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F e b r u ar y 2016
DfID
The battle against Ebola
Collaboration Driving progress and building sustainable relationships Sustainable Sourcing There’s value in an ethical supplier network
LPP
IN FINE STYLE
An exclusive interview with International Logistics Director, Sebastian Soltys
SPECIAL REPORT
General Mills: Food for thought
May 17 – 19, 2016 | Phoenix, AZ gartner.com/us/supplychain SAVE $425 Register with code GARTSCD
The World’s Most Important Gathering of Supply Chain Leaders The Bimodal Supply Chain: Tackling Today, Preparing for Tomorrow
Learn from 46 Gartner supply chain research analysts and hear from more guest speakers than ever before, including:
Michael T. Duke Retired President and CEO of Wal-Mart Stores, Inc.
Joby Ogwyn Mountain Climber, BASE Jumper and Wingsuit Flyer
Chris Tyas Head of Supply Chain, Nestlé
View the full supply chain agenda and speaker lineup at gartner.com/us/supplychain. © 2016 Gartner, Inc. and/or its affiliates. All rights reserved. Gartner is a registered trademark of Gartner, Inc. or its affiliates. For more information, email info@gartner.com or visit gartner.com.
2016 tracks A. Strategy and Leadership B. Supply Chain Innovation C. Supply Chain Planning D. Logistics E. Supply Management and Manufacturing
EDITOR’S COMMENT
2016: the year of sustainability warm welcome to the February issue of Supply Chain Digital. Our cover story features insight from Wendy Manning, Vice President of Customer Logistics at Coca-Cola Enterprises. She discusses the difference between collaboration and services, and gives supply chain managers her best advice about how to manage these. We also have an informative contribution from Costa’s Buying Director Paul Barber who talks about the value of sustainable sourcing and how it has proved essential to the success of the business. Last but not least, Manfred Vogels, Vice President for Business Development, EMEA at IQNavigator, explores the potential challenges of the increasing uptake of contingent labour across modern supply chains. We also take a look at how US consumer food giant General Mills is taking its supply chain to new levels. Our profile on East African Breweries explores how the Diageo subsidiary is supporting local suppliers and partners through operational excellence and sustainability. We hope you enjoy the issue, and if you have anything to add, don’t hesitate to tweet @MrNLon and @SupplyChainD HELLO AND A VERY
Nye Longman EDITOR Nye.Longman@wdmgroup.com 3
CONTENTS
Features
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MANAGEMENT Driving progress and building sustainable relationships
18 12
LOGISTICS SOW the seeds of change 4
February 2016
TECHNOLOGY sustainable sourcing there’s value in an ethical supplier network
Company Profiles
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General Mills
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Department for International Development
EUROPE 24 General Mills 36 Department for International Development
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50 LPP
LPP
MIDDLE EAST 62 NADEC
AFRICA
NADEC
78 East African Breweries Limited
East African Breweries Limited
86 El Sewedy Electrometer 96 Transtech Logistics
AUSTRALIA 104 Hitachi Consulting
LATIN AMERICA 116 Impala Terminals México
USA
62
78
86
E l Sewedy Electrometer
Hitachi Consulting
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132 Bay and Bay Transportation
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142 Glanbia Nutritionals
and Bay 132 Bay Transportation Glanbia Nutritionals
142
Impala Terminals México
MANAGEMENT
DRIVING PROGRESS and building sustainable relationships Wendy Manning, Vice President of Customer Logistics at Coca-Cola Enterprises discusses the important difference between collaboration and service in the supply chain
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MA LO NG AG I SETM I CESN T
COLLABORATION IN THE supply chain is a hot topic. Those who can effectively collaborate through the supply chain benefit from reductions in inventories and costs, along with improved agility, order fulfilment, and customer satisfaction. Collaboration between companies is a joint initiative that takes us one step beyond day-to-day business, with the intention of delivering a significant long-term improvement. 8
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That’s all fine and well, but what does collaboration actually mean in this context? It’s one of those words that is used so much it’s starting to lose meaning. We all know it’s important and that we should try to do it, but are we actually doing it when we think we are? One of the main problems is that – in the supply chain world – collaboration more often than not gets confused with what is actually just great service. Could
DRIVING PROGRESS
an enhanced service expectation be described as collaboration? Ultimately, the two concepts are linked because collaboration delivers better service. We all know that service underpins success but real collaboration drives progress and builds sustainable relationships where value is shared across all parties involved. That’s the main difference. Take the space race in the 60s with the USA and the USSR competing to
‘In the supply chain, real collaboration will help in opening new revenue or optimisation streams; it can help to embed long-term relationships and ultimately remove waste and smooth the end to end process’ 9
MANAGEMENT get out into, and understand, space. Both countries spent extraordinary sums of money on technology and training to get there, and I wonder what could have been achieved, in a much shorter period of time, if the two nations had recognised earlier that they had a shared goal and there was no benefit to the winner other than prestige. What if they had collaborated and shared the cost and value earlier? In the supply chain, real collaboration will help in opening new revenue or optimisation streams; it can help to embed longterm relationships and ultimately remove waste and smooth the end to end process. At Coca-Cola Enterprises, we aim to help our customers and we want to be the best at understanding how to grow our customers’ business. Genuine collaboration is an enabler to this. I’m often asked what my top tips are for identifying and implementing a real and lasting approach to collaboration in the supply chain. It’s fair to say that it’s not a finite science but there are five areas I always highlight: 10
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DRIVING PROGRESS
Ensure there is the right tone from the top in encouraging collaboration; Always recognise great collaboration when it happens and share the success; Make sure you have team members with the right capabilities that work in an open and pragmatic way; Only collaborate in areas where you are strong and confident, or it won’t work; Accept that sometimes you can’t collaborate. That doesn’t mean you can’t deliver an excellent service proposition, so focus on that. If you asked me which was the most important, I’d say it’s having your senior leaders set the right tone from the top. Collaboration is a skill and mind-set more than it is a task and so much more can be achieved if you have the right culture, and a common mandate to succeed. If I could urge you to do one thing tomorrow, it would be to set up a series of job swops with suppliers and customers. This is something we do at CCE and I can tell you that there are few catalysts to real collaboration like seeing the same challenge from your partners’ perspective. 11
SOW the seeds of change Manfred Vogels explores the challenges of managing growing levels of contingent labour in the supply chain W r i t t e n b y: M a n f r e d V o g e l s , VP of Business Development, EMEA at IQNavigator
LOGISTICS THE GLOBAL WORKFORCE is changing. Up to a third of workers in Western Europe are not employed on a full- or part-time basis, but instead are contractors, freelancers, temps, agency workers, outside vendors working on projects, or other types of contingent workers. And contingent or non-employee workers are expected to rise to 45 percent by 2017. This massive shift from traditional permanent employment to greater use of contingent labour presents significant management challenges to organisations. While 92 percent of all enterprises say non-employees are important to their overall business strategy, other industry statistics are worrisome. For example, up to 60 percent of the contingent labour workforce goes unaccounted for in financial planning, forecasting and budgeting, according to Ardent Partners. A growing group of contingent workers deliver project-based services, also known as Statement of Work (SOW) services. Spending with this group of workers is over 10 times that of temporary labour. The SOW workforce is associated with a project, along with key deliverables, a 13
LOGISTICS timeline, the terms and conditions of the contract, pricing and milestones. SOW labour is typically not hired by HR departments, but procured at departmental or project level. They are also paid in very different ways than temporary labour; for instance, based on hourly/daily rates or per project fees, and their services can fall under different taxation rules and rates and be governed by different national and regional regulations. Recent industry analyst findings indicate that 76 percent of companies are not adequately managing and controlling SOW services. Furthermore, much of
Manfred Vogels, VP of Business Development, EMEA at IQNavigator
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these workforce costs are ‘hidden’ and not accountable, affecting how organisations manage their supply chain and impacting the bottom line. To start to address this issue, there needs to be a shift in culture and managerial approach to gain control of SOW costs and integrate it into the contingent workforce programme. This includes dealing with crossborder regulations, procurement, billing and supplier analysis. Managing SOW labour The largest problem by far is that in many cases, there is no overall management of the SOW workforce or spend. Contracts are usually drawn up with suppliers on an individual basis by those looking for short-term gain, such as the rapid completion of a project. Also, the long-term goals of the HR procurement team are quite different than those in the business unit that require quick delivery. A lack of visibility of SOW spend across such an organisation can lead to a blindness in total workforce planning where resource gaps and requirements in the business could be better served by a permanent headcount.
F E AT U R E A R T I C L E S H O R T E N E D H E A D L I N E
‘While stringent vetting processes are in place for permanent staff, they are often overlooked for temporary workers’ Question of compliance With increasing focus on security, privacy and data protection, risk and compliance are critical to all stakeholders of a contingent workforce program – from procurement and human resources to IT, legal and the boardroom. However, SOW contract terms and conditions are often agreed upon on an individual basis with no overall contract control. And while stringent vetting processes are in place for permanent staff, they are often overlooked for temporary workers. Without rigorous on-boarding and off boarding work streams, organisations are exposed to poor
worker management and considerable financial and reputational risk. For example, failure to ensure all technical requirements are met on day one can result in workers not having all of the equipment required to complete their task, while poor off boarding can lead to security risks if access rights are not revoked. Best rates Procurement departments are tasked with obtaining the best suppliers at an optimum rate, while taking a sensible and strategic approach that reflects the organisation’s ethos, core values and vision. But when it comes to SOW labour, normal procurement routes are 15
LOGISTICS
‘Contingent or non-employee workers are expected to rise to 45 percent by 2017’ often bypassed, with no negotiation for best or incentive rates from suppliers or management of volume discounts. Furthermore, bill payments launched through business units can lead to delays or mistakes in payments. Making the change So how do companies foster an environment for change in dealing with SOW contingent labour and bring this rogue spend under better control? The approach should include a balance of both tactical and strategic elements: 16
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Tactical elements such as management of master agreements and tracking spend allows organisations to stay compliant and lift the administrative burden placed on managers. Strategic elements including increased collaboration and the ability to distinguish SOW from other contingent labour in the requisition phases ensure that SOW-based projects are aligning to business objectives in order to plan for future workforce needs.
SOW THE SEEDS OF CHANGE
3. Gain control of suppliers 4. Achieve visibility of all temporary workers, their worth to the business, and exact costs 5. Bring in temporary workers to your total talent management analysis and strategy utilising resources appropriately and cost-effectively
Here are five steps to help you achieve SOW enlightenment and avoid common pitfalls faced when trying to transition to a fully managed workforce strategy: 1. Acknowledge the problem and the fact that you need to spend money to save money 2. Hire a managed service provider (MSP) partner or set up an in-house programme office to manage this huge area of spend
Challenges notwithstanding, there are benefits to incorporating SOW projects using an MSP and vendor management systems (VMS). Short-term benefits can include process efficiencies, data transparency, supplier consolidation and rate management. Over the longer term, companies can gain by having a single point of contact to manage the SOW lifecycle. Standardisation of SOW terms and sourcing criteria as well streamlined programme management, audit and risk mitigation can also help. With the growth of contingent labour and SOW services in particular, the potential savings you can achieve if managed more effectively will make a significant contribution to the bottom line. 17
TECHNOLOGY
Sustainable sourcing
There’s value in an ethical supplier network Leading Costa’s Buying and International Supplier Network teams globally, Paul Barber is responsible for the sourcing and buying of the majority of Costa’s food, drink and consumables W r i t t e n b y: P a u l B a r b e r, B u y i n g D i r e c t o r, C o s t a
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TECHNOLOGY CREATING A TRANSPARENT and sustainable supplier network is now more vital than ever in the hotel and restaurant business. With consumers becoming increasingly conscious of where products are sourced from and, with the media’s continued interest in sustainability credentials, businesses like ours are beginning to see that there can be more than just monetary value in having an ethical supplier network. Both consumers and corporate stakeholders are increasingly interested in understanding businesses’ supplier networks. Many consumers are mindful of the ethical and environmental impact of the products they purchase whilst stakeholders understand the positive effect that a sustainable supplier network can have on the business’ reputation more widely. Developing a supplier network structure that will stand up to increased scrutiny by consumers, the media and your stakeholders is a valuable way to enhance and protect your corporate reputation across all channels. As part of our commitment in becoming a truly sustainable and environmentally conscious business, 20
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we have set targets to increase the awareness of our supplier network’s sustainable credentials internally and to increase the transparency of our operations to consumers. By 2020, we aim to have achieved the accreditation of our ten critical product sourced commodities and are implementing a number of measures to ensure that we succeed. Regardless of whether you are working with a partner or not, it is essential to develop a strategy
S U S TA I N A B L E S O U R C I N G
‘A traffic light rating system helps us to identify which suppliers fully meet our policy requirements and which suppliers require a full audit’ and guidelines for sustainable practice. At Whitbread we have developed Responsible Sourcing and Commodity Policies that we urge suppliers to meet and we work with those suppliers who do not meet our high standard. Taking a collaborative approach with our suppliers has been immensely beneficial and is helping us to increase knowledge of every facet of our supplier network. Having created guidelines, the key is ensuring that your suppliers
meet them. Through our automated system, developed with CRedit 360, suppliers are asked to input details relating to the source of their products. For example, the supplier of our disposable cups will be asked about the labour used within their supplier network and where the timber used to create the cups was sourced from. Following the assessment, the supplier will be given a grading. A traffic light rating system helps us to identify which suppliers fully 21
TECHNOLOGY
‘Many consumers are mindful of the ethical and environmental impact of the products they purchase whilst stakeholders understand the positive effect that a sustainable supplier network can have on the business’ reputation more widely’ 22
February 2016
meet our policy requirements and which suppliers require a full audit. This ensures that we are working with suppliers who share our belief in responsible sourcing, helping to safeguard the environment and communities with which we work and thus reducing the reputations risk to our business by creating a transparent,
S U S TA I N A B L E S O U R C I N G
sustainable supplier network Supplier networks are long and complex so while the importance of sustainability is clear, many businesses find it difficult to put new strategies into practice. At Whitbread, we have found our collaborative approach highly effective and I would suggest that other businesses take inspiration from this approach.
Smaller steps such as a quick quiz for suppliers demonstrating how much they know about the sources of their product will be interesting and informative. Suggesting ways in which your suppliers can improve their supplier network will then ensure that you are working together to create more responsible practices that work for everyone. 23
Food for thought Written by: Lucy Dixon Produced by: Richard Durrant
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GENERAL MILLS
Increased collaboration is the key to food manufacturer General Mills’ success in a constantly evolving retail landscape
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February 2016
T
he UK food retail industry has been through some enormous changes. The market used to be dominated by the big four supermarkets – Tesco, Sainsbury’s, Asda and Morrisons – but in recent years they have been getting some serious competition from discounters such as Lidl, Aldi, Poundland and others. There has also, of course, been a big shift to online shopping and convenience. Dave Howorth, Supply Chain Director for General Mills in the UK, says that this change in consumer behaviour has been the driving force behind many of the innovative moves made by the company, as it reacts to the growth of convenience shoppers, as well as those who favour the discounters and online retailers. He says: “The UK has come out of the recession, but what we are seeing is a permanent change in consumer behaviour. If you listen to some of the
EUROPE
retailers, they’ll talk about more change in the last two years than they’ve seen in the last 20 years.” This transformation, which sees people shopping more frequently and happy to switch between stores, means that supermarkets are feeling the pressure – and looking to manufacturers such as General Mills to help them out. Howorth explains: “There are significant commercial pressures, the retailers are looking to their supply chain to operate at a lower cost. So, for instance, they are looking to de-stock, which means they want deliveries seven days a week.” Meaning General Mills has had to introduce a high level of agility into its own operations. One example of this is a new distribution centre in the North West of England, which General Mills is utilising alongside logistics provider Culina. Howorth says: “The only way to replenish the retailers on a seven-day
Key Personnel
Dave Howorth Supply Chain Director UK
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CARGO GENERAL MILLS
200
200 MILLION ROAD MILES ELIMINATED Peel Ports are running a campaign to help UK companies take 200 million miles off our road and rail infrastructure by the end of 2020
200 PARTNERS We will be partnering with 200 importers and exporters to support shipping lines connecting to Liverpool2; the UK’s most central deep-water container terminal being developed at the Port of Liverpool
YOU ARE IN GOOD COMPANY
Cargo200 has already attracted a significant number of retailers, manufacturers and cargo owners to sign up to the initiative including: JCB QVC Matalan
B&M Regatta Typhoo Tea
Do you want to be part of the CARGO200 INITIATIVE? Contact us at cargo200@peelports.com or visit www.peelports.com/cargo200
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week, 363 days a year, while maintaining your efficiencies, is to consolidate our volumes with other manufacturers. Because unless you are a huge company such as Nestlé or CocaCola, very few suppliers have the volumes to deliver full loads 365 days a year to the DCs of an increasingly fragmented customer base. So it’s all about collaborating with your 3PL partners and other manufacturers, and with the retailers, to flow those products in a consolidated way and to generate enough critical mass to be able to do that.” General Mills operates in three temperature channels in the UK – an ambient business (Old El Paso, Green Giant, Betty Crocker and Nature Valley), a frozen business (HäagenDazs ice cream and Jus-Rol pastry) and a chilled business (chilled Jus-Rol and Yoplait yoghurt). The new distribution centre is for the ambient brands and it is allowing General Mills to respond to retailers’ needs while still maintaining vehicle fill rates. This helps reduce the company’s environmental impact as well as protecting its cost base. “And it’s all done through collaboration with our logistics partner, other manufacturers and the retailers,” says Howorth. The centre is at Port Salford, on the bank of the Manchester
‘If you listen to some of the retailers, they’ll talk about more change in the last two years than they’ve seen in the last 20 years.’ Green Giant is one of General Mills’ ambient brands
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GENERAL MILLS
‘General Mills has been around for at least 150 years, and it’s intending to go forward for a long time as well, so it’s important that we protect the planet that we’ll be operating in.’
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Ship Canal, which has meant that General Mills can use sea freight. Howorth explains: “Green Giant sweetcorn is manufactured in the south west of France, Old El Paso and Nature Valley in northern Spain. So, for cost reasons and for environmental reasons, we move those products by short sea freight, from the Port of Bilbao in northern Spain into the port of Liverpool. Then it can go onto a barge and then to the quayside at our new warehouse. Not only are we saving the road miles, but we’re also using a more environmentally friendly mode of transport.” Reducing the company’s environmental impact is very
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important, says Howorth, for several reasons. “It’s typically associated with cost benefit, of course. We’re a global manufacturer, we have a responsibility – and a reputation – it’s what our consumers and our customers would expect of us. Shareholders and stakeholders would expect us to operate in an environmentally friendly way. But, most importantly, it’s the right thing to do. So General Mills has been around for at least 150 years, and it’s intending to go forward for a long time as well, so it’s important that we protect the planet that we’ll be operating in.” The new centre offers another advantage to General
Culina Port Salford
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GENERAL MILLS
We’re going the extra mile in our service and reducing the miles in our service delivery
At Yearsley Logistics we’re passionate about helping our customers manage their logistics better. From our award-winning customer service, to day 1 for day 2 retail deliveries. From reducing food miles out of our strategically located superhubs, to being the largest foodservice network in the UK. We go above and beyond; it’s a philosophy that drives every corner of our business. Find out more. Call us on 01706 694680, email at logistics@yearsley.co.uk or visit us at www.yearsley.co.uk
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Mills, when it comes to adapting to the new consumer demands. Howorth says: “The different channels – discounters, online, convenience – require different pack formats and pack sizes. For example, some retailers are servicing online through what they call ‘dark stores’ and these are very automated, so the product at the moment gets redistributed from their main distribution centres into these dark stores, and the first thing they do is rip the cases apart and put them into plastic crates to go into their automated system. We can see a future whereby the retailer may well ask us to do that, and say, ‘You need to start delivering to our dark store, and by the way this is how you need to present it.’ So potentially this could further drive new and different pack formats.” In response, General Mills is looking very closely at what it calls a postponement strategy, so rather than packing a product six to eight weeks before it is sold, it brings the product over in bulk, unpacked, and then packs it in the actual distribution centre one or two weeks before the sale. It is then able to customise the packing as required. Howorth adds: “We’re more responsive and also it’s freeing our factory to do what the factory is good at, and that’s producing the actual finished goods, and not becoming bogged down with all sorts of different pack formats. So within this new distribution facility, there will be a substantial packing facility to enable that.” All this highlights the positive changes for w w w. g e n e r a l m i l l s . c o . u k
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GENERAL MILLS
‘Delivering the same volumes across a more fragmented marketplace is a key challenge.’
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General Mills that, says Howorth, have only been possible thanks to the increase in collaboration. “It’s certainly been the most used word of the last five years, because it is crucial going forward, and we’ve been good at collaboration in all directions – with the retailer and the third-party logistics team. It is a true partnership, based on a joint strategy.” As an FMCG-branded food manufacturer, General Mills wants its product in front of the consumer, wherever the consumer is – so these collaborations have been crucial to its success. “Overall within the food and drink sector in
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Culina Port
this country there isn’t any growth, it’s flat – so one of our challenges as a business is to grow, while the market is becoming more fragmented with new channels and retailers opening up. Delivering the same volumes across a more fragmented marketplace is a key challenge.” As a result of this, Howorth believes, both manufacturers and retailers are starting to think more end-to-end, pulling down the barriers between what is the manufacturers’ supply chain and what is the retailers’, seeing it as one supply chain. “I think in doing that, we will open up a lot of opportunities,” he concludes.
Salford
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“Now I want to be a doctor� - Celina Kamanda, a young Ebola survivor
The battle against Ebola
Written by: Nell Walker Produced by: Richard Durrant 37
D E PA R T M E N T F O R I N T E R N AT I O N A L D E V E L O P M E N T
The UK’s Department for International Development led the response to the Ebola crisis in Sierra Leone, committing £427 million to the epidemic and getting the country back on its feet
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T
he Ebola crisis of 2014 brought West Africa to its knees and the rest of the world to arms. The UK’s Department for International Development (DFID) played a major part in containing and fighting the disease, having been tasked by the Prime Minister, David Cameron and Justine Greening, Secretary of State for International Development, to step in and help Sierra Leone’s government. DFID has the ability to respond to up to three international crises at one time, thanks to their partnership with the international development company, Crown Agents and its Conflict, Humanitarian and Security Operations Team – otherwise known as CHASE OT. CHASE OT allows DFID to respond to emergencies exceptionally quickly. For example, when a natural disaster occurs – such as the April 2015 Nepal earthquake – a CHASE OT team will be assembled
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in a tactics room, a plan laid out, and within a 24-hour period there are boots on the ground. The goods follow later; that’s where the supply chain comes into the equation. DFID steps in John McGhie, Supply Chain Demand Manager for DFID, is a busy man. When the World Health Organisation declared the Ebola crisis an international emergency, it was soon realised that the international supply chain was unable to cope with the depth of goods and flexibility required, and so the British government put into place its own end-to-end supply chain to handle operations on location in Sierra Leone. “Although you can acquire some information from initial reports, it’s only when you actually have people on the ground that you can truly assess what is needed,” McGhie says. “We unfortunately don’t have the time to sit and discuss things; we need to actually get people there. It’s peoples’ lives at risk.” Before the supply chain
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‘It’s only when you actually have people on the ground that you can truly assess what is needed’
Yusuf Kabba - an Ebola survivor and campaigner
“No one company could physically tackle what we were facing” – John McGhie, Supply Chain Demand Manager for DFID
D E PA R T M E N T F O R I N T E R N AT I O N A L D E V E L O P M E N T
‘Working with world experts, we worked out what an Ebola treatment centre looked like and what supplies were needed’
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could begin moving, DFID had to work out not only what was needed, but how it would slot together. “Essentially back in Whitehall we looked at it and said ‘what is a treatment centre?’ Working with world experts who had dealt with Ebola on a smaller scale, we worked out what an Ebola treatment centre looked like and what supplies were needed.” Acquiring supplies At this point, the basic items could be gathered: “At the beginning we had to think about patient numbers and consumption rates. We needed treatment centres, with 100 beds, able to operate for at least a six month period. Medical staff would be changing their Personal Protective Equipment (PPE) every shift, taking blood samples from patients, conducting physical checks and prescribing essential medicines. How many nurses are required, how many doctors, how many cleaners would be going in and out of the red zone?” The centres needed an isolation area, triage, labs, separate wards for suspected and confirmed cases, facilities for decontamination and a mortuary. Air conditioners were required, as temperatures within the tents could reach 44 Celsius, plus all manner of PPE – something that would need to be removed and replaced every time a medical worker entered or left a red zone – and, of course, medical supplies. “All these things were ongoing during the August/
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September period and being mobilized from October through to the opening of the first fully-formed treatment centre in November. It all had to work in sequence so that we could get on top of it, and this constantly evolved with the pattern of the outbreak.” At its height, the outbreak was bringing 500 people a week into the doors of 15 emergency treatment centres across the country, 6 of which were UK built, and CHASE OT could no longer tie up so much of its services in one place. “It became clear that the Ebola response was absorbing the majority of CHASE OT’s operations, so it meant that if there was another global disaster – and in the time CHASE OT
Yusuf Kabba - The President of the Sierra Leone Association of Ebola Survivors, Reaching out to Ebola survivors in Magazine Wharf, Freetown
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Equipping the Ebola fight in Sierra Leone November 7, 2015 was a remarkable day for Crown Agents and International Procurement Agency (IPA) – but also a day like any other. It was remarkable because it was the day that Sierra Leone was officially declared free of Ebola. It was the Holy Grail that we had been working towards for more than a year. But then it was just like any other day because we still had plenty of work to do – on the Ebola response and on much more. At both companies we did take a moment, however, to reflect on the magnitude of the achievement, which had seemed so distant and so desperate when work first began. A year previously, the work being done was on a scale and with an urgency that few, if any, had seen before. The outbreak was rising to its peak. Rates of infection in Sierra Leone topped 500 in one week in November 2014. The international
response was surging into action and Crown Agents and IPA were at the heart of things. Our core procurement and supply chain contingent was swelled with anyone who could be of assistance – director-level staff were rolling up their sleeves, getting on the phone and calling suppliers. Procurement, supply chain, logistics, health, IT, finance and HR staff – people from all over the companies – all had vital and urgent roles to do. At that point Crown Agents had sourced, procured and shipped everything needed to equip the first of the Ebola treatment centres funded by the UK government’s Department for International Development (DFID) in Sierra Leone. We had also been given our orders to do it all again for six more centres.
The award-winning CAIPA partnership, between Crown Agents and IPA, was also being formed, to establish the supply chains for the resupply and continued operation of the ETCs. The pressure of the situation was unlike anything we’d seen before because of the simple fact that it was literally a matter of life and death for the people in Sierra Leone. Between September 2014 and September 2015, CAIPA procured more than 10 million individual items from over 240 suppliers. 2,118,548 kilogrammes of products were shipped by air and sea freight from all over the world to Sierra Leone. When an all-consuming incident like the Ebola outbreak happens, it’s easy to forget that the rest of the world keeps spinning. During 2015 Vanuatu was stricken by Cyclone Pam, the earthquake in Nepal required a huge humanitarian
response and the refugee crisis in the Mediterranean called upon international humanitarian assistance. Throughout the Ebola work Crown Agents and IPA’s expertise has also been needed elsewhere so, on November 7, no-one took their foot off the pedal, work continued, supply chains for medical supplies and solar panels and infrastructure and technical assistance and more, kept moving. Work also continued on the Ebola response, moving into decommissioning, donation and making sure that all the positive medical advances made in Sierra Leone during the outbreak are leveraged for future health systems strengthening.
What is CAIPA? CAIPA was formed in November 2014 as a partnership between Crown Agents and International Procurement Agency (IPA) to help fight Ebola in Sierra Leone. IPA holds the DFID procurement contract for Sierra Leone and Crown Agents was able to offer additional supply chain capacity and experience in the region, so the decision to join forces was an easy one to make.
The Ebola response captured the best of what a partnership like CAIPA could offer: • More than 215 combined years of history in international procurement and supply • Strong and productive relationships with governments, donors and suppliers • Multi-disciplinary expertise spanning supply chain, logistics, consultancy & financial services • Agile international staff accustomed to getting things done in the most extreme environments CAIPA’s job is not over yet. The reporting of one new case of Ebola in Sierra Leone on January 15, reflects the ongoing risk of new flare-ups of the virus in the Ebolaaffected countries. CAIPA must still maintain the supply chains
and facilities to isolate and treat any such flare-ups and to scale up and down as necessary. Looking to the future, those supply chains and systems will also be used for wider health systems strengthening work, including for distribution under the Free Health Care programme run by DFID, the Government of Sierra Leone and UNICEF. We’re also supporting Public Health England in running four labs in Sierra Leone that were initially set up within the ETCs, but have now been relocated within Sierra Leone to take on a bigger role in general medical testing. Further afield, CAIPA has also begun working in South Sudan to provide emergency medical health supplies – including pharmaceuticals and medical consumables – country wide in support of the work being carried out by the national Ministry of Health and DFID.
For more information please visit: Crown Agents www.crownagents.co.uk International Procurement Agents BV www.ipa-bv.nl
Crown Agents was involved in the UK government’s Ebola response from the outset: its embedded Operations Team (OT) within DFID’s Conflict, Humanitarian and Security Department worked on the initial setting up of the seven British ETCs in Sierra Leone. Crown Agents is an international development company that takes on clients’ fundamental challenges and makes lasting change to the systems and organisations that are vital for people’s well-being and prosperity. Headquartered in London, it has more than 180 years of experience in international procurement and has international offices, project operations and agents across the world. IPA is one of the leading organisations in providing superior supply, procurement, consultancy services and emergency response to principals in all parts of the developing world on a strictly independent basis. It was founded in 1981 and is based in Bussum in The Netherlands. The partnership’s work with DFID on the Ebola was recognised with two awards at the European Supply Chain Excellence Awards, taking the honours for International Operations and for the Public and Third Sectors. It has also been shortlisted for the Outstanding International Collaboration Award at the British Expertise International Awards 2016.
D E PA R T M E N T F O R I N T E R N AT I O N A L D E V E L O P M E N T “There will be life after Ebola” - John Sesay
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have had to deal with the Nepal earthquake, the outbreak of hostilities in Yemen, the migrant crisis in Europe and through Syria, the issues around the border of Turkey – as bad as the Ebola crisis was, they couldn’t have one operation tie up what we have been tasked by the government to tackle,” McGhie says. CAIPA offers aid A normal response for CHASE OT would last between one and three months, but Ebola had the potential from the beginning to stay longer and spread wider: “No one company could keep up with the demand for PPE, so DFID’s procurement unit ordered from several companies. No one company could physically tackle what we were facing.” The procurement unit decided that supply chain needed help to cope with this enormous drain, leading to a partnership between Crown Agents and IPA, known as CAIPA. Crown Agents is a large, long-standing organisation and IPA is smaller and proactive; “This provided us with the kind of platform we required, because what is needed today is not what’s going to be needed next week, and this was a constant evolving pattern where we were assessing what was necessary.” This extra support from external contractors contributed towards the development of over 70 community care centres which were located around the country to help quickly isolate and treat
1000 The number of Department for International Development employees
Celina Kamanda - an Ebola survivor
D E PA R T M E N T F O R I N T E R N AT I O N A L D E V E L O P M E N T
British Army Sergeant Sulaiman Kamara meets Ebola survivors in Magazine Wharf, Freetown
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cases. What remains now is DFID’s legacy. “The reason I was brought out here was to maintain the supply chain for DFID, but also manage the transition of what happens once this is over. Moving from active treatment to surveillance, through to recovery, through to development… All to help and support the Government of Sierra Leone to get back to normal.” Pre-Ebola crisis, Sierra Leone had one of the fastest growing economies in the world. This dropped to growth of only 1% in 2015. “It was a country that was ready to step ahead and make significant increases which then
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got cut off at the knees. We want to leave a legacy of capability within the government.” Sierra Leone today Sierra Leone reached zero cases of Ebola in November 2015, but as the new flare up in January of this year demonstrates, the virus will emerge in clusters every so often. Ebola has also delayed immunization programmes and led to many people feeling afraid of hospitals – increasing Sierra Leone’s exposure to other diseases such as malaria and cholera. However, DFID is developing a programme of support for a free healthcare service for pregnant woman, lactating mothers and children under five (as Sierra Leone has one of the highest child mortality rates in the world, with 8.7 percent of babies dying under the age of one), and the elderly. This is all in the name of allowing the people of Sierra Leone to continue to live healthily and without fear. DFID has gone above and beyond during the operation in Sierra Leone, working with the national government and its partners including the World Health Organisation, Centres for Disease Control and Prevention, the Ministry of Defence, Public Health England, the National Health Service and the Australian Government-funded Aspen Medical. In the fight against Ebola, the international aid has proven invaluable, and will continue to allow a damaged nation to get back onto its feet as it recovers from one its weakest points in history.
‘It was a country that was ready to step ahead and make significant increases, which then got cut off at the knees. We want to leave a legacy of capability within the government’
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In fine style Written by Nye Longman Produced by James Pepper
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LPP
Having grown into a major fashion retailer, Poland’s fast fashion network is cresting the wave of its success, expanding its brands into new markets and leveraging its optimised supply chain network
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is perhaps the best example in the European fashion retail market of what can be achieved in 20 years. Following consistently high growth – especially over in the past few years – the Polish fashion retailer has pushed the limits of its global supply chain in order to deliver both quality and value to its customers. In just under a decade, the company has seen its sales swell from €170 million to over €1.13 billion, significantly grown its number of stores and accelerated logistics facilities and solutions. We speak to Sebastian Soltys, LPP’s International Logistics Director, about how he and his teams have ensured that the company’s supply chain has accommodated rapid geographical expansion, as well as evolved to serve the addition of new clothing brands. Operations and expansion LPP is the most popular fashion retailer in Poland – and it is by far the largest. Its size and popularity have enabled the company to look beyond its borders for revenue opportunities. Following the entry into Germany, Croatia and the Middle East, it currently has stores in 18 countries serving three continents. Over the years, LPP has developed six well-known fashion brands which consist of: RESERVED; Tallinder; MOHITO; House; Cropp; and SiNSAY. The RESERVED brand is perhaps the best example of LPP’s diversity and
Key Personnel
Concept work for the new LPP Headquarters
supply chain capabilities and is little wonder that the company chose to launch this as its premier brand in the German market in 2014 –it is maintained by extra value added services such as garment ironing or hanging garment distribution. Later this year, the retailer is planning to open a high-profile store on London’s prestigious Oxford Str. House and Cropp offer clothing lines for fashion-conscious young people; its SiNSAY brand specifically targets the younger female market. The company attracts customers over 30 through its newly rolled-out premium brand Tallinder - while it focuses specifically on the female market with its MOHITO brand whose autumn/winter collection in 2014/15 was designed in collaboration with Polish supermodel Anja Rubik. Somewhat fondly, Soltys recalls a time when the company was small enough to be managed from a single location he says:
Sebastian Soltys International Logistics Director When Sebastian joined LPP back in 2005 as Project Manager he had a clear goal - to set up LPP’s first automated distribution centre. Having achieved that, he took charge of processes optimisation and throughput development, attaining the role of Logistics Center Director and advanced to Supply Chain Management Director further down the line.
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LPP
The flagship store for the Cropp brand
The flagship store for the House brand
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“I remember when I joined the company 10 years ago - we used to have 10,000 square meters of warehousing - our turnover and the store collateral were both small back then.” Back in 2005, LPP had just over 200 retail stores, but by 2015 this number had shot up to over 1,600 supported by a 70,000 square metre logistics centre. He explains how the youthfulness of the organisation had actually facilitated rapid growth and had given LPP the freedom to create modern solutions: “We had the luxury of creating our logistics operations from scratch, which differs from many retailers; when they need to scale their operations for periods of constant growth, they often have to squeeze them into existing facilities. Saying that, we were able to expand production at our site from 250,000 pieces per day in 2008, to 1,200,000 in 2015.” Supply chain strategy Soltys also explains that, in order to accommodate the massive growth of its retail stores network, LPP had to ensure that its entire
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“Alongside the growth of our company, in terms of logistics and supply chain it was enormous, very rapid growth that actually forced us to be very dynamic and flexible to keep up with organisational changes” – Sebastian Soltys, International Logistics Director supply chain was able to adapt and grow, he says; “Alongside the growth of our company, in terms of logistics and supply chain it was enormous, very rapid growth that actually forced us to be very dynamic and flexible to keep up with organisational changes.” “With growth in both the number of our stores and the destinations we serve, the challenge is to orchestrate on a daily basis in terms of time, cost and quality the supply from hundreds of manufacturers which are placed in more than 20 countries, spread across more than 120 different landing points.” “Every single day we have a multitude of goods landing, as well as goods in transit and coming in and out from sea ports, airports, and roads. All in all, it is a constant flow from one supply chain side to the other, represented by 1600 shop floors. Adding additional disruptive layers to that global network means that my team and I have very difficult jigsaw to put together.” And how does LPP ensure that the entirety of its supply chain is up to scratch? Soltys explains: “The key to success is ability to be flexible
The flagship store for the MOHITO brand
The flagship store for the SiNSAY brand
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LPP
Reliable partner for value-added warehouse automation
Vanderlande is a major player in the warehouse automation market and specialises in solutions for food retail, fashion, parts and components and e-commerce. It cooperates closely with its customers to optimise their supply chain and enhance the efficiency of the processes in their distribution centres. The company is a one-stop shop for innovative systems, intelligent software and life-cycle services. This integrated approach results in an optimum performance throughout the system‘s lifetime. > vanderlande.com
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with the strong eagerness on driving process improvements. You need to also remember to be reliable when collaborating with your vendors. “The biggest advantage for LPP is that we can react at a fast pace to cope with any environmental changes. When expansion was booming in Russia three years ago, we set up a distribution centre in Moscow and created a separate supply chain model for the reason of strengthening reaction against the market demand and to bring stock closer to the end customer.” “A year and a half ago, when the political and economic situation in Russia deteriorated, we were able to very smoothly balance what we were bringing out in the Russian market directly, and what we bring to the other countries. So we were just very dynamic with goods between the countries where we operate.” Jacek Kujawa, Vice President of the Board at LPP, adds: “More than ever before, excellence in supply chain and logistics is about bringing the real contribution into the revenue growth and enhancing customer
An extra layer of efficiency gained by the Automatic Storage and Retrieval
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LPP
“I would say that nowadays supply chain visibility is crucial, but it’s going to be very challenging for the next couple of years, and only those companies that have full supply chain visibility would gain any advantage facing the volatile macroeconomics” – Sebastian Soltys, International Logistics Director
TRANSFORM
YOUR COMPANY. THE CAPABILITIES TO ACTUALLY DO IT.
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THE INSIGHTS TO KNOW HOW TO
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satisfaction. Being innovative in terms of advanced logistics technology and IT systems in reasonable fields really pays off. Although all logistics developments made required much capital investment, they brought us a continuous cost to serve decrease.” Ethical expansion In recent years LPP has worked hard to ensure that its supply chain is as transparent and ethical as possible, which culminated with the creation of a dedicated CSR department last year to provide oversight on this initiative. This endeavour may be relatively new to the company, but due to its inherent speed, it has been able to take it on board with gusto. LPP’s spokesperson Marta Chlewicka says: “We are initially concentrating on implementing the right controls and auditing our factories. While we don’t actually own any factories, we are focusing on being precise with the ones we use – we will be conducting more audits and social audits in our supply chain, especially in Bangladesh this year, and in the future we would like to also control our factories in China.” “We are the only Polish fashion retailer who joined the Accord on Fire and Building Safety in Bangladesh initiative whose aim is to improve the safety in the clothing production facilities in Bangladesh.” Soltys adds: “We also take into account the transport we currently use; we ship via
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Number of staff employed by group
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LPP modern ocean ultra-vessels, which are currently the best on the market and have reduced carbon dioxide emissions. We are also starting some trials with rail connections from the Far East to Poland which will make the supply chain smoother and faster, and no doubt much environmentally friendly. “I would say that nowadays supply chain visibility is crucial, but it’s going to be very challenging for the next couple of years, and only those companies that have full supply chain advanced visibility would gain any advantage facing the volatile macroeconomics. We aim to enhance the supply chain supporting systems to clearly see and analyse every single step of chain, because that helps you to mitigate the impact of the global disruptions and keeps you a step ahead.” “We operate in a total of 18 countries, across three continents and supply roughly 120 million pieces of garments and accessories yearly.
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Tallinder – the first premium brand in the portfolio of LPP
Such a distribution scale would definitely not be feasible without a well synchronised supply chain, supported by the advanced intralogistics technology and systems. He concludes: “On top of that, I would emphasise the human element, because you might have an ideal system but there need to be personnel to understand the process and the data and combine it to achieve the best results. In the end, it’s all about synchronising every supply chain link well with the previous and the next one.” Having grown at an unbelievable rate in the past decade, LPP has shown that a newcomer to the market can not only move with unmatched speed, but can do so without compromising on the quality of its products and build a strong yet flexible supporting supply chain. As the fashion retail space continues to evolve, the company can be sure that the systems that it has in place are more than capable of accommodating them.
“More than ever before, excellence in supply chain and logistics is about bringing the real contribution into the revenue growth and enhancing customer satisfaction” – Jacek Kujawa, Vice President of the Board
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Vertical
excellence
Written by Nell Walker Produced by Dennis Morales
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NADEC
How vertical integration has aided NADEC’s rise to agribusiness prominence
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T
he National Agricultural Development Company – known as NADEC – is one of the largest share stock companies in the agricultural and food processing sector of the Middle East and North Africa. The Saudi Arabian company was established in 1981, with 20 percent owned by the government and the rest publically traded on the Saudi Stock Exchange, and is now among the leading food, dairy, and beverage businesses in the region. NADEC’s success is in part due to its vertically integrated business model which is one the largest such dairy systems in the world. It means that the end to end value chain is owned and controlled by NADEC, which makes life simpler for Graham Burne, General Manager of Supply Chain.
MIDDLE EAST
“We’ve grown from an agricultural business,” Burne says. “We grow our own crops, which feed our cows that supply over 1.5 million litres of milk and juices a day to our huge factory operations. We have full control and we know what kind of quality systems we’re using, rather than having to rely on a suppliers that could potentially be unreliable. Having control in the supply chain is key to our success.” Vertical integration has helped NADEC to become one of the cheapest raw milk suppliers in the world, simply because it has no need to outsource to other businesses, allowing the supply chain to move as smoothly as possible. As important as full vertical integration is in terms of setting
7000 Number of jobs supported by Nadec
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NADEC
1981 The year the company was founded
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NADEC apart from others, Burne says the most significant element of the company is, quite simply, quality: “We ask ourselves ‘Is that product great quality? Is it safe for the consumer? Does it taste better than our competitors?’ For us, those are the defining things that make consumers choose our product and not the product sitting next to it.” Managing such a large supply chain requires extreme focus and Burne is a firm believer in setting key performance indicators (KPI’s) to manage the essential activities on a day-to-day, month-to-month basis: “We look at our performance from a KPI point-ofview, and then for me it’s about developing capabilities. Focus on people, people, people; that’s how you drive performance and really get the expertise you need. If you can’t measure it, you can’t manage it.” Burne oversees the flow of R&P materials into the factory operations, picking up the finished products from the end of lines and putting them through both our primary and secondary distribution networks. “We have very close cooperation with our dairy farms and manufacturing colleagues. It’s a real team effort considering the size of the milk supply and production operations and the volumes they produce and handle each day. Our CFR performance is world class at 99.8 percent and this can only be achieved by careful planning and daily synchronization
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between all departments across our value chain. Of course our procurement teams must also receive great credit for ensuring the necessary R&P materials are continuously available at the right time, price and quality.” Ashraf Abu Shaqra, General Manager of Industrial Operations is equally focused on delivering to the highest standards, and plays in integral role to ensure the manufacturing facility and operations are run to the optimal efficiency delivering the freshest product on time, with the right quality and the right costs. Shaqra comments: “NADEC Industrial is one of the largest facilities in the world, having three plants capable of a throughput capacity of over 2 MLT per day; the products are spread over 200 SKUs in nine categories. The plants are all ISO certified, equipped
‘People, people, people is how you drive performance and really get the expertise you need. If you can’t measure it, you can’t manage it’
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SUPPLIER PROFILE
TETRA PAK Tetra Pak is the world’s leading food processing and packaging solutions company and one of the largest suppliers of packaging systems for milk, fruit juices and drinks. Working closely with our customers and suppliers, we provide safe, innovative and environmentally sound products that each day meet the needs of hundreds of millions of people in more than 170 countries around the world. With more than 23,000 employees based in over 80 countries, we believe in responsible industry leadership and a sustainable approach to business. Our motto, “PROTECTS WHAT’S GOOD™,” reflects our vision to make food safe and available, everywhere. We are committed to making food safe and available, everywhere. Our commitment extends far beyond protecting the contents in a package. It also includes supporting our customers’ businesses, a responsibility to reduce our environmental footprint and shape a better future for all our stakeholders—from our employees, to our suppliers and the communities in which we operate. Today, we are the only international company in the world able to provide integrated processing, packaging and distribution line and plant solutions for food manufacturing. This means that our customers enjoy the advantage of being able to get multi-product solutions from a single source, with matching equipment at every stage. Our environmental commitment is embedded in every aspect of our products’ life cycle – to enable our customers and us to achieve sustainable, profitable growth and to do our part in protecting our precious natural resources.
Website: tetrapak.com/protection
NADEC
MIDDLE EAST
with the latest processing and filling technologies worldwide which are able to deliver the best quality product at all times.” The growth of NADEC in the past several years has put a huge burden on industrial operations to seek high-capacity production units and automated solutions. Investment in state-of-the-art technologies and the building of highly-skilled resources to operate the sophisticated machines was coupled with intense planning to improve productivity and efficiency. “Lean programing and advanced tools were deployed with detailed tracking systems to measure the development of a high-performance organisation. “With more tailored production serving diverse markets, diverse consumers, and ever-expanding territories, the operation will be inevitably stretched for more dynamic flexibility and proactive planning. For NADEC to maintain its leadership
‘We have full control and we know what kind of quality systems we’re using. Having control in the supply chain is key to integration’
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NADEC
FACTS ABOUT
NADEC NADEC’s seven dairy farms hold 65,000 cows The two processing plants produce 1.5 million litres of milk and juices per day The lab runs 8,000 quality control tests per day
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position, its industrial engine needs to continuously adapt to keep up with market innovations and world class performance.” Another area of NADEC’s supply chain that requires careful planning is the large primary distribution operation which covers over 40 million kilometers a year, delivering fresh and time-sensitive products to over 30 sales depots across Saudi Arabia and the GCC countries. “We must be slick, efficient and effective with this operation,” says Burne. “Any delay impacts on the freshness we offer our consumers, and any operational deficiencies can impact the quality of the cold chain which must remain intact throughout the product’s journey.” Technological advancements are an integral part of this fast-growing company. Burne says: “We have an enterprise resource planning platform which we will be utilising more in the future. We’ve recently automated our demand and supply platforms, and we’re looking to fully integrate a warehouse management system into our operations. It’s fair to say that the roadmap is fairly busy as we look to continuously develop our operations and link automation to
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NADEC
How we build innovation for beverage and dairy industry Sipac and Emmeti offer innovative solutions and complete “turn-key� installations for beverage, dairy and chemical industry.
Sipac S.p.A., Via Berettinazza 25 43010 Fontevivo, Parma, Italy Tel. 0039 0521 611811 Fax. 0039 0521 611850 E-mail: sipac@sipac.pr.it Website: www.sipac.pr.it
Emmeti S.p.A., Via G. Galilei 9 42027 Montecchio Emilia, Reggio Emilia, Italy Tel. 0039 0522 861911 Fax. 0039 0522 861912 E-mail: emmeti@emmeti-spa.it Website: www.emmeti-spa.it
MIDDLE EAST
key areas within our supply chain. We’re going to be quite proactive in this area.� Agriculture is the cornerstone of the company, complementing its aim of increasing self-sufficiency and dependability for the national economy. NADEC produces onions, potatoes, fruit, olives, wheat, corn, alfalfa, dairy and juices, and nutritious animal fodder for the cows across thousands of acres of land in Haradh, Wadi Al-Dawasser, Hail, and Al Jouf. Its seven dairy farms hold around 65,000 cows between them, and the two processing plants produce over 1.5 million litres of milk and juices per day. NADEC offers more than 200 products across its range, in many variations and w w w. n a d e c . c o m . s a
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NADEC formats to suit different consumer needs and occasions. NADEC also has its own labs on site led by experts in nutrition and quality, who run over 8,000 tests per day to comply with the relevant industry and government standards. The company has achieved many international accolades thanks to its pursuit of perfection including ISO 22000, Ceres award and the most recent being a highly rated quality certificate from the BIOL 2015 awards. In terms of its continuous improvement strategy, NADEC has adopted many different means of developing the smooth-running of the company. “We adopt some Kaizen, Lean Six Sigma and ISO-type principles, so we are always benchmarking ourselves through
MIDDLE EAST
‘We are always benchmarking ourselves through different accreditation bodies to make sure we’re continuing industry best practice.’ different accreditation bodies to make sure we’re continuing industry best practice.” NADEC has big plans to develop its current portfolio, adding new products and even new categories under the NADEC brand while maintaining its reputation as a trusted, selfsufficient company. “In terms of our portfolio expansion, we’re always looking to grow in areas of dairy and juices which are the core of our business, but we are expanding into a broader food business with the launch of several new cheese and olive oil products over the last 24 months. We continue to develop our innovation pipeline with a range of product extensions including new juice flavours, cheese products and even creating new segments like the very successful launch of NADEC Ayran: a light, refreshing dairy based drink for the local market which is proving highly successful and is targeted at a new and younger audience. We will continue to develop our innovation capabilities to meet the ever-changing needs of the market place and our objective of becoming a major food-based business, helping the country with self-sufficiency in food.” w w w. n a d e c . c o m . s a
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The busine
Written by Nye Longman Produced by Da
ess of brewing
aniel Pritchard
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EAST AFRICAN BREWERIES LIMITED
East African Breweries is expanding on the directives of its parent company, Diageo, to create a responsible, regionallyrelevant business
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hile being a subsidiary company of the global beverage company Diageo certainly has countless benefits, East African Breweries Limited (EABL) is determined to guide its own destiny, bringing to bear decades of experience serving its region. Having secured a number of the most popular African beer brands, the company has expanded on Diageo’s global standards and has combined this with its knowledge of local supply chains in order to deliver value for money, reduce waste and champion the countries of East Africa across all of its operations. EABL’s range of brands covers a significant portion of the continent and consist of Kenya, Uganda and Serengeti Breweries, as well as East African Maltings, United Distillers and Vinters, and EABL International. Its brewing companies boast some of the most popular beer brands in their respective markets which include Guinness, Tusker Lager, Serengeti Premium Lager and Bell Lager. These brands cover six East African countries which consist of Kenya, Uganda, Tanzania, South Sudan, Rwanda and the Democratic Republic of Congo. In total, these facilities directly employ roughly 1,500 people, mainly consisting of locals with a smattering of expats. Greg Moser, Head of
AFRICA
Logistics and Governance explains: “On any given day EABL ships out between 80,000 and 100,000 cases of beer into our markets. It’s a significant logistics operation –240 trucks a day go through the Nairobi central depot. Production, packaging and storage all take place in one location – we have kegs, spirits, and bottled beer as well non-alcoholic products. “Besides global reporting and KPIs we really created a changed management programme and new way of working for our markets here in Africa which allows us to compete globally with the other markets which is really exciting.” Supply chain strategy Although EABL owns and manages some warehousing assets, most is outsourced using third-party logistics (3PL) partners including global logistics solutions provider DHL. EABL is working very closely with these partners to implement Project MOVE, which will deliver an integrated, streamlined, and agile logistics network, all the way from end of packaging line to the distributor. In-line with more mature markets such as Europe, this will exploit technology to measure how well the changes are performing. Moser explains: “We have really improved the way that we interact metrically with our 3PL partners. We bring them in to our internal standardised improvements processes – they are very much treated like one of the team. The data that we get from them is w w w. e a b l . c o m
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EAST AFRICAN BREWERIES LIMITED
MIDLANDS
HAULIERS LIMITED
Possibility In Every Direction
We transport to the following countries – Kenya, Tanzania, Uganda, Rwanda, Burundi, South Sudan, Zambia, Malawi & Zimbabwe) Tel: +254 (20) 2211690 Office Mobile: +254 (731) 069 525 Email: info@midlandgroup.co.ke Email: operations@midlandgroup.co.ke Email: hiren@midlandgroup.co.ke
AFRICA
incorporated into our own; we mix their data with our SAP data, for example, to show us the insights so we can track our performance.” EABL has a four step process to ensure best practices are deployed which consists of measuring, monitoring, managing, and subsequently making a difference to its processes. Using 52 KPIs gathered from packaging line all the way down to outlet level, the company is able to make informed decisions (backed up by a set of analytics tools) to create an atmosphere of continuous improvement. This is all reinforced by Diageo’s Logistics Essentials training programme which aims to upskill its logistics teams, allowing them to speak a common language, standardising processes across markets, and delivering ‘best in class’ ways of working. EABL’s MOVE program is delivered through a number of key projects which include: network improvement and warehouse optimisation, as well as optimising its transport, customer services, procurement and by making distribution savings. Last year the program delivered £1.9 million in savings and is on track to make a further £2.9 million saving this year. On top of saving the company a significant amount of money, the program has delivered a remarkable set of operational improvements. Palletisation of the Kenya Central Depot has rocketed from 24 percent to 85 percent in a single year; return bottle pre-sorting has soared w w w. e a b l . c o m
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EAST AFRICAN BREWERIES LIMITED
1500 Number of staff at East African Breweries Limited 84
February 2016
from 65 percent to 99.9 percent. OTIFNE (on time, in full; no errors) has increased from 85.7 percent to 95.8 percent. Demurrage has also decreased by 25 percent in the past year and turnaround time at the central depot has been reduced by 33 percent. Having such substantial operations in the region gives EABL the scope to use its scale for good in the communities it works in; this
AFRICA
covers everything from employing, training and rewarding local workforces, investing in its 3PL partners so they can grow into regional players in their own right and also through its support of local sourcing and social programmes. Combined with its detailed business plan, the company is showing that it is possible for an African region to compete on a global scale while making a positive local impact.
“On any given day EABL ships out between 80,000 and 100,000 cases of beer into our markets. It’s a significant logistics operation –240 trucks a day that go through the Nairobi central depot” – Greg Moser, Head of Logistics and Governance
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A revolution in metering Written by Nell Walker Produced by Daniel Pritchard
solutions 87
EL SEWEDY ELECTROMETER
How El Sewedy Electrometer Group stays ahead in the competitive metering industry
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W
ith 19 million meters running in 46 countries, and as one of the top 10 metering companies in the world, El Sewedy Electrometer Group (EMG) has come a long way from its well-established roots. The company has been established since 1998, and for decades it has slowly but surely built its brand, thriving where similar businesses fell behind. Its rise to prominence has occurred steadily throughout its timeline, as follows: • 1938 – Zaki El Sewedy Holding (ZSG) was founded as a supplier of electrical materials in Egypt • 1962 – ZSG was appointed by the Egyptian government as the main supplier of all electrical materials for the largest hydro power plant in Egypt, the Aswan High Dam • 1980 – ZSG started investing in industry,
AFRICA
starting with the manufacture of power cables, electricity distribution boards, electricity and gas meters, lighting fixtures, and energy-saving lamps in addition to its turn-key electrification projects • 1998 – ZSG established El Sewedy Electrometer (EMG), the first private sector company specialising in the design and manufacture of electricity meters in the Middle East • 2004 – EMG founded Ghana Electrometer Ltd, the first metering factory in West Africa, followed by the successful implementation of the e-Cash pre-payment system • 2007 – EMG ventured with EEPCO in Ethiopia Electrometer to produce prepaid meters in Ethiopia, as well as with ZESCO in Zambia Electrometer • 2008 – EMG partnered with BMG bank in Electrometer do Brazil, in addition to Electrometer de Las Americas in Mexico with CICASA • 2009 – EMG established El Sewedy Electrometer India to supply Asia as well as the rest of the group with quality meters and modules • 2010 – EMG acquired an established meter manufacturer in the Czech Republic to supply Europe and the rest of the world with smart grid solutions EMG is fully-focused on production of meters, network management services, large electrification
El Sewedy Electrometer has 19 million meters running in 46 countries
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EL SEWEDY ELECTROMETER projects, and product aftercare. The business expanded facilities in Africa to cover Ghana, Ethiopia, and Zambia respectively. As its success spread, EMG began to globalise, extending facilities to India, Brazil, and Mexico, before penetrating the European market by acquiring ZPA Smart Energies in the Czech Republic. EMG has attained ISO 9001, ISO 14001, and OHSAS 18001 certification during its lifetime, and has become a sought-after partner for many other large businesses. Some of its major recent projects include the North Lebanon Project and the Ghana Ashanti BOT Project, both involving the design, manufacture, supply
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and installation of various metering systems. “We have a complete portfolio of products that cover residential, commercial, and industrial market needs,” says Mohammed Shoaib, Head of PMO and Strategic Sourcing at El Sewedy Electrometer. “Our portfolio includes basic meters, advanced meters that provide prepayment features, and smart meters that come with a flexible design to communicate via GPRS, RF or PLC. These smart meters enable utility companies to remotely collect metering data as well as configure meters, which enhances the accuracy and swiftness with which data is transferred between the utility and consumers.” Productivity is optimised by utilising the latest techniques in lean manufacturing and Six Sigma. Calibration and testing systems are automated, allowing simultaneous manufacture of multiple products without sacrificing accuracy, and the ability to respond to customer delivery demands without risk of human error. The supply chain is strictly operated and Shoaib demands perfection at every step of the way: “We have a solid supplier-management mechanism where we evaluate our suppliers based on their financial performance, the quality of the product, lead times, and cost. We try to have multiple suppliers for every item to minimise risk and lessen competition. We like to maintain an open relationship with all of them by sharing our production plans and our needs, which keeps them engaged. We have a list of authorised
Mahmoud Shawky Operations Director Mohamed is the director of operations and is a member of the management committee. He is responsible for overseeing Elsewedy Electrometer’s daily operational activities including manufacturing, quality, supply chain, and performance reporting. He plays effective role in the top management committee regarding the firm’s performance, dayto-day operations and overall strategic planning.
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suppliers, and another for preferred suppliers that we always return to. Also we are implementing a very solid tracking mechanism and an ERP system that connects the dots and ensures every point in the business runs smoothly.” All of EMG’s products are heavily tested by world-renowned labs, including OFGEM in the UK, MET Lab in the US, INMETRO in Brazil, LAPEM in Mexico, ERDA in India, and many more to ensure all products are of the highest quality. “We have prestigious R&D houses in Egypt, India, the Czech Republic, and many other countries. Five percent of our annual revenue is invested in R&D; El Sewedy is one of the top five platforms for R&D in the metering industry. We don’t buy ready-made designs and just put our logo on them; we develop every concept ourselves.”
EMG’s smart meters come with a flexible design to communicate via GPRS, RF or PLC
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Mohammed Shoaib Head of PMO and Strategic Sourcing Mohammed heads PMO and Strategic Sourcing at ElSewedy Electrometer. He oversees project execution from customer order all the way through to delivery. He also oversees supplier relationships and evaluation plus BOM costing, lead times, and quality. Prior to that, he worked at Intel managing its R&D outsourcing. He is the recipient of Intel’s prestigious Division Recognition Award. Mohammed holds a recent MBA and is PMP certified
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Such a large, rapidly-expanding company has a lot to offer an employee, Shoaib says. “We always offer opportunities for growth; it’s a global company and doesn’t have one single focus, so as an employee you would have the luxury of being exposed to the product development every step of the way; employees can grow within one department or expand to the next. We also offer training programs, depending on the position being applied for.” Shoaib says that the economic climate hasn’t affected El Sewedy, as the business is always there. “We are operating in a B2B market. There’s a lot of demand for our products from the utilities and from privately-held companies. Developing countries are connecting more people through metering solutions, and the demand is growing. That’s connected to the economic status and
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growth of the country. Besides, the technology itself is evolving from the mechanical meter to the electricity meter, from post-paid to pre-paid meters, and recently to the smart meters. The demand is finding its way in both developed and developing countries.” El Sewedy Electrometer’s slogan is ‘Manage Utilities Better’, which reflects its belief that its responsibilities lie beyond meters themselves and the aftercare thereof. EMG wants to enable its customers to manage their own utilities without difficulty, and offers comprehensive services to tackle that: “EMG is a total solution provider with deep focus on quality and customer service. Our solutions and services include engineering, installation, operation, maintenance, meter management, and billing activities.” Shoaib says. What truly sets El Sewedy apart from other companies in the industry is experience, according to Shoaib: “The leaders of the company have a lot of experience in this industry and have been doing it for many years. EMG now has 10 factories present across five continents, which gives us global market leadership and significant production capacity of more than 5 million meters per annum. We cater to all segments of the meter market, not only focusing on one. We have the power to decide where to produce depending on capacity and market needs.”
Mahmoud Adel Purchasing Manager Mahmoud Adel is the Purchasing Manager at Elsewedy Electrometer. He is responsible for buying the best quality equipment, goods and services for the organisation at the most competitive prices. Mahmoud has 10 years of experience in purchasing and supplier management. Mahmoud is Certified Supply Chain Professional (CSCP) from the American University in Cairo and Certified International Purchasing Manager (CIPM) from IPSCMI.
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CONNECTING THE AFRICAN CONTINENT Written by: Lucy Dixon Produced by: Richard Deane
“
We don’t look at ourselves as simply a transporter or a logistics firm, we are a complete service provider,” said Transtech Logistics’ business manager, Chokani Mhango, describing the company’s philosophy and one of the biggest factors behind its success. Founded in 1997 in Malawi, Transtech
Logistics is a freight specialist, offering comprehensive and integrated solutions throughout South Africa, Zimbabwe, Zambia, Mozambique and, of course, Malawi. The company operates a fleet of just under 100 Freightliner trucks, employing the same number of drivers and 40 additional staff at its offices 97
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Transtech Logistics explains why its strategy of offering clients a complete freight solution sets it apart from the rest
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in Lilongwe (Malawi), Lusaka (Zambia), Harare (Zimbabwe) and Johannesburg (South Africa). The South African office, which is now also the head office, is a relatively recent addition, opening in 2013. He explained: “I am an economics scholar and started my career in banking. But after six years I was ready for a new challenge and Transtech’s Managing Director approached me with his plans to open an independent office in South Africa. The rest, as they say, is history.” Transtech’s vision is to facilitate its customers’ entire supply chain, meeting the demand for both manufactured products from South Africa and beyond and various raw materials and agricultural products from southern Africa. Mhango said: “We are positioning ourselves in this very exciting space, being able to connect our southern African clientèle, with both SA and international manufacturers, and at the same time connecting agricultural exporters in Malawi, Zimbabwe and so on with our international customers. That’s why our slogan is ‘Connecting the African Continent’.” And as the South African office starts its third year, it’s an exciting time for the company. “While the business as a whole has been operating for 18 years, this office is the ‘newbie’, so the first three years have been very important in the getting the right personnel in, getting the right structures in place and getting the right client base - building
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a structure for business,” said Mhango. Attracting the right personnel is a key element of the company’s strategy, particularly as the logistics industry is very labour intensive. People are the heart and soul of Transtech and all our personnel are critical to the vision of the organisation in order to cohesively run the fleet on a daily basis. “As management, we strive to create a corporate work environment that is second to none. Our recruitment policy endeavours to attract highly qualified individuals with a passion for this industry and we, in turn, strive to provide our personnel with a very exciting and challenging corporate environment that promotes free thinking, career growth and self-improvement.” Transtech understands the importance
Transtech’s vision is to facilitate its customers’ entire supply chain
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Hyperclass Investments T/ A Asante Sana Freight Services is a locally registered company according to Zimbabwe regulations, specializing in other if not all aspects of shipping based on client’s requirements. These are, but not limited to Customs clearing, forwarding, transport, tracking, monitoring etc. Raleity freight services cc is our sister company registered in South Africa. We have got high calibre staff well and sufficient trained to meet the ever demanding challenges and deadlines associated with the freight industry. Management and staff – boast a combined twenty-five years experience in the sector having worked for customs, Allen Wack & Shepherd and the world’s top two shipping lines (Maersk Sea land and MSC)we maintain an excellent working relationship with Customs, local regulating bodies , transporters , shipping lines, brokers and fellow Agents as we interact on day to day operations. Our staff’s high regard of clients and readiness to always assist maintain our integrity and reputation as the best service provider of choice.
Services Customs Clearing • Forwarding Air Freight • Expertise Advise
Asante-Sana Freight Stand No: 540 Pound Road, Near Peters Road P.O Box 104, Beitbridge, Zimbabwe Tel: +263 22217/23210 Email: opsbb@asante-freight.com
Raleity Freight Services Protect It Truck Park P.O Box 1596, Mussina 0900 Tel/Fax: +27155300040 Fax to Email: ops@raleity-freight.com Farai Mukuya, Tel: 0799085449
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of training and education for its staff, with some of the office team taking part in postgraduate programmes and regular training for all employees. Mhango said: “As a very wise person once told me, a person who graduates today and stops learning tomorrow is uneducated the day after. And in the global economy that we’re in today, we’re faced with new ways of conducting business on a daily basis and it is therefore critical that our teams are up-to-date with latest systems, the new procedures, the different regulations and all the new opportunities that business of today demands.” This policy really helps when it comes to retaining great staff too, as they recognise Transtech as an employer that can satisfy their needs beyond a salary. In addition to a professional and dedicated staff, Mhango also believes that technology is crucial to Transtech’s success as he believes that, in the transportation industry, technology can set you aside from everyone else. An example is how the company makes use of tracking technology. “One of the premier needs of our clients is tracking; they want to know where their cargo is at any time,” he said. “There is an automated tracking alert that goes out to clients twice a day, at 7am and 4pm. In addition to this, our operations team provide our clients with a more comprehensive report detailing all the events occurring on the date in question.” Transtech Logistics also has a new website in development that will allow its clients to log in at any time of day
“While the business as a whole has been operating for 18 years, this office is the ‘newbie’, so the first three years have been very important in the getting the right personnel in, getting the right structures in place and getting the right client base - building a structure for business” – Chokani Mhango, Business Manager
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“In the global economy that we’re in today, we’re faced with new ways of conducting business on a daily basis and it is therefore critical that our teams are up-todate with latest systems, the new procedures, the different regulations and all the new opportunities that business of today demands.” – Chokani Mhango, Business Manager
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Transtech understands the importance of training and education for its staff
and track the cargo themselves, making use of the state-of-the-art tracking units. Furthermore this software can also asses the performances of the trucks, including fuel consumption, which then allows the workshop team to identify any concerns and defects as the trucks are coming in and thus turn them around very quickly. Road transport is a critical component for any sort of business in southern Africa and this is reflected in the type of projects Transtech is currently working on, which include a coal mine in Mozambique and a new railway connecting Malawi and Mozambique. It is also working on a road construction project in Malawi, transporting raw materials such as bitumen. A diverse range of projects and clients again points back to Transtech’s determination to provide a holistic solution for anyone who has cargo to move,
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incorporating every aspect of the supply chain. Mhango added: “Transportation is just the first step of what we do here at Transtech. We strive to provide our clientele with a more comprehensive solution. All cargo transported on our trucks is considered bonded which then allows our clients to defer duty payments until the consignment arrives at its final destination.” This means that cargo doesn’t get delayed by customs officials which may in turn incur storage costs. So, with its 20th anniversary approaching in 2017, what does the future hold for Transtech? As well as growing its fleet in the next few months, the company is also focusing on other markets, including domestic routes and consolidated work. A new department focusing on consolidation has been opened, as Mhango explained: “We have started to target private clients who may only have five or 10 tonnes of cargo to move. We have a warehouse on our premises and can consolidate all their products and once we secure enough cargo to make a full truck load we are good to go. We are currently dispatching two consolidated trucks a week but we are looking to improve that statistic to at least five a week by 2016.” In a difficult economic environment, it seems that Transtech is rising to the challenge. Mhango concluded: “We are a growing organisation but we cannot just be a single-solution firm, we have to stand out from the rest, that is the only way we can achieve growth.”
Company Information INDUSTRY
Supply Chain HEADQUARTERS
Johannesburg, SA FOUNDED
1997 EMPLOYEES
130 REVENUE
Not Disclosed PRODUCTS/ SERVICES
Air Cargo, Logistics
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A New Age
SUPPLY CHAIN
Hitachi Consulting leads the way through the s advancement of new technology Written by: Eric Harding | Produced by: Glen White
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echnology is advancing in the supply chain industry, and Hitachi Consulting is at the forefront of the movement. A catalyst of positive business change, Hitachi Consulting assists its clients through enabling superior operational performance and helping them realize their business vision. Hitachi Consulting is transforming the way businesses engage with customers and employees through technology, as the company’s customer experience solutions help clients achieve better engagement and interaction across multiple channels and devices. Meanwhile, Hitachi’s employee experience solutions have assisted
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in better employee productivity and happiness, driving innovation and efficiency. With the technological landscape always changing, Hitachi stays on top of the latest trends and innovations. INTERNET OF S U P P LY C H A I N The Internet of Things (IoT) is connecting daily, mundane objects to the internet, transforming them into the extraordinary. When an object can be represented in a digital space, it can be monitored and controlled from anywhere, as well as feed realtime information from its operator or owner and environment constantly. Through this connectivity, data can be gathered from more places and provide more ways to increase efficiency and asset utilization, innovate product development, streamline the supply chain, enhance the customer experience and improve safety and security. Although IoT hasn’t quite made a major impact on the manufacturing process, the beginning of a fundamental shift is coming. IoT will
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“I think we’re on the cusp of a breakthrough. IoT will radically change things.” – Hitachi Consulting Australia Director of supply chain Owen Keates
enable real-time data to be shared from the prospective customer, manufacturing and logistics environments, and products already in use. “I think we’re on the cusp of a breakthrough,” said Hitachi Consulting Australia Director of Supply Chain Owen Keates. “It will radically change things.
“Ultimately, you’re going to have far more visibility of product movement, as well as productivity and scheduling within operations, You’ll be able to track where a product is. In terms of supply chain planning and optimisation, real time visibility and analysis of data will provide better decision making around delivery, changing the game
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IMPROVE CASH FLOW AND At Hitachi Consulting, we help you establish organizational readiness for change with one-on-one coaching to help you through these six key steps. This way you can identify opportunities, anticipate and forecast change, and navigate that change with foresight, agility and conndence.
6 STEPS to Supply Chain Value You Can Measure & Sustain Create supply chains that are both cost effective and responsive to customer demand. The Management Consulting division within Hitachi Consulting can guide you through six steps that will deliver improved cash fow and ROI.
Integrated Planning
Network Optimizatio
15-20% reduction in inventory; 5-10% reduction in supply chain costs; 5- to 10-fold ROI
5-15% reduction o distribution costs
“The organizational structure and mindset of key players can determine 90% of the success of the transition from supply chain to value chain” www.hitachiconsulting.com | Info@hitachiconsulting.com
ROI
on
of s
Strategic Procurement
Working Capital
Logistics Excellence
Operational Excellence
15-20% reduction in inventory; 5-10% reduction in supply chain costs; 5- to 10-fold ROI
5-15% reduction of distribution costs
10-20% savings on external expenditures
Make the transition happen in your business There is no question whether there is a necessity for a re-deenition of the supply chain function – the needs and challenges in the market are driving that. The question is much more how to make that transition happen and what it means speciically for your own organization. We believe that IT plays a major role in enabling this, but will not be the solution. Instead, the setup of proven processes and, more importantly, the organizational structure and mindset of key players can determine 90% of the success of such a transition. The ability to master these dimensions might not be easy, but can make the difference between remaining a “technical” supply function or ecoming (and being recognized as) a driver for the value chain.
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significantly.” “And that is just the beginning,” Keates continued. “Adding the ability to crunch vast amounts of customer and customer behaviour data, we will be able to move toward anticipatory shipments of goods, with the ability to adjust the last mile routing to fulfill the actual order.” Keates also pointed out that IoT-enabled advanced monitoring of products will enable predictive 110
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maintenance and shipment or 3D printing of service parts if and when they are needed. THE CLOUD OF THE FUTURE As more devices and processes get connected via the Internet, risks to cyber security also increase. Big businesses such as Hitachi are aware of these risks and significant developments are underway to
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improve cyber security for IoT systems. “Cloud-based solutions are the absolute future,” said Keates. “It’s clear that not only the big enterprise resource planning (ERP) providers are moving to the cloud, but also the on-premise servers probably won’t be there in the future. Everything will be cloud based.” Optimising and transforming a successful supply chain starts at the very top. Often, the best way to start is have discussions about the importance of supply chain at the C-suite level. It then turns into a process of
understanding the strategy and how it needs to be spread through the company. “Today, the best-in-class companies have don’t just recognize the supply chain is a critical part of their business,” said Keates. “These companies comprehend that their entire business is a supply chain in and of itself, and they take ownership and drive the overall performance of that supply chain end to end.” Also important is intimately understanding the customer, which Keates believes is the core of major businesses like Google
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and Facebook; meanwhile, more traditional players have started to realise and better use the treasure trove of customer behaviour data at their disposal. “Understanding customer segmentation and buying behaviours through the use of deep analytics sets the scene for true supply chain transformation, because ultimately you have to determine the appropriate service levels for each segment, not only in terms of reliability, but in terms of responsiveness,” said Keates. “For us, it’s definitely about looking at the future,” said Keates. “With IoT, there is so much additional visibility being made available to supply chain management.”
C O N T I N U A L LY IMPROVING According to Keates, embedding the learning culture within the company and ongoing continuous improvement is the key to supply chain success. “There’s an element of foundational best practice that needs to be truly embedded in an organisation. Leading companies embrace the continuous improvement philosophy of examining their current processes, benchmarking with best practice processes and empowering crossfunctional teams to implement the changes required to ensure ongoing competitive advantage. “It is critical that consultants who implement technology solutions
“Today, the best-in-class companies have recognised supply chain is a critical part of their business.” – Hitachi Consulting Australia Director of supply chain Owen Keates w w w. h i t a c h i c o n s u l t i n g . c o m
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for their clients work collaboratively with the clients themselves. This ensures appropriate upskilling and change management for all personnel, as well as effective business process and practices are developed, resulting in overall business success.” C O N S U LT I N G F O R THE FUTURE The organizational structure of the company within the next few years will adapt from the setup of a typical manufacturing company, in Keates’ view. He points out that there will be an increased importance of understanding the customer and the need to develop collaboration with both the customer and supplier. “I think you’ll see more and more process managers and greater alignment of the internal processes to the particular customer segment or product family,” said Keates. “That will be a fundamental change that the early adopters will take on. And with IoT, there will be a much bigger involvement of the traditional IT role in operations and supply chain functions. 114
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“It will become more practiced as those functions start helping businesses look for breakthroughs. IoT can give them a competitive advantage and the IT systems will be better powered by cloud-based systems.” Supply chain management will soon become much more real time and predictive. Keates believes there will be a significant increase of collaboration between the
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Company Information NAME
Hitachi Consulting Australia INDUSTRY
Supply Chain HEADQUARTERS
New South Wales, Australia ABOUT
suppliers, the operations itself and third-party global logistics providers. “Data will be shared and decisions will be made in real time more than ever before,” said Keates. “Part of that disruption can already be seen in the growing on line retail businesses. These businesses are already using the extensive customer browsing and buying data that they collect, to continually improve their product offerings and service levels. You need that visibility to make the right calls to service.”
Hitachi Consulting is a recognised leader in delivering proven business and IT strategies and solutions to Global 2000 companies across many industries. With a balanced view of strategy, people, process and technology, Hitachi Consulting works with companies to understand their unique business needs, and to develop and implement practical business strategies and technology solutions.
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BENCHMARKING LOGISTICS IN MEXICO Impala Terminals brings its global solutions into Mexico, setting new standards in logistics, storage and cargo management
Written by: Mateo Rafael Tablado Produced by: Andrea Duque Interviewee: Mauricio Marquez, Executive Director for Impala Terminals Mexico
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mpala Terminals, founded in 1993 by the late Claude Dauphin, belongs to Dutch financial group Trafigura. The company’s 25 locations are spread over 18 countries, totaling almost 2.5 million acres of warehouses and multimodal transport terminals in strategic locations of Africa, Middle East, Europe and America. Developing affordable custom-made solutions for every client is one of Impala’s major strongholds.
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The company first ventured into Mexico in 1997, in the port of Altamira, Tamaulipas, next to the Gulf of Mexico. After the rise of Asia’s involvement in global commerce, the operation moved to the Pacific coast in 2010, to the port of Manzanillo, Colima, where more than US$80 million have been invested in continual growth endeavors, catering – mainly – to the mineral commodity market.
Key People
Mauricio Márquez Executive Director for Impala Terminals Mexico Mauricio Marquez graduated as a civil engineer from the Valley of Mexico University (UVM, Mexico City), he has postgraduate studied in International Business and Management Planning from the National Autonomous University of Mexico (UNAM, Mexico City) and the Mexico Autonomous Institute of Technology (ITAM, Mexico City also). Marquez is highly experienced in logistics and chain supply, having worked for UPS Mexico (operations manager), Holcim concrete (logistics) and Cargill foods (trading, sourcing and risk management); he was hired by Impala Terminals Mexico in 2013 and became appointed Executive Director in September 2015.
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Resources at Impala Terminals allow reduce time needed for loading and unloading procedures
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Other operations within the Americas for Impala include cargo and container conveyance in Colombia; carbon, bauxite and alumina conveyance and storage in the U.S.; basic minerals in Peru, Chile and Bolivia; and benefitting Brazil’s iron ore producers, a stateof-the-art facility designed for iron conveyance, Porto Sudeste. “At Impala Terminals Mexico, we strive on serving, meeting and surpassing our clientele’s expectations. We design, construct and operate multimodal logistic processes connecting production and consumption areas within our port network,” Mauricio Morales, Executive
L AT I N A A M E R I C A
Impala owns the best available resources for mineral blending
Director for Impala Terminals Mexico, explained. Mauricio Marquez graduated as a civil engineer from the Valley of Mexico University (UVM, Mexico City) before doing postgraduate studies in International Business and Management Planning from the National Autonomous University of Mexico and the Mexico Autonomous Institute of Technology, both in Mexico City. Marquez is highly experienced in logistics and supply chain, having worked for UPS Mexico, Holcim Concrete and Cargill foods. He was hired by Impala Terminals Mexico in 2013 and appointed Executive Director in September 2015. “I became passionate about stock trading and other financial activities,� shared Marquez.
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I M PA L A T E R M I N A L S M É X I C O Quality solutions at affordable prices
Impala’s resources result
Impala Terminals Mexico identifies small to medium business opportunities, incorporating individual units as part of a whole value chain, capable of offering affordable services within long-term schemes.
in savings, as vehicles remain less time in transit
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Besides the general logistic services offered by Impala, the company also specializes in the mining commodities market. This requires meeting demands in safety, reliability and efficiency at affordable prices, in addition to other factors such as volume capacity and timely deliveries. “We use all of our talent, effort and passion to bring the best solutions available to our clientele,” the executive said.
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The reference for foreign trade law-making in Mexico Impala Terminals’ global operations display an innovative business vision, by creating new services that enable it to meet needs that seem unattainable at certain points. This “push forward” attitude and the support of a global knowledge base has resulted in the Mexican branch of Impala becoming a benchmark for the country’s legislative government, particularly regarding foreign trade and multimodal transport. Facility’s surroundings,
“We are the ‘go to’ source for environmental and occupational safety, as well as for asset security,” Marquez said.
the clients’ cargo and the company’s employees are a major safety concern for Impala
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“Clients will always demand the same kind of service: fast, secure, done right and affordable” – Mauricio Marquez, Executive Director, Impala Terminals Mexico
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Innovation and avant-garde technology Innovation is a trait displayed in every one of Impala Terminals’ procedures in management, equipment, machinery and IT, with the purpose to simplify and fulfill its clients’ needs. The in-house software Impala Container Yard Management System (I-CYMS) allows clients real-time, personalized access from any location to their cargo’s details, while cargo conveyance bands and systems within Impala’s facilities reduce load times for ships. Mineral blending processes are one of the company’s most sought-after services; the cutting-edge machinery used for these procedures allows for a guarantee that the finished product will be according to the client’s requirements. Supplier Development Due to its location, the Manzanillo terminal requires importing some products and services; fortunately, Impala’s suppliers are certified companies. Suppliers that are not yet certified are subject to the company’s supplier development program, giving these companies the chance to eventually become an Impala supplier globally.
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“In the same way our clients rely on us, we rely on our suppliers. We know who and how they are in the same way they understand who we are and our needs,” the executive said. Growth in Latin America Impala Terminals are located in strategic points around Africa, Asia, Middle East, Europe, Latin and North America. There are 35 new facilities under development. In Mexican territory, the company operates in key locations such as the ports of Guaymas and Sonora, and will be opening a port in Altamira once again, depending on several outcomes related to global economy, exchange rates and other economic indexes.
Training programs at Impala derive from direct experience at the position as well as from constant communication with workmates and superiors
“We haven’t dismissed any expansion project in case the market enters a more static phase. For now, we will rely on predesigned strategies from our growth portfolio,” Marquez said. Company culture The company’s model for employee training is based on 70 percent actual development at the employee’s work post, 20 percent performance feedback, and 10 percent structured learning programs. This method has resulted in having
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“Logistics are a com directed to one si CLIENT’S SAT
– Mauricio Marquez, Executive Direct
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L AT I N A A M E R I C A
mbination of efforts imple purpose: TISFACTION�
tor, Impala Terminals Mexico
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I M PA L A T E R M I N A L S M É X I C O already-experienced workers become coaches for new employees, in a sort of “trickle down” knowledge structure. Members of mid-level management are subject to standard workshops, where they learn about lean manufacturing processes, Six Sigma, 5S and other programs. Impala Terminals
Care for the neighboring community
provides employees plenty of resources to optimize their abilities
Impala Terminals’ facility in Manzanillo is built in a way that minerals and other stored substances
L AT I N A A M E R I C A
have hardly any effect on the environment or the immediate community surrounding the terminal. In addition to this, Impala established agreements with the Colima Technologic Institute and the Manzanillo Technologic University, providing internships for both of these colleges’ students, with the possibility of becoming hired by the company.
Impala Terminals is a source to different government agencies for creating laws around foreign trade
“We are committed to the development our surrounding communities. We show respect for them and want to contribute to the well being of community members”
1,705 employees between south and north america
– Marquez declared.
$207.3
million revenue in 2015
Projections: adjusting to the market’s outcomes Current market tendencies provide a scenario for Impala Terminals Mexico to set goals based on cautious growth. 2016 answers to three concepts:
$2.022 billion in assets as of 2015
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I M PA L A T E R M I N A L S M É X I C O
Impala Terminals is the ideal partner for commodity management
L AT I N A A M E R I C A
“consolidation,” “caution” and “control,” with awareness of exchange rate volatility and of worldwide market dynamics. The next year may provide for steady growth and security. Five years from now, the company must display slow, steady growth in other business units which are currently in stand-by mode due to current conditions in the market. “There were positive trends during 2015, one of them – and a very important one – was the increase in aggregate demand, and another one was the increase in foreign investments in our country,” concluded the Executive Director for Impala Terminals Mexico.
Company Information NAME
Impala Terminals México INDUSTRY
Logistics HEADQUARTERS
Manzanillo, Colima, Mexico FOUNDED
1997 EMPLOYEES
140 REVENUE
US $80 million WEBSITE
www.impalaterminals.com
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Driving
GROWTH
Bay & Bay Transportation COO Chip Smith discusses new a focus on safety and security in asset-based and third-par Written by: Sasha Orman Produced by: Jason Wright
w technology and rty logistics
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B AY & B AY T R A N S P O R TAT I O N
I
n a world full of options, Bay & Bay Transportation aims to give its customers more: more services, more capacity, more security and more quality under one roof. For over 50 years, Bay & Bay has been working toward combining 3PL brokerage capabilities and services with a fleet of 500 company-owned trucks. Rising to the top in both categories, Bay & 134
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Bay is a top 40 freight broker, a top 250 truckload carrier, and one of the top 20 fleets to drive for by the Truckload Carriers Association. “We give our customers the best of both worlds,” says Bay & Bay COO Chip Smith. “It’s the security they need and the available capacity we control, as well as resources encompassing multiple modes and tens of thousands of fleets.”
S U P P LY C H A I N
“We give our customers the best of both worlds. It’s the security they need and the available capacity we control, as well as resources encompassing multiple modes and tens of thousands of fleets” – Bay & Bay COO Chip Smith
UNLIMITED OPTIONS By combining a full fleet with a well-connected brokerage service, Bay & Bay is able to offer its clients practically limitless options to fit their unique transportation needs. “While our fleet side is constrained to where you can send 500 trucks at any given time, on our logistics side—which includes rail intermodal, highway truckload
and LTL services covering North America—we really are unbound. I’ve got 30,000 different fleets under contract, all qualified and able to help,” says Smith. This is especially beneficial for customers with varied needs who rely on Bay & Bay as both a carrier and a broker. “Customers find it really valuable to have a one stop shop that gives them access to w w w . b a y a n d b a y. c o m
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Connecting strength to supply chains, and data to decision makers. It’s all about relationships. With some of the most powerful logistics tools, market data, and one of the industry’s mostfrequented freight marketplaces, we may provide software solutions but we produce stronger connections.
Proud partner of
To learn more, visit Go.Truckstop.com/BayAndBay
Connecting Transportation
S U P P LY C H A I N
all the capacity that they need, and gives them options and different mode considerations in one spot,” says Smith. “We do this with high quality levels of service and controls; it doesn’t really matter what part of the company is moving the freight for a particular customer. They have one point of contact, yet the resources of all these different modes and capacity sources.” FOCUSING ON SAFET Y “By and large we’re dealing with small carriers. We’re aggregating all this capacity for our shippers, and they expect us to vet the carriers properly so we control the risks, rather than picking any carrier that happens to post a truck available,” Smith explains. To ensure that Bay & Bay is able to provide the highest quality carriers
SUPPLIER PROFILE
Bay and Bay Transportation offers tricks and tips for OTR truck drivers
TRUCKSTOP.COM
At Truckstop.com, we are the one-stop connection between carriers, brokers, and shippers. Founded in 1995 as the first freight-matching marketplace to hit the web, Truckstop.com has grown to provide load planning, transportation management, telematics, route optimization, real-time rates, powerful negotiation tools, and other logistics solutions. Truckstop.com is recognized as the leading resource for transportation data and trends, including the weekly Trans4Cast, which informs outlets like Bloomberg Financial and Fox News. Additionally, Truckstop.com also serves as the largest credit reporting entity in the transportation industry, helping companies guard against fraud and choose the right partners for their business.
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C O M PA N Y N A M E
to its clients, the company maintains rigorous standards. “It begins with the contracts we have with our carriers as well as with our shipper customers. For a carrier to meet our compliances, there’s a number of steps they have to go through beyond just having an adequate safety rating,” says Smith. The company looks at much more than carrier safety ratings to make its assessments, from insurance 138
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levels of carriers to extensive background checks. Bay & Bay also holds its own internal operations to the same rigorous standards, going above and beyond to give clients peace of mind that their cargo is in good hands. “We carry quite a bit of insurance beyond what any normal carrier or even most brokers would carry—so we have the vetting of the carriers up front to begin with, then we have
S U P P LY C H A I N
their insurance, then we have our additional protections on top of that,” says Smith. INVESTING IN TEC H N O LOGY “Our assets are primarily the drivers and the trucks,” says Smith. “On the logistics side, our assets are the information and the information management systems we’ve selected.” Bay & Bay has made significant investments into technology to support those information-based
assets, including the creation of its proprietary BOSS system built to monitor every aspect of the company’s load management and customer management. Based in the cloud and fully integrated with the company’s CRM from Salesforce.com, Bay & Bay’s BOSS system is able to handle an array of vital functions. “We have all kinds of portability, report writing functions, and other benefits because we have a robust base platform,” says Smith. “Because it’s based in the cloud, we
Eco truck - Winter driving
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B AY & B AY T R A N S P O R TAT I O N
Sam Anderson - President / CEO
can operate from virtually anywhere we can get internet access. Even if we have a power outage or the phones go down, we can operate with just a cell phone and still conduct business with our carriers and customers.” As Smith explains, the significant expense of an in-house program like BOSS is well worth the cost for the safety net and convenience that it provides. “It gives us an advantage in the market that is hard for any of 140
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Brokerage
the canned packages available to brokers to copy,” he says. “The cost to develop BOSS was well over a million dollars and it never ends— you’re in the IT business forever once you’ve developed your own software—but we think it gives us a leg up on everybody else.” LOO K I N G FO RWA R D Bay & Bay is looking forward to more rapid growth in its future. “Last year our brokerage grew
S U P P LY C H A I N
Company Information INDUSTRY
Transportation services HEADQUARTERS
Eagan, Minnesota FOUNDED
2008 ABOUT
41 percent,” says Smith, noting that while this year has been tough, the brokerage side of the business is still up 15 percent. “Right now, we anticipate being a $180 million company, but five years from now we could easily be $300 million, with about $200 million being our freight brokerage and the balance being our assets,” says Smith. “Assets were 70 percent of our business five years ago, and now it’s 50/50 with our brokerage—so there’s a shift toward 3PL services that complement what we can do with our own assets.”
Bay & Bay Transportation offers a range of truck transportation services, operating as both an asset-based carrier and a 3PL provider. Based in Minnesota, Bay & Bay Transportation works with clients across the United States. According to its website, Bay & Bay creates a work environment where its employees are committed to customer satisfaction and reinvesting in equipment, technology, communities and environmentally responsible initiatives.
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REACHING FOR A STRONGER SUPPLY CHAIN Glanbia explores management systems for a better supply chain in the digital age Written by: Sasha Orman
Produced by: Jason Wright
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ith decades of growth and a global reach across more than a hundred countries, Glanbia PLC is a major force in the food industry, branching into several sectors from dairy to nutritional supplements. It is also a company at the top of its game, ranked as one of the leading producers of cheese, whey powders at various levels of protein concentration and sports nutrition products in the United States. But even a leading business 144
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cannot grow complacent: continuous improvement is vital, and Glanbia is on a journey to make its supply chain leaner and more efficient every day. Building a stronger supply chain in the cloud As a way to streamline its supply chain operations and build in efficiencies, Glanbia is in the process of integrating an upgraded transportation management system (TMS) through 3PL and technology
Glanbia cheese and whey plants in Idaho and New Mexico take in over 20 million pounds of milk every day from farmer patrons, adding up to over 350 trucks of milk per day
companies. Already successfully partially integrated at Glanbia’s operations, the company is now working to implement the program across its divisions nationwide. As a cloud-based system, TMS can be accessed anywhere in the world through smartphones and tablets, allowing trucks to be routed and pickups to be requested from anywhere with an internet or LTE connection. Supplying analytics and KPIs, the program also doubles as a business intelligence suite to help
Glanbia optimize its processes and create new efficiencies. The TMS system will support the company’s SAP-designed CRM and ERP systems to provide a more holistic form of top shelf customer service, from materials suppliers to the end customer. “TMS eliminates the need to install and maintain many different facets of transportation systems,” said Andy Weisel, Executive, Procurement Center of Excellence. “It puts all the information in one source.” w w w. g l a n b i a . c o m
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Nutrition
Consumer Care
Ingredients You Can Trust
Lonza offers evidence-based health ingredients to the food, dietary supplement and pharmaceutical markets. Products carrying the following quality seals on the packaging show the end-consumer that they contain high quality ingredients from Lonza Ltd, Switzerland. Lonza’s nutritional quality seals signify: – Evidence-based ingredients you and your customers can trust – Regulatory and scientific support – Reliable service
Lonza Inc. Allendale, NJ, USA Tel +1 800 365 8324 contact.allendale@lonza.com
www.lonzanutrition.com
All product information corresponds to Lonza’s knowledge on the subject at the date of publication, but Lonza makes no warranty as to its accuracy or completeness and Lonza assumes no obligation to update it. Product information is intended for use by recipients experienced and knowledgeable in the field, who are capable of and responsible for independently determining the suitability of ingredients for intended uses and to ensure their compliance with applicable law. All trademarks belong to Lonza or its affiliates. © 2016 Lonza
GLANBIA
USA
Glanbia also continues to upgrade other technologies and processes, applying better SAP implementation across all business units, including business intelligence tools, spend & processes analysis, and waste removal. Glanbia uses eProcurement tools for RFIs, RFPs and eAuctions along with integrated contract databases that alert us to expiring supplier agreements. Meanwhile, the Glanbia Performance System utilizes a lean/six sigma operational excellence-based quality and performance management system, which guides the business on a journey to zero losses in the future.
Andy Weisel, Executive Procurement Center of Excellence
Searching for further efficiencies With its transportation management system
SUPPLIER PROFILE
LONZA INC.
Lonza is one of the world’s leading and most-trusted suppliers to the pharmaceutical, biotech and specialty ingredients markets. Founded in 1897 in the Swiss Alps, Lonza is a well-respected global company headquartered in Basel, Switzerland with more than 40 major manufacturing and R&D facilities.
Lonza is a leading manufacturer of L-Carnitine sold under the brand name Carnipure®. L-Carnitine plays an important role in energy metabolism and is essential for transporting long-chain fatty acids across the mitochondrial membrane for subsequent fat breakdown and energy generation. ResistAid® is a proprietary natural immune support ingredient consisting of the soluble polysaccharide arabinogalactan and bioactive polyphenolic flavonoids, and thus has antioxidant capacity. Lonza supplies Vitamin B3 ingredients, Niacin and Niacinamide, essential vitamins that must be taken through diet or supplementation. Lonza’s food emulsifiers are uniquely positioned to provide a broad portfolio of innovative technologies and improved ingredients for the food industry.
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Glanbia’s success as a global ingredients provider is built on its expertise in nutritional solutions supported by significant investment in research and development
GLANBIA underway, Glanbia is now turning its sights to streamlining and optimizing other facets of its supply chain. “We are in the late stages of tender for our proposed supplier information management system (SIM),” said Weisel, explaining the need for Glanbia to develop a more direct portal for interface between suppliers and the company’s procurement and crossfunctional teams. “We would like to further the supplier performance measurement vision of SIM by bringing together in dedicated supplier dashboards all the pertinent KPIs for that supplier. This will support our SRM efforts for our operations and for customers looking for the whole gamut of information,” he said. From specifications and forecasts to invoice submission and order management, additional technology can optimize vital processes by allowing companies and their suppliers to have further insight into available stock and transport and the timing of orders and delivery. A more centralized and automated system can increase transparency internally and with suppliers, thus cutting down on mistakes and lost time related to material orders.
USA
Glanbia looks forward to the integration of this technology as a next step along its road to supply chain optimization. “It’s more efficient, and it’s also a way of getting the right data in the right place at the right time,” said Weisel. That efficiency translates to savings for Glanbia, suppliers and end customers. The transparency afforded by such an implementation will also strengthen communication and synergy between Glanbia and its suppliers through analytics and performance metrics. “The metrics keep suppliers up to date on how they’re performing against the average of all our suppliers,” said Weisel. “It allows us to segment our suppliers, and it’s also a communication portal between the supplier and Glanbia. There are no secrets—they’ll know exactly where they stand. I think it will raise expectations for the suppliers and make them better, as well as making us more efficient on invoices.” A company coming together As Glanbia continues to grow, it is also consolidating. In a bid to further its pursuit of efficiency, the w w w. g l a n b i a . c o m
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GLANBIA
Glanbia manufacturers 900 million pounds of American style cheese and 170 million pounds of whey a year, to meet customer demands from around the world
company is integrating three B2B ingredients business units into one global ingredients organization, which will have a single customer interface and standardized systems and processes Along with this shift comes a reshaping of the organization structure for maximum effectiveness. This will see a regional sales structure and a new product category management function supported by strong centers of excellence including procurement operations. “As well as providing day-to150
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day support to our plants on the operations side, the new procurement structure will have a dedicated team that focuses on longer term solutions across product categories,” said Weisel. “We’ve done this with our vitamins and amino acids categories already, along with our transportation and packaging side, and we plan to roll it out to all indirect and direct spend. Developing sound cross-functional strategic sourcing teams will lead the business to future growth opportunities.”
USA
Improving on an executive level As another means to improving business practices, Glanbia is active with the Corporate Executive Board (CEB) organization in order to develop the leadership tools needed to grow leaner and keep improving. “We are delighted with our membership of the CEB. They provide great training resources thst we have utilized this year across Glanbia,” said Weisel. As the category managers participate in different training courses, they apply what they’ve learned at a practical level for the benefit of the company. “Our headquarters-led initiative used a “Voice of the Supplier” survey with our top 30 SAP vendors to really understand how they viewed Glanbia, which helped shape our vendor engagement and improvement plans. They also provided training and access to global best practices to apply to our businesses,” Weisel said. “We’re looking at internal relationship management, and how procurement internally sells the value and benefit we can add to the business. Through our supplier relationship management, we continue to build strong relationships with suppliers, which leads to strategic category management and more innovation opportunities,” said Weisel. “These are just some of the areas we’re focusing on with the CEB to help Glanbia fulfill its ambition to be a global nutrition company and set truly world class practice.”
Company Information INDUSTRY
Nutrition HEADQUARTERS
Glanbia plc Kilkenny, Ireland FOUNDED
1964 EMPLOYEES
5800 REVENUE
3.5bn
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