
World wars give rise to defence procurement Successive world wars witnessed the creation of a parallel procurement process: procurement.defenceCountries the world over rushed to source the raw materials, weapons, equipment, food and machinery necessary to fuel the war efforts of civilians and fighting forces. 1914 - 1945
Industrial Revolution sees procurement take shape
1800s
1960s
Pandemic and digitalisation Following the pandemic, procurement is now no longer seen as a cost-control centre, but a means for businesses to seek competitive advantage to defy supply disruption and keep products available. Modern-day procurement is driven by Industry 4.0 tech that offers end-to-end supply chain visibility.
present2019the ages
supplychaindigital.com
Procurement has come a long way since its origins in the ancient world
Procurement takes shape as a profession Approaching the mid-1960s, the concept of ‘materials management’ took hold on a wider scale. The practice of competitive bidding became embedded, and this gave rise to trained procurement professionals who began to establish the function’s status within businesses.
1980s
Supplier becomesmanagementestablished By the 1980s, procurement experienced an increase in supplier competition, allowing organisations to focus on supplier quality and importantstrategicsupplieritProcurementdependability.asweknowtodaytookshape,asmanagementandsourcingbecamefactors.
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JOB TITLE: CEO COMPANY: DHL CHAINSUPPLYUK&I
S aul Resnick recently assumed the role of Chief Executive at DHL Supply Chain, UK & Ireland, having moved from Australia, where he held a similar position for the ANZ region of DHL’s business. Resnick lauds DHL’s “supportive, encouraging culture”, feeling it to be a unique culture in the logistics industry, “where people look out for each other and support one another’s progression through theThebusiness”.startpoint of his journey towards the top of DHL came after he studied finance at university, after which he began his working life at shipping company Micor, from where he moved to logistic firm Exel, which was then acquired by DHL. UK & Australia ‘bring different DHL challenges’ He spent time as the GM and then VP of its Healthcare division, and, in 2014, took on the role of CEO of DHL’s Australia and New Zealand business, leading 4,000 colleagues through the pandemic, before his move to the UK. “Culturally, the two businesses are aligned,” he says, “but there are a few significant differences between the markets.”
ResnickSaulSaulResnick,recentlyappointedasCEO
TRAILBLAZER
DHL Supply Chain, UK & Ireland, on why logistics is one big happy family
He adds: “We’re focused on the longterm benefit, not just the short-term return. We’re accelerating our investment in gas trucks and plan to have 500 gas-powered vehicles operating across our fleet by 2025. These will deliver up to 80% reduction in carbonSustainabilityemissions.is just one of many challenges Resnick is helping DHL navigate.
“We’re finding innovative ways to do business differently to make the efficiencies necessary.” He adds: “My biggest hope for the future is that the UK&I team will grow and that we’ll have fun in the process. Ultimately, the more we grow, the more opportunities we’re able to offer our people.”
supplychaindigital.com
He says that leading a mature healthcare business in Australia also taught him that it’s possible to grow a business “even when you’re starting from a strong place”.
As for DHL UK&I's net-zero roadmap, Resick says this “is a major business priority” and that it is “very much aligned to our own customers’ ambitions”.
“There are many external events out of our control that are impacting our business,” he says, “so our focus is on building a resilient business.”
“My biggest hope for the future is the team will grow and we’ll have fun in the process”
“You just have to do things differently for the customers you already have,” he says. DHL ‘shares customers’ goals on sustainability’
As an example, he discusses the company’s ongoing investment in alternative-fuel vehicles, “which means we’re able to mitigate some of the rising fuel prices, as well as provide ourselves with a solid base to build our net-zero fleet”.
He also says that DHL is committed to “making every effort” not to pass on increasing costs directly to its customers.
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For one, he says, Australia’s population of 26 million is spread across a continent, and concentrated in two coastal areas, “while, in the UK, 67 million people live in a much smaller area, which presents very different supply chain challenges and opportunities”.
Resnick also points out that, in the UK, DHL is the top provider, “and a very mature business, compared to being a much younger business in Australia and NewHeZealand”.adds:“This meant that, in Australia, we were able to grow at around 15%, while in the UK, we already have significant market share – and it’s a competitive environment, so we need to look for lateral growth opportunities.” Resnick cut his teeth in DHL healthcare Resnick says his background in the healthcare market helps him in his current UK“Myrole.DHL healthcare background gives me a laser focus on process and quality control,” he says. “For customers in life sciences and healthcare, service levels have to be extremely high and the margin for error very low, so if you can deliver the same levels in a non-healthcare setting –treating every shipment as if it were a life-saving vaccine – you can be certain you’re holding yourself to the highest possible standards.”
I graduated from Northwestern with a Master’s in Industrial Engineering and Management Science. My first project was helping AB InBev optimise routing for its delivery trucks. Finding ways to solve such inefficiencies became my passion. After seven years working on supply chain issues at i2, and then two and a half years on supply chain products at Oracle, the time was right for a transformative logistics startup.
FourKites offers real-time visibility beyond transportation and into yards, warehouses, and stores, says Mathew Elenjickal.
»QEMATHEWLENJICKAL.TELLUSALITTLEOFYOURSELFANDFOURKITES
18 September 2022 FIVE MINUTES WITH...
Amazon had revolutionised the B2C customer experience, and I knew that kind of visibility did not exist on the B2B side. I launched FourKites to revolutionise supply chain management.
FourKites was the first company to apply SaaS technology to GPS-enabled electronic logging devices, enabling shippers to improve on-time delivery and optimise their supply chains based on actionable data and predictive intelligence. Today, we are focused on providing realtime and predictive visibility all along the endto-end supply chain, which extends beyond transportation into yards, warehouses, stores and beyond.
supplychaindigital.com 19
Q. WHAT HAS FUELLED FOURKITES' FAST GROWTH?
» Collaboration – both within and among supply chain organisations – can help companies eliminate waste, maximise profits and promote sustainability. The logistics industry has a long history of decentralisation – proprietary workflows, processes and systems that are largely unknown or unintelligible to outsiders. These workflow chokepoints can be overcome through shared systems that facilitate communication with supply chain networks, partners and stakeholders.Dataiscritical to effective supply chain collaboration. Without it, the best anyone can do is make an educated guess. For shippers that are under constant pressure to succeed, that’s simply not good enough. points
FIVE MINUTES WITH... “Our
20 September 2022
rapidFourKites'havedifferentiationoffuelledgrowth”
Q. HOW IMPORTANT IS COLLABORATION IN LOGISTICS?
» Our points of differentiation, the first of which is our network. The supply chain intelligence we provide is powered by a global network of quality, real-time data on a single platform. The second is our team. Real-time visibility will continue to grow and evolve. Users should feel confident that the people defining the product roadmap deeply understand use cases and pain points. The third point of differentiation is close collaboration with customers. By co-innovating alongside our customers, we’ve developed solutions that help large, global enterprises solve some of the most complex supply chain challenges they face. Co-innovation is even baked into our online customer community, where customers can request new features and product enhancements.
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» We help customers in four ways. First, we help them reduce costs. One of the largest meat producers in the US slashed their monthly detention costs by 22% within their first year of using FourKites. We also improve productivity by: giving up-to-the-minute insights that help dock workers understand which inventory is a priority; improving turn times for drivers and gate staff; and by pushing loadlevel data to all members of support, to drive time-to-value for every deal. We also increase customer satisfaction by helping suppliers exceed expectations and outperform their competitors. Finally, real-time visibility helps companies cut emissions. For example, Paul Avampato, Head of International Logistics at Henkel, uses FourKites data to understand better where there’s waste within the supply chain.
Q. HOW DOES FOURKITES HELP ITS CUSTOMERS?
Q. WHO INSPIRES YOU?
Q. BEST PIECE OF ADVICE EVER GIVEN?
supplychaindigital.com
» Too many to mention individually; I wouldn't be here without a lot of support along the way. But I have to namecheck my dad as an inspiration, because he used to run a small business.
» A couple of years into the business, one of my advisors encouraged me to pivot from founder-led sales to value-led sales. When you start a business, initially it’s all founder-led sales. You’re the main sales guy out there. The founder is doing the selling, and it tends to be feature-function sales because we’re all product-oriented. But, at some point, you have to transition from that into value-based selling. You need a professional team and the right leader to guide that transition.
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LEADERS2022 S•LEADER 2202•SREDAEL2202 DAEL•ERS 2022 • Creating Digital Communities TOP 100 LEADERS COMING SOON Join the Community Never miss an Issue! Discover the latest news and insights about Global Supply Chain
StrategyTheProcurement:Data-DrivenSMBC 24 September 2022 PRODUCED BY: SADRMIKE WRITTEN BY: ÖZSEVIMİLKHAN
supplychaindigital.com 25
26 September 2022 SMBC GROUP
“After finalising our target operating model towards the end of 2020, we hit the ground running in 2021, growing the procurement team, successfully implementing the Coupa platform, and standing up procurement operations for four of nine of our group companies,” says Wadsworth. “We are roughly one-year old as a procurement organisation following our first implementation, and I’m proud to say we’ve accomplished a significant amount in a short period of time. “We’ve onboarded more than 1,000 suppliers with 75% of fromparadigm–electronicallyinvoicessupplierprocessedasignificantshiftoneyear
Wadsworth’s experience includes responsibility for driving multi-milliondollar savings, improving process efficiencies, and reducing risk by identifying and establishing outsourcing, offshoring, and shared services opportunities. As Chief Procurement Officer for SMBC, Wadsworth is leading the development and implementation of a multi-year target operating model for the organisation to provide a centralised, strategic, and valuedriven procurement function that will foster the timely delivery of quality goods and services to the business.
“All things procurement’ with Frank Wadsworth, Managing Director and Chief Procurement Officer, Americas Division at Sumitomo Mitsui Banking Corporation”
F rank Wadsworth is a Managing Director and Chief Procurement Officer for the Americas Division at Sumitomo Mitsui Banking Corporation (SMBC). Frank has spent his career in financial services, having worked at some of the biggest names in banking: Morgan Stanley, Merrill Lynch, Bank of America, JPMorgan Chase, Bloomberg, and now at SMBC. Beginning his career in technology, Wadsworth gradually transitioned to assume a variety of vendor management leadership roles. Prior to joining SMBC, he led global supply chain operations for Bloomberg, while also establishing a third-party risk management programme for the firm, transforming a fragmented, reactive approach into a cohesive one. This role at Bloomberg was preceded by a position leading strategic vendor management for J.P. Morgan’s Investment Banking Division (IBD), as well as Procurement Professional Services for the bank globally, with several billion dollars of spend under management.
supplychaindigital.com 27
Our procurement practitioners provide a range of advisory and managed services, along with enabling Contact us for more information Achieve your company’s procurement vision with customised solutions
Outcome-driven companies like SMBC partner with WNS Denali to operationalise their procurement function: Business Unit Leader Alpar Kamber explains Alpar Kamber is Business Unit Leader of WNS Denali, the global business process management company he founded in 2008 and that is now under the umbrella of WNS Global Services. WNS Denali is a leading procurement solutions company providing procurement, strategic sourcing and supply chain services to 90+ global 1000 companies and offering consulting, source to contract execution, procurement operations, market intelligence, capability enablement, and digital solutions and services to procurement Bankingprofessionals.andfinancial services are a key sector for WNS Denali, where the conversation usually starts with a discussion around the client’s level of maturity in their procurement journey, the current state of the organisation, and where they want to take it over the outlook period. This is how the relationship with SumitomoMitsui Banking Corporation (SMBC) started. “SMBC is a great example of the value we can bring. They are in the midst of a digital transformation, and implementing a platform that will enable and bring more efficiency to procurement. “So we’re working with SMBC to enable digitalisation of their contracts and help them onboard suppliers with maximum efficiency. Also, we set up a help desk: there’s a lot of transactional work too. Though you want to automate as much as possible, you still need to put human checks in place to make sure that you can deal with exceptions!”
WNS Denali Links with SMBC to Digitalise its Procurement Ecosystem
This is the first phase of enabling digital and transactional procurement at SMBC. The next step is effectiveness: “Strategic thinking around category management, decision-making about which suppliers to work with, taking into account pricing and innovation trends, matching best-of-breed suppliers with the company’s requirements and deriving value from its thirdparty resources – these are among the essential considerations WNS Denali is helping SMBC with on its digital journey.” At the top of most of his clients’ concerns right now are cost and talent. Both of these challenges threaten the viability of the supply chain in ways WNS Denali’s services and technology can mitigate significantly. Learn more
“When I first joined SMBC in 2020, it was important to understand the existing supplier base and historical spend. A simple spend report by business and high-level spend categories was a manual and time-
30 September 2022 SMBC GROUP
“Separately, we’ve established a supplier spend analytics data lake with PowerBI dashboards that allows us to quickly and easily assess spend across multiple regions, businesses, and spend categories.”
“Data is everythingimportantexceptionallytowedo”
The importance of data to the procurement process “Data is exceptionally important to everything we do,” says Wadsworth. “As Peter Drucker, a leading management consultant and renowned author, once said, ‘you can’t manage what you can’t measure,’”
ago, when all invoices were processed manually. We’ve loaded more than 2,500 contracts into Coupa, with a steady number of new contracts authored and approved through Coupa and executed through DocuSign every day.”
intensive exercise, pulling data from six ERPs (Enterprise Resource Planning systems), ten general ledgers, filtering, rationalising the data, and, finally, producing a simple PPT spendAccesschart.”togood, accurate data in a timely way is critical to making informed business and purchasing decisions. Wadsworth says: “Given our long implementation runway with Coupa combined with the need to have quick and easy access to spend data across the regions, I partnered with Visionet Data Driven Procurement: The SMBC Strategy
FRANK SMBCCHIEFMANAGINGWADSWORTHDIRECTORANDPROCUREMENTOFFICER,AMERICASDIVISION
INDUSTRY: FINANCE LOCATION: SMBC GROUP
specialising in strategic vendor and risk management. Wadsworth is known for transforming business/ procurement operations and thirdparty supplier engagements to reduce risk, create value, and take out cost. Officer for SMBC Americas Division, Wadsworth is currently leading the development and implementation of a multi-year target operating model to provide a centralised, strategic, and value-driven procurement function that enables the timely delivery of quality goods/services to SMBC businesses.
OF
BIOEXECUTIVE FRANK WADSWORTH
TITLE: MANAGING DIRECTOR AND CHIEF PROCUREMENT OFFICER THE AMERICAS DIVISION
Are you protecting your business and employees? Comply with ConfidenceStar’sFuture-Ready Compliance PlatformOn-DemandDeliversConfigurability to respond quickly to new regulations Multi-Jurisdicational Integrity to support global employee base Non-Intrusive, easy-to-use UX to drive adoption Actionable Intelligence provides real-time analytics Multi-Layered Protection secures employee‘s privacy and assets
The cost of missing an outside business activity that could lead to a conflict of interest could be devastating to an organization. And the financial ramifications and reputational damage to both the firm and the employee can have irreversible Starconsequences.alleviates these concerns by providing a single, centralized place for monitoring employee conflicts with a compliance software solution. The STAR Platform lowers the cost for reconciliation and database administration, and frees up compliance officers to do the higher-level follow-up and investigative work they’re best suited for.
Meeting Client Needs–Now And Into The Future
Why Monitoring For Employee Conflicts Matters
www.starcompliance.com
David Rowland, Star’s Chief Technology Officer, says, ‘We admire forward-thinking companies like SMBC that value their employees and want to make sure they are secure about how their personal dealings could affect their professional careers. Through the STAR Platform–which monitors for employee conflicts of interest–our clients can ensure that issues are flagged and reconciled in a timely manner.’
Star, a leading provider of compliance technology solutions, is now partnering with SMBC to give them the tools they need to monitor and better understand employees’ charitable donations, private investments, board memberships, and other outside business activities.
Monitoring for employee conflicts has become more critical than ever in the complex regulatory environment in which we live and work. Whether dealing with employees at one location, or a staff across multiple time zones, Star has cost-effective solutions for each situation. And because Star partners with so many organizations worldwide, clients benefit from the kind of collaborative software development that delivers unparalleled features and functionality in the compliance technology Compliancespace.nolonger needs to be complex. Check out Star’s intuitive, straightforward UX and give your employees the multi-layered protection they need to comply with confidence.
Stop guessing if your teams are putting themselves and your business at risk with Future-readyStarCompliance’splatform
StarCompliance gives firms full visibility into the outside business activities of their employees, enabling them to operate with confidence and steer clear of risk and costly conflicts of interest.
Rowland says ‘the STAR Platform enables enterprise organizations like SMBC to stay ahead of regulatory changes, minimize their risk and protect their assets.’
How the supplier-spend analytics data lake helps identify supplier-spend trends and reveals savings opportunities
Procurement at SMBC has created a supplier spend analytics data lake armed with PowerBI reporting capabilities, allowing both the procurement function and stakeholders across the bank to have quick, easy access to supplier spend reports for SMBC businesses and regions. Authorised users can report on supplier spend, applying dynamic reporting filters to view supplier spend data by: • Region or country • Line of business/group company • Category of third-party goods and services
34 September 2022 SMBC GROUP
SMBC was founded more than 400 years ago when the Sumitomo and Mitsui family businesses came together, bringing together their diverse products and services and expanding their business. The Mitsui Bank was established in 1876, followed by the establishment of the Sumitomo Bank in 1895. Two decades later, the first branch was opened in the U.S. in San Francisco and in 1918, the New York Agency was established. In the intervening years, the Sumitomo Bank and the Mitsui Bank opened different offices and branches, including in Brazil and Los Angeles. The two banks merged in April 2001, forming what is now SMBC. The firm has a long-standing tradition of serving clients and businesses around the world with more than 86,000 employees across the globe in 140 offices in nearly 40 countries. to build a supplier spend analytics data lake.” In addition to tracking supplier spend information, it was equally important for SMBC to assess KPIs for its procurement operations function to better understand transactional throughput and processing times, with a view to identifying any bottlenecks in its process. “Since deploying Coupa, 75% of our invoices are now processed electronically with a mean days-to-pay of three days from the time an invoice is approved,” he says. “Applying a data-driven and analytical approach is foundational to making informed decisions and appropriately aligning our procurement strategy and operations.” YOU KNOW...
DID
• Concentration/fragmentation
Establishing a centralised procurement function allows SMBC to shift from a tactical transactional purchasing approach supplychaindigital.com
SMBC went through an extensive RFP process to assess several leading sourceto-pay technology solutions. “We ultimately selected Coupa as our technology of choice, and I’m pleased to say that, looking back over the past year – and six implementations later – we made the right choice,” says Wadsworth. “Coupa is a Software-as-a-Service (SaaS) solution that is highly configurable and interoperable across various modules or source-to-pay functions. Aside from its robust functionality, Coupa provides an intuitive, user-friendly interface that is easy to navigate. Coupa also regularly enhances the product to stay ahead of customer needs and market developments”.
SMBC’s procurement function and key stakeholders can identify: opportunities of suppliers across businesses and/or spend categories Negotiations leveraged through aggregate purchasing power (region, business, etc.)
• Savings
Through analysis of historical spend data
•
What technology is SMBC utilising to optimise its procurement operations?
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SMBC’s centralised, strategic and value-driven procurement function
We Innovate,Listen,AndDeliverEngineeringAgilityLikeNoOther
Visionet empowers businesses to drive innovation through modern technologies. We enable digital transformation through digital solutions like PartnerLinQ and HauteLogic that cater to all supply chain needs while our Live Commerce service leverages video streaming to create immersive eCommerce experiences.
Visionet Systems’ CEO Arshad Masood highlights the growth of its PartnerLinQ platform which is empowering industries to achieve supply chain resiliency Most CEOs who saw 100% growth during COVID would be eager to proclaim their recent successes and focus on the changing digital dynamics. But it’s telling that Arshad Masood, founder and CEO of Visionet Systems, initially takes me back to 1995 and ‘Y2K’ era to explain how, from the outset, he was focused on differentiating the company by focusing on multitask automation. It’s fair to say his vision has paid off. From a $1mn investment, Visionet Systems has grown into a $250mn annual turnover business, operating with 8,000 brilliant minds worldwide, with a diverse range of products, solutions, and services.“You have to focus on the value to the customer, and go and solve their problems in an innovative way –and that’s where the longevity of the business comes,” he said. The company’s 25+ years of experience provided solid foundations at a time of great uncertainty amid the COVID chaos. Today, under a catchy alliterative slogan –‘Digital Defined, Digital Delivered’ –Visionet’s customers are as broad as they’re long, encompassing F&B and logistics to healthcare and fashion. Key to its recent success has been its supply chain vertical cloud application, PartnerLinQ, which is a integratedhybridplatform for supply chain connectivity with all analytics, tracking and visibility built in. It’s designed to handle very rapid on-boarding. “That’s why we have grown 100% in the last two years, it’s such a versatile tool, and selling itself,” he said. “We can place PartnerLinQ in the middle of company’s ERP and e-commerce systems, and connect with other vendors, in a matter of weeks.”Arshad Masood is proud to have built a company which is employeeowned and futuregeared.“ Our number one purpose is to serve our employees –and you can’t do that unless you serve your customers, so both are equally important.”
Visionet Systems –Enabling Businesses to Navigate the Future of Supply Chain
1,000+
We’ve onboarded more than 1,000 suppliers with 75% of supplier invoices submitted and processed electronically – a significant paradigm shift from a year ago, when all invoices were processed manually 2,500+
We’ve loaded more than 2,500 contracts into Coupa, with a steady number of new contracts authored and approved through Coupa and executed through DocuSign every day
38 September 2022 SMBC GROUP
FRANK WADSWORTH MANAGING DIRECTOR AND CHIEF PROCUREMENT OFFICER, SMBC AMERICAS DIVISION
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across the region to a strategic value-driven procurement model, leveraging digital transformation while providing improved governance and oversight, and hiring professional procurement experts to guide and influence business purchasing decisions.
“As Peter Drucker, a leading management consultant and renowned author once said, ‘you can’t manage what you can’t measure’”
SMBC’s category leads have several key priorities on the horizon this year, according to Wadsworth: “First and foremost is to assess the supplier footprint and historical spend for their respective categories, establishing savings targets together with an action plan to realise those savings.”
“In building out the centralised procurement organisation, I first focused on establishing a team to support day-to-day procurement operations, contract management, and invoice processing, aligning closely with our implementation of Coupa,” says Wadsworth. “More recently, I’ve established our strategic sourcing function staffed with senior-level category leads across our largest spend categories, such as professional services, IT, corporate services, real estate, HR services, travel, and marketing.”
39 SMBC GROUP
The firm’s ESG priorities for procurement are:
• Promote supplier spend diversity
“Given the transformational nature of this implementation and the centralisation of procurement for the region, our primary focus will be on implementation planning and change management activities across the region”
“The third priority is to establish quarterly business reviews (i) internally with key stakeholders and business representatives, and (ii) with our strategic and critical suppliers, to ensure visibility into their pipeline of prospective deals as well as provide performance feedback.” SMBC’s approach to sustainability
According to SMBC’s Christine Ackerson, Head of Sustainability, Americas Division: “We are committed to fostering a society in which today’s generation can enjoy economic prosperity and wellbeing to pass on to future generations. Ackerson explains: “SMBC’s ten-year sustainability roadmap – called GREEN X GLOBE 2030 – is focused on the environment, community, and next generation, including initiatives to address climate change by committing to becoming net-zero in its global operations by 2030, and net-zero in its loan and investment portfolio by 2050, all while supporting our customers in the transition to a decarbonised society.”
The firm’s procurement team is working closely with the SMBC Americas Sustainability Committee and ESG team to incorporate ESG goals into the procurement policy and to execute against each of the ESG goals for procurement.
• Achieve net-zero greenhouse gas (GHG) emissions in its operations by 2030 (including company travel, but excluding suppliers currently)
supplychaindigital.com 41 SMBC GROUP
• Procure renewable energy (goal of100% renewable energy for its operations by 2024)
“A second priority is to establish a strategic sourcing engagement model and policy with the business to ensure that procurement is in front of buying decisions. It’s important to establish a supplier portfolio-based buying approach to ensure we are selecting the appropriate suppliers based on business requirements, supplier market segmentation and capabilities, and to ensure we are leveraging aggregate purchasing power when making our buying decisions.”
FRANK SMBCCHIEFMANAGINGWADSWORTHDIRECTORANDPROCUREMENTOFFICER,AMERICASDIVISION
• Develop green procurement guidelines (including greener office supplies, green leasing for office space)
The future of SMBC’s procurement: the next 12-18 months By the end of this year, SMBC plans to have Coupa fully implemented in the U.S. and procurement fully operational for the region. The implementation of Coupa is significant, in that it includes the full suite of core functionality:
• Supplier onboarding (SIM)
• Invoice processing (P2P)
• Increased visibility into supplier spend and contract management
“We’reprogrammealsobreaking new ground this year with the implementation of eSourcing and Coupa Risk Assess,” says Wadsworth. “Given the transformational nature of this implementation and the centralisation of procurement for the region, our primary focus will be on implementation planning and change management activities across the region.”
Value Delivered
• eSourcing • Coupa Risk Assess to support SMBC’sthird-party risk management
• Alignment with Bank and regulatory requirements.
42 September 2022 SMBC GROUP
• Contract lifecycle management (CLMS)
• Centralised contract repository, contract templates and full contract lifecycle capabilities
Separately, SMBC’s procurement is contracted with Util, a London-based fintech company. Util has extensive data-mining capabilities used to identify individual company performance against the United Nations’ Sustainable Development Goals, which are helpful in assessing SMBC’s suppliers against its ESG corporate goals and identifying exposure to reputational, legal, or financial risk.
• Electronic supplier invoicing with improved governance to ensure invoices are tied to approved purchase orders and underlying contracted commercials
• Auditable, traceable source-to-pay workflow with visibility into “who has the ball”
• Checks and balances through predefined workflows, approval chains, and designated tolerances to mitigate rogue spend
According to Wadsworth, “While we are still on our Procurement transformation journey, we have delivered significant value to the Bank to-date” :
SMBC’s partnership with Visionet Arshad Masood is the Managing Director and CEO of Visionet Systems Inc., a leading digital technology solutions company that helps their global clients increase agility, reduce costs, and enable business and technology outcomes. Visionet played a critical role in designing and developing SMBC’s supplier spend analytics data lake and PowerBI dashboards. The Visionet delivery team hit the ground running, engaging with SMBC’s business partners across multiple group companies and regions to identify, map, ingest, and rationalise data from six ERP/AP (Accounts Payable) systems with ten general ledgers into a single repository.
43 SMBC GROUP
“While it may seem like a relatively straightforward exercise, it was exceptionally difficult,” says Wadsworth. “Working with fragmented systems, data models and inconsistent data values presented numerous challenges, all of which the Visionet team addressed head on.”
In addition to the design and development of the data lake, Visionet developed PowerBI reports that are not only easy to use and exceptionally versatile, but also graphically sophisticated. “Visionet’s client partner, Rajasshri Phadnaik, played a key role in managing our overall relationship and went beyond the call of duty to drive programme success,” says Wadsworth. “We supplychaindigital.com
“SMBC’s 10-year sustainability roadmap – called GREEN X
CHRISTINE ACKERSON EXECUTIVE DIRECTOR, HEAD OFSUSTAINABILITY, SMBC AMERICAS DIVISION are currently exploring other opportunities with Visionet to leverage their cloud services capabilities.”
GLOBE 2030 – is focused on the environment, community, and next generation, including initiatives to address climate change by committing to becoming net-zero in its global operations by 2030, and net-zero in its loan and investment portfolio by 2050, all while supporting our customers in the transition to a decarbonised society”
When SMBC kicked off its procurement transformation in 2021, they leveraged WNS Denali’s procurement subject matter expertise to assist in SMBCs Coupa sourceto-pay activities. WNS Denali was a key partner for contract meta-data extraction in support of the Coupa Contract Lifecycle Management implementation. Additionally, when SMBC Procurement hit a critical point of onboarding suppliers into Coupa, WNS Denali provided support with supplier onboarding/setup activities. WNS Denali is an excellent partner willing to quickly spin up teams to meet project deadlines, taking an agile and nimble approach and providing support as needed. Dell EMC Dell Technologies products play a crucial role as the strategic data processing platform to run SMBC's core infrastructure. Additionally, SMBC utilises Dell as part of the end-user compute experience. Both are critical use cases for which SMBC relies on Dell’s global footprint to deliver and ensure no disruption to its day-to-day business. Consistent and transparent communication between the executive account team, internal stakeholders and Procurement plays a key role to ensure commitments are kept or contingency plans are made to address (potential) global supply chain issues. Star Compliance “In today’s world, there is so much digital information to track, manage, and attempt to put to proper use. As a financial institution, we must be ever vigilant about maintaining proper controls and compliance in a dynamic regulatory environment.”, said Wadsworth.So,when SMBC went to market in search of such a product, Star Compliance encouraged the business to leverage proofof-concept methodology to ensure that requirements were met or exceeded prior to full investment. Sand Hill East In 2019, SMBC engaged Sand Hill East, a strategic venture and fintech advisory firm, to assess the Bank’s technology organisation and their readiness to support the transformation journey and leverage
OTHER PARTNERS THAT HELP SMBC TO ACHIEVE ITS GOALS
44 September 2022 SMBC GROUP
WNS Denali
45
the capital markets fintech and innovation ecosystem. As part of this ongoing engagement, Procurement was introduced to a fintech company called Util by Roseann Palmieri, the President of Sand Hill East, to help track ESG performance metrics for key SMBCSandsuppliers.HillEastworks with new and growthstage technology companies to advise and develop new technology ventures from ideation to go-to-market strategies, to scale their businesses and accelerate growth.
SMBC benefits tremendously in that it gains insight and early access to new and disruptive technologies. supplychaindigital.com
IT’S CALLED THE FOR A REASON ‘VALUECHAIN’ 46 September 2022
Brandon Rael (BR) is Strategy & Operations Leader at Capgemini Invent. Capgemini is a French multinational IT services and consulting company; Capgemini Invent is its innovation, design, and transformation arm, designed to generate scalable, real-world solutions to help its clients.
47 SUPPLY CHAIN
WRITTEN BY: SEAN ASHCROFT
A ccording to a recent McKinsey survey, the organisations that leverage supplier know-how for innovation purposes enjoy up to 10% more earnings’ growth. And, given that ‘supply chain’ is also commonly referred to as the ‘value chain’, this makes perfect sense. You see, the truth is, there’s a great deal of value to be had from suppliers – especially in today’s uncertain, disruption-filled world, with its greater reliance on innovation to keep things on track. Here, we speak to two supplier relations experts for their insight into how organisations can extract maximum value from their supplier base:
Nicolas Walden (NW) is Senior Director of Procurement Executive Advisory Membership Programmes for The Hackett Group – an advisory, benchmarking and transformation consulting specialist, whose Smart Automation Platform helps organisations plan, identify, design and monitor smart automation programmes.
Organisations that draw on supplier innovation fare better than those who don’t, say Brandon Rael of Capgemini Invent & Nicolas Walden of The Hackett Group Brandon Rael (BR) Strategy & Operations Leader, Capgemini Invent Nicolas Walden (NW) Senior Director of Procurement Executive Advisory Membership Programme, The Hackett Group
supplychaindigital.com
Join us Jat oin us at Procurement & Supply PChain rocurement & Supply Chain Live in LLondon. ive in London.
perquisites need to be in place to ensure sustainable innovation success: Validating the organisational and cultural readiness for collaboration Shifting the procurement mindset from cost reductions to profit improvement Prioritising capability areas for supplier innovation • Identifying and attracting the best suppliers for capability growth
•
BR: With the great digital acceleration and ongoing global supply chain disruptions, businesses are being challenged to drive profitable and sustainable growth while mitigating operating costs. This requires procurement teams to simplify the collaboration model with their suppliers along the innovation process and enhance the combined teams' capabilities. Several BRANDON RAEL STRATEGY & OPERATIONS LEADER, CAPGEMINI INVENT
•
“THERE ARE ADVANTAGES IN LEVERAGING SUPPLIER CAPABILITIES DURING THE DESIGN PHASE OF THE INNOVATION CYCLE”
supplychaindigital.com 49 SUPPLY CHAIN
NW: Businesses need to start by identifying the type of innovation they are looking for, whether that’s continuous improvement, company innovation or market innovation. They then need to develop a process to support and enable that innovation – this can be divided into four key stages: What do businesses need in place to systematically leverage supplier innovation to further their own ends?
•
Capture: How are we going to capture the benefits? How can firms use supplier innovation at the design stage?
NICOLAS WALDEN SENIOR DIRECTOR, SENIOR DIRECTOR, PROCUREMENT EXECUTIVE ADVISORY MEMBERSHIP PROGRAMMES, THE HACKETT GROUP 50 September 2022
BR: There are clear advantages for businesses to leverage supplier capabilities, particularly during the design and conceptual phase of the innovation cycle. Suppliers clearly understand their end customers and can provide innovative ideas about strategy, products, services, and business models.
Search: How can we find opportunities for innovation through scanning or scouting?
BR: L'Oréal has established a collaboration process with its suppliers. IS A VEHICLE FOR INNOVATION TO DRIVE THE COMPANY AND SUPPLIER COLLABORATION MODEL”
This could include developing relationships to access the necessary complementary capabilities, prototypes, minimum viable product, and incubators. It could also involve developing an ecosystem to support innovation that extends beyond Tier 1 vendors, to Tier 2/3 and other startups and academic sources.
Implement: How are we going to make it happen? This means finding, selecting and helping transferring capabilities from external parties and managing external parties, as well as ensuring the right commercial structures are in place to motivate, reward and encourage innovation.
NW: Some key examples include improving customer satisfaction or the user experience, improving goods or services available, and increasing the efficiency of product or service development. Give an example of the power of supplier innovation?
Select: What are we going to do and why?
“TECHNOLOGY
The study says companies should follow three guidelines for maximising supplier innovation: Prioritise development capabilities for supplier innovation Focus on profit improvement instead of cost reduction Simplify collaboration processes on innovation supplychaindigital.com
SUPPLIER INNOVATION A DRIVER OF GROWTH, SAYS OLIVER WYMAN REPORT
A study from global management consultancy Oliver Wyman suggests innovation is a key driver of profitable growth – but that development costs can eat up the benefits of growth.
“The earlier suppliers are integrated, the greater the potential impact on lifecycle costs.”
It continues: “Supplier innovation is about leveraging the innovation power of the supply base in a systematic way to increase one’s own innovation performance.
51 SUPPLY CHAIN
For example, the company's annual ‘Cherry Pack’ exhibition provides suppliers with the new consumer trends that will be investing in developing packaging solutions harmoniously with these trends. Additionally, P&G shifted its R&D strategies from 100% internal to a 50/50 split, improved productivity by 60%, and contributed 50% of the new product innovations to the market.
“This is one reason why leading companies are reconsidering their internal capabilities and are moving to integrating suppliers into the development process,” according to the study.
•
•
•
“If managed successfully, supplier innovation has many benefits – including fresh ideas, shorter time-to-market, and higher margins, all of which can lead to profitable growth.
“Up to 70% of total lifecycle costs are defined during the design phase. The ability to influence the total cost of ownership decreases rapidly the further out along the development curve you get.
NW: Large infrastructure and engineering projects increasingly utilise consortium commercial relationships, where pain/gain sharing models reward innovation in design, planning, and delivery of the projects to deliver outcomes ahead of initial project budgets – including in terms of cost, time, quality, and service.
What are common barriers to leveraging supplier expertise?
BR: The lack of an integrated co-creation and collaboration model between companies and suppliers remains an obstacle to developing innovative ideas. Another obstacle remains 52 September 2022
the lack of the organisation and governance of supplier-collaboration programmes' formal structures and processes. NW: The typical barriers are not having the right innovation-related roles to discover or scout for innovation, not working with the right suppliers aligned to your innovation goals, and not having the right buyer/ supplier partnering relationships in place to enable innovation to happen.
What are the main benefits of leveraging supplier innovation?
BR: One of the most significant advantages of
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53 SUPPLY CHAIN
Which sector has a strong record of leveraging supplier expertise?
BR : Technology is a significant enabler and vehicle for innovation to drive the company and supplier collaboration model. Co-creation and product development cycles have become more accelerated and cost-effective by leveraging technologies such as AR, VR, and AI to reduce the traditional innovation timelines. In addition, pilot programmes and the innovation cycles are further reduced to weeks/months vs. what used to take years of planning and execution.
NW: Statistics show that high innovation companies offer earnings (EBIT) growth at two to three times the levels of other more average companies. Other benefits include incremental revenue, profitability, lower costs, and other advantages in terms of service, quality, and features and functionality.
NW: Technology allows buyers to better engage with suppliers or the broader market ecosystem to, for example, communicate the types or topics of innovation they are interested in, or to improve collaboration between buyers/suppliers in terms of the innovation process.
NW: Product manufacturing, hi-tech, and engineering are examples of industries that are either systematically searching for innovation, conducting specific projects on innovation topics, or being strong in-house, in terms of innovation and bringing in specific external capabilities. Does tech make supplier innovation easier to access?
BR: The consumer products sector has a strong record of leveraging supplier expertise within the product innovation cycle. Companies such as Unilever, P&G, and others are leveraging an increasingly collaborative approach with their suppliers to drive new product ideas, methods to overcome supply chain disruptions, or technical solutions for complex manufacturing challenges.
leaning on supplier innovation is shifting the procurement mindset from cost optimisation to profit improvements. Collaborating with suppliers early in the innovation process provides capabilities that are not internally available, improves the speed to market, and drives product differentiation.
SUPPLY CHAIN IS THE AT THE HEART OF 54 September 2022 PRODUCED BY: SADRMIKE WRITTEN BY: GIBSONJESS
THE ENGINE supplychaindigital.com 55 NUTRABOLT
As Nutrabolt’s VP of Procurement, Brendan O’Toole highlights the importance of sourcing and supply, reinvention, and staying agile in a volatile climate N utrabolt is a fast-growing, global active health and wellness company founded back in 2002 and headquartered in Austin, Texas, a city home to an eclectic range of live music and vintage clothes shops. Described as a grassroots organisation that has worked its way onto the global playing field, Nutrabolt shares a few things in common with its birthplace –namely, an endless abundance of energy and being endearingly “scrappy throughout”.
In the 20 years since its inception, Nutrabolt has not only firmly established itself as a major player in the active nutrition market, but the entrepreneurial and agile business has also continued to expand globally with a varied range of products, “focusing on the functional beverage segment for the last five years, which has been a huge success for our growing business”. “It's very entrepreneurial here at Nutrabolt and moving quickly, like a startup,” states Brendan O’Toole, Vice President of Procurement at Nutrabolt. “But it's a 20-year-old company, so it also has some of those guardrails of establishment.”
56 September 2022 NUTRABOLT
The branding and distribution company has a portfolio that’s distributed across 150 countries, with a particular focus on the pre- and post-workout hydration and muscle strength market – and this is one of the factors that sets Nutrabolt apart from its contemporaries. It has, however,
supplychaindigital.com 57
experienced much of the same volatility and disruption that other global companiesdistributionhavehad to withstand over the past fewO’Toole,years. firmly ensconced in the thick of it, describes the current environment as “very volatile and very tumultuous”, particularly for a co-manufacturing company where “collaboration is key”. And there are no signs that this is going to let up any time soon, with geopolitical events and the economy causing significant stress on global supply chains for the foreseeable future.
“That's really where myself and my team come into play because we're a 100% co-manufacturing company; we don't do any of our own manufacturing here. So, LOVE WHAT I DO, WHO I DO IT FOR AND WHO I DO IT WITH” at the
Supply is the engine
heart of Nutrabolt BRENDAN O’TOOLE VP OFNUTRABOLTPROCUREMENT, 58 September 2022 NUTRABOLT
“I
LOCATION: AUSTIN, TEXAS, US really, it's our external partners that we have to stay extremely close to. It’s a lot of overcommunication, just waiting through the different challenges.” From O’Toole’s perspective, the procurement and supply chain function of a business – particularly at Nutrabolt – is the engine that keeps the system running effectively and feeds into every aspect of the business, from legal and sales to finance. From humble beginnings to global juggernaut Nutrabolt began as a small, grassroots business out of central Texas. Tapping into a growing market related to exercise and wellness, Nutrabolt CEO Doss Cunningham started the company himself with an aim to help build – as the company website
TITLE: VP OF PROCUREMENT INDUSTRY: HEALTH AND WELLNESS
Brendan O’Toole is an entrepreneurial supply chain executive with over 20 years of experience in a variety of industries including consumer packaged goods (CPG), health and wellness, real estate and land development, sports nutrition, in both startups and Fortune 200Incompanies.hiscurrentrole with Nutrabolt, Brendan is responsible for E2E sourcing of all globally sourced materials, packaging components, and external manufacturing services for both business segments of active nutrition and functional beverages. Previously at The Honest BRENDAN O’TOOLE
NUTRABOLT
FIRST MANUFACTURINGCLASS
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mantra states – ‘strong bodies, clear minds, and a culture of respect and belonging’ within the active health sector. Cunningham has built the company into “a global juggernaut”, effectively “pulling himself up by the bootstraps” to fund it at the beginning. “At the heart of it, we're a branding and distribution company,” says O’Toole. “Our primary focus is, and continues to be, ensuring that we’re the global leaders on the pre-workout side, which is our branded product line called C4.”
O’Toole explains further: “We have different iterations of that: C4 Sport, C4 Original, C4 Ultimate. It's really meant to be accessible throughout for different customer goals and life cycles through their performance journey. C4 Sport is meant to
BRENDAN O’TOOLE VP OF
“THETHEISFUNCTIONANDPROCUREMENTSUPPLYREALLYTHEENGINETOBUSINESSSALES”
Nutrabolt has three core brands that its products fit under, each marketed to different groups and specialising in related pre- or post-workout supports: C4 Energy, Cellucor, and XTEND. The best element of these brands, aside from their differentiated price points to appeal to consumers of different financial capabilities, is the time and dedication that goes into developing each of the formulas, which are targeted at different aspects of the body but with the same overall desired outcome.
NUTRABOLTPROCUREMENT, supplychaindigital.com 61 NUTRABOLT
62 September 2022 NUTRABOLT
be a more introductory product line that you can find almost anywhere – the Targets, the Walmarts, CVS. C4 Original is a step up there with a slightly different ingredient makeup, while C4 Ultimate contains more caffeine and more clinically studied ingredients for certain outcomes.”
The art of procurement and strategic supply management O’Toole’s role as Vice President of Procurement is an expansive one, which means a huge amount of responsibility sits on his shoulders day-to-day – though it is this, perhaps, that keeps him interested in the role. “I love what I do, who I do it for and who I do it with,” O’Toole enthuses. “Knowing the importance of what we do day-to-day, it’s very motivating. What I do really is act as a liaison back and forth, both internally and externally, to our partners and through our business. So I get to wear many hats. It's never a boring day, and I love that – it fits my personality.”
“IT FEELS NEW EVERY DAY HERE. NUTRABOLT IS IN HYPER-GROWTH MODE. WE STRIVE TO BE INNOVATIVE AND ON THE LEADING EDGE OF WHAT WE DO IN OUR INDUSTRY HERE”
BRENDAN O’TOOLE VP OF PROCUREMENT,NUTRABOLT
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JW Nutritional is an example of one of these newer partners. Hailing from Texas, just like Nutrabolt, JW is a young company with what O’Toole describes as “untapped potential” that has itself pivoted “to innovate in out-of-the-box ways”.
64 September 2022 NUTRABOLT
KNOW...YOUDID
NUTRABOLT’S KEY PARTNERSHIPS
The fallout of the pandemic combined with ongoing geopolitical, cost of living and climate concerns has led to Nutrabolt pivoting to include a new roster of partners, who are more suited to the immediate future of sourcing and supply.
As a 100% co-manufacturing company, Nutrabolt is close to its partners, which means that collaboration is Whilekey. it remains dedicated to historically loyal partner companies – such as Phoenix Formulations, Armada Nutrition, Prinova UK, all of whom have been partners of Nutrabolt through thick and thin – with positive collaboration and teamwork set to continue in the future, new issues necessitate a strategic partnership rethink.
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NUTRABOLT CULTURE: ‘WE HAVE THE BEST PEOPLE IN THE BUSINESS’
“Everything is a challenge, right? I used to have to explain that my undergrad degree was supply chain management at Michigan State University, and no-one knew what
As a testament of the company’s purpose-led, value-focused team culture, Nutrabolt has been included on Great Place to Work and Fortune magazine’s list of Best Workplaces in Texas 2022. This achievement is all the more notable due to the fact that it’s based on employee feedback via the world’s largest ongoing annual workforce study.
Nutrabolt Culture: for EOY Events
A gregarious character, O’Toole is well-suited to a role in procurement, which is all about forging relationships and problem-solving with partners as a cohesive team. “I'm responsible for all global sourcing efforts with regards to raw materials, packaging, and co-manufacturing relationships throughout our global network,” he asserts, somehow managing to fit his varied role into neat soundbites. Despite this enthusiasm for his job and the varied elements that come together to make it up, O’Toole is the first to agree that it has been a difficult few years for everyone within the procurement and supply chain function.
Teammates Gather
A cost-effective solution was identified to resolve this ingredient issue, though it required careful planning to ensure the formulation was not just similarly effective, but safe for consumption, too. Time had to be taken to ensure that the ingredients used 66 2022
September
As a co-manufacturing company, the key to surviving and thriving in the face of such difficulty has been ensuring constant communication and collaboration with sourcing and supply partners; luckily, O’Toole is determined to continue building and strengthening partner relationships for the benefit of the business and customers. But another core element has been willingness to adapt and reinvent.
that was; now, over the past two-to-three years, everyone knows what that is,” O’Toole says with a wry smile. “There’s really been a start, stop, start, stop rhythm to commerce. During COVID-19, everything completely shut down, and then, coming out of it, everything just shot back the other way. Now, we have macroeconomic and geopolitical challenges that continue to make business even harder.”
“To give an example, there are certain raw materials in our products; our product ingredient makeup is highly clinically studied and there are ingredients that come from all over the world. If you have 30 of those ingredients in a product and one has a major constraint, you can't make that product."
“OVER THE NEXT 12-18 MONTHS, THE AIM IS TO CONTINUE TO SCALE AND GROW OUR BUSINESS WITH
BOTHPARTNERSHIPSSTRATEGIC–ONTHENUTRITIONANDFUNCTIONALBEVERAGESIDE”
He continues: "It's really been an oscillation of keeping eyes on all the different ingredients, packaging components, the labour side, domestically and abroad, with COVID callouts, stimulus checks and getting people to go back to work. It was a continuous circular issue wheel, if you will, day-by-day. “My group and I oversee all of that. Through the pandemic and even now, when we're designing products up front, we really have to take a step back and look at the ingredient makeup and the packaging. Here's where we want to produce it, closest to the customer.
We have to really look at all the lead times at an aggregate level, the constraints throughout – if we have 15, 20 ingredients in one, but one is single-sourced from Italy and it has a lead time of 20 weeks, we have to account for that. That all plays into our speed-to-market and is part of our procurement process.”
PROCUREMENT,NUTRABOLT supplychaindigital.com 67 NUTRABOLT
Other ways that the company has stayed afloat have been liaising with potential vendors, seeking cost-effective solutions in the locality and being open to change. Together, these solutions have helped Nutrabolt’s procurement and supply chain function to demonstrate “resilience through insurmountable changes”, retaining some aspects of the team in place while growing others after the pandemic This is particularly important because, as O’Toole passionately believes, “a team that embodies understanding is the crux of a good partner”. worked well together and had no adverse effects, as well as to account for different sourcing locations.
BRENDAN O’TOOLE VP OF
Another key to surviving such a difficult few years has been the act of strategically investing in new tools and systems for routine admin tasks. “We've launched new tools, demand planning software or ERP systems, business intelligence and reporting to really try to automate routine administrative tasks, allowing for us to focus more on our partners and the relationship with those partners, which is what matters most.”
68 September 2022
Investing in automated technology and systems, and shifting suppliers
O’Toole continues: “We had to start redesigning our supplier sourcing strategies to create opportunities for localised suppliers, allowing for flex manufacturing capacity through simplified contractual addendums.”
• To ensure continued global business growth “through a high-quality and built-forscale network of co-manufacturing partners”
“What we don't want to do is get hung up on contract details or get ‘deal fatigue’ and make it too hard to do business with some of these partners. We want everyone involved to be protected, but are trying to have some simplified addendums so we can continue to move quickly with these partners to garner the manufacturing and supply capacity that we need.”
• To provide an omnichannel supply chain service that is “transparent to our customer, repeatable and cost optimised”
• To “drive internal operational efficiency with a focus on continuous improvement and“Ifsimplicity”youdon't have the basic foundation in place or are trying to be too orchestrative, it’s just a recipe for failure,” he explains, setting down the company’s outlook. Though his sector is experiencing a tumultuous time, O’Toole is excited for the future at Nutrabolt.
In an age of unprecedented global strife, many sales, branding and distribution companies have found themselves unexpectedly impacted. As such, sourcing strategies are being reconsidered by many, if not all, global businesses – and Nutrabolt is no“We'reexception.looking and choosing to nearshore where possible. Indigenously, a lot of our ingredients that go into our products come from global sources, including China. With their repeated lockdowns, COVID surges, the port struggles and other geopolitical factors, we've had to look at other countries and, more imminently and myopically, why not in the States?” Looking to the future of Nutrabolt Focus is something that O’Toole believes all businesses will crumble without. As such, he cites Nutrabolt’s operational pillars as the core focus for the business, now and into the future: LAUNCHED NEW TOOLS, DEMAND PLANNING SOFTWARE OR ERP SYSTEMS, BUSINESS INTELLIGENCE AND REPORTING TO REALLY TRY TO AUTOMATE ROUTINE ADMINISTRATIVE TASKS”
“WE'VE
“Over the next 12-18 months, the aim is to continue to scale and grow our business with strategic partnerships – on both the nutrition and functional beverage side. The domestic part of our business has always been the key to our sustainability and growth, but we're really seeing opportunities globally, as well, in different markets. We’re continuing to robustly fortify and create strong relationships here in the US, but these are also starting to occur in other markets, so this is a huge focus of our business going forward,” O’Toole concludes.
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BRENDAN O’TOOLE VP OFNUTRABOLTPROCUREMENT, supplychaindigital.com
70 September 2022 LOGISTICS
WRITTEN BY: SEAN ASHCROFT
F or years, many organisations for whom logistics is not a core competency have preferred to bring in specialist logistics service providers to keep goods moving. In the wake of the pandemic – which saw businesses struggle with shipping delays and huge spikes in demand – the use of third-party logistics providers (3PLs) has become increasingly common.
The past couple of years have put unprecedented pressures on supply chains,
criticalsupplychaindigital.com 71
outsourcingLogisticsis now mission
Specialist logistics firms offer a spectrum of services, from basic transport services to inventory management, warehouse management, fulfilment and returns. But what are the advantages and disadvantages of using such businesses to handle logistics? To seek insight on this, we turned to PwC colleagues Miles Lethbridge ( ML ) and Tom Woodham ( TW ). Lethbridge is Director of Mergers and Acquisitions Consulting, and has extensive experience in the logistics industry, operational leadership, business development, supply chain development and operational diligence.
Logistics outsourcing – once the domain of those with no logistics function – is now seen as a way to differentiate and build resilience, explain PwC’s MILES LETHBRIDGE and TOM WOODHAM
Woodham is a Partner and specialises in leading supply chain transformations for PwC’s customers. Why are ever-more businesses outsourcing logistics? ML: Some of the reasons for outsourcing logistics are unchanged – such as logistics not being an area of expertise, wanting to leverage a 3PL’s scale, and the desire to make costs more variable – to align with fluctuating demand.
The end-to-endThevolatilitysupplyconnectedchainturnsintoopportunity.e2openconnectedsupplychainplatformprovidesthevisibilityandcollaborationyouneedtotackle unpredictability. Build trust and confidence with your channel, supply, logistics, and global trade partners. Take control of supply constraints through direct procurement and meet customer commitments in the face of disruptions and scarcity. The connected supply chain. Moving as one™. www.e2open.com E2open and the e2open logo are registered trademarks of e2open, LLC, or its affiliates.
“Boards now view outsourcing not only as a way to drive savings, but also as a way to increase resilience” PWC
MILES DIRECTOR,LETHBRIDGEMERGERS AND ACQUISITIONS CONSULTING,
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ML : It all comes down to the level of control over assets in the supply chain. In 3PL, there is a higher degree of dedicated assets to an operation. A potential risk is that an operation might carry too much capacity at certain points but it does provide certainty. and boards are looking at outsourcing not only as a way to drive savings, but also to increase resilience. As businesses have become more comfortable with outsourcing and more educated about it, they’re more adept at tailoring what they ask of outsourced providers and using it as a differentiator. In what ways has outsourcing changed since the pandemic? TW: The pandemic, and its associated supply chain disruption, has increased the need of businesses to outsource for a variety of reasons.There’san acute shortage of both labour and warehouses, and 3PLs have greater access to resources that can be shared acrossAlso,operations.thereisapressing need for automation in supply chains and logistics operations (in part to cover for the shortage of people). 3PLs generally have more experience in this area, and some businesses are leveraging their relationship with them in order to help fund this investment.
Businesses also now see 3PLs as a way to help manage the tothissystems.risk-managementtoAlso,spaceadditionalsecurerelationshipschains,inlevelsincreasedofvolatilitytoday'ssupplybecausethesehelpaccesstocapacityatshortnotice.3PLsareheldenablebetterHowever,doesneedbefullytested and understood by any company that is outsourcing, so that they are confident they’ll receive the necessary focus when it is needed. What determines whether a business needs a 3PL or 4PL provider?
• Leveraging a 3PL’s scale and broader experience to bring flexible capacity and establish best practice
ML & TW:
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In 4PL, meanwhile, all assets are subcontracted, meaning that the business buys capacity on the market as it is required. This can lead to cost benefits, as the outsourcer does not carry the same fixed costs as operating in a 3PL environment, but they are more exposed to the market forces that impact pricing, and with current capacity constraints, this could result in increased costs.
• Using a 3PL to invest in a supply chain using their cash that is recovered through a contract
• Contracting. This needs to be done in a way that provides the 3PL with appropriate incentives to drive performance, but not so that it is too onerous in dishing out penalties. The 3PL needs to be able to see a path to earning a reasonable margin in order to maintain focus and receive the management attention it needs. For 3PLs, areas such as attractive payment terms often have higher value than managementoutrightfees, given the nature of expenditure for running contracts.
• Using a specialist provider to operate what is often seen as a non-core area of a business
• Accessing a network of capability across a region, or globally
• Incentivising a logistics provider to improve performance and then rewarding them based on results
And the most common problems?
What are the main benefits of outsourcing logistics?
ML & TW:
•
Tendering. The specification of the operation being outsourced needs to be accurate to allow the 3PL to prepare a robust response and price that reflects the operation. If this is not done correctly at the start of the project, then capacity challenges and poor operational performance can follow.
With supply chain volatility being what it is, and with a constrained supply of labour – particularly drivers – we are seeing a greater focus on 3PL than 4PL, because they are geared towards asset ownership.
OF
an
knowledge Logistics
Instant
Better customer experience The
FIVE BENEFITS THIRD PARTY LOGISTICS
International logistics Most
knowledge
Risk
Cost reduction
international
Plus,
FirstLOGISTICS:SUBCONTRACTEDAGLOSSARYpartylogistics(1PL) • Basic subcontracting dedicated to nationwide transport services. Second party logistics (2PL) • Storage and warehousing services are added to transport services. Third party logistics (3PL) • Companies that provide services and expertise across the supply chain as a whole, including monitoring, communications and customs formalities. Fourth party logistics (4PL) • Consulting companies offering digital integration solutions over and above the resources offered by 3PLs. Fifth party logistics (5PL) • The provider offers expertise in engineering and innovative systems across supply networks. “3PLs generally have automation”ofinexperiencemorethearealogistics TOM PARTNER,WOODHAMSUPPLY TRANSFORMATION,CHAINPWC supplychaindigital.com 75
3PL providers work with carriers on behalf of multiple customers and are often able to leverage better rates than individual shippers, thanks to their collective volume and order frequency. so-called ‘Amazon Effect’ means today’s customers expect next- or sameday delivery as standard. A 3PL provider can help here, as they have efficient and established distribution networks. mitigation Disruption continues to dog supply, and when problems do arise, 3PL providers are responsible for finding alternatives and solutions. They are also insured against the loss or damage of your products. expertise and is complex, but engaging with experts can improve the way organisation’s logistics operation functions, leaving it free to focus on other areas of its business. 3PLs offer and expertise around logistics, which is ideal for those looking to expand into a new territory or markets without the risk of investing heavily in local warehousing space or staff. 3PLs handle the welter of duties, customs and documentation that comes with cross-border trade.
“Businesses are now more adept at using outsourced providers as a differentiator” MILES DIRECTOR,LETHBRIDGEMERGERS AND ACQUISITIONS CONSULTING, PWC 76 September 2022 LOGISTICS
• Contract management. It is not uncommon to see businesses set up a shadow logistics function to manage 3PL operations. Not only can this add unplanned costs, but it also adds a layer of decision making that can cause problems. Ensuring this approach to contract management – with appropriately timed reviews set up from the start – will maximise the benefits of outsourcing. Under what circumstances do businesses choose not to outsource logistics? ML: There are few examples of this. Most commonly, it is because logistics is a core part of the business and a point of differentiation. However, even in this case, certain non-core areas can still beOtheroutsourced.times, a business might require a certain level of operational maturity to outsource their logistics. This covers areas such as forecasting, systems, and data, all of which are key to enabling a 3PL to successfully pick up an operation. see 3PLs as a way to help manage the increased levels of
TOM PARTNER,WOODHAMSUPPLY CHAIN TRANSFORMATION, PWC “Businesses
supply chain volatility” supplychaindigital.com 77 LOGISTICS
Y'ello 78 September 2022 AD WRITTENFEATUREBY: GEORGIA WILSON PRODUCED BY: WHITEGLEN
Y'ello supplychaindigital.com 79 MTN
Dirk andGroupKarl,ExecutiveCPOatMTN. 80 September 2022 MTN
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“We are building the largest and most valuable business platform, with a clear focus on bringing Africa and its enterprises forward,” says Dirk Karl, Group Executive and CPO at MTN.
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Leading MTN Group’s procurement transformation, Dirk Karl , Group Executive and CPO, discusses benefits, smart data-driven decision making, and ESG D riven by its strong belief that everyone deserves the benefit of a connected modern life – particularly on the African continent – MTN Group is committed to bridging the digital divide, bringing connectivity and financial inclusion to its operating markets.
Procurement transformation: leading the charge Being a successful and perceptive procurement leader with an international career spanning 25 years, Karl has been CPO at MTN since 2017. As part of his role, Karl leads the group’s procurement transformation strategy. “Our strategy is built on three key pillars,” he explains. “The first is ESG, which is not only key to our procurement transformation, but central to our core strategy as a business. Next, we have the ‘digital DNA’ to push data driven decision making, advanced analytics and agility into procurement, and finally, we are focused on driving supply chain resilience.”
DIRK KARL AND
GROUP EXECUTIVE
CPO, MTN 82 September 2022 MTN
As an early adopter of (ROI).onwithalready“Thissuchtheisoperations,integralsourcingchainintegratingtransformation,procurementitssupplyandstrategicintoonepartofitsMTNalreadyreapingbenefitsofastrategy.approachhasprovidedusavitalreturninvestmentAsanearlieradopter, we were able to navigate the perfect storm of semiconductor shortages alongside the friction caused throughout the supply chain over the last couple of years,” explains Karl. A core part of the isfunction,function.thesourcingagile,introducinginvolvedtransformationgroupMTNnew,anditerativemodelsinprocurement“Acrosstheeveryonescrummaster certified; we have cross functional teams operating in agile squads and pods in order to drive agility. Everything that we have “We have developed our own tools that support our sourcing function to decisiondata-drivenadoptmaking”
Karl has taken MTN’s sourcing and supply chain to the forefront of the industry through an ambitious digitalisation and transformation programme. Focusing on the development and exploitation of advanced technologies such as artificial intelligence and machine learning, a well established centre of excellence comprising data scientists and sourcing
DIRK KARL
Dirk Karl is the Group Executive and CPO of Global Sourcing and Supply Chain at MTN Group and has overall responsibility for Sourcing and Supply Chain across the MTN Group. Since joining MTN in 2017, Karl has been instrumental in delivering significant impacts on MTN Group’s sourcing and supply chain management business. Building on his experiences, he has transformed the organization through multiple levers, which have increased the EBITDA results of the sourcing business by more than 30%.
LOCATION: DUBAI, UAE learned from IT software development, we are translating into the procurement organisation,” says Karl. Adopting this approach drastically changed MTN’s operating model. “This also transforms our throughput times in terms of how long it takes us to meet supply chain demands and complete sourcing transactions. This is why ‘digital DNA’ is a critical part of our transformation.”Itwasimportant for MTN to onboard and restructure the people within its organisation due to the new skill set required. “It was a real transformational undertaking, bringing data science expertise into the organisation as well as catering for such change, and developing the systems and tools to transform sourcing and supply chain,” adds Karl.
TITLE: GROUP EXECUTIVE AND CPO INDUSTRY: TELECOMMUNICATIONS
MTN
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Making smart procurement decisions in the face of uncertainty
One thing for certain in modern procurement and supply chains is uncertainty and disruption. “We have had no choice but to become smarter,” says Karl, “Uncertainty is a part of daily life. We still have to make decisions in the face of uncertainty, we can’t take it away, but we can better harness huge volumes of information to make data-driven decisions, which has become an integral part of our procurement and sourcing operation.”
MTN is using data analytics and automation to enhance its throughput time, cut down on manual, time consuming activities and drive greater efficiency.
Karl explains: “We have developed our own in-house tools that support our sourcing function to adopt data-driven decisionmaking platforms and supply chain risk management frameworks using advanced technologies such as machine learning and artificial intelligence. Our expert sourcing teams are guided by price curves within each category, and our scenario analysis tool is used to analyse millions of possible “With the introduction and completion of
managementtotransformation,ouritwillbeimportantfocusonchangewithinthegroup”
DIRK KARL GROUPANDEXECUTIVECPO,MTN
DIRK
“As an earlier adopter, we were able to navigate the perfect storm of semiconductor shortages alongside the friction caused throughout the supply chain over the last couple of years” KARL GROUP EXECUTIVE AND CPO, MTN
86 September 2022 MTN
Incorporating ESG into procurement transformation
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sourcing award scenarios and select the optimum scenario for negotiation. We even have our own artificial intelligenceenabled virtual assistant, GeSSiCa, who scans our entire procurement ecosystem searching for bundling opportunities.
MTN AND ITS PARTNERS had agility in mind. “We have organised ourselves in the transformation journey to be agile, moving away from the typical category structure that is mimicked in the procurement function. Instead, our procurement operations are very much aligned with the MTN Group Ambition 2025 business strategy. We are catering for the same change across the company in order to be future fit.”
“We have further developed our artificial intelligence and machine learning capabilities to assist in eAuctions, providing data-driven vendor evaluations that allow our category managers to optimise the potential tender outcome.”
“With this approach, we are much more supplychaindigital.com
With ESG core to its business strategy, MTN is not only supporting ESG initiatives in the form of its net-zero roadmap for 2040 and its innovations to reduce emissions across Scope 1 to Scope 3, but the group is also introducing elements of a circular economy into its operations.
Along its transformation journey, MTN has MTN Group has an extensive range of partners across its ecosystem.
“We also work with academic institutions to support data science and machine-learning capabilities for procurement to enhance this kind of expertise across Africa. As part of our ecosystem, we often work collaboratively, forming joint alliances with others both to further the procurement and supply chain functions and to sell our services.”
“This not only includes our external suppliers, but our innovation partners, startup partners, local SMEs, and crossborder suppliers,” explains Karl.
MTN transforms procurement with digital DNA approach
FUTURE TRENDS
PROCUREMENT
When it comes to future trends in procurement, Karl emphasises the importance of seeing procurement as an integral part of the business as opposed to an appendix. “Procurement is not only a vital function for cost savings, it has strategic value to unlock opportunities for businesses,” says Karl. To achieve such value, a key trend going forward will be the effective use of data to navigate the complexities of the procurement and sourcing function. “Data will help organisations to tackle inflation and further disruptions to the supply chain. It will be particularly beneficial in our operating markets to navigate the complexities of procurement and supply in developing countries when it comes to hyperinflation, currency fluctuations, crossborder trade, and sanctions,” says Karl. “It’s no longer enough to talk about procurement data visualisation, we have long passed data warehousing, data lakes and data visualisation, it is time to realise the value that can be created to implement behavioural models and predict outcomes. It’s more about empowering operations with predictive insights and forecasting to drive the future of procurement excellence.” IN
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What does the future hold for MTN Group?
DIRK KARL GROUPANDEXECUTIVECPO,MTN
“We are building the largest and most valuable business platform, with a clear focus on bringing Africa and its enterprises forward”
One way that MTN achieves this is through its localisation policy. ”Through technology innovation and onboarding of local suppliers, we can help societies to prosper and suppliers develop. We do this with sustainability governance oversight by our social and ethics committee to ensure that we are meeting our pledges and supplier code of conduct.”
“With the university, we will be continuing to work on advanced digital procurement solutions and supply chain tools. We want to advance our control tower and nerve centre here at MTN, which combines sourcing transactions, inventories, and supply chain disruptions. We also want to ensure that our markets are getting the supplies they need on time, with early alert systems in place to further improve our intervention and prevention if disruptions occur,” explains Karl.
Over the next 12 to 18 months, MTN Group will continue to drive its procurement transformation, focusing on agility and its new operating model. “The next 18 months are going to be a very bumpy journey,” says“WithKarl.the introduction and completion of our transformation, it will be important to focus on change management within the group to ensure that our human workforce doesn’t fall back onto old methods. The next 18 months will be very much about adapting. We will be looking at the metrics of adapting, the usage of tools, adapting machine learning and adapting data.”
“Finally, we want to focus on our people, investing in their skills and training over the next 12 to 18 months. We are providing agile coaching, agile training, and scrum certifications, along with upskilling our teams in areas such as intelligent automation to be future ready, which we hope to translate into valuable business outcomes,” concludes Karl.
Expanding on MTN’s sustainability strategy, Karl explains the group’s shared value of developing a responsible environment through social and governance practices that are supported by procurement and supply chains. “Only healthy societies can prosper; we have an obligation to support societies to stay healthy or become healthy.”
focused on the end-to-end sustainability of our business,” says Karl. “We are also focused on reusing and extending the lifetime of our assets and supplies with refurbishment and repairs, instead of producing and buying new. This sub-pillar of our ESG strategy coincides with our drive for agility.”
In addition to its internal ambitions for the next 12 to 18 months, MTN will also be working on its collaboration with startups and universities – specifically, with the University of Johannesburg.
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IBM’s Global Sustainability Leader, Sheri Hinish – the Supply Chain Queen – says innovative thinking on sustainability is often what separates the trailblazers from the laggards
SUSTAINABILITYISA MINDSET NOT A PROJECTTECH
WRITTEN BY: SEAN ASHCROFT
A chieving net-zero supply chains is an era-defining challenge for worldwide.organisationsScour the world’s boardrooms, and you’ll struggle to find a CEO who fails to speak passionately about the importance of sustainability and their commitment to it. Frankly, though, talk is cheap – unlike the reality of actually embedding sustainable practices across the workforce and beyond, all the way to the far reaches of the supply chain. Few people are better qualified to speak about supply chain sustainability than Sheri Hinish, who is Consulting Global Leader for Sustainability Services, Alliances and Strategy at IBM, but is better known to her 47,000 followers on LinkedIn as ‘The Supply Chain Queen’. Hinish – who describes her job as “helping people make better decisions to design a better world” – spoke about supply chain sustainability at Procurement & Supply Chain Live, which was held in London in DubbedApril.the‘Risk & Resilience Conference’ to reflect the current state of affairs for procurement and supply chains, the event saw Hinish query a live and remote audience 90 September 2022
supplychaindigital.com 91 SUSTAINABILITY
Making forAskdrivenAskintoresilience,excellence,tocustomer-suppliershiftSuppecoMeasurableValuedeliversaparadigminB2Battitude-leveragingrelationshipsdrivecollaborativeperformancerelationshipdrivenandsustainabilitydeeptheecosystem&supplychain.usaboutcollaborativerelationshipco-resilience.usaboutoperationalcompliancesustainablesupplychain. BOOK A DEMO
“SUSTAINABILITY IN THE SUPPLY CHAIN NEEDS TO START WITH INNOVATION”PRODUCT
IBM’s study also showed that CEOs view sustainability and regulatory pressures as their greatest challenges, with demand from boardrooms, investors and other stakeholders on this front – including customers – increasing by 20% since 2021’s figure. “CEOs are reporting pressure to be transparent in their business operations and in the communities they operate,” HinishHavingsaid.shone a light on CEO mindsets, Hinish went on to ask what, exactly, transparency and sustainability mean?
LEADER FOR SUSTAINABILITY SERVICES, ALLIANCES AND STRATEGY, IBM supplychaindigital.com
SHERI CONSULTINGHINISHGLOBAL
She revealed that, although 86% of CEOs surveyed said their organisation has a strategy for sustainability, less than half –just 35% – have actually acted on this. Such statistics pierce the very heart of the supply chain’s sustainability issue: there is enormous will and positive intent, but this is not translating into action. But it must – and soon, says Hinish.
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“A lot of folk think transparency and sustainability are all about due diligence and compliance. No, they’re not; they’re about which among them “feels sustainability is a personal responsibility” in their life? Every hand in the room went up. Next, she asked if people carried that same responsibility with them into their work lives. Same result. IBM research shows chasm between ESG talk and action Hinish went on to say that this response chimed with findings from research conducted by the IBM Institute of Business Value, in conjunction with Oxford Economics, a leader in economic forecasting. The study – an annual undertaking – explores the intersection between digital transformation, modernisation and sustainability at a time when there’s a shift towards a valuesbased“Oureconomy.research shows environmental sustainability is absolutely a priority,” Hinish said. “But it also shows there's a gap between ambition and intention, and what actually happens in the decisions we make.”
Transparency and sustainability ‘all about trust’ – Hinish
trust, about fundamentally helping your customers, trading partners, employees and investors to feel like they're making a difference when they choose your brand – when they interact with you at every transactional point, every touchpoint across your global network and supply chain.”
Hinish stated that technology has a huge role to play in helping businesses make progress on sustainability, but she struck a note of warning: “The adoption and scaling of technology can operationalise ESG and sustainability, but what comes after that?”
Sustainable supply chains ‘requires change of thinking’ – IBM “For example, what is their thinking around designing for a circular economy? What is their thinking around addressing the ESG-related risks that make our jobs really tough? How are they taking their people with them? Are they giving people what they need to make the right decisions, to design a better world?”
It’s all about helping human beings become better versions of themselves. It’s about empowering people so that their personal values and personal responsibility shows up in their ‘Thinking’work.”may well be more fundamental than ‘acting’ in the quest for supply chain sustainability, but a big problem is that too many organisations appear to be doing neither. Hinish calls these the “stragglers andSuchsideliners”.businesses have made no sustainability investments to date. “Inaction is a decision, right?” Hinish highlighted. “It’s disappointing, but listen, I spend a lot of time with these folks. These are good people, just like you and me. They want to make a
Hinish added: “That's what we're after.
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This was followed by Hinish pointing out that too many businesses think they can “buy a suite of solutions, turn the light on and be transformed". That, she emphasised, is “not the journey we're on”. Instead, she says businesses need to be looking at how they are“Innovatinginnovating.is
what I help people do,” she said. “Often, it starts with product innovation; with design and deploying upstream thinking. Up to 85% of today’s negative ESG impacts are designed into products and services. It’s about engaging the ecosystem – manufacturing, supply chain, customers. The transformation trailblazers have this figured out.” But too many organisations have not figured it out because, according to Hinish, “they believe it’s all about acting, when the truth is that it’s really all about thinking”.
difference, only they’re paralysed. They don’t know where to start.”
Sustainability trailblazers ‘are investing smartly’ Businesses in such a state of paralysis are fundamentally unlike those at the other end of the sustainability spectrum, who Hinish dubbed “trailblazers” and “strivers”.
“These organisations outperform in carbon-reduction initiatives and strategy,” she said. “When you use carbon as a leading indicator, it becomes clear these folks are breaking the barriers; the differentiator is how they're using smart investments in technology to modernise and make it real.” Hinish offered Unilever as an example of a multinational company who are “walking the talk” on sustainability.“Forthem,it's a core value – and it shows,” she said. “It has cascaded down through their performance, on a strategic, operational, and tactical level. Using technology, they leverage sustainability as a competitive advantage.” On that point, Hinish explained that sustainability and profitability must not be viewed as mutually-exclusive goals. “It’s a mindset shift,” she said. “It’s a culture change, a talent transformation change. It’s about seeing sustainability as being good for the planet, good for society, and good for business.”
Procurement & Supply Chain Live London 2022 will take place at the QEII Centre from 12-13 October. To find out more, click here. supplychaindigital.com 95
INDUSTRY 4.0 ORREVOLUTION,TECH:EVOLUTION? 96 September 2022
here’s probably not a single supply chain professional on the planet who has failed to utter the words 'visibility’, ‘resilience’ and ‘agility’ over the past two tumultuous years.
Melnyk adds that, with increased focus on environmental and social risks, the demand for transparency “is extending into the upstream parts of a company’s supply chain”, and that this means “more data will need to be collected from multiple actors, including indirect suppliers and workers”.
T
Leanne Melnyk is Head of Global Supply Chains at Diginex, a blockchain-enabled SaaS solution for ESG reporting. Asked how Industry 4.0 tech is helping organisations build supply chain resilience, she says: “Since the dawn of Industry 4.0, there’s been maturation of transparency in supply chains.”
In striving to bring these qualities to their supply chains, organisations have turned to Industry 4.0 technologies such as Artificial Intelligence (AI), Machine Learning (ML) and the Internet of Things (IoT). Such tech is reshaping the way businesses operate in a world of uncertainty and disruption.
“This increases supply chain resilience, because the physical is connected with the digital, which opens up new pathways and provides real-time information and visibility into processes and operations at all levels.”
Striking examples of Industry 4.0 at play in supply chain
EVOLUTION? supplychaindigital.com 97 TECH & AI
There can be no doubt that Industry 4.0 technology is revolutionising the way that Industry 4.0 technologies are helping to make supply chains more resilient, but with its strengths there are also weaknesses and areas in which it needs to improve
Because Insight Beats Hindsight Ensuring the agility and resilience of your business and supply chain starts with identifying the risks. Download our report to start your resilience planning today. Inform your supply chain reporttime-measuredplanningresiliencewithourseries Download ASCRI Report
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Outside of Diginex’s customers, Melnyk cites another outstanding example of Industry 4.0 innovation: the case of ESG transgressions aboard the bulk carrier, Fortune Genius. business is done, and Melnyk can point to outstanding examples of innovation in the ESG space. One such example is a Diginex customer, Tat Win – a major manufacturer of latex.
“Tat Win is an upstream partner in complex supply chains that produce end products such as medical PPE, as well as consumer goods, such as balloons and adhesives.“Therewas significant responsibility on it to ensure supply chain transparency for LEANNE MELNYK
“Since the dawn of Industry 4.0, there’s been maturation of transparency in supply chains”
HEAD OF GLOBAL SUPPLY CHAINS, DIGINEX
supplychaindigital.com
“Usingworkers.our blockchain solution, Tat Win has visibility on the recruitment and employment of migrant workers – from their countries of origin to their place of work – so is able to proactively address risks before they escalate.”
She adds: “The data and information collected allowed Tat Win’s team to put in place action plans to strengthen policies, management systems, due diligence and remediation practices.”
its end consumers, including around the protection of rights for vulnerable groups of
Another executive who has seen some outstanding deployments of Industry 4.0 tech is Evan Sloss, Director of EMEA for iBASEt, a company that simplifies complex manufacturing with digitallyintegrated solutions. According to Sloss, complex manufacturing is one area in which technology is making a huge contribution.
“Aerospace manufacturers are using Industry 4.0 technology to keep pace with the rapid changes required during production, sometimes right at the last moment,” says Sloss. The sophisticated nature of space technology means that production processes often require sudden amendments due to new engineering designs and updated project requirements.
When Fortune Genius entered Australian waters, the International Transport Federation (ITF) – the global union for shipping – carried out a digital inspection. Thanks to its tech-based grievance channels, the ITF learned directly from the vessel’s Burmese crew that they had been forced into working excessive – and unpaid – hours. It was, in essence, forced labour.
“The ITF multilingual app has SMS and hotline number, Facebook page and Seafarer centres. It’s a powerful illustration of how multistakeholder due diligence systems, underpinned by technology, can effectively detect and remediate labour issues in supply chains,” says Melnyk. Aerospace manufacturing a hotbed of tech innovation
“Deployed cybersecuritycapabilityblockchainproperly,hasthetocounterrisks” LEANNE MELNYK HEAD OF GLOBAL SUPPLY CHAINS, DIGINEX 100 September 2022 TECH & AI
“When this happens, production-line equipment can send triggers to automated carts to find and load smart pallets and then deliver them where needed. Replacement supplies can then be automatically ordered from the inventory system. In many cases,
Blockchain improving supply chain, finds GlobalData ‘Blockchain is boosting customer confidence in products by offering clear and trustworthy information about product provenance, ethical sourcing, responsible supply chain methods, and authenticity’, finds a report from GlobalData, a leading data and analyticsGlobalDatacompany.Senior Disruptive Tech Analyst Abhishek Paul Choudhury said: “There is no straightforward way to monitor a product's provenance and authenticity in today's supply chain networks. Blockchain solutions can track products back to their origin through the supply“Blockchain-augmentedchain. product authenticity innovations have the potential to generate enormous company value by lowering supply chain risk, boosting transparency, and improving operational efficiency and overall supply chainChoudhurymanagement.”added: “As the supply chain evolves, the technology will generate interesting use cases to make operations more resilient.” this complex chain of actions can be managed without any human input.”
Industry 4.0 tech ‘falling short on ESG due diligence’ Although tech is working wonders in many areas, Melnyk feels it is yet to make an impact in others, such as corporate due diligence. “Transparency on due diligence has not progressed as quickly as it should supplychaindigital.com 101
mandatory due diligence legislation and new technology, including the use of blockchain.
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“Until recently, the highly analogue nature of the upstream part of global supply chains meant most companies were relying only on social audits to identify risks, whereas supply chain due diligence calls for a stronger combination of smart measures, including engagement with stakeholders, proactive monitoring and target setting.”
Melnyk points out that although the market for socially responsible supply chain tools is expected to reach US$2.7bn over the next five years, “many supply chain tools have,” she says. “Much of this is because of the absence of scalable due diligence systems that can touch the entirety of the supplyMelnykchain.”cites a 2020 report published by the European Union, in which just 36% of surveyed companies said they publicly disclose the processes they follow to prevent human rights risks and violations throughout their supply chains – and that even fewer follow such protocols when it comes to upstream. “Such ineffective monitoring can be solved through a combination of stronger
A recent report from consulting firm Capgemini highlighted this, suggesting Industry 4.0 tech is leaving smart factories open to cyberattack and that action is urgently needed. Sloss, for one, agrees that organisations must be wary of the vulnerabilities that come with technology.
He says: “Industry 4.0 brings a lot of benefits but an increasingly connected factory producing more and more data also increases the potential attack surface for criminals to try and exploit, “Manufacturers must be aware that this means cyberattacks are a much more realistic threat than everSlossbefore.”says to combat this risk, businesses need a strategic approach to security. “At a fundamental level, they need to establish private networks within the wider system so they can isolate areas, divide the network flow, and keep end-users and mission-critical applications separate,” he advises.
cybersecurity concerns Another area in which many feel leadingedge tech has a way to go is around cybersecurity. Cybercriminals are known to target supply chains to gain ‘back-door’ access to multinational targets upstream.
Industry 4.0 tech & supply chain
For her part, Melnyk feels that, deployed properly, blockchain has the capability to counter cybersecurity risks. “If everyone in the supply chain knows who the other players are, then a cyberattack on one part doesn’t necessarily mean everyone goes down with them,” she says. “So, if an attack were to happen, it could remain isolated at that point in the supply chain.” supplychaindigital.com
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have carried over the same problems that exist with social auditing”. She adds: “Most business tools are designed for large brands and cost around $30-$50,000 per year on average. And, while there are tools that focus on upstream actors in the supply chain and others that focus on workers, very few create a tailored end-toend due diligence journey for all partners.” This, she says, means that today’s digital tools can miss “hidden” agents, such as subcontractors or lower-tier suppliers. “We need affordable and scalable tools that cater to downstream and upstream companies and workers, and that provide relevant data for all parties,” she stresses.
DISCOVER & SUBSCRIBE THE FUTURE OF ELECTRIC VEHICLES 2022OCTOBERA BizClik Brand
